September 13 - 24, 1999 Developments in international law, prepared by the Attorney-Editors of International Legal Materials The American Society of International Law
U.S. Court of Appeals for the First
Circuit: United States v. Swiss American Bank, Ltd.,
No. 99-1012 (September 8, 1999)
In a case of first impression, the U.S. First Circuit
considered the circumstances under which jurisdiction
may be established over foreign corporations pursuant
to Fed. R. Civ. P. 4(k)(2).
In 1993 the U.S. government entered into a plea agreement
with Fitzgerald, a money launderer whose fruits of criminal
activity - approximately $7,000,000 - had been ultimately
deposited with Swiss American, an institution organized
under the law of Antigua and Barbuda ("Antigua") and
headquartered there. The U.S. District Court for
the District of Massachusetts tried to recover the money
accumulated by the convicted felon as part of the plea
bargain. Despite a U.S. judicial order of forfeiture,
Swiss American distributed some $5,000,000 from the
subject accounts to the Antiguan authorities and retained
the rest. The Antiguan authorities also refused
to comply with the U.S. order. The U.S. government
responded by filing the instant action, alleging conversion,
unjust enrichment, and breach of contract.
The district court dismissed for want of jurisdiction,
and additionally denied the government's request for
jurisdictional discovery. The U.S. government
appealed both rulings, claiming, in particular, that
the district court possessed in personam jurisdiction
under the Massachusetts long-arm statute or, in the
alternative, under Fed. R. Civ. P. 4(k)(2).
The First Circuit first established the inapplicability
of the Massachusetts long-arm statute on the grounds
that no showing had been made that the U.S. had suffered
tortious injuries "in Massachusetts."
The court then turned to the alleged alternative basis
for personal jurisdiction, i.e. Rule 4(k)(2).
For Rule 4(k)(2) to apply a threefold test must be met:
1) the plaintiff's claim must be one arising under federal
law; 2) the putative defendant must be beyond the jurisdictional
reach of any state court of general jurisdiction; and
3) the federal court's exercise of personal jurisdiction
over the defendant must not offend the Constitution
or other federal law.
In dealing with requirement two, the court focused
primarily on the issue of first impression concerning
the order and allocation of proof. "In a world
of exponential growth in international transactions,"
the court said, "the practical importance of this issue
looms large." In order to strike an "equitable
balance" between the positions of plaintiff and defendant
the court decided that Rule 4(k)(2) is "fertile territory"
for a special burden-shifting framework. The court
held that a plaintiff who seeks to invoke Rule 4(k)(2)
must make a prima facie case for applicability
of the rule. In particular, it must be shown:
1) that the claim asserted arises under federal law;
2) that personal jurisdiction is not available under
any situation-specific federal statute; and 3) that
the putative defendant's contacts with the nation as
a whole suffices to satisfy the applicable constitutional
requirements. Additionally, plaintiff must prove
that, based on the information readily available, the
defendant is not subject to suit in the courts of general
jurisdiction of any state.
If the plaintiff establishes a prima facie case,
the burden shifts to the defendant to show either that
there exists at least one state in which it would be
subject to suit, or that its contacts with the U.S.
are constitutionally insufficient. Should the
defendant fail to satisfy its burden of production,
the trier may infer lack of personal jurisdiction in
any state court of general jurisdiction. Given
this holding, the court concluded that the district
court's order of dismissal "cannot stand unless dismissal
is justified on some ground apart from negation."
The First Circuit then turned to requirement one, resolving
this prong of the test by applying a "binary" mode of
analysis based on two questions: 1) a "source question",
meaning whether the source of controlling law should
be federal; and 2) a "substance question", namely whether
the court should, in defining the substance of the rule
to be applied in the particular situation, adopt state
law as a proxy for an independent federal common law
rule, or alternatively fashion a uniform federal rule.
As to the source question, the court held that, "when
the [U.S.] sues to assert its rights against an alleged
converter to recoup assets (or obtain the value of assets)
forfeited to it, the rights that it has acquired find
their roots in, and must be adjudicated in accordance
with, a federal source." Having resolved the source
question in favor of federal law, the court elected
not to pursue the inquiry further.
Finally, the First Circuit vacated the district court's
denial of the U.S. government's motion for jurisdictional
discovery. According to the court, a timely and
properly supported request for jurisdictional discovery
to permit the plaintiff to meet the requirement "merits
solicitous attention." GI http://laws.findlaw.com/1st/991012.html
U.S. District Court for the District
of New Jersey: Burger-Fischer v. Degussa AG, No. 98-3958
(September 1999)
The plaintiffs are classes of U.S. citizens who had
emigrated from Europe and who had been subjected to
Nazi persecution and slave labor for two German companies
during WWII. Relying on customary international
law and German civil law, the plaintiffs sought: 1)
damages or restitution for gold and other precious metals
taken from their possession and further refined by Degussa
for the Nazi regime; and 2) damages arising from the
Zyklon B gas that Degussa had provided for use in the
gas chambers in German concentration camps. The
plaintiffs also sought compensation for the forced labor
they performed for Degussa and Siemens, as well as damages
for the abominable conditions in which they were compelled
to live and work.
The court accepted the factual allegations made by
the plaintiffs because they were consistent with the
well-known history of the Nazi era and records of the
Nuremberg trials. The court rejected the claims,
however, in finding them to be political questions that
should be dealt with by the executive branch.
The plaintiffs argued that their individual claims
against the German companies could not be subsumed under
the series of treaties and agreements concerning reparations
after WWII. They also argued that the London Debt
Agreement of 1953 provided that claims of private persons
against German companies could be brought after reparation
issues were finally resolved. In addition, the
plaintiff's expert, Dr. Wolf, asserted that WWII forced
labor claims are different from the ones that arose
from WWI because they emerged from injuries that had
been inflicted solely for racial and ideological reasons
"far exceeding the scope of atrocities usually occurring
during the war," and therefore should not be included
in reparation claims.
The defendants for their part moved to dismiss the
claims on a number of grounds, arguing that the court
lacked personal jurisdiction over the defendants, as
well as subject matter jurisdiction to adjudicate the
claims because they were only appropriate for state-to-state
resolution.
The court considered at length the issue of reparations
under international law, and noted the compensation
efforts made by Germany through legislative acts and
bilateral agreements pursuant to its obligations under
the 1954 Transition Agreement. The court ultimately
held that whether the reparation agreements made adequate
provisions for the victims of Nazi oppression, and whether
Germany has implemented the reparation agreements, were
all "political questions which a court must decline
to determine."
In addition to the lack of judicially determinative
standards, the court emphasized the potential damage
to foreign relations if a court could post hac
undo a "solemn pact" negotiated by the president and
ratified by the Senate. BM http://www.lawlibrary.rutgers.edu/fed/html/ca98-3958-1.html
U.N. Security Council Resolution
1264 (on East Timor)
On September 15, 1999 the Security Council, "appalled"
by the worsening humanitarian situation in East Timor
and acting under Chapter VII of the Charter of the United
Nations, condemned all acts of violence in the region,
called for the immediate end of violence, and demanded
that those responsible for such acts be brought to justice.
Para. 1.
The Security Council authorized the establishment of
a multinational force under a unified command structure.
Para. 3. The multilateral force is to restore
peace and security, protect and support the United Nations
Mission in East Timor (UNAMET) and, within force capabilities,
facilitate humanitarian assistance operations. Id.
The States participating in the multinational force
are authorized to take all necessary measures to fulfill
this mandate. Id. The Security Council
agreed that the multinational force is to be collectively
deployed in East Timor until replaced by a United Nations
peacekeeping operation as quickly as possible. Para.
10. GI http://www.un.org/peace/etimor/9926481E.htm
International Law Commission: Draft
articles on Nationality of natural persons in relation
to the succession of States, A/CN.4/L.573 (May
27, 1999)
The International Law Commission submitted to the U.N.
General Assembly for consideration Draft articles on
Nationality of natural persons in relation to the succession
of States. The preamble establishes that the articles
are in response to the problems of nationality arising
from State succession, and emphasizes that the legitimate
interests of States and individuals in nationality rights,
as guaranteed by the Universal Declaration of Human
Rights of 1948, are governed by internal law within
limits set by international law.
The General Provisions of the Draft Articles declare
that every person has a right to a nationality. Art.
1. "Succession" is defined as the replacement
of one state by another in the responsibility for the
international relations of that territory. Art. 2(a).
"Persons concerned" are defined as every individual
who have the nationality of the predecessor state on
the date of succession. Art. 2(f).
The principles of nationality outlined in the draft
articles cover only successions that have occurred in
conformity with international law. Art. 3. Under
the draft articles, States shall take all appropriate
measures to prevent statelessness of concerned persons
after a succession. Art. 4. Persons concerned are presumed
to have the nationality of the successor state on the
date of succession, Art. 5, and are to be informed of
the effects of a State's legislation on their nationality.
Art. 6.
States are not required to attribute nationality to
persons concerned who have their habitual residence
in another state, and cannot force nationality upon
persons with habitual residences in other states without
their consent unless they would become stateless. Art.
8. A State may, however, make the attribution of nationality
dependent on a person's renunciation of nationality
to another State. Art. 9.
States are to give consideration to the will of persons
concerned by granting a right to opt for nationality
where appropriate, and may make the voluntary acquisition
of the nationality of a successor State a condition
for the loss of its own nationality. Arts. 10.1, 11.
States shall take appropriate actions to maintain family
unity, and shall grant the right of nationality to children
born in the territory. Arts. 12, 13.
Nationality status of habitual residents is not affected
by the succession of States, and where habitual residents
have been forced to leave through recent events the
State will take appropriate measures to allow their
return. Art. 14. States shall not deny nationality rights
by discriminating on any ground. Art. 15. Applications
should be processed without undue delay, and shall be
open to judicial and administrative review. Art. 17.
States are to exchange information and consult with
other States on nationality issues affected by a State
succession, and seek to mitigate the detrimental effects
of such negotiations. Art. 18.
Part II of the Draft Articles address scenarios involving
specific categories of the succession of States, including
the transfer of territory. Art. 20. A successor state
shall attribute its nationality to habitual residents
within the transferred territory, and the predecessor
shall withdraw its nationality only after persons concerned
have been granted the nationality of the successor State.
Art. 20.
When States unify, the successor State shall attribute
its nationality to persons concerned which had the nationality
of the predecessor State. Art. 21. Upon the dissolution
of a State, and the unification of one or more of its
territories into one or more successor States, the successor
state shall attribute its nationality to habitual residents
having an "appropriate legal connection" with a constituency
in the predecessor State. Art. 22. Persons concerned
not otherwise entitled to nationality under Art. 22,
and having their habitual residence in a third State,
but having been born in or "having any other appropriate
connection with that successor State" shall be accorded
the successor State's nationality. Art. 22(b)(ii).
Successor states shall grant the right of option to
persons concerned who are covered by the provisions
of Art. 22 and who are qualified to acquire the nationality
of two or more successor States. Art. 23. Persons concerned
in territories that separate to form successor states
are granted the same rights that Art. 22 provides for
persons concerned in cases of multiple successor States.
Art. 24.
Predecessor States shall withdraw their nationality
from persons concerned that qualify for successor State
nationality, so long as the persons concerned have already
acquired the nationality of the successor State.
Art. 25(1). The predecessor State may not withdraw its
nationality from persons who have: 1) their habitual
residence in its territory; 2) an appropriate legal
connection to a remaining constituent part of the predecessor
State; or 3) their habitual residence in a third State,
and were born in or had their last habitual residence
in a remaining part of the predecessor State's territory
before leaving, or who have any other appropriate legal
connection to the predecessor State. AH
Download in Adobe pdf format http://www.un.org/law/ilc/sessions/51/english/l_573.pdf
Ministers from all member economies in the Asia-Pacific
Economic Cooperation (APEC) group held their Eleventh
Ministerial Meeting in Auckland, New Zealand on September
10, 1999. The meeting was structured to reflect
the three themes of APEC 1999: 1) expanding opportunities
for business around the region; 2) strengthening market
functions; and 3) broadening support for APEC. Para.
2.
Within the theme of expanding opportunities for business
around the region, the Ministers reaffirmed the crucial
role of Individual Action Plans ("IAPs") and directed
that the work program for these mechanisms be conducted
in conjunction with the review of Collective Action
Plans ("CAPs"). Paras. 3-4. They emphasized the
need for member economies to consult closely with business
in developing the work program. Para. 4. Recognition
was given to the important achievements reached in the
context of both the 1999 IAPs and the CAPs. Paras. 6-9.
The Ministers acknowledged the significance of APEC's
trade and investment facilitation work, and wished to
expand its visibility in order to improve business and
community understanding. Paras. 10-12. Support
was given to the proposal of building a regional food
system. Para. 13. The Ministers stressed the importance
of the WTO mission, including the full implementation
of existing WTO agreements by APEC members, and expressed
their goals for the negotiations in the upcoming WTO
meeting in Seattle. Paras. 14-27.
It was noted that strengthening market functions provides
an integrated framework for the coordination of APEC's
efforts in pivotal areas such as trade and investment,
competition and regulatory reform, and capacity building,
with a view towards generating sustained growth in APEC
economies. Para. 30. The Ministers agreed to a
"road map" to guide future work by APEC to strengthen
markets in the region. Para. 31. The importance
of economic and technical cooperation was emphasized.
Paras. 33-39. Ministers stressed the need for
member economies to ensure "a favorable regulatory environment
for e-commerce to flourish." Para. 41. In developing
their regulatory framework, consideration of the UNCITRAL
model law was encouraged. Id. A call for
Y2K cooperation was made, and special attention was
drawn to biotechnology. Paras. 43-44, 45.
The theme of broadening support for APEC was seen as
fundamental to strengthening the effectiveness of APEC's
actions within the region. Para. 46. The Ministers
recognized the importance of addressing the barriers
to women's integration in APEC states. Paras. 47-48.
Moreover, the necessity of enhanced community awareness
of APEC goals -- particularly the benefits of trade
liberalization -- was stressed. Para. 49. The
social impact of APEC's mission was also discussed.
Paras. 50-51. Finally, the Ministers acknowledged
the need to increase the involvement of the business
community in the APEC process. GI http://www.apecsec.org.sg/virtualib/minismtg/mtgmin99.html
The Economic Leaders ("Leaders") of APEC celebrated
ten years of regional cooperation at their 1999 meeting.
Recognizing that "open, transparent and well-governed
markets, both domestic and international, are the essential
foundation of prosperity," the Leaders committed themselves
to strengthening markets by: 1) providing greater transparency
and predictability in corporate and private sector governance;
2) enhancing the role of competition; 3) improving the
quality of regulation and the capacity of regulators
to address the need of growth; 4) reducing compliance
cost; and 5) building a favorable environment for free
and fair competition. The Leaders consider the
attached APEC Principles for Enhanced Competition and
Regulatory Reform "a core part of the framework for
strengthening [the] markets."
The Leaders reaffirmed APEC's leadership role in strengthening
the global economy, and particularly the multilateral
trading system. The Leaders stated their readiness
to give "the strongest possible support" at Seattle
to the launch of a new Round of multilateral negotiations
within the WTO.
The Leaders recognized their responsibilities to ensure
full and successful participation by all segments of
their societies in the modern economy. "Globalization,"
they said, "must become an opportunity for all."
It was noted that since "income and wealth disparities
... can pose a challenge to social stability," developing
economies must be enabled to participate successfully
in the global economy. The Leaders welcomed efforts
by APEC economies and other institutions to address
the social safety net issue. The Leaders emphasized
that the best means of building a prosperous future
together is an "open regional framework, within which
competition and cooperation flourish." GI http://www.apecsec.org.sg/virtualib/econlead/nz.html
The ASIL Wildlife Law Interest
Group will hold its 5th International Wildlife
Law Conference on March 25, 2000 at the American
University Washington College of Law. The theme
of the conference will be "The Convention on International
Trade in Endangered Species: A Quarter Century Report
Card." Speakers are sought to make presentations
on various topics related to CITES. For further
information contact Wil Burns, Co-Chairman, at asilwildlife@pacbell.net
Pakistan has instituted
proceedings on September 21, 1999 against India
at the International Court of Justice arising out
of India's downing of a Pakistani Navy aircraft on August
10, 1999. Pakistan asserts that the actions of
India constitute a breach of the Charter of the United
Nations, a 1961 bilateral agreement on the prevention
of air space violations, and customary international
law obligations not to use force against another State
or violate another State's sovereignty. Download
the Application in Adobe pdf format http://www.icj-cij.org/icjwww/idocket/ipi_application_19990921.pdf
International Law In Brief - Copyright 2000 - The American
Society of International Law Editors: Peter C. Hansen, Esq., David A.
Levy, Esq. Interns: Matthew Casebolt, Adam Hill, Giuliano
Iannaccone, Branislav Maric, Adv., Esteban Valansi, Kaniah
Whitehorn, Laziz Yusupov, Adv.
To comment on this publication, send an e.mail message
to David A. Levy, Interim Editor at david.levy@his.com
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