2011 OFII General Counsel Conference Washington, D.C.

Recent Developments in U.S. Litigation

Brant BishopKirkland & Ellis LLP

Richard KlinglerSidley Austin LLP

Moses SilvermanPaul, Weiss, Rifkind, Wharton & Garrison LLP

2011 OFII General Counsel Conference Washington, D.C.

2

Developments in U.S. Litigation

I. Jurisdiction Over Foreign Defendants

II. Discovery-Related Issues

III. Extraterritoriality

IV. Supreme Court Preview

2011 OFII General Counsel Conference Washington, D.C.

3

Jurisdiction Over Foreign Defendants

• Goodyear v. Brown, 131 S. Ct. 2846 (2011)

• McIntyre v. Nicastro, 131 S. Ct. 2780 (2011)

• Bauman v. DaimlerChrysler, 644 F.3d 909, petition for rehearing pending,

(9th Cir. 2011)

2011 OFII General Counsel Conference Washington, D.C.

4

Goodyear v. Brown• North Carolina Court of Appeals found personal jurisdiction over European

subsidiaries of Goodyear USA for a claim concerning an accident in France involving tires manufactured in Turkey.

– North Carolina court found jurisdiction because some tires manufactured in Turkey entered "stream of commerce" and some were sold in U.S.

• Supreme Court unanimously reversed.

– No specific jurisdiction because nothing happened in North Carolina.

– No general jurisdiction based on fact that some tires unrelated to accident entered "stream of commerce.“

– Parent’s and subsidiary’s contacts examined separately unless corporate veil pierced.

2011 OFII General Counsel Conference Washington, D.C.

5

McIntyre v. Nicastro• New Jersey Supreme Court found personal jurisdiction over English

manufacturer whose U.S. distributor sold machine to a New Jersey company, where accident took place.

• Supreme Court reversed.

– Plurality: No jurisdiction because no purposeful contacts by defendant with New Jersey.

– Concurrence: Concurs with result but seeks to preserve greater flexibility to consider "relevant contemporary commercial circumstances.”

– Dissent: Defendant's purposeful contacts with U.S. – if not New Jersey – are sufficient.

2011 OFII General Counsel Conference Washington, D.C.

6

Bauman v. DaimlerChrysler

• Ninth Circuit found personal jurisdiction in California over foreign parent for claims involving torture in Argentina.

– Under "agency" test, foreign parent controlled a U.S. subsidiary distributor that was sufficiently important to parent's business that parent would perform the same function itself if it did not have a representative in the jurisdiction.

• Query whether this decision is consistent with Goodyear and McIntyre, which were decided one month later.

2011 OFII General Counsel Conference Washington, D.C.

7

Discovery: Affiliates’ Documents• “Possession, Custody or Control”, which may include:

– Alter ego, Agency or Close Relationship (especially in relation to subject matter of suit). In re Subpoena to Huawei Technologies (N.D. Ill. 2010)

– Practical ability to get documents in ordinary course.

Appeals courts seldom address these issues – lower court discretion and very flexible standards prevail. Compare Camden Iron & Metal v. Marubeni (D.N.J. 1991) with Glenz v. Sharp Electronics (D.N.J. 2010).

• Considerations of Company Practice and Policy– Outside of Litigation: Policies of Separation v. Business Needs– Within Litigation: Refused request for documents may decrease chance of

ordered production. Ehrlich v. BMW of North Am. (C.D. Cal. 2011); Maniscalco v. Brother Int’l (D.N.J. 2010); Ex Parte BASF (Ala. 2006).

2011 OFII General Counsel Conference Washington, D.C.

8

Discovery: Data Protection• Conflict of Production Obligations and Non-U.S. Data Protection

• Courts may treat data protection laws as proper basis for resisting discovery, Trusz v. UBS Realty Inv. (D. Conn. 2011), but do not simply defer, Accessdata Corp. v. ALSTE Tech. GmbH (D. Utah 2010).

• Greater deference where non-parties subpoenaed, Tiffany Co. v. Andrew (S.D.N.Y. 2011), but subpoenas may also be enforced, Gucci Am. v. Curveal Fashion (S.D.N.Y. 2010).

• Failure to retain and produce documents because of data protection laws may result in sanctions. IO Group v. GLBT Ltd (N.D. Cal. 2011).

• Practical considerations:• How do U.S. counsel even review documents?

• Crafting protective orders to meet data protection law requirements

• Data protection officer sensitivity to U.S. litigation realities and practice

2011 OFII General Counsel Conference Washington, D.C.

9

Extraterritoriality: U.S. Law Abroad

• Morrison v. NAB

─ “When a statute gives no clear indication of an extraterritorial application, it has none.”

• Door closed on securities suits

─ Beyond exchange listed securities: e.g., UBS

• RICO

• Brit. Amer. Tobacco

• Norex Petroleum

• Trade secrets, copyright, antitrust, criminal

2011 OFII General Counsel Conference Washington, D.C.

10

“If you represent a foreign defendant – or even a U.S. defendant accused of overseas wrongdoing – and you’re not at least considering Morrison’s implication, you’re not thinking hard enough.”

… But plaintiffs are also thinking…

2011 OFII General Counsel Conference Washington, D.C.

11

Extraterritoriality: Alien Tort Statute

• Kiobel v. Royal Dutch Pet. – covers corporations?

─ Also TVPA – Rajoub

• Post-Sosa, scope of liability – how broad?

─ Mamani v. Sánchez Berzaín

─ Aiding and abetting

• Alien-alien jurisdiction (Sarei v. Rio Tinto)?

• Extraterritorial scope?

2011 OFII General Counsel Conference Washington, D.C.

12

Upcoming Supreme Court Term

• Healthcare law challenge

• Immigration

• International/copyright

• Patent and arbitration

• Kiobel/Rajoub