The First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. This month, our update was released on the second Tuesday of November, in light of Election Day on November 5, 2024.
SCOTUS to Decide if Award Creditors Must Prove Minimum Contacts
We start with a recent update regarding certiorari review of a decision in the Ninth Circuit that addressed the requirements for exercising personal jurisdiction over a foreign sovereign under the Foreign Sovereign Immunities Act (FSIA). The US Supreme Court granted certiorari over a pair of cases1 related to the enforcement of an arbitral award and whether a plaintiff must demonstrate that a foreign sovereign has "minimum contacts" with the US before a federal court may assert personal jurisdiction over foreign states sued under the FSIA. The Ninth Circuit had reversed enforcement of the award on the grounds that the District Court incorrectly held that it did not have to determine whether an India-owned corporation had minimum contacts with the US.2 Petitioners argued that the Ninth Circuit's approach to the minimum contacts test conflicts with decisions from other circuits.
The controlling federal statute on the exercise of personal jurisdiction over a foreign sovereign is 28 U.S.C. ' 1330(b): "Personal jurisdiction over a foreign state shall exist as to every claim for relief over which the district courts have jurisdiction under subsection (a) where service has been made under section 1608 of this title." Traditionally, courts have interpreted this provision as conferring personal jurisdiction over a sovereign where there has been proper service, and a plaintiff has satisfied one of the exceptions to sovereign immunity under the FSIA. Accordingly, the widespread view is that the test for personal jurisdiction over a foreign sovereign does not extend as far as the Due Process Clause. The Ninth Circuit, however, held that the FSIA itself statutorily requires satisfying the minimum-contacts analysis to exercise personal jurisdiction over a foreign sovereign.
In particular, the Ninth Circuit determined that it had previously "rejected the plaintiff's argument that the FSIA's long-arm provision changed the minimum contact analysis for foreign states."3 Relying on its 1980 Gonzalez decision, the court held that "personal jurisdiction under the FSIA requires satisfaction of the traditional minimum contacts standard."4 The Gonzalez decision relied "on a reading of the FSIA's legislative history to conclude that the FSIA was intended to be consistent with the minimum contacts analysis."5
US Circuit Judge Eric D. Miller noted, in his concurring opinion joined by US Circuit Judge Lucy H. Koh, that he was open to a full court rehearing regarding the minimum contacts test. He noted that while the court's previous cases "have clearly recognized a minimum-contacts requirement for subjecting foreign states to personal jurisdiction," they have been "less clear about the source" of it.6 Judge Miller concluded that the "precedent applying the minimum-contacts test to the exercise of personal jurisdiction over foreign states has no foundation in the Constitution or the FSIA, and it is contrary to the views of other courts of appeals."7 Ultimately, the appeals court denied en banc rehearing earlier this year.
In their petitions for certiorari, both petitioners emphasized that the Ninth Circuit's position is an outlier, and has created a circuit split as a result. Citing opinions from the Second, Seventh, Eleventh, and DC Circuits, petitioners argued that all other circuit courts of appeals to have considered the issue have all held that personal jurisdiction under the FSIA requires nothing more than satisfying the subject-matter jurisdiction and proper service requirements set out in 28 U.S.C. ' 1330(b).8
Petitioners also argued that nothing in the text of the FSIA's long-arm provision imposes a...
