Justia Civil Procedure Opinion Summaries

Articles Posted in International Trade
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In 1963, the Republic of Guinea entered into an agreement with Halco establishing the Compagnie des Bauxites de Guinée (CBG) for the purpose of developing Guinea's rich bauxite mines. Nanko filed suit against Alcoa, alleging breach of the CBG Agreement, asserting that it was a third-party beneficiary thereof, and another for racial discrimination in violation of 42 U.S.C.1981. Nanko later added Halco as a defendant and asserted an additional claim against Alcoa for tortious interference with contractual relations. The district court dismissed the case under Rule 12(b)(7) for failure to join Guinea as a required Rule 19 party. The court concluded that the district court's Rule 19 holding failed to fully grapple with Nanko's allegations and that those allegations, accepted as true, state a claim for racial discrimination under section 1981. The court reasoned that, insofar as the existing parties' interests are concerned, evidence of Guinea's actions, views, or prerogatives can be discovered and introduced where relevant to the parties' claims and defenses even if Guinea remained a nonparty. At this stage in the pleadings, the court did not believe that the allegations could be reasonably read to show that Guinea was a necessary party. Accordingly, the court reversed and remanded. View "Nanko Shipping, USA v. Alcoa" on Justia Law

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NMEPT, a joint venture, was formed to sell environmental equipment in China. Nalco owned 55% of the venture, Chen 40%, and a third party 5%. When NMEPT encountered business problems, Nalco paid its creditor and sued Chen for his 40% share of the outlay. The district court awarded Nalco more than $2 million, rejecting Chen's counterclaim that Nalco’s subsidiary, NMI, had caused the joint venture to borrow $300,000 without Chen's approval, even though the agreement required all investors’ consent for borrowing. Chen also claimed that the creditor petitioned the joint venture into bankruptcy under Chinese law, on behalf of NMI, in an effort to avoid a clause requiring the investors’ unanimous consent for bankruptcy proceedings. Nalco wanted to wind up the unprofitable venture, but Chen preferred to keep it alive (if dormant) to protect its intellectual property. Chen did not appeal, but filed a new suit in China, against Mobotec. The Seventh Circuit affirmed an injunction, prohibiting Chen from pursuing the Chinese litigation. Rejecting an argument that Mobotec was not a party to and could not benefit from the Illinois judgment, the court stated: “That would be a questionable proposition even if Mobotec were a distinct entity, for federal courts no longer require mutuality in civil litigation.” The district court found that NMI and Mobotec are the same entity. View "Nalco Co. v. Chen" on Justia Law

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Polar, a Finnish company based in Finland, owns U.S. patents directed to a method and apparatus for measuring heart rates during physical exercise. Polar sued, alleging infringement directly and indirectly, through the manufacture, use, sale, and importation of Suunto products. Suunto is a Finnish company with a principal place of business and manufacturing facilities in Finland. Suunto and ASWO (a Delaware corporation with a principal place of business in Utah) are owned by the same parent company. ASWO distributes Suunto’s products in the U.S. Suunto ships the accused products to addresses specified by ASWO. ASWO pays for shipping; title passes to ASWO at Suunto’s shipping dock in Finland. At least 94 accused products have been shipped from Finland to Delaware retailers using that standard ordering process. At least three Delaware retail stores sell the products. Suunto also owns, but ASWO maintains, a website, where customers can locate Delaware Suunto retailers or order Suunto products. At least eight online sales have been made in Delaware. The Federal Circuit vacated dismissal of Suunto for lack of personal jurisdiction. Suunto’s activities demonstrated its intent to serve the Delaware market specifically; the accused products have been sold in Delaware. Suunto had purposeful minimum contacts, so that Delaware’s “assertion of personal jurisdiction is reasonable and fair” and proper under the Delaware long-arm​ statute. View "Polar Electro Oy v. Suunto Oy" on Justia Law

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In 2007, Hutchison imported furniture from China through Orient International. The Commerce Department assigned Orient an antidumping duty margin of 216.01%. The Court of International Trade (CIT) entered an injunction and directed that the entries be liquidated “in accordance with the final court decision ... including all appeals.” In February 2013, CIT sustained Commerce’s remand redetermination, including a rate of 83.55%. Orient did not appeal; in June CIT ordered that Orient’s entries be liquidated in accordance with the February Final Judgment. In September, Customs liquidated the entries at 83.55%. Hutchison filed an unsuccessful protest with Customs under 19 U.S.C. 1514. In October 2014, Hutchison sought review under 28 U.S.C. 1581(i)(4), asserting that the entries should have been deemed liquidated at 7.24%, citing 19 U.S.C. 1504(d): “[w]hen a suspension required by statute or court order is removed, [Customs] shall liquidate the entry . . . within [six] months after receiving notice of the removal,” and, if the entry is not so liquidated, it shall be deemed "liquidated at the rate of duty, value, quantity, and amount of duty asserted by the importer” at the time of entry. Hutchison argued that Commerce’s liquidation instructions misidentified the date on which suspension of liquidation was lifted and that the suspension expired with the Final Judgment. CIT dismissed for lack of subject matter jurisdiction, stating that the “claim involves a protestable [Customs] decision,” which Hutchison could have appealed under 28 U.S.C. 1581(a) if its protest was denied. The Federal Circuit affirmed; regardless of whether the Final Judgment constituted a final court decision or constituted notice to Customs, starting the six-month period in 1504(d), a party may not invoke jurisdiction under 28 U.S.C. 1581(i) when jurisdiction under another subsection could have been invoked. View "Hutchison Quality Furniture, Inc. v. United States" on Justia Law

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A guest at Ohio social gathering, Grimm, brought a rifle and ammunition to the Sunbury house, where he assembled and invited guests to shoot. At Grimm's direction, Rote loaded the rifle; before the bolt moved into a closed-and-secured position, the round exploded and a “loud sound” was heard. Rote sustained severe damage to his right hand. The round that exploded came from a box bearing marks identifying it as being manufactured by DGFM. The allegedly defective ammunition was purchased online through a New Jersey-based company. Rote and his wife filed a negligence and products-liability suit against several defendants, including DGFM. DGFM argued that, as an instrumentality of the Republic of Argentina, it is immune from suit under the Foreign Sovereign Immunities Act, 28 U.S.C. 1602. The district court denied its motion to dismiss, finding that the “commercial activity” exception to the Act applies. The Sixth Circuit affirmed, stating that the design and manufacture of a product constitutes a “commercial activity” under the FSIA and that a court need not find that a foreign state has minimum contacts with the United States in order to conclude that the state’s acts have a direct effect here. View "Rote v. Zel Custom Mfg., LLC" on Justia Law

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In 2004-2005, Ford imported Jaguar-brand cars from the UK into the U.S. and deposited estimated duty payments. Ford later concluded that its estimates had been too high and filed nine reconciliation entries, seeking a refund of about $6.2 million. Customs may liquidate an entry within one year after filing, 19 U.S.C. 1504(a). It may extend that period if it needs additional information or if the importer requests an extension, for a maximum of three one-year extensions. Otherwise the entry “shall be deemed liquidated at the rate ... asserted by the importer.” When an entry is deemed liquidated, Customs may not recalculate the duty owed. Ford asserted the rate in its reconciliation entries rather than the rate asserted at the time of entry. Ford sought a declaratory judgment that its entries had been liquidated as a matter of law in 2009. The Court of International Trade dismissed some claims as barred by the statute of limitations under 28 U.S.C. 2636(i) and declined to exercise its discretionary jurisdiction over the remaining claims. The Federal Circuit affirmed, declining to address the statute of limitations and noting that all of Ford’s entries have now liquidated; Customs denied the protest for Ford’s 2005 entries, and Ford has filed a section 1581(a) challenge. View "Ford Motor Co. v. United States" on Justia Law

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VLM, a Montreal-based supplier, sold frozen potatoes to IT in Illinois. After nine successful transactions, IT encountered financial difficulty and failed to pay for the next nine shipments. Invoices sent after delivery included a provision purporting to make IT liable for collection-related attorney’s fees if it breached the contracts. VLM sued; the deadline for an answer passed. The court entered a default. On defendants' motion, the court vacated the default as to IT’s president only. All three defendants then filed answers, contesting liability for attorney’s fees. The judge applied the Illinois Uniform Commercial Code and found that the fee provision had been incorporated into the contract. The Seventh Circuit reversed, holding that the U.N. Convention on Contracts for the International Sale of Goods applied. On remand, the judge applied the Convention and held that the fee provision was not part of the contracts and that IT could benefit from this ruling, despite the prior entry of default. The Seventh Circuit affirmed. IT never expressly assented to the attorney’s fees provision in VLM’s trailing invoices, so under the Convention that term did not become a part of the contracts. VLM waived its right to rely on the default by failing to raise the issue until its reply brief on remand. View "VLM Food Trading Int'l, Inc. v. Ill. Trading Co." on Justia Law

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Creative, an Iowa corporation, designs and sells beauty products. LF, a Hong Kong corporation, with its principal place of business in Hong Kong, provides services, including product development, shipping oversight, and production planning. LF contacted Unger, President of Creative, in Iowa, seeking to manage Creative’s operations in China and e-mailed a presentation describing proposed services. Unger traveled to Hong Kong to execute the contract. LF managed Creative’s supply chain; the companies communicated extensively electronically and by telephone for two years. As required by the contract, LF shipped pre-production and production samples (made in China by third party factories) to Iowa. LF received payments from Creative’s customers on its behalf, and sent proceeds, less deductions, to Iowa. No LF agents or employees visited Iowa and LF has no connection with Iowa outside of this business relationship. Creative filed suit in Iowa, alleging that LF breached the contract by sending samples that could not be used because they were defective. The district court dismissed for lack of personal jurisdiction. The Eighth Circuit reversed, stating that a reasonable jury could find that LF had sufficient contacts with Iowa to justify the exercise of personal jurisdiction and that the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice. View "Creative Calling Solutions Inc v. LF Beauty Ltd." on Justia Law

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Celgard is a developer and manufacturer of battery membranes, used to separate chemical cell components in lithium-ion batteries, preventing contact between the positive and negative electrodes. The patents concerns a separator technology that uses a ceramic composite coating that helps prevent electrical shorting. This technology is used in rechargeable batteries in electronic vehicles and consumer electronic devices such as laptops and cellular phones. Celgard is headquartered in Charlotte, North Carolina. SKI is a manufacturer of separators for use in lithium-ion batteries. SKI mainly supplies the separators to third-party manufacturers, but also manufactures batteries that include the separators it produces. SKI’s principal place of business is in Seoul, Korea. All of SKI’s design, manufacturing, and sales operations are based in Korea. Celgard sued SKI for infringement. Celgard sought to establish the district court’s jurisdiction based on allegations that SKI purposefully directed activities at the forum state through sales and offers for sale of its accused separators to residents of North Carolina. The Federal Circuit affirmed dismissal for lack of personal jurisdiction, under either a purposeful-direction theory or a stream-of-commerce theory, noting an absence of evidence that SKI ever sold or offered for sale the accused products in North Carolina. View "Celgard, LLC v. SK Innovation Co., Ltd." on Justia Law

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ICP imports products sold to food manufacturers, including “white sauce.” In 1998, Customs issued a Ruling Letter, classifying “white sauce” under Harmonized Tariff Schedule of the U.S. (HTSUS) 2103.90.9060 as “sauces and preparations therefor.” In 2005 Customs issued a Notice, without providing statutory notice and comment, reclassifying “white sauce” under HTSUS 0405.20.3000 as “[d]airy spreads,” effecting a tariff increase of almost 2400%. Waves of litigation followed. In 2007, Customs liquidated entries from 2003-2004 under the Notice, imposing a liability of $28 million. After Customs denied a protest, ICP unsuccessfully asked Customs for relief under 19 U.S.C. 1520(c). ICP did not ask Customs to voluntarily reliquidate under 19 U.S.C. 1501, nor seek administrative review of the protest denial, which became final and could not be suspended pending the Federal Circuit decision concerning the Notice. ICP sued without paying the $28 million owed. The Trade Court dismissed for lack of jurisdiction based on ICP’s failure to pay and for failure to state a claim. In 2014 the Federal Circuit held that the 2005 Notice was subject to the requirements in 19 U.S.C. 1625(c) and was void because Customs failed to comply. The Federal Circuit affirmed with respect to the 2003-2004 entries. To invoke Trade Court jurisdiction, an aggrieved importer must file protest under 19 U.S.C. 1514. Once Customs denies that protest, the importer must pay “all liquidated duties, charges, or exactions” owed before commencing suit,28 U.S.C. 2637. The pre-payment requirement is a valid condition attached to the government’s waiver of immunity, and ICP lacked a constitutionally protected property interest. View "Int'l Custom Prods., Inc v. United States" on Justia Law