Justia International Trade Opinion Summaries

Triple A, a Michigan corporation, has offices in Dearborn, Michigan, the Congo (previously known as Zaire), and Sierra Leone. In 1993, Zaire ordered military equipment worth $14,070,000 from Triple A. A South Korean manufacturer shipped the equipment to Zaire at Triple A’s request. For 17 years, Triple A sought payment from Zaire and then the Congo without success. In 2010, Triple A sued the Congo for breach of contract. The district court dismissed the case, citing lack of jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1602. The Sixth Circuit affirmed, citing the language of the Act, under which federal courts have jurisdiction “in any case in which the action is based upon” the following: [1] a commercial activity carried on in the United States by the foreign state; or [2] upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or [3] upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. View "Triple A Int'l, Inc. v. Democratic Republic of the Congo" on Justia Law

In 2003, Russell, the sole occupant and pilot of an Agusta 109C helicopter, died after his helicopter crashed in Illinois. Russell, a resident of Georgia, was living in Illinois and working for an Illinois air ambulance service operating in the Chicago area. The helicopter was manufactured in Italy in 1989. The trial court dismissed claims against SNFA, a French company that manufactured a custom tail-rotor bearing for the helicopter, for lack of jurisdiction. The appellate court reversed and the Illinois Supreme Court affirmed, noting that Agusta and its American subsidiary, AAC, effectively operated as an American distributor for the tail-rotor bearings in the U.S. market and that SNFA custom manufactured the bearings at issue specifically for Agusta. By engaging a business entity located in Illinois, SNFA undoubtedly benefitted from Illinois’ system of laws, infrastructure, and business climate and has the requisite minimum contacts with Illinois for purposes of specific personal jurisdiction. The exercise of jurisdiction is reasonable; Illinois has an indisputable interest in resolving litigation stemming from a fatal Illinois helicopter accident. View "Russell v. SNFA" on Justia Law

Johnson Controls, a Wisconsin manufacturer of building management systems and HVAC equipment, and Edman Controls entered into an agreement giving Edman exclusive rights to distribute Johnson’s products in Panama. In 2009, Johnson breached the agreement by attempting to sell its products directly to Panamanian developers, circumventing Edman. Edman invoked the agreement’s arbitration clause. The arbitrator concluded that Johnson had breached the agreement and that Edman was entitled to damages. Johnson sought to vacate or modify the arbitral award, challenging the way in which the award took account of injuries to Edman’s subsidiaries and the arbitrator’s alleged refusal to follow Wisconsin law. The district court ruled in Edman’s favor. The Seventh Circuit affirmed and upheld the district court’s award of attorney fees. View "Johnson Controls, Inc. v. Edman Controls, Inc." on Justia Law

In 1996 Beloit agreed to build high-speed paper-making machines for Indonesian paper companies. Two of the companies executed promissory notes in favor of Beloit reflecting a principal indebtedness of $43.8 million. The paper companies guaranteed the notes; Beloit assigned them to JPMorgan in exchange for construction financing. The machines were delivered in 1998 but did not run as specified. In 2000 the parties settled claims pertaining to the machines but preserved obligations under the notes. JPMorgan sued for nonpayment. The district court held that warranty-based claims were foreclosed by the settlement and that other defenses lacked merit; it awarded JPMorgan $53 million. After the appeal was filed, JPMorgan issued citations to discover assets. Although the companies raised an international conflict-of-law question, the district court ordered compliance with the citations. The Seventh Circuit affirmed. The settlement waived implied warranty defenses and counterclaims. The fraud defense is also mostly barred; to the extent it is not, the evidence was insufficient to survive summary judgment. The court also rejected defenses that the notes lacked consideration; that the notes were issued for a “special purpose” and were not intended to be repaid; and that JPMorgan is not a holder in due course. The discovery order was not appealable. View "JPMorgan Chase & Co., N.A. v. Asia Pulp & Paper Co., Ltd." on Justia Law

In its tax return for the year 1997, ConEd claimed multiple deductions pertaining to a lease-in/lease-out (LILO) tax shelter transaction under which a Dutch utility, EZH, a tax-indifferent entity because it is not subject to U.S. taxation, conveyed to ConEd a gas-fired cogeneration plant that delivers power to customers in the Netherlands, then leased it back, followed by a reconveyance to EZH and a sublease. The stated purpose of the arrangement was tax avoidance. LILO transactions accelerate losses to the taxpayer and defer gains. The transaction provided several upfront deductions that allowed ConEd to pay lower taxes in 1997 (and in later years) than it otherwise would have. The IRS disallowed these claimed deductions and assessed a deficiency of $328,066. ConEd paid the deficiency and filed a refund claim; when this claim was denied, ConEd filed suit. The Claims Court awarded ConEd a full refund. The Federal Circuit reversed, applying the substance-over-form doctrine to conclude that ConEd’s claimed deductions must be disallowed. There was a reasonable likelihood that EZH would exercise its purchase option at the conclusion of the ConEd sublease, thus rendering the master lease illusory. View "Consol. Edison Co. of NY v. United States" on Justia Law

In these three consolidated appeals, the court must decide issues about the enforceability of German bonds issued during the period between World War I and World War II. The court concluded that the district court had jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330, 1302-1311, over the complaint against Germany filed by Sovereign Bonds regarding its Agra bonds issued in the territory that later became East Germany; all the bonds were subject to the 1953 Validation Treaty and must be validated before they could be enforced in American courts; the complaint filed by World Holdings to enforce its validated bonds was untimely; and the district court did not abuse its discretion when it denied discovery to Sovereign Bonds on the issue of validation. View "World Holdings, LLC v. Federal Republic of Germany" on Justia Law

Harley-Davidson had a licensing agreement with a subsidiary of DFS and received notice that the companies had merged. Harley-Davidson did not exercise its right to terminate, but later discovered that DFS had sold unauthorized products bearing the trademark to an unapproved German retailer. Harley-Davidon sent an e-mail saying that it believed DFS was in breach of contract and that it was suspending approval of products. DFS responded in kind. Harley-Davidson then attempted to recover unpaid royalties and to secure from DFS information required under the agreement. DFS refused these attempts, but submitted production samples for a new collection. Harley-Davidson reminded DFS of the termination. DFS advised Harley-Davidson that it had “wrongfully repudiated the License Agreement” and that DFS planned to act unilaterally in accordance with its own views of rights and obligations. The district court granted injunctive relief against DFS, which was attempting to litigate the dispute in Greece. The Seventh Circuit affirmed. Harley-Davidson made strong showings that DFS was deliberately breaching a licensing agreement and “has tried numerous legal twists and contortions to try to avoid the legal consequences.” The court rejected an argument that the agreement provision consenting to personal jurisdiction in Wisconsin was not binding on DFS. View "H-D MI, LLC v. Hellenic Duty Free Shops, S.A." on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery. View "Republic of Argentina v. NML Capital, Ltd." on Justia Law

Residents of Argentina sued Daimler, a German company, in a California federal district court, alleging that Mercedes-Benz Argentina, a Daimler subsidiary, collaborated with state security forces during Argentina’s 1976–1983 “Dirty War” to kidnap, detain, torture, and kill MB Argentina workers, related to the plaintiffs. They asserted claims under the Alien Tort Statute and the Torture Victim Protection Act of 1991, and under California and Argentina law. Personal jurisdiction was predicated on the California contacts of Mercedes-Benz USA (MBUSA), another Daimler subsidiary, incorporated in Delaware with its principal place of business in New Jersey. MBUSA distributes Daimler-manufactured vehicles to independent U.S. dealerships, including some in California. The district court dismissed. The Ninth Circuit reversed, holding that MBUSA, which it assumed to fall within the California courts’ all-purpose jurisdiction, was Daimler’s “agent” for jurisdictional purposes. The Supreme Court reversed. Daimler is not amenable to suit in California for injuries allegedly caused by MB Argentina outside the U.S. California’s long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U. S. Constitution. Even if California is home to MBUSA, Daimler’s affiliations with California are not sufficient to subject it to the general jurisdiction of that State’s courts. The proper inquiry is whether a foreign corporation’s “affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum State.” Neither Daimler nor MBUSA is incorporated in California; neither has its principal place of business there. If Daimler’s California activities sufficed to allow adjudication of this case in California, the same global reach would presumably be available in every other state in which MBUSA’s sales are sizable. View "Daimler AG v. Bauman" on Justia Law

Wiley, an academic publisher, often assigns to its foreign subsidiary (WileyAsia) rights to publish, print, and sell Wiley’s English language textbooks abroad. WileyAsia’s books state that they are not to be taken (without permission) into the U.S. When Kirtsaeng moved to the U.S., he asked friends to buy foreign edition English-language textbooks in Thai book shops, where they sold at low prices, and mail them to him. He sold the books at a profit. Wiley claimed that Kirtsaeng’s unauthorized importation and resale was an infringement of Wiley’s 17 U.S.C. 106(3) exclusive rights to distribute its copyrighted work and section 602’s import prohibition. Kirtsaeng cited section 109(a)’s “first sale” doctrine, which provides that “the owner of a particular copy or phonorecord lawfully made under this title ... is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.” The district court held that the defense did not apply to goods manufactured abroad. The jury found that Kirtsaeng had willfully infringed Wiley’s American copyrights and assessed damages. The Second Circuit affirmed, concluding that section 109(a)’s “lawfully made under this title” language indicated that the “first sale” doctrine does not apply to copies of American copyrighted works manufactured abroad. The Supreme Court reversed; the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad. Section 109(a) says nothing about geography. A geographical interpretation of the first-sale doctrine could re¬quire libraries to obtain permission before circulating the many books in their collections that were printed overseas; potential practical problems are too serious, extensive, and likely to come about to be dismissed as insignificant—particularly in light of the ever-growing importance of foreign trade to America. View "Kirtsaeng v. John Wiley & Sons, Inc." on Justia Law