News

     In what seems like record time, the U.S. Court of Appeals for the Fifth Circuit ordered a Japanese corporate defendant to respond to the petition for rehearing en banc filed by CCL on behalf of U.S. Navy sailors injured or killed when a container ship operated by the defendant struck the U.S.S. Fitzgerald, on which the sailors served. The petition was filed Friday, and the order of a response came only after the weekend passed.

     The Fifth Circuit warns attorneys and parties that rehearing en banc is disfavored because it saps judicial resources and is rarely granted. However, in this case, the panel that decided the issue made plain that rehearing was in order because the judges in the case felt boxed in by in-circuit precedent that only the entire court, hearing a case en banc, could overturn. The precedent, under what is called the "rule of orderliness," required a ruling against the plaintiffs, but the judges indicated their agreement with the plaintiffs' arguments on why personal jurisdiction under Rule 4(k)(2) of the Federal Rules of Civil Procedure should allow the courts to entertain lawsuits against foreign defendants with substantial and continuous contacts with the United States over a matter related to those contacts, rather than require the foreign defendants also be "at home" in the United States.

     CCL filed a petition for rehearing en banc in the federal Fifth Circuit, asking the Court to overturn an in-circuit precedent that erroneously applies a Fourteenth Amendment analysis to a federal case, in which the Fifth Amendment's due-process clause applies.

     In Douglass v. Nippon Yusen Kabushiki Kaisha, two weeks ago, a Fifth Circuit panel affirmed a district court ruling that there was no jurisdiction over the Japanese corporate defendant, but only did so because of the "rule of orderliness," which prohibits one panel of the court from overruling an earlier panel's precedent. The opinion, and a special concurrence by two of the three judges on the panel, made clear that it believed CCL's argument on behalf of the plaintiffs was correct. The plaintiffs are U.S. Navy sailors and their families who sued over deaths and injuries sustained on the U.S.S. Fitzgerald, a U.S. Navy destroyer, when a container ship under the defendant's control crashed into the destroyer's hull.

    In a 2016 case, a panel of the court interpreted due-process requirements to impose a general jurisdiction analysis to Federal Rule of Civil Procedure 4(k)(2), which meant that the Japanese company, despite a century-old presence in the United States, had to be incorporated in this country or have its headquarters here to be susceptible to personal jurisdiction on a federal cause of action brought in federal court. CCL had argued that the 2016 decision was dicta and not precedential and that is was wrong as a matter of law, because, among other things, the due process analysis would render the rule unconstitutional in all conceivable applications. Instead, it argued a national-contacts rule was applicable, as previous Fifth Circuit precedent had held.

    With the filing of the petition asking the entire Fifth Circuit to overrule the wayward 2016 precedent, the court's mandate was stayed. The next step, if the Court decides to consider taking up the matter, is for it to request a response from the defendant.

    CCL's Robert S. Peck wrote the petition and represents the plaintiffs, along with the Koonz McKinney law firm of Washington, DC.

     The Supreme Court rebuffed efforts by Ford Motor Company to further narrow plaintiffs' options on where they can bring a lawsuit for vehicle defects that result in injury or death in an unanimous decision, relying in part on an amicus brief filed by CCL on behalf of the American Association for Justice (AAJ) and Public Justice. 

     In consolidated cases from Montana and Minnesota, Ford argued that it could not be sued in either state in cases where the vehicle at issue was originally purchased in another state. Instead, it said, plaintiffs were limited to the place of purchase, the place where the car was designed, or the state where Ford has its headquarters, because only those places have a causal link to the alleged defect. The Court, however, rejected that argument, holding that "[w]hen a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State's courts may entertain the resulting suit."

    In the AAJ and Public Justice brief, CCL pointed out that Ford encouraged owners of their vehicles to service and maintain the cars with original equipment manufacturer (OEM) parts, whether they bring their cars to dealerships, auto shops, or work on the vehicles themselves. On a Ford owner's website, the company promotes its OEM parts with the slogan, "Keep Your Ford a Ford." Only the CCL-authored brief made this point in the filings before the Supreme Court. Justice Elena Kagan's opinion for the Court adopted the argument, demonstrating that Ford maintained a relationship with the vehicle and with every owner of a Ford through its promotion of those parts and noting the slogan promoted by the company of "Keep Your Ford a Ford." The use of these facts and argument by the Court testifies to the effectiveness of CCL's brief.

     CCL President Robert S. Peck, author of the brief, was quoted by Bloomberg News as saying that the Court's decision was a "step back from the brink" as it arrested a trend of personal jurisdiction decisions dating back to 2011 that increasingly narrowed the eligible jurisdictions for lawsuits against out-of-state companies.

     CCL President Robert S. Peck told a federal appeals court yesterday that personal jurisdiction over a Japanese defendant for a collision between its container ship and a U.S. Navy destroyer comported with due process and the circuit's precedents, requiring that the district court's contrary decision be reversed.

     The lawsuit grows out of a 2017 collision in which the U.S.S. Fitzgerald suffered a significant gash that flooded compartments where the killed and injured sailors were. Personal jurisdiction was premised on a federal rule of civil procedure, Rule 4(k)(2), which applies to lawsuits based on federal law where no state court would have jurisdiction. The district court, sitting in the Eastern District of Louisiana, superimposed a requirement that the foreign defendant also be "at home" in the U.S. Peck asserted that that was error before a panel of the U.S. Court of Appeals for the Fifth Circuit.

      Instead, Peck argued that existing precedent was unimpaired and that it merely required sufficient national contacts. Opposing counsel conceded that, if a national contacts rule applied, his client, NYK Line, did have sufficient national contacts. 

      Peck added that an "at home" overlay would render Rule 4(k)(2) a nullity, for it would apply to no instances at all. If a defendant was "at home" in the United States, then it would necessarily be subject to jurisdiction in some state's court. As a result, the rule would never apply to any instance and would be considered unconstitutional if the "at home" requirement were considered a function of due process.

      The case is now under advisement.

     CCL filed a amicus curiae brief in the U.S. Supreme Court on behalf of state and local government groups, arguing that appeal from a remand order that rejects removal on federal-officer grounds, when other removal grounds was also asserted, is limited to that one issue. 

     In addressing this technical civil procedure issue, CCL's brief argued that the removal statute's text, Congress's intent, congressional ratification of prior court precedent, and legislative history all support affirming the decision rendered by the Fourth Circuit in this case, BP Plc v. Mayor and City of Baltimore, No. 19-1189. Federalism principles further support the reading advanced by CCL's brief, because Congress would only abrogate state court authority through the most explicit statutory direction, as past Supreme Court decisions have required. 

     The brief also defends the capability and impartiality of state courts when confronted with issues of this kind. Furthermore, it argues that BP's myopic focus on the word "order" in the statute as authorizing an appeal of all grounds rejected by a district court in a single ruling takes the word out of context. It cites the late Justice Scalia's book on interpretation to explain that a good "textualist" is neither a literalist nor a nihilist, but that BP's approach would make the Court both. 

      Baltimore, like a number of states and local governments, brought what are largely public nuisance actions under state law in state court, seeking relief from oil companies for their contributions to climate change. BP and the other oil company defendants tried to remove the case from state court to federal court, claiming that its responsibility for climate change was a function of following the federal government's directions and making them the equivalent of a federal officer, who has a right to have any case against that officer heard in federal court. BP does not really defend that ground, but uses it as a basis to bring its other grounds as a basis for appeal. Federal law does not allow the other bases to be grounds for being in federal court. CCL argues that this misuse of federal-officer removal is a matter of gamesmanship. Any competent lawyer would make the allegation in order to obtain appellate rights for more serious arguments.

     In the amicus brief, CCL represents the National Conference of State Legislatures, the Council of State Governments, the National Association of Counties, the National League of Cities, the U.S. Conference of Mayors, the International City/County Management Association, and the International Municipal Lawyers Association.

     Today, CCL filed its reply brief in City of Miami Gardens v. Wells Fargo & Co., pending on a writ of certiorari in the U.S. Supreme Court. Representing Miami Gardens, CCL argues that Wells Fargo distorts the record in attempting to avoid review in the Supreme Court.

      When the case was before the U.S. Court of Appeals for the Eleventh Circuit, that court raised a new issue that had not been briefed or before the district court just before oral argument. That issue, whether there was record evidence of the City's injuries from allegedly discriminatory mortgage loans the bank had made, had not been part of the threshold inquiry that the district court had limited itself to. Because the district failed to permit discovery on that issue, CCL's Robert Peck argued that the issue was not ripe from review and instead remained at the pleadings stage, where allegations were sufficient. 

     Nonetheless, the appellate court ruled that it was a fair inquiry and held that Miami Gardens lacked Article III standing to pursue its case. CCL then sought rehearing en banc, arguing that this procedural tactic had been condemned by the U.S. Supreme Court in Alabama Legislative Black Caucus v. Alabama (2015). The Eleventh Circuit denied review, but the original panel wrote an extensive defense of its use of the procedural device. Two judges on the Eleventh Circuit dissented from the denial of rehearing en banc, likening the situation to a teacher who confiscated a student's pencil before an exam and then penalized the student for turning in a blank sheet of paper.

     CCL petitioned for certiorari, and Wells Fargo opposed. The International Municipal Lawyers Association filed an amicus brief in support of the petition. Today's filing responded to the Wells Fargo brief. The case is expected to be reviewed by the Supreme Court at its January 8 conference.

     In a reply brief filed in the Fifth Circuit, CCL argued that treating Federal Rule of Civil Procedure 4(k)(2) as just another form of general jurisdiction renders it facially unconstitutional, stating that no court should casually render such a constitutional determination. 

     In Douglass v. NYK Line, the Fifth Circuit will decide whether the "at home" standard used for general jurisdiction in state courts applies to personal jurisdiction in a federal cause of action filed in federal court. Rule 4(k)(2) was written to fill a gap in federal personal jurisdiction and, by its terms, permits federal courts to exercise personal jurisdiction over companies with substantial national contacts but insufficient presence to be subject to jurisdiction in a state court. As the CCL brief points out, if a company has a sufficient presence to be at home in the U.S., then it is at home in one of the states -- and Rule 4(k)(2) cannot apply. As a result, imposing an "at-home" requirement on top of Rule 4(k)(2) as a matter of Fifth Amendment due process renders the rule null and void.

      The Douglass case arises from a collision between the U.S.S. Fitzgerald, a U.S. Navy destroyer, and a much heavier container ship. The collision killed seven American sailors and injured 40 others. The case was filed in the U.S. District Court for the Eastern District of Louisiana, which dismissed the matter for lack of jurisdiction over the Defendant, a Japanese corporation.

     The federal First Circuit today held that denial of grounds for removal from state to federal court based on claiming to be a federal officer, while subject to appeal, does not open the door to appealing any other basis asserted in the removal. The decision in State of Rhode Island v. Shell Oil Company, a lawsuit over the oil companies' misrepresentations about the effects of oil use on climate change, is one of a number of cases in which federal courts have reached identical conclusions, with only some older cases in other appellate courts going the other way. In today's case, CCL represented the National League of Cities, the U.S. Conference of Mayors, and the International Municipal Lawyers Association as amicus curiae, or friends of the court.

     A similar decision from the Fourth Circuit in a case brought by Baltimore was accepted for review by the U.S. Supreme Court in September. Briefing is now underway in the Baltimore case.

     CCL President Robert S. Peck told TRIAL magazine that oral argument in a major personal jurisdiction case before the Supreme Court demonstrated unexpected dissatisfaction by members of the Court with their recent jurisprudence. Over the past decade, the Court has increasingly restricted the authority of state courts over out-of-state defendants.

     However, in Ford v. Montana Eighth Jud. Dist. Ct., consolidated with another Ford case from Minnesota, the justices seemed to realize that it made little sense to say that there was some type of fundamental unfairness to making Ford appear in the Montana and Minnesota courts for injuries that occurred in those states from an allegation of product defect. In both instances, the vehicle was originally sold in another state, but the same model was sold and serviced in the forum states.

      Ford asked the Court to rule that it may only be sued in its place of incorporation, its headquarters state, the state where the car was manufactured, or, possibly, the place of first sale. Justices who had been part of the precedents that had restricted jurisdiction questioned the meaning of fair play under the Due Process Clause, that had led to a narrowing of personal jurisdiction. 

     The case, originally slated to be argued last April but postponed due to the pandemic, will be decided before the current Supreme Court term ends next June.

    Representing U.S. Navy sailors and their families in a case arising from the the deadly collision between a Japanese-owned container ship and the U.S.S. Fitzgerald, a U.S. Navy destroyer, CCL filed its opening brief explaining that the trial court's decision to throw the case out on personal-jurisdiction grounds amounted to declaring an authorizing federal rule of civil procedure unconstitutional.

    The 2017 crash of the two ships tore open a huge hole in the destroyer, causing compartments on the ship to fill with water, killing seven sailors and injuring 40 others. Rule 4(k)(2) authorizes federal courts to assume personal jurisdiction over foreign defendants who have a substantial and continuing presence in the United States even though the defendant has no specific state where personal jurisdiction naturally lies. Even so, a federal district court held that due process also requires that the defendant be "essentially at home" in the United States.

     CCL's brief argues that the "at-home" requirement is not an aspect of Fifth Amendment due process and wrongly renders Rule 4(k)(2) a nullity and unconstitutional on its face. Moreover, because the case takes place in the category of admiralty law, the district court's ruling undermines traditional admiralty jurisdiction, which the Constitution itself confirms.

     The case now stands in the U.S. Court of Appeals for the Fifth Circuit.