Show Me the Money: Evaluating Personal Jurisdiction over Foreign Nonparty Banks in Light of the

26 Pages·2017·0.37 MB·English

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Show Me the Money: Evaluating
Personal Jurisdiction over Foreign
Nonparty Banks in Light
of the Gucci Case
Xin Xu†
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 745 R
I. From International Shoe to Daimler: Modern U.S.
Jurisprudence of Personal Jurisdiction . . . . . . . . . . . . . . . . . . . . 748 R
A. Minimum Contact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 748 R
B. Reasonableness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751 R
II. Revised Personal Jurisdiction over Foreign Nonparties . . . . 753 R
A. Minimum Contacts for Foreign Nonparty . . . . . . . . . . . . . . 755 R
B. Reasonableness for Foreign Nonparty . . . . . . . . . . . . . . . . . . 756 R
III. Gucci on Appeal and Remand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 R
A. Background of Gucci cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759 R
B. Legal Analysis of Gucci Cases . . . . . . . . . . . . . . . . . . . . . . . . . 761 R
1. Gucci I: It is All About Comity . . . . . . . . . . . . . . . . . . . 761 R
2. Gucci II: Think Twice . . . . . . . . . . . . . . . . . . . . . . . . . . . 763 R
3. Gucci III: Nothing but Specific . . . . . . . . . . . . . . . . . . . . 763 R
IV. Would the Result Be Different?— Applying Proposed
Scheme to Gucci . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764 R
A. Minimum Contact Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764 R
B. Reasonableness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766 R
V. The Butterfly Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767 R
A. Potential Retaliatory Actions from Other Nations . . . . . . . 767 R
B. Deterrence to Cross-Border Transactions . . . . . . . . . . . . . . . 768 R
C. Potential Frustrations of the United States’ Efforts to
Complete Treaties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769 R
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770 R
Introduction
Three recent cases, all decided between June and September 2015,
show that luxury brand owners have developed a new strategy for limiting
† B.A., University of Rochester, 2014; J.D. Candidate, Cornell Law School, 2017;
Managing Editor, Cornell International Law Journal, 2016– 2017. I thank Professor Kevin
M. Clermont and my fellow classmate, Xunming Cui, for their opinions and guidance. I
also thank members of the Cornell International Law Journal for their invaluable
contributions during the editing process. Lastly, I would like to express gratitude to my
family and friends for their support and encouragement throughout law school.
49 CORNELL INT’L L.J. 745 (2016)
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counterfeits: they bring lawsuits against individuals responsible for manu-
1
facturing and selling counterfeit goods. The defendants in all three cases
sold counterfeit versions of the plaintiffs’ products on the Internet, includ-
ing “Gucci” wallets, “Bottega Veneta” handbags, and other luxury brands’
2
jewelry, wallets, and handbags. These cases discuss the issue of whether
nonparty foreign banks could be compelled, under U.S. federal civil proce-
dure rules, to produce bank account information of individuals accused to
3
have engaged in counterfeit activities. Although the three cases share
almost identical facts, in 2011, three Southern District of New York judges
4
released differing opinions on this issue.
5
In Tiffany (NJ) LLC v. Qi Andrew, the court held that before asking the
court to issue a federal subpoena under Federal Rule of Civil Procedure,
Rule 45 (“FRCP 45”), plaintiffs should first request information located in
6
China through the Hague Convention. The court noted that plaintiffs may
renew their applications to enforce a federal subpoena if such a process
7
proved futile.
8
On the other hand, in Gucci America, Inc. v. Weixing Li (“Gucci I”),
the court ordered the nonparty, Bank of China (“BOC”), to produce docu-
ments located in China pursuant to FRCP 45, reasoning that a Hague Con-
vention request through the Chinese government would not be a “viable
9
alternative.”
In another similar case initiated by Tiffany, Tiffany (NJ) LLC v.
10
Forbse, the court diverged from two previous cases and ruled that the
BOC would be required to produce documents through the preliminary
injunction order’s discovery provision, while the two other Chinese banks
11
could produce documents through a Hague Convention request.
1. See Minning Yu, Note, Benefit of the Doubt: Obstacles to Discovery in Claims
Against Chinese Counterfeiters, 81 FORDHAM L. REV. 2987, 2996– 97 (2013).
2. Gucci Am., Inc. v. Bank of China (Gucci II), 768 F.3d 122, 125 (2d Cir. 2014).
3. Megan C. Chang & Terry E. Chang, Brand Name Replicas and Bank Secrecy:
Exploring Attitudes and Anxieties Towards Chinese Banks in the Tiffany and Gucci Cases, 7
BROOK. J. CORP. FIN. & COM. L. 425, 425 (2012).
4. Id.
5. Tiffany (NJ) LLC v. Qi Andrew, 276 F.R.D. 143, 160– 61 (S.D.N.Y. 2011).
6. FED. R. CIV. P. 45; Hague Convention on the Taking of Evidence Abroad in Civil
and Commercial Matters, Mar. 18, 1970, 23 U.S.T. 2555, 847 U.N.T.S. 231 [hereinafter
Hague Convention].
7. Qi Andrew, 276 F.R.D. at 160– 61. The Hague Convention on the Service Abroad
of Judicial and Extrajudicial Documents in Civil or Commercial Matters, to which the
U.S. is also a party, was signed by the People’s Republic of China in 1991 and ratified in
1992. See Status Table, 14: Convention of 15 November 1965 on the Service Abroad of
Judicial and Extrajudicial Documents in Civil or Commercial Matters, HAGUE CONF. ON
PRIVATE INT’L L. (Oct.13, 2015), http://www.hcch.net/index_en.php?act=conventions.sta
tus&cid=17.
8. Gucci Am., Inc. v. Weixing Li (Gucci I), No. 10 Civ. 4974 (RJS), 2011 U.S. Dist.
LEXIS 97814 (S.D.N.Y. Aug. 23, 2011).
9. Id. at *27, *38.
10. Tiffany (NJ) LLC v. Forbse, No. 11 Civ. 4976 (NRB), 2012 U.S. Dist. LEXIS
72148 (S.D.N.Y. May 23, 2012).
11. Id. at *39.
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12
Nonparty BOC appealed both decisions in Gucci I and Forbse. On
appeal, the Second Circuit Court of Appeals in Gucci America, Inc. v. Bank
13
of China (“Gucci II”) remanded both cases. The court reasoned that
because the decisions in Gucci I, Forbse, and Qi Andrew were decided based
14
on a presumption that was later overruled in Daimler AG v. Bauman, the
district court should reconsider whether it could exercise specific personal
jurisdiction over nonparty foreign banks based on the activities of the
15
banks’ in-state branches.
On remand, the district court in Gucci America, Inc. v. Weixing Li
16
(“Gucci III”) held that because New York’s long-arm statute provides a
statutory basis for exercising personal jurisdiction and the exercise of such
specific personal jurisdiction comports with constitutional due process
and principles of comity, the court could exercise specific personal juris-
17
diction over BOC. BOC was then compelled to produce the requested
documents pursuant to FRCP 45, including those located at the BOC’s
18
headquarters in China.
Gucci III exemplifies one way district courts approach personal juris-
19
diction issues over a nonparty foreign bank in the post-Daimler era.
Given the case implications and the party involved, the decision will
expectedly attract media attention and inspire discussion among practi-
20
tioners. The Gucci case highlights the uneasy relationship between non-
party discovery and personal jurisdiction. Although the Supreme Court
has yet to address whether U.S. courts have specific jurisdiction over non-
12. See Gucci Am., Inc. v. Bank of China (Gucci II), 768 F.3d 122, 125 (2d Cir.
2014).
13. Tiffany (NJ) LLC v. China Merchants Bank, 589 Fed. Appx. 550, 551 (2d Cir.
2014); Gucci II, 768 F.3d at 145.
14. Daimler AG v. Bauman, 134 S. Ct. 746, 759– 60 (2014) (holding that a foreign
corporation may not be subjected to a court’s general jurisdiction solely based on the
contacts of its in-state subsidiary).
15. Gucci II, 768 F.3d at 145.
16. Gucci Am., Inc. v. Weixing Li (Gucci III), No. 10 Civ. 4974 (RJS), 135 F. Supp. 3d
87 (S.D.N.Y. Sept. 29, 2015).
17. Id. at 96, 101, 104.
18. Id. at 104.
19. On remand, plaintiff Tiffany in both cases moved to default judgment, which left
the issue regarding specific personal jurisdiction over nonparty banks premature. See
Tiffany (NJ) LLC v. Forbse, No. 11 Civ. 4976 (NRB), 2015 U.S. Dist. LEXIS 129647, at
*1– 11 (S.D.N.Y. Sept. 22, 2015) (granting plaintiff’s motion of default judgment without
discussing issues of specific personal jurisdiction over the nonparty banks); Tiffany (NJ)
LLC v. Qi Andrew, No. 10 Civ. 9471 (KPF) (HBP), 2015 U.S. Dist. LEXIS 77391, at *37
(S.D.N.Y. June 15, 2015) (declining to address the issues raised by the banks concerning
personal jurisdiction and comity).
20. For examples of media coverage and law firm publications, see Erika Kinetz,
Bank of China Ordered to Release Counterfeiter’s Records, ASSOCIATED PRESS (Oct. 7, 2015,
12:16 AM), http://bigstory.ap.org/article/008d86537c0b4d40b8d2d9a95c34c861/
bank-china-ordered-release-counterfeiters-records; Owen Pell et al., The Second Circuit
Limits the Power of Courts to Enforce Asset Restraints and Discovery Orders Against Foreign
Banks, WHITE & CASE, http://www.whitecase.com/publications/alert/second-circuit-
limits-power-courts-enforce-asset-restraints-and-discovery-orders (last visited Oct. 15,
2015).
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21
parties, lower federal courts have tackled the issue by applying the same
test they use to determine jurisdiction over civil defendants, whether
22
domestic or foreign. As the Second Circuit has recognized, there is no
case on point regarding whether the exercise of personal jurisdiction is
appropriate in the context of a foreign nonparty with only limited contacts
23
in the forum. With the growing volume and complexity of international
24
litigation in American courts, it would be important to assess such a test
and provide clear and consistent guidance to future nonparties, because
parties increasingly request documents from (distant) nonparties, such as
Chinese banks.
This Note assesses the specific personal jurisdiction test for foreign
nonparties applied in Gucci III. It argues that nonparties do not have a
stake nor an interest in the conflict and that the exercise of specific per-
sonal jurisdiction has an extraterritorial effect affecting the sovereignty of
other nations when weighed against the “traditional notion of fair play and
25
substantial justice” due process demands. Part I of this Note recounts
the recent development of Supreme Court cases regarding personal juris-
diction over parties. Part II briefly discusses how lower courts treat
domestic nonparties for jurisdictional purposes; it then proposes a revised
personal-jurisdiction analysis designed for foreign nonparties. Part III dis-
cusses the facts and courts’ analyses of the Gucci II and Gucci III cases.
Part IV discusses the problems with the current analysis as applied to BOC
as a foreign nonparty in the Gucci III case and how courts should rule
under the proposed revised scheme. Part V discusses the potential conse-
quences of upholding specific personal jurisdiction over foreign nonpar-
ties. The Note concludes that due process imposes limitations on personal
jurisdiction over foreign nonparties, and that minimum contacts analysis
should apply to foreign nonparties. The Note proposes that when assess-
ing whether the court should exercise specific personal jurisdiction over a
foreign nonparty, however, the court should differentiate foreign nonpar-
ties from defendants on both the minimum contacts framework and rea-
sonableness prong by assigning more weight to international rapport and
the fact that nonparties have no stake or interest in the conflict.
I. From International Shoe to Daimler: Modern U.S. Jurisprudence of
Personal Jurisdiction
A. Minimum Contact
26
In Pennoyer v. Neff, the Supreme Court held that a tribunal’s juris-
diction over persons reaches no farther than the geographic bounds of the
21. Gucci Am., Inc. v. Bank of China (Gucci II), 768 F.3d 122, 136 (2d Cir. 2014).
22. Id. at 136– 37.
23. Id. at 137– 38.
24. See, e.g., John H. Robinson, The Extraterritorial Application of American Law:
Preliminary Reflections, 27 J.C. & U.L. 187, 203 (2000).
25. International Shoe v. Washington, 326 U.S. 310, 316 (1945).
26. Pennoyer v. Neff, 95 U.S. 714 (1878).
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forum. With time, however, that rigid territorial focus yielded to a less
strict approach, spurred by “changes in the technology of transportation
and communication, and the tremendous growth of interstate business
28
activity.”
The Supreme Court introduced the touchstone modern due process
29
principle in International Shoe Co. v. Washington and held that before a
court may exercise jurisdiction over a person or an organization, that per-
son or entity must have sufficient minimum contacts with the forum “such
that the maintenance of the suit does not offend ‘traditional notions of fair
30
play and substantial justice.’” Following International Shoe, the central
concern of personal jurisdiction inquiries has focused on “the relationship
among the defendant, the forum, and the litigation, rather than the mutu-
ally exclusive sovereignty of the state on which the rules of Pennoyer
31
rest.”
Professors Arthur von Mehren and Donald Trautman first proposed
the terms “general jurisdiction” and “specific jurisdiction” to categorize
32
courts’ treatment of personal jurisdiction over out-of-state defendants.
The Supreme Court adopted their formulations nearly forty years after
33
International Shoe in Helicopteros Nacionales de Colombia, S.A. v. Hall, and
34
for the first time, differentiated between general and specific jurisdiction.
In Helicopteros, the Court concluded that the forum state has “specific
jurisdiction” over a defendant in a suit arising out of or related to the defen-
dant’s contacts with the forum, and the forum state has “general jurisdic-
tion” over a defendant in a suit not arising out of or related to the
35
defendant’s contacts with the forum.
In a line of cases addressing specific jurisdiction, the Supreme Court
distilled the minimum contacts inquiry to two issues: (1) the “purposeful
availment” prong, whereby the court determines whether the defendant
36
purposefully directed his activities in the forum; and (2) the “related-
27. Id. at 720; see also Shaffer v. Heitner, 433 U.S. 186, 197 (1977) (holding that
under Pennoyer, “any attempt directly to assert extraterritorial jurisdiction over persons
or property would offend sister states and exceed the inherent limits of the state’s
power”).
28. Burnham v. Superior Court of California, 495 U.S. 604, 617 (1990).
29. See International Shoe, 326 U.S. at 316.
30. Id.
31. Shaffer, 433 U.S. at 204.
32. See Arthur T. von Mehren & Donald T. Trautman, Jurisdiction to Adjudicate: A
Suggested Analysis, 79 HARV. L. REV. 1121, 1136 (1966). This article is the most cited
source in Justice Ginsburg’s majority opinions addressing the personal jurisdiction
issue. Harvard Law Review, Daimler AG v. Bauman, 128 HARV. L. REV. 311, 318 (2014)
(noting that von Mehren and Trautman’s thinking influenced Justice Ginsburg’s view of
personal jurisdiction).
33. See Helicopteros Nacionales de Colombia, S. A. v. Hall, 466 U.S. 408, 414
(1984).
34. Id. at 414 nn.8– 9.
35. Id.
36. See Hanson v. Denckla, 357 U.S. 235, 253 (1958). The Supreme Court has sub-
sequently enforced this requirement of purposeful availment in several cases. See World-
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (holding that when a
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ness” prong, whereby the court determines whether the litigation results
from alleged injuries that arise out of or are related to those activities in the
37
forum.
To address whether exercising general jurisdiction over a non-resident
defendant is proper, the Supreme Court in Goodyear Dunlop Tires Opera-
38
tions, S.A. v. Brown refined the International Shoe standard to require that
the contacts be “so continuous and systematic as to render them essentially
39
at home in the forum state.” The Goodyear Court explained that general
jurisdiction exists for an individual when the forum state is the individual’s
domicile; the Court also explained that general jurisdiction exists over a
corporation when the forum state is a place that the corporation is fairly
40
regarded as at home. Importantly, Goodyear emphasized that specific
jurisdiction has become the centerpiece of modern jurisdiction theory,
41
while general jurisdiction has played a reduced role.
Although Goodyear recognized that general jurisdiction exists at the
corporation’s place of incorporation and principal place of business, the
42
opinion did not restrict general jurisdiction to those “paradigm” places.
The Supreme Court clarified Goodyear in Daimler AG v. Bauman by hold-
ing that Daimler AG (“Daimler”), a German public stock company, could
not be subjected to California’s general jurisdiction in a suit filed by Argen-
43
tine plaintiffs over events occurring entirely outside the United States.
The Court reasoned that Daimler was not “at home” in California, even
assuming that Daimler’s U.S. subsidiary was “at home” in California and
that the U.S. subsidiary’s contact could be imputed to it on an agency the-
44
ory. In sum, Daimler closes the door on expanding general personal
jurisdiction for corporations by reaffirming the restrictive test articulated
in Goodyear that foreign corporations are not subject to general personal
jurisdiction in a state unless they are “essentially at home” in that state—
general jurisdiction exists for a corporation when the forum state is its
45
principal place of business or the place of incorporation. Daimler fur-
corporation purposefully avails itself of the privilege of conducting activities within the
forum state, it has clear notice that it is subject to suit in that state); Rush v. Savchuk,
444 U.S. 320, 329 (1980) (noting that the defendant had not engaged in any purposeful
availment related to the forum that would make the exercise of jurisdiction reasonable);
Kulko v. California Superior Court, 436 U.S. 84, 94 (1978) (noting that it is essential
that defendants purposefully avail themselves of the privileges of conducting activities
within the forum state to justify bringing them to suit there).
37. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). International
Shoe created the concept of relatedness, requiring the defendant to be connected to the
litigation. See International Shoe v. Washington, 326 U.S. 310, 316– 18 (1945).
38. Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011).
39. Id. at 2851.
40. Id. at 2853– 54.
41. Id. at 2854; see also Mary Twitchell, The Myth of General Jurisdiction, 101 HARV.
L. REV. 610, 628 (1988).
42. See Goodyear, 131 S. Ct. at 2854.
43. Daimler AG v. Bauman, 134 S. Ct. 746, 753– 63 (2014).
44. See id. at 759– 61.
45. See id. at 754.
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46
ther clarified that where the alter ego test is not satisfied, a corporate
subsidiary’s sizeable sales in the forum state or the importance of its ser-
vices to its parent are not sufficient to support general jurisdiction over a
47
foreign parent corporation. Daimler reiterated the Supreme Court’s posi-
tion on personal jurisdiction in Goodyear by concluding that general juris-
48
diction has played a reduced role in modern jurisdiction theory.
B. Reasonableness
Having established sufficient minimum contacts with the forum state,
a court then considers several additional factors to assess the reasonable-
49
ness of exercising specific jurisdiction over the defendant. In World-Wide
Volkswagen, the Supreme Court listed several factors while considering the
reasonableness of jurisdiction: (1) “the burden on the defendant,” (2) “the
forum state’s interest in adjudicating the dispute,” (3) “the plaintiff’s inter-
est in obtaining convenient and effective relief,” (4) “the interstate judicial
system’s interest in obtaining the most efficient resolution of controver-
sies,” and (5) the “shared interest of the several states in furthering funda-
50
mental substantive social policies.” However, in contrast to the burden
of establishing sufficient minimum contacts with the forum state, which is
placed on the plaintiff, the burden to persuade the court that the exercise of
51
specific jurisdiction is unreasonable belongs to the defendant. There-
fore, when a plaintiff has shown that a defendant has purposefully directed
his activities in a forum state, the defendant must present a compelling case
that the presence of some other considerations would render jurisdiction
52
unreasonable. On the other hand, if a plaintiff presents a lesser showing
of minimum contacts than would otherwise be required, the considera-
tions suggested in World-Wide Volkswagen would sometimes serve to estab-
53
lish the reasonableness of jurisdiction. Justice Brennan quietly reiterated
this in the Burger King opinion to undermine the minimum contacts test so
that a defendant’s insufficient minimum contacts would not be fatal, per-
54
haps even doing so unethically. Although subsequent cases have ignored
this part of Burger King, the Supreme Court has not overruled that holding,
46. The two prongs of the “alter ego” test are as follows: “(1) that there is such unity
of interest and ownership that the separate personalities of the two entities no longer
exist and (2) that failure to disregard their separate identities would result in fraud or
injustice. The first prong of this test has alternately been stated as requiring a showing
that the parent controls the subsidiary to such a degree as to render the latter the mere
instrumentality of the former.” Bauman v. DaimlerChrysler Corp., 644 F.3d 909, 920
(9th Cir. 2011) (citing Doe v. Unocal Corp., 248 F.3d 915, 926 (9th Cir. 2001)).
47. See Daimler, 134 S. Ct. at 759– 61.
48. See Goodyear, 131 S. Ct. at 2854.
49. Daimler, 134 S. Ct. at 762 n.20. The reasonableness test will only be invoked in
a case where the court is exercising specific jurisdiction. When a corporation is deter-
mined to be genuinely “at home” in the forum state, “any second-step inquiry [of reason-
ableness] would be superfluous.” See id.
50. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980).
51. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
52. Id.
53. Id.
54. See id.
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and it is therefore still good law. Notably, in situations where defendants
purposefully engage in forum activities, defendants may still defeat specific
55
jurisdiction if the exercise of jurisdiction would be unreasonable.
The Supreme Court in Asahi Metal Industry Co. v. Superior Court of
California specifically addressed the reasonableness prong in evaluating
56
the exercise of personal jurisdiction over a foreign country defendant.
Although the Asahi court did not agree on the minimum contact analysis,
eight justices agreed that the assertion of personal jurisdiction over a Japa-
nese defendant was unreasonable and unfair, so as to violate the Due Pro-
57
cess Clause of the Fourteenth Amendment.
In Asahi, Gary Zurcher was severely injured and his wife was killed
after the motorcycle that they were riding collided with a tractor on a Cali-
58
fornia highway. Zurcher filed a products liability suit in California state
59
court, alleging that the motorcycle tire, tube, and sealant were defective.
Zucher named Cheng Shin Rubber Industrial, Co., Ltd., the Taiwanese
60
manufacturer of the tube, as a defendant. Cheng Shin then filed a third-
party cross-complaint against Asahi Metal Industry Co., Ltd., the Japanese
61
corporation that manufactured the valve assembly of the tube. Asahi
moved to quash the service of this third-party complaint, arguing that the
62
California court could not assert personal jurisdiction over it. In sup-
port of this motion, Asahi’s president submitted an affidavit indicating that
Asahi never contemplated that it could be subject to suit in California
63
through Asahi’s sales of tire valves to Cheng Shin in Taiwan. The Califor-
nia court denied the motion and the Supreme Court of the United States
64
granted certiorari.
When addressing the reasonableness prong, the Asahi court first con-
sidered the “severe” burden California litigation would impose upon Asahi
and noted that Asahi not only had to travel the distance between Japan and
California, but also submit the dispute with Cheng Shin to a foreign
65
nation’s judicial system. The Court noted that “[t]he unique burdens
placed upon one who must defend oneself in a foreign legal system should
55. Burger King, 471 U.S. at 477– 78. Assertion of specific jurisdiction, which is
determined to be unreasonable, would contradict the traditional notion of “fair play and
substantial justice.” Id. at 476 (quoting International Shoe Co. v. Washington, 326 U.S.
310, 320 (1945)).
56. See Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 113– 15 (1987).
57. Id. at 116. Justice Scalia concurred with this portion of Justice O’Connor’s opin-
ion, finding that there were constitutionally insufficient minimum contacts. Id. at
121– 22.
58. Id. at 105.
59. Id. at 106.
60. Id.
61. Id.
62. Id.
63. Id. at 107.
64. Id. The case went to the Supreme Court of the United States after the Supreme
Court of California reversed and discharged the writ issued by the Court of Appeal of
the State of California, which commended the Superior Court to quash service of sum-
mons. Id. at 107– 08.
65. Id. at 114.
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have significant weight in assessing the reasonableness of stretching the
66
long arm of personal jurisdiction over national borders.”
The Court then assessed the interests of both the plaintiff and the
forum and held that such interests played a slight role in the jurisdictional
67
question over Asahi. The court emphasized that Cheng Shin, as the
third-party plaintiff, had not demonstrated that it would be more conve-
nient to litigate its claim against Asahi in California rather than in Taiwan
68
or Japan.
Finally, the Supreme Court was extremely concerned about “the inter-
ests of the ‘several states,’ . . . in the efficient judicial resolution of the
69
dispute and the advancement of substantive police.” Given the interna-
tional components of the case, the Court explicitly held that in the interna-
tional context, the procedural and substantive interests of other nations in
a court’s assertion of jurisdiction over an alien defendant as well as the
Federal Government’s interest in its foreign relations policies, deserved a
70
careful inquiry into the reasonableness of the assertion of jurisdiction.
Having conducted thorough analysis of the reasonableness prong in evalu-
ating the assertion of personal jurisdiction over Asahi, the Court had no
difficulty concluding that the exercise of personal jurisdiction was
71
unreasonable.
II. Revised Personal Jurisdiction over Foreign Nonparties
Although the above-discussed framework is well suited for determin-
ing whether a court could assert jurisdiction over a foreign defendant, the
72
Supreme Court has not addressed specific jurisdiction over nonparties.
73
The case that comes closest is Philips Petroleum Co. v. Shutts, in which the
Court considered whether due process protection could be applied to a
74
non-defendant. In that case, the defendant argued that the Kansas court
lacked personal jurisdiction over absent non-named class-action plaintiffs,
who automatically joined the case through a class “opt out” notice and
75
lacked any pre-litigation contacts with the forum state. The Supreme
Court upheld the Kansas trial court’s assertion of personal jurisdiction
over absent non-named class-action plaintiffs, reasoning that although the
66. Id.
67. Id.
68. Id.
69. Id. at 115.
70. Id.
71. Id. at 116.
72. Gucci Am., Inc. v. Bank of China (Gucci II), 768 F.3d 122, 136 (2d Cir. 2014).
The preferred route for roping foreign nonparties into general jurisdiction is specific
jurisdiction, mainly because for a corporation, the paradigm forum for the exercise of
general jurisdiction is one in which the corporation is fairly regarded as at home. As a
result, there would be many less-qualified forums to subject foreign nonparties to gen-
eral jurisdiction as compared to the number of forums to subject foreign nonparties to
specific jurisdiction.
73. Philips Petroleum Co. v. Shutts, 472 U.S. 797 (1985).
74. See generally id.
75. Id. at 802.
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minimum contacts analysis was originally designed to protect defendants
76
from litigation in a distant forum, “[t]he Fourteenth Amendment does
77
protect ‘persons,’ not ‘defendants.’” Specifically, the Court reasoned that
the Due Process Clause does not and need not afford an absent class plain-
tiff as much protection from state-court jurisdiction as it does an absent
78
defendant in non-class suit. Therefore, a state places fewer burdens upon
79
the former than it does upon the latter. Only a minimum procedural due
process protection, rather than minimum contacts, is required for a forum
80
state to exercise jurisdiction over the claim of an absent class plaintiff.
In assessing the question whether federal courts may properly exer-
cise jurisdiction over a domestic nonparty, the courts have adapted the sim-
81
ilar minimum contacts test used for defendants. In the international
context, the Ninth Circuit in Reebok Int’l Ltd. v. McLaughlin concluded that
district courts lack the specific personal jurisdiction to order foreign non-
party banks without contacts in the United States to comply with an asset
82
freeze injunction. McLaughlin, however, does not provide much gui-
dance on how to conduct the minimum contacts analysis in the context of
a foreign nonparty with only limited contacts in the forum state. First, the
district court found that the foreign nonparty had a “super contact” with
the forum state, because defendant’s act of assisting in an injunction viola-
tion through aiding and abetting amounted to a contact, albeit significantly
different from the traditional meaning of “contact” under the minimum
83
contacts framework. Second, the Ninth Circuit held that the district
court lacked specific personal jurisdiction mainly because of international
comity considerations— the court emphasized that the simple fact that “the
mandate of an injunction issued by a federal district court runs nation-
wide” did not apply to a situation where “[a] national of a foreign coun-
try . . . followed the law . . . of its own country . . . when it did acts within
84
that country.” No other case has applied this analysis in the context of a
85
foreign nonparty with only limited contacts in the forum state. Law
review articles have addressed this issue narrowly, determining the applica-
bility of specific jurisdiction over a nonparty when assessing the nonparty
76. Id. at 807.
77. Id. at 811.
78. Id.
79. Id.
80. Id.
81. Gucci Am., Inc. v. Bank of China (Gucci II), 768 F.3d 122, 137 (2d Cir. 2014).
These courts first evaluate the relevance between the nonparty’s contacts with the forum
state and the order at issue, and then decide whether asserting jurisdiction for the pur-
pose of the order would be consistent with fair play and substantial justice. See, e.g.,
Application to Enforce Administrative Subpoenas Duces Tecum of the S.E.C. v. Knowles,
87 F.3d 413, 418 (10th Cir. 1996) (upholding specific jurisdiction where the “subpoena
enforcement action” at issue “ar[ose] out of [the nonparty’s] contacts” with the forum).
82. See Reebok Int’l Ltd. v. McLaughlin, 49 F.3d 1387, 1391– 95 (9th Cir. 1995).
83. See id. at 1391.
84. See id. at 1391, 1394.
85. Gucci II, 768 F.3d at 137.