Agrégateur de flux

Assurance construction

Many thanks to Dr. Cristina M. Mariottini for sharing the news of this very recent decision by the U.S. Supreme Court on specific jurisdiction.

On June 19th, 2017 the U.S. Supreme Court rendered a new opinion on the issue of specific jurisdiction over nonresident defendants in Bristol-Myers Squibb v. Superior Court of California. In an 8-to-1 opinion penned by Justice Alito (Sotomayor, J., dissenting), the majority ruled that, as a result of the limitations imposed on jurisdiction by the due process clause, California courts lack specific jurisdiction to entertain the product liability claims brought (along with resident plaintiffs) by plaintiffs who are not California residents, regardless of the fact that all the claims are the same, because of an insufficient connection between the forum and the specific claims at issue.

A group of plaintiffs – consisting of 86 California residents and 592 residents from 33 other States – sought compensation before Californian State courts for injuries associated with the consumption of the Bristol-Myers Squibb drug Plavix. Bristol-Myers Squibb, incorporated in Delaware and headquartered in New York, contracted with a State distributor in California, but it also engaged in business activities nationwide, extensively promoting and marketing the drug.

On the grounds that it “resembles a loose and spurious form of general jurisdiction”, the U.S. Supreme Court refuted the “sliding scale approach to specific jurisdiction” on which the California Supreme Court relied when it asserted (by majority) specific jurisdiction over the nonresidents claims. Applying this test, the California Supreme Court concluded that Bristol-Myers Squibb’s “extensive contacts with California” permitted the exercise of specific jurisdiction “based on a less direct connection between [Bristol-Myers Squibb’s] forum activities and plaintiffs’ claims than might otherwise be required”. This attenuated requirement was satisfied, the California Supreme Court found, because the claims of the nonresidents were similar in several ways to the claims of the California residents (as to which specific jurisdiction was uncontested).

Reversing the decision of the California Supreme Court and assertively relying on its precedents, the majority of the U.S. Supreme Court ruled that “for specific jurisdiction, a defendant’s general connections with the forum are not enough”. Among the variety of interests that a court must take into consideration in determining whether the assertion of personal jurisdiction is constitutionally proper are “the interests of the forum State and of the plaintiff in proceeding with the cause in the plaintiff’s forum of choice”. Restrictions on personal jurisdiction “are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States”. Relying, in particular, on Walden v. Fiore et al. (“a defendant’s relationship with a… third party, standing alone, is an insufficient basis for jurisdiction”), the majority of the Court held that, to assert jurisdiction, “a connection between the forum and the specific claims at issue” is needed and that “this remains true even when third parties (here, the plaintiffs who reside in California) can bring claims similar to those brought by the nonresidents”. The mere fact, as in the case at hand, that other (resident) plaintiffs were prescribed, obtained, and ingested a medication in a State – and allegedly sustained the same injuries as did the nonresidents – does not allow that State to assert specific jurisdiction over the nonresidents’ claims.

In her dissent, however, Justice Sotomayor challenged the majority’s core conclusion that the exercise of specific jurisdiction in the case at hand would conflict with the Court’s decision in Walden v. Fiore, stating that “Walden concerned the requirement that a defendant ‘purposefully avail’ himself of a forum State or ‘purposefully direc[t]’ his conduct toward that State […], not the separate requirement that a plaintiff’s claim ‘arise out of or relate to’ a defendant’s forum contacts”. Looking at the overall picture of personal jurisdiction in the U.S. and advocating for a balanced approach to general and specific jurisdiction, respectively, Justice Sotomayor underscored the “substantial curbs on the exercise of general jurisdiction” that the Court imposed with its decision in Daimler AG v. Bauman (in which Justice Sotomayor filed a concurring opinion and whose principles were reaffirmed as recently as last month in BNSF Railway Co. v. Tyrrell). In her dissent Justice Sotomayor further observed that, with its decision in Bristol-Myers Squibb (and – one may add – even more so with its plurality opinion in J. McIntyre Machinery, Ltd. v. Nicastro), the Court has introduced a similar contraction of specific jurisdiction. This contraction “will result in piecemeal litigation and the bifurcation of claims” curtailing, to a certain extent, plaintiffs’ ability to “hold corporations fully accountable for their nationwide conduct”. The majority’s response to this objection that “The Court’s decision… does not prevent the California and out-of-State plaintiffs from joining together in a consolidated action in the States that have general jurisdiction over [Bristol-Myers Squibb]. Alternatively, the nonresident plaintiffs could probably sue together in their respective home States” is of limited avail to those national plaintiffs who wish to bring a consolidated action in case the corporation’s “home” is abroad and, overall, it seems to confirm the Court’s trend towards progressively relinquishing jurisdiction in favor of foreign courts.

Entreprise en difficulté (Loi du 26 juillet 2005) - Lettre de
contestation de créance - Obligation de répondre

Entreprise en difficulté (Loi du 26 juillet 2005) - Lettre de
contestation - Contestation portant sur la régularité de
la déclaration et le montant de la créance

Entreprise en difficulté (Loi du 26 juillet 2005) - Assignation d'un créancier - Conditions

Entreprise en difficulté (loi du 26 juillet 2005) - Mandat - Fin

Entreprise en difficulté - Créancier hypothécaire -
Demande d'attribution judiciaire d'un immeuble hypothéqué

Entreprise en difficulté (loi du 26 juillet 2005) - Extension de la procédure collective
du codébiteur solidaire - Portée

End of exam season (sadly not yet of marking marathon). In the next few weeks I shall be posting on judgments issued a little or longer while ago, which I was pondering to use in exams. (I did for some of them).

In [2017] EWHC 1216 (Pat) Chugai Pharmaceutical v UCB the issue at stake was to what degree a suit seeking to establish absence of liability under a patent license, in reality provokes argument on the validity of the patent. Carr J has excellent overview of review of precedent, much of which has passed in one way or another on this blog. Please do refer to judgment for proper reading.

Claimant (“Chugai”) seeks a declaration against the Defendants (collectively “UCB”) that it is not obliged to continue to pay royalties under a patent licence (“the Licence”) granted by the First Defendant (“UCB Pharma”).  UCB Pharma is a Belgian company with an English branch which entered into the Licence with Chugai in respect of a portfolio of patents. Chugai claims that its products, which are, in part, manufactured and sold in the USA, fall outside the scope of the claims of the Patent concerned. Accordingly, Chugai seeks a declaration that it owes no royalties for the manufacture and sale of these drugs manufactured after a certain date.

UCB alleges that, although framed as a claim for a declaration relating to a contract, a part of these proceedings, in substance, concerns not only the scope but also the validity of the Patent. UCB submits that the validity of a US patent is non-justiciable, since the English court has no power to determine the validity of a foreign patent. Accordingly, it submits that those parts of Chugai’s pleading which are said to raise issues of invalidity fall outside the subject matter jurisdiction of the English court.

European private international law as readers will know lays greats emphasis on exclusive jurisdiction in the case of validity of patents. The CJEU’s holding in C-4/03 Gat v Luk that nullity actions against a national part of a certain European patent can only be conducted in the jurisdiction for which that patent was registered, regardless of whether the nullity argument is raised in the suit or by way of defence, is now included verbatim in Article 24(4) Brussels I Recast. The EU’s take is rooted in the idea that the grant of a national patent is “an exercise of national sovereignty” (Jenard Report on the Brussels Convention (OJ 1979 C59, pp 1, 36)). The rule therefore engages the Act of State doctrine, and suggests that comity requires the courts of States other than the State of issue, to keep their hands off the case.

Particularly in cases where defendant is accused of having infringed a patent, this rule gives it a great possibility to stall proceedings. Where the action is ‘passive’, with plaintiff aiming to establish no infringement, the argument that the suit really involves validity of patent is less easily made.

The possibility of ‘torpedo’ abuse, coupled with less deference to the jurisdictional consequences of the Act of State doctrine [particularly its contested extension to intellectual property rights], means the English courts in particular are becoming less impressed with the exclusivity. Where the EU Regulation applies, they do not have much choice. Carr J refers to [2016] EWHC 1722 (Pat) Anan where claimant sought to carve out issues of validity by seeking a declaration that the defendant’s acts infringed a German patent “if the German designation is invalid (which is to be determined by the German courts)“.  EU law meant this attempt could not be honoured. Carr J however suggests that EU rules have no direct application in the present case because the Patent at stake is a United States patent. That is not quite spot on, for under the amended lis alibi pendens rule of the Brussels I Recast, reflexive effect is suggested for the Regulation’s exclusive jurisdictional rules, leaving a Member State court in a position (not: under an obligation) to give way to pending litigation in third countries. (In the case at hand there was no such litigation pending elsewhere).

Allow me to lean on 20 Essex Street’s conclusion in their review of the case: Carr J held that the case before him was not a direct challenge to validity. He accepted Chugai’s submissions that its claim was contractual. Disputed parts of the patent were incidental to the essential nature of its claim, which was a claim for determination of its royalty obligations. In his view, this claim fell within the exclusive jurisdiction clause, in favour of the English courts, which parties had agreed.

Essential reading for IP litigators.

Geert.

 

La Cour de justice de l’Union européenne a jugé, dans un arrêt du 14 juin 2017, qu’un site de téléchargement et partage en ligne d’œuvres protégées, tel que The Pirate Bay, effectue un acte de communication au public et qu’il peut porter atteinte au droit d’auteur.

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La Cour de justice de l’Union européenne (CJUE) confirme, le 21 juin 2017, que l’influence causale d’un vaccin dans le développement d’une maladie peut être présumée en l’absence de certitude scientifique.

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Cour d'appel de Versailles, 1re chambre, 1re section, 23 juin 2017

Conseil des Prud'hommes de Boulogne-Billancourt, 216 mai 2017

Congregación de Escuelas Pías Provincia Betania
Aide d'État
Les exonérations fiscales dont jouit l’Église catholique en Espagne peuvent constituer des aides d’État prohibées si et dans la mesure où elles sont octroyées pour des activités économiques

Le lendemain du dernier remaniement gouvernemental, soit le 22 juin 2017, le conseil des ministres a entériné deux textes très attendus : le projet de loi relatif à l’état d’urgence et le projet de loi renforçant la sécurité intérieure et la lutte contre le terrorisme.

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La Cour européenne des droits de l’homme a condamné la France en raison de la durée excessive de la conservation des données au sein du fichier national des empreintes génétiques s’agissant de délits mineurs. Elle rejoint ainsi le Conseil constitutionnel dont les réserves d’interprétation sur ce point n’ont pas été suivies d’effet.

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… is applicable from today on (see art. 92).

See here as well the Commission Implementing Regulation (EU) 2017/1105 of 12 June 2017 establishing the forms referred to in Regulation (EU) 2015/848 of the European Parliament and of the Council on insolvency proceedings, OJ L 160, 22.6.2017.

In 2011 Facebook, Inc. used the name and picture of certain Facebook.com members as part of an advertising product.  In response, a class action was started in British Columbia on behalf of roughly 1.8 million British Columbia residents whose name and picture had been used.  The claim was based on section 3(2) of the province’s Privacy Act.  In response, Facebook, Inc. sought a stay of proceedings based on an exclusive jurisdiction clause in favour of California contained in the contracts of use for all Facebook.com members.

Canadian courts had repeatedly held that “strong cause” must be shown to displace an exclusive jurisdiction clause.  In addition, while there was some ambiguity, the leading view had become that the analysis about whether to stay proceedings due to such a clause is separate and distinct from the general forum non conveniens analysis (para 18).  The clause is not simply an important part of the forum non conveniens analysis – rather, it triggers a separate analysis.

In Douez v Facebook, Inc., 2017 SCC 33 (available here) the Supreme Court of Canada confirms the second of these points: the analysis is indeed separate.  However, by a slim majority of 4-3 the court holds that the “strong cause” test operates differently in a consumer context than in the commercial context in which it was originally formulated.  The court overturns the decision of the British Columbia Court of Appeal and rejects a stay of proceedings, paving the way for the class action to proceed in British Columbia.

The Separate Analysis

All of the judges support the separation from forum non conveniens (paras 17, 20 and 131).  I have found this approach troubling as it has developed and so, while not a surprise, I am disappointed to see it confirmed by the court.  As I understand it, the core reason for the separate analysis is to make sure that the clause is not overcome by a series of less important factors aggregated under the forum non conveniens analysis.  So the separate analysis requires that the “strong cause” to overcome the clause has to involve something closely related or intrinsic to the clause itself.  The best explanation of this view is in Expedition Helicopters Inc. v Honeywell Inc., 2010 ONCA 351 (available here; see in particular para 24).  The problem is that courts, in their search for strong cause, frequently go beyond this and refer to factors that are well established under the forum non conveniens approach.

In its analysis, the court puts almost no emphasis on (and does not really even explain, in the way Expedition Helicopters does) how the separate approach differs from forum non conveniens in terms of how the clause gets displaced.  In places, it appears to actually be discussing forum non conveniens (see paras 29-30 and 155), in part perhaps due to its quite direct reliance on The Eleftheria, an English decision I think is more consistent with a unitary framework rather than a separate approach (a point noted in Expedition Helicopters at para 11).  In Douez, the plurality finds strong cause for two reasons: public policy and secondary factors (para 64).  Leaving public policy aside for the moment, it is telling that the secondary factors are “the interests of justice” and “comparative convenience and expense”.  These are the most conventional of forum non conveniens factors.  If this analysis is followed by lower courts, rather than that as explained in Expedition Helicopters, the separate analysis might end up not being very separate.

The Consumer Context

The majority (which is comprised of two decisions: a plurality by three judges and a separate solo concurrence) considers the unequal bargaining power and potential for the relinquishing of rights in the consumer context to warrant a different approach to the “strong cause” test (para 33).  In part, public policy must be considered to determine whether the clause is to be given effect.  As a matter of law, this may well be acceptable.  But one of the key features of the plurality decision is the basis on which it concludes that strong cause has been shown on the facts.  It reaches this conclusion because the contract is one of adhesion with notable inequality of bargaining power and because the claim being brought relates to “quasi-constitutional rights” (para 58), namely privacy.  If these factors are sufficient, then a great many exclusive jurisdiction clauses in standard form contracts with consumers are subject to being defeated on a similar basis.  Lots of consumer contracts involve unequal bargaining strength and are in essence “take it or leave it” contracts.  And it may well not be that difficult for claims to be advanced, alongside other claims, that involve some form of quasi-constitutional rights (the breadth of this is untested).  This possibility that many other clauses do not provide the protection once thought is likely the most notable dimension of the decision.

The Dissent

The dissent would not modify the “strong cause” test (paras 125 and 171).  It stresses the need for certainty and predictability, which are furthered by exclusive jurisdiction clauses (paras 124 and 159).  The dissent concludes the clause became part of the contract, is clear and is not unconscionable.  It reviews possible factors which could amount to strong cause and finds none of them present.  It is critical of the majority for its use of public policy as a factor in the strong cause analysis.  If the clause is enforceable – and in its view it is, even with the inequality of bargaining power – then it is wrong to rely on the factors used by the plurality to find strong cause (para 173).  In the immediate aftermath of the decision I think the dissent has the better of the argument on whether strong cause has been shown in this particular case.

Territorial versus Subject Matter Jurisdiction

The proposed class action relies on a statutory provision.  That statute contains a provision (section 4) that provides that the British Columbia Supreme Court must hear and determine claims under the statute.  The British Columbia Court of Appeal concluded that this provision addresses subject matter jurisdiction and not territorial jurisdiction (para 14).  The dissent agrees with that view (para 142).  In contrast, the plurality conflates the two types of jurisdiction.  While it accepts that the provision is not one which overrides jurisdiction clauses (para 41), in the public policy analysis it is concerned that in litigation in California the plaintiff class would have no claim (para 59).  But as the dissent points out, it is open to the California courts to apply the statute under its choice of law analysis (paras 165-66).  No evidence was adduced to the contrary.  Section 4, properly interpreted, does not prevent that.  Even more worrying is the analysis of Justice Abella in her solo concurring decision.  She concludes that section 4 deals with territorial jurisdiction and so overrides any jurisdiction clause to the contrary (paras 107-08).  This is a remarkable interpretation of section 4, one which would see many other provisions about subject matter jurisdiction instead read as though they addressed territorial jurisdiction (which she does in footnote 1 in para 109).

Conclusion

The split between the judges as to what amounts to strong cause sufficient to set aside an exclusive jurisdiction clause is the most dramatic aspect of the decision.  They see what is at stake very differently.  On one view, this is a case in which consumers should not be deprived of important statutory rights by a clause to which they did not truly agree.  On another view, this is a case in which contracting parties should be held to their agreement as to the forum in which any disputes which arise should be resolved because, even though the contract involves consumers, the agreement is not unfair and has not been shown to deprive them of any substantive rights.  This debate will now play out across a wide range of consumer contracts.