Author: Roger Alford

by Roger Alford

The news coming out of China of ten suicide deaths at Foxconn industrial park is terribly distressing. All of the workers who committed suicide were recent high school or vocational training school graduates aged between 18 to 24. One of the fatalities, Sun Danyong, jumped to his death after being interrogated over a missing iPhone prototype. Foxconn, the makers of Apple iPhones and iPads, is now under international scrutiny for its working conditions and the news is not good. Not surprisingly, Apple (and other companies that purchase Foxconn products such as Dell and Hewlett-Packard) are also under intense scrutiny regarding their enforcement of supplier codes of conduct.

The New York Times reports that:

“Foxconn’s production line system is designed so well that no worker will rest even one second during work; they make sure you’re always busy for every second,” says Li Qiang, executive director of the China Labor Watch, a New York-based labor rights group. “Foxconn only values the enterprise benefits but totally ignores the social benefits. Those claims have been bolstered in recent weeks by some of China’s state-run newspapers, which have published a series of sensational reports about the suicides, alongside exposés detailing what they claim are the harsh conditions inside Foxconn factories. Some articles have described the company’s authoritarian management style, the heavy burdens workers face in trying to meet Foxconn production quotas. Others say the company has cramped dormitories that sometimes house 10 to a room.”

An Apple spokesman stated today that “a team from Apple is independently evaluating the steps they are taking to address these tragic events and we will continue our ongoing inspections of the facilities where our products are made.” Sounds good.

But it made me wonder what has Apple done prior to these tragedies to promote labor standards. The news isn’t pretty. Apple’s Supplier Code of Conduct is acceptable enough, limiting working hours to 60 hours per week (including overtime), requiring minimum wage and benefits consistent with local laws, and clean and safe dormitories with adequate heat, ventilation, personal space, and entry and exit privileges.

So does the reality match the rhetoric? When social auditors examined factory compliance, they found distressing news. Only 46% of their audited suppliers comply with Apple’s working hours requirements. This means a majority of Apple’s audited suppliers violate the 60 hour work week. Here’s what Apple’s 2010 Supplier Responsibility Progress Report says:

At 60 facilities [of the 102 audited], we found records that indicated workers had exceeded weekly work-hour limits more than 50 percent of the time. Similarly, at 65 [of the 102] facilities, more than half of the records we reviewed indicated that workers had worked more than six consecutive days at least once per month. To address these issues, we required each facility to develop management systems—or improve existing systems—to drive compliance with Apple’s limits on work hours and required days of rest.

Second, according to the report, 65% of the audited factories comply with the local minimum wage and benefit laws. In other words, one-third of Apple’s audited suppliers pay their employees below the minimum wages required by the local law. According to the report:

At 48 of the [102] facilities audited, we found that overtime wages had been calculated improperly, resulting in underpayment of overtime wages. At 24 facilities, our auditors found that workers had been paid less than minimum wage for regular working hours…. Another common violation we found was underpayment of legally required benefits. We found 57 facilities with deficient payments in work benefits such as sick leave, maternity leave, or social insurance for retirement.

Finally, the audit revealed a 51% compliance rate with respect to management accountability and responsibility. In other words, almost half of Apple’s audited suppliers do not evidence a commitment to corporate social responsibility. According to the report:

Our audits revealed 55 facilities [of the 102 audited] that did not have dedicated personnel accountable for compliance with all categories of Apple’s Code. Apple required the facilities to appoint qualified personnel, ensuring that responsibility and accountability for compliance are included in their job descriptions. These job descriptions include ownership of a process for correcting deficiencies identified by internal and external audits, written corrective action procedures, and verification of the completion of appropriate actions.

Apple’s report states that it “is committed to ensuring the highest standards of social responsibility throughout our supply base.” Today an Apple spokesman stated that the company is “saddened and upset” by the suicides and that Apple was determined to ensure that Foxconn workers were treated with respect and dignity. But if you scratch beneath the surface, Apple’s own social audit report paints a different picture of its suppliers. It is a picture of employees who are routinely being underpaid, overworked, and poorly supervised.

by Roger Alford

At the recent Northwestern Law School conference on the Israeli-Arab Dispute and International Law I had the good fortune to address one of the few bright spots in current Arab-Israeli relations.

Most international law scholars of the Arab-Israeli conflict seem to know little about international trade, and focus almost exclusively on the laws of war in their discussion of Middle East relations. Therefore when I was choosing my topic for discussion, I decided to analyze the current status of the Arab League boycott against Israel. The secondary boycott, of course, involves the blacklisting of any corporation that does business in Israel.

As a result of the secondary boycott, Arab consumers suffered because they did not have access to the most efficient source of goods and services. Israeli investment also suffered because foreign corporations often chose to sell their products to dozens of countries with hundreds of millions of consumers rather invest in one small country with a few million consumers. Third-country corporations were caught in the middle and forced to make hard choices that they should never have been forced to make.

The good news is that in the past fifteen years the secondary boycott against Israel has died a quiet death. According to official reports from the United States, of the twenty-two members of the Arab League boycott, only three countries–Iraq, Libya, and Syria–continue to enforce a secondary boycott. Even then, it appears that only Syria is serious about it. USTR has recently stated that the secondary boycott “has extremely limited practical effect overall on U.S. trade and investment ties with most Arab League countries.” As a practical matter, we are experiencing the death rattle of the secondary boycott against Israel.

One can only speculate about the cause of death, but I would hazard that it has much to do with the legalization of international economic relations. Since the end of the Cold War, thousands of bilateral investment treaties have been signed. Hundreds of those involve Arab countries, with Egypt having signed seventy-nine, Morocco seventy-three, Oman seventy-one, Lebanon forty-nine, Jordan thirty-five, etc. These BITs are unusually significant in that they depoliticize disputes by guaranteeing foreign investors the right to pursue treaty-based investment arbitration. If an investor is blacklisted as a result of the secondary boycott against Israel, then it likely has a viable claim for a BIT violation, such as compensation for conduct tantamount to an expropriation or denial of fair and equitable treatment.

Equally momentous is the binding nature of the WTO rules, which prohibit discriminatory import bans. The Arab League boycott violates WTO rules against MFN treatment and quantitative restrictions. Not surprisingly, none of the twelve Arab League countries that are WTO members enforce a secondary boycott, and only three of them–Kuwait, Saudi Arabia, and the UAE–continue to enforce a primary boycott.

Even the primary boycott is subject to a strong legal challenge before the WTO, but Israel thus far has decided to forego this avenue, concluding that “the boycott right now is on the defensive as a result of working behind the scenes…. We do not wish to politicize the WTO.” One may take this at face value, or conclude that Israel fears that such a challenge would require the WTO to finally interpret the national security exception, an ambiguous provision that deserves careful interpretation in a less politically-volatile context.

WTO accession talks will continue to create pressure to eliminate the secondary boycott. In its accession talks, for example, Saudi Arabia confirmed that “the application of secondary and tertiary boycotts had been terminated in practice and in law.” Recent WTO decisions involving China’s accession commitments now make clear that those promises are subject to legal enforcement. The three secondary boycott holdouts–Iraq, Libya, and Syria–are all seeking WTO membership, and given the nature of accession talks, one can be sure that termination of the secondary boycott will be a precondition of their membership.

That’s great news for the Arab street. The importance of promoting foreign investment is particularly acute in the Middle East. The Arab world is facing a ticking time-bomb, with approximately 70 percent of its population under twenty-five years old. It desperately needs to find ways for its growing population to contribute to its economy. For most Arab countries, the commitment to strengthen their economies and develop trade relationships has taken precedence over the desire to enforce a secondary boycott against Israel. Almost nine out of ten Arab countries have concluded that the costs of continued enforcement of the secondary boycott outweigh the benefits.

That’s also great news for Israel. It is now enjoying a tremendous influx of foreign investment. The boycott’s greatest risk was always that it would impede direct foreign investment into Israel. That fear no longer animates the discussion. In the same year that Israel was at war with Lebanon, it enjoyed record direct foreign investment of over $13 billion.

by Roger Alford

When I teach International Trade, one of my favorite parts of the class is the discussion of trade linkages. How does a state balance competing concerns such as labor, the environment, and human rights? Typically the WTO accommodates those concerns through the General Exceptions that permit a state to violate the WTO rules if doing so is, say, “necessary” to protect “human health or life.”

One of the more curious aspects of the WTO General Exceptions is the differences the WTO has established for trade in services versus trade in goods. The regime for trade in goods allows a state to violate WTO rules if the measure “relates to the conservation of exhaustible natural resources.” Not so for trade in services. Thus, a state could prohibit the trade in products that contain CFCs because they cause ozone depletion, an exhaustible resource. It could also prohibit the importation of shrimp caught without devices that exclude endangered sea turtles. But a state could not, say, easily impose limits on the landing rights of jumbo jets because they contribute to global warming. Nor could Chile easily prohibit the docking of cruise ships at Cape Horn because they drop high-sulfer “bunker” fuel in the Antarctic Ocean. Instead, Chile would have to meet the more stringent requirement of proving that such restrictions are “necessary” to protect human, animal, or plant life or health. It seems that when it comes to the environment and trade in services, all concerns about natural resources are derivative.

On the other hand, trade is services can be restricted in order to protect public order, but trade in goods cannot. (Trade in goods must somehow offend a more value-laden public morals exception). China could, for example, have an easier time restricting Internet services that disrupt public order–such as pro-democracy websites, but have a harder time justifying its ban on the importation of pro-democracy T-shirts because their sale would disturb the peace. Or even more radical, if one takes the working language of the WTO seriously, then the GATS seems to have incorporated a general public policy exception (ordre public in French) for trade in services, but not for trade in goods.

I have yet to discover a satisfactory explanation for the disparate treatment that the WTO drafters have given to the general exceptions in GATT versus GATS.

by Roger Alford

The ABA Journal has an interesting article on the Americanization of international arbitration. There’s nothing particularly new to our readers in this article. It’s a theme that my friend and colleague Tom Stipanowich has written about extensively.. But the fact that the story is being told in the largest legal publication in the United States is significant. The focus of the story is on transplanting American practices to the international arbitration arena, almost at the request of American counsel or arbitrators. Here’s a few choice quotes:

“If arbitration is to commit suicide, it will do so of its own choosing, because the parties have chosen to make it more expensive, time-consuming and more like litigation,” said Joe Profaizer of Paul, Hastings.

“The proliferation of electronically stored information is a major cost driver in U.S. litigation, and it’s becoming a major cost driver in international arbitration,” said Christopher Larus of Robins, Kaplan, Miller & Ciresi. “As more and more companies have to delve into their electronic records, it’s becoming more and more expensive.”

“The U.S. must recognize that international arbitration is international. The system must accommodate a wide variety of traditions and practices. It can’t just accommodate the American model, or people will stop using it,” says Glenn Hendrix of Arnall Golden Gregory.

So if the parties are so concerned about the Americanization of international arbitration, why don’t they fix it? That might mean (1) embracing mediation; (2) avoiding U.S. arbitrators; (3) avoiding U.S. counsel; (4) building in pre-dispute discovery limits into the contract; (5) vesting the arbitrators with greater discretion to limit discovery; (6) imposing more serious deadlines for the different stages of arbitration; (7) adopting expedited arbitration rules; (8) embracing advanced technologies for e-discovery; (9) selecting arbitrators who are particularly adept at case management; and (10) establishing more creative fee structures for resolving disputes.

These are just a few ways that one could avoid the increased costs and delays of international arbitration. I doubt that such concerns are paramount when a billion dollars is in dispute. I don’t accept the premise that the Americanization of international arbitration is always a bad thing. But for many disputes where cost and delay are significant priorities, there are ways to avoid the Americanization of international arbitration.

by Roger Alford

A federal district court in Texas has held that the Alien Tort Statute (”ATS”) requires allegations of intent to violate international law. The mere knowledge that such violation was occurring, or would occur, is insufficient to support a claim under the ATS.

The complaint in Abecassis v. Wyatt alleges that various corporations and individuals purchased oil from Iraq and made payments that violated the United Nations Oil-for-Food (”OFP”) program. The plaintiffs allege that the oil companies were involved in buying Iraqi oil with payments to a secret bank account in Jordan controlled by Hussein. Hussein used these funds from this account to make reward payments to the families of suicide bombers and others who engaged in terrorist attacks in Israel. The also allege violations of the TVPA and the Antiterrorism Act (”ATA”).

With respect to the ATS, the court dismissed the ATS claim, finding that that the requisite allegations of corporate intent to violate international law were not alleged:

It is not sufficient to allege facts showing that the defendants intended to violate the OFP or to assist Hussein in violating the OFP. That, while unlawful, is not a violation of the type of definite, universally accepted norm of international law that Sosa would include among the small set of norms giving rise to ATS jurisdiction. The allegation would have to be that the defendants acted with the purpose of assisting terrorists to murder or maim innocent civilians. No such factual allegations appears in the complaint…. The factual allegations in this case do not support a plausible inference that any defendant acted with the purpose of assisting terrorist attacks. The absence of any such allegations defeats aiding and abetting and conspiracy liability under the ATS. [pp. 51-52].

With respect to the ATA claim, the court applied a different standard, essentially a knowledge standard, but tweaked to require evidence that the defendant must know that money will be used to support terrorism against Americans:

The defendant must collect funds willfully but the only required knowledge is that the funds will be used for terrorism. Knowledge is sufficient. But … it is not enough to know the character of the ultimate organization. The defendant must know (or intend) that its money is going to a group engaged in terrorist acts or is being used to support terrorist acts…. [T]he plaintiffs have not … sufficiently alleged that any defendant had the knowledge necessary for liability. The only relevant allegations are either wholly conclusory or inadequate. The plaintiffs must allege, at a minimum, that each defendant knew that the oil it was buying through the OFP was tied to a kickback to Hussein and that Hussein was using OFP kickback money to fund terrorism that targeted American nationals…. There are no allegations that, if proven, would show that the defendants had information that Hussein was using OFP kickback money to fund terrorism targeting Americans. [pp. 67-68].

I’m not keeping score, but there seems to be a strong movement afoot for the ATS to require purposeful intent on the part of corporate defendants. With the heightened pleading standard of Iqbal, it seems increasingly likely that this standard could shut down most ATS claims. How does a plaintiff properly allege corporate intent in a complaint in order to survive the purpose test?

by Roger Alford

“An ancient gold tablet, discovered during archaeological excavations in 1913 in the Ottoman Empire, disappeared from a Berlin museum in the immediate aftermath of World War II and reappeared almost sixty years later in the safe deposit box of a Holocaust survivor.” So begins In re Flamenbaum, a case that reads like a Hollywood movie script.

As reported here, “the gold tablet was found during an excavation around the city of Ashur, now Qual’at Serouat, Iraq, by a team of German archeologists led by Walter Andrae. The inscribed tablet, which was discovered in the foundation of the Ishta Temple, is actually a construction document, according to the judge. It dates to the reign of the Assyrian King Tukulti-Ninurta I (1243-1207 BCE) who expanded the Assyrian empire but was later killed by his son. When the excavations finished in 1914, the tablet was packed up along with other artifacts and sent to Basra, where it was loaded on a Germany-bound freighter…. In 1934, the tablet was put on display at the Vorderasiatisches Museum…. Five years later, with World War II looming, the museum was closed and the tablet was put in storage along with other antiques and works of art. At the end of the war in 1945, an inventory discovered that the tablet was missing. Nearly 60 years later, in April 2003, the tablet was discovered among the possessions of Riven Flamenbaum, of Great Neck, N.Y., after his death at the age of 92.”

The court rejected the museum’s claim under the doctrine of laches, but in so doing it left unresolved a fascinating international law question pertaining to spoils of war and prohibitions against pillaging and plundering. Here is how that issue was articulated by the court:

The executor argues that the spoils of war doctrine applies, based upon the possibility that the former [USSR] acquired the gold tablet along with other museum artifacts following the end of the World War II. In support of this position, the executor cites the testimony of the museum director at the hearing. Dr. Salje testified that Russian troops took valuables out of the museum at the conclusion of World War II, and returned some, but not all, of the objects in 1957…. The estate claims that under the applicable laws of the Soviet Union … cultural property taken by Russian troops during the occupation of Berlin after World War II was lawfully transferred from one sovereign to another and that this taking of the gold tablet by Russian troops extinguished the rights of the museum pursuant to international law. Thus, a party subsequently acquiring the tablet could obtain good title and transfer good title to others.

The museum maintains, however, that the spoils of war doctrine does not affects its right to the tablet because international authorities as well as the Hague Convention of 1907 forbid pillaging and plundering….

The court finds that the estate has not adequately established facts upon which the court might consider the applicability of the spoils of war doctrine. Consequently, the court need not address the complex international law issues and conventions raised by learned counsel in this matter.

So for all you law of war experts out there, had the Flamenbaum estate been able to establish that Russian troops seized the golden tablet of Ishta Temple from the Germans at the end of World War II, and then transferred the tablet to Holocaust survivor Riven Flamenbaum, would he be lawfully entitled to keep it?

by Roger Alford

Yesterday’s oral argument in Morrison v. National Australia Bank Ltd gave strong indications that the Court was prepared to extend the territorial limitations of Hoffman-La Rouche v. Empagran to the securities fraud context. Morrison involves a class action brought by foreign plaintiffs against a foreign stock issuer on a foreign exchange for alleged fraud that occurred on foreign soil. The justices strongly questioned whether the Securities Act of 1934 should extend to reach such conduct.

Justice Ginsburg (p. 7):

This case is Australian plaintiffs, Australian defendant, shares purchased in Australia. It has “Australia” written all over it…. Of the applicable laws to this transaction, to this alleged fraud, isn’t the most appropriate choice the law of Australia rather than the law of the United States?

Justice Alito (p. 11):

Wouldn’t your clients have an adequate remedy under Australian law in Australia, in the Australian court system…. Let’s assume that on the facts of this case they could not prevail under Australian law in the Australian court system. Then what United States interest is there that should override that?

Justice Breyer (pp. 13-14):

In my mind the difficult issue in this case is not the jurisdictional issue under principles of international law. It’s the question of the scope of the statute. And there the things against you are three. One is Professor Sach’s argument [in her article published in 28 Colum. J. Trans Law 677 (1990)], which I would like to know your answer to. The second is in Judge Friendly’s two opinions…. Now, France, Britain and Australia have filed briefs in this case giving what they consider very sound reasons, which are reasons that Judge Friendly never considered…. [T]hey point to a number of conflicts, that if you win, how that will interfere with their efforts to regulate their own securities market….

Justice Scalia (p. 16):

But Australia says: Look, it’s up to us to decide whether there has been a misrepresentation, point one; and whether it’s been relied upon by the … plaintiffs, point two. And we should be able to decide that and we don’t it decided by a foreign court. You are talking about a misrepresentation … made in Australia to Australian purchashers; it ought to be up to us to decide that issue; and here you are dragging the American courts into it.

Justice Ginsburg (p. 18):

[U]nless you want to say, the Australia court to say, the United States taking this case is so outrageous that we will not respect its judgment…. What conflict of laws is all about is you have two jurisdictions, both with an interest in applying their own law, but sometimes one defers to the other.

Justice Ginsburg (p. 21):

[Y]ou have two classes of plaintiffs, one the Australians, who bought their shares in Australia; then you have Morrison, who has an ADR, and who is dismissed because he wasn’t able to show damages. So what U.S. investor was harmed?

Reading the tea leaves, it looks as though Morrison could be one of the more significant cases on the presumption against extraterritoriality. The questions, particularly from Breyer and Ginsburg, suggest that we should not read the statute to regulate foreign fraud by foreign stock issues against foreign purchasers on a foreign exchange.

by Roger Alford

The Eleventh Circuit in United States v. Frank has ruled that a child sex trafficking statute applies extraterritorially. The statute, 18 U.S.C. § 2251A, provides that:

“[w]hoever purchases … a minor … with intent to promote … the engaging in of sexually explicit conduct by such minor for the purpose of producing any visual depiction of such conduct,” and “in the course of the conduct described … the minor or the actor traveled in or was transported in or affecting interstate or foreign commerce” is guilty of an offense punishable by fine and not less than 30 years’ imprisonment or for life.

In January 2004, Kent Frank, a United States citizen and resident, was detained in Cambodia by the Cambodian National Police (“CNP”) on suspicion of violating Cambodian laws against child sex prostitution. During his detention by Cambodian authorities, Frank admitted that he had engaged in sexual conduct with and had taken sexually explicit photographs of Minors A, B, C, and D on multiple occasions. He confessed to paying the girls $15 or $25 to either photograph them or have sex with them. At some point during the interview, Gary Phillips, the Assistant United States Immigration and Customs Enforcement Attach in Bangkok, Thailand, arrived to meet with Chief Meng Say of the CNP, but did not participate in Frank’s interview. In a separate room, Agent Phillips reviewed the evidence Cambodian officials had seized from Frank’s hotel room.

The Eleventh Circuit upheld the conviction finding that (1) Miranda warnings were unnecessary; (2) the statute applied extraterritorially; and (3) the “purchase” of a child may occur through payment directly to the child, rather than a third party.

The Court found that generally, “statements obtained by foreign officers conducting interrogations in their own nations have been held admissible despite a failure to give Miranda warnings to the accused.” The reasoning behind this rule is that the exclusion of evidence by an American court has little to no deterrent effect on foreign police practices. That is, our “Constitution cannot compel such specific, affirmative action by foreign sovereigns.” Moreover, the joint venture exception does not apply because American officials did not know of Frank’s presence in Cambodia until after he was arrested and did not participate in Frank’s detention or interrogation.

As for the extraterritorial application of the statute, the Court found that because Section 2251A requires that in the course of the prohibited conduct, the defendant or minor “travel[ ] in … interstate or foreign commerce,” Congress plainly intended that the statute sweep broadly and apply extraterritorially. The language of § 2251A requiring travel in foreign commerce, the broad sweep warranted by child pornography offenses, and Congress’s repeated efforts to prevent exploiters of children from evading criminal punishment demonstrate that Congress intended § 2251A to apply extraterritorially. Moreover, such an intent is consistent with international law, which permits jurisdiction under the “nationality” principle.

Finally, the Court held that “purchase” does not require the sale of a minor from a third party to the defendant. In the context of child prostitution, the minor herself is turned into an object or commodity, by selling her body to be used by the defendant for a certain purpose. A minor cannot separate her services from herself because she lacks the capacity to do so. Congress used the term “purchase” alone, rather than “purchase from the minor herself,” “purchase a minor’s services,” or “purchase from another,” to encompass situations where money is paid to a third party and where money is paid directly to the minor. “Purchase,” as used in § 2251A(b), covers situations where a defendant pays a minor directly for sex.

by Roger Alford

In the long-running battle between Chevron and Ecuador over environmental damage, a federal court in New York has denied Ecuador’s motion to stay arbitration of a Ecuador-U.S. BIT claim. In September 2009, Chevron filed a notice of arbitration alleging, among other things, that “Ecuador has breached … the Ecuador-United States BIT, including its obligation to afford fair and equitable treatment, … an effective means of enforcing rights, non-arbitrary treatment, [and] non-discriminatory treatment.”

In the hearing this week, counsel for plaintiffs in the underlying Ecuadorian litigation described the arbitration as “a collateral attack” on a future Ecuadorian judgment. “There is no demonstration that there’s even any prejudice to Chevron at this point,” said Jonathan Abady. “There’s no judgment that has been rendered.” The Court nonetheless denied Ecuador’s motion to stay the BIT arbitration and allowed the question of due process violations to go forward to arbitration:

The petition contains … specific grounds asserted by Chevron why a judgment rendered against it pursuant to the litigation now pending in the Ecuadorian Court would not be one rendered in accordance with due process…. I am returning only the arbitrability of the due process claim, and I am expressing no opinion with respect to any other claim or with respect to any claim for relief. Those matters are for the arbitrators. There are also significant issues that have been raised concerning the timing of proceedings before the arbitrators, specifically, whether the arbitration can commence prior to the rendering of a decision in the suit now pending, and that is one of the … many issues for the arbitration panel to determine, giving consideration to the interests of the parties in matters of timing, which seems to be a great concern.

My sense is that Chevron is bringing this action not only in an attempt to succeed on the merits of its due process claim, but also to send a signal to the Ecuadorian court that any future action that denies Chevron basic due process will be subject to international scrutiny. The Ecuadorian court now faces the unpleasant prospect of knowing that the Ecuadorian government may be on the hook financially for any improper judgment rendered against Chevron.

I also think it is quite plausible that the BIT arbitration is an opening salvo in future attempts by Chevron to challenge the enforcement of the Ecuadorian judgment in foreign courts. If a BIT arbitration panel concludes that Chevron has been denied due process, this would significantly bolster arguments that the foreign judgment should not be enforced in the United States under the Hilton v. Guyot standard. If the arbitral tribunal concludes that Chevron has been denied due process or fair and equitable treatment in the Ecuador litigation, then it will be difficult to enforce an Ecuadorian judgment in the United States consistent with the Hilton test requiring a showing of “a full and fair trial abroad … under a system of jurisprudence likely to secure an impartial administration of justice … and [that] there is nothing to show either prejudice in the court … or fraud in procuring the judgment.”

by Roger Alford

As I have noted earlier, there is a pitched battle between victims of Pan Am 73 terrorist hijacking over the distribution of treaty funds secured by the United States for American victims in a 2008 diplomatic settlement with Libya. The treaty and Executive Order stipulate that the money shall be distributed solely for the benefit of United States nationals, but foreign nationals are claiming that they are entitled to the overwhelming majority of the funds pursuant to a Joint Prosecution Agreement signed among the passengers of Pan Am 73, most of whom were non-Americans. The American terrorist victims argue that the contract is inapplicable to a diplomatic settlement, and alternatively, that it is void for public policy because the contract cannot contravene the federal policy designed to distribute these funds for American victims, and only American victims. They contend that the JPA places an obstacle in the way of the United States’ efforts to effectuate the comprehensive settlement on behalf of U.S. nationals and undermines the essential purpose of applicable federal law.

Last week, a federal district court judge in Washington, D.C. heard oral arguments on a motion to compel arbitration of this dispute pursuant to an arbitration clause in the Joint Prosecution Agreement. Press reports of the developments are here, here, and here.

One of the most unusual twists in the case is that the implementing statute, the Libyan Claims Resolution Act (“LCRA”), immunizes the assets from “attachment or any other judicial process” before, during, and after the assets are held by the U.S. Department of Treasury for distribution to the American victims. In other words, when Treasury cuts a check to the American victims who succeed before the Foreign Claims Settlement Commission, those assets remain immune from attachment or any judicial process. How then can non-American victims attempt to seize those assets pursuant to a contract claim? The answer should be that they cannot. Consistent with the arbitrability doctrine, a competing federal statute overrides the general requirements of the FAA, precluding arbitration of the contract claims.

Serving as an expert consultant on the case on behalf of the American victims, I read this statute as precluding “any judicial process” whatsoever, which includes court proceedings to compel arbitration. Section 4 of the LCRA states that “[n]otwithstanding any other provision of law, any property described [below] … shall be immune from attachment or any other judicial process.” The property is defined as “any property that relates to the [U.S.-Libya] claims agreement” and “for purposes of implementing the claims agreement” is “held by,” “transferred to,” or “transferred from” the Department of Treasury. See 73 Fed. Reg. 50666 (Aug. 27, 2008). Thus, it seems clear that the assets the non-Americans are seeking to attach were immunized by law from “attachment or other judicial process” under the LCRA in order to guarantee that they would reach the intended recipients after they were “transferred from” the Department of Treasury.

During the hearing Judge Bates was very intrigued by the argument, but frankly it was impossible to tell which way he would rule on the arbitrability question. He was particularly interested in hearing that the Department of State was considering filing a Statement of Interest in the case to articulate the federal policy interests that are at stake. The American victims argued that one of the reasons the case should not go to arbitration is that there are clearly established rules requiring federal courts to give deference to such Executive Branch concerns, whereas in arbitration there is no obvious means for the United States to intervene in the arbitration, nor any guarantee that the panel would give the government’s Statement of Interest any weight.

by Roger Alford

That’s the question, sort of, raised in Totes-Isotoner v. United States, the most interesting tariff classification case you will ever read. Under the Harmonized Tariff Schedule, men’s glove have a tariff rate of 14 percent whereas gloves “for other persons” have a rate of 12.6 percent. An importer of gloves, Totes-Isotoner, argues that these duties unconstitutionally discriminate on the basis of sex.

The government raised several handy little arguments which the Federal Circuit quickly rejected. It argued that Totes lacked standing because every glove importer pays the same duty rate, and therefore Totes has suffered no injury-in-fact. Discriminate equally and there’s no discrimination! As long as you refuse service to every black customer, no black customer has room to complain. The Court described this argument as “frivolous” noting that “equal protection requirements still apply even though everyone in the targeted group is targeted equally.”

That conclusion went hand in glove with the next, which addressed whether discriminatory duties on gloves raised a political question. Imagine the embarrassment if we have multifarious pronouncements on the duty rate of gloves! The Federal Circuit rejected the argument out of hand, finding that “none of the cases cited by the government remotely holds or even implies that the federal courts are barred by the political question doctrine from reviewing federal statutes for compliance with equal protection guarantees.”

As to the key question of whether the duty rate on gloves unconstitutionally discriminates against men, the Court of International Trade said no because everyone cross-dresses these days anyway: men buy women’s gloves and women buy men’s gloves. “This … entirely misses the point,” said the Federal Circuit. “There is no serious dispute that men’s gloves are typically purchased for use by men and women’s gloves, for women.”

In the end the key question was not whether the differential duty rate had a disparate impact on men, but whether “Congress intended to discriminate against men in the tariff schedule.” Totes, of course, did not allege facts sufficient to infer a government purpose to discriminate against men. I’m not sure exactly what evidence that would be: a searching inquiry into the minds of government bureaucrats who write the tariff schedules to determine if they have special animus towards men, or men’s hands?

So men everywhere will continue to suffer in silence, going gloveless or paying an offensive and invidious 1.4 percent more on their beloved gloves. Meanwhile women will don their gloves at discriminatory prices, and continue to enjoy the kid glove treatment.

by Roger Alford

UC Irvine should be ashamed of itself. This is about as rude and discourteous as one could possibly imagine. Chancellor Drake issued the following statement of apology:

This behavior is intolerable. Freedom of speech is among the most fundamental, and among the most cherished of the bedrock values our nation is built upon. A great university depends on the free exchange of ideas. This is non-negotiable. Those who attempt to suppress the rights of others violate core principles that are the foundation of any learning community. We cannot and do not allow such behavior. Eleven individuals were arrested as a result of their actions last night and are being processed accordingly. Additionally, the Office of Student Conduct has initiated the Student Judiciary Review process to address issues under their jurisdiction.

Beyond this predictable apology, what is the appropriate response for UC Irvine? Dismissal or expulsion of these students? Discipline of all those who encouraged such behavior? And will the moderate Muslim community in the United States stand up and condemn this sort of behavior?

by Roger Alford

Here’s a wonderful story from my friend and former student Jeff Cook on the wonderful work he is doing in Cambodia with International Justice Mission to fight child prostitution. Jeff Cook is a former law clerk to Judge Urbina in Washington, D.C. and a former associate at O’Melveny & Myers. Here is Jeff’s account of the conviction of a man who had been selling the sexual services of an eight-year-old girl:

“Just before Christmas I received a gift that was far greater than any I had ever received. From an impoverished village outside of Phnom Penh where abuse, molestation and trafficking are part of daily life, a story of triumph, hope and inspiration emerged. A little over two years ago a small eight-year-old girl, weighing no more than 40 pounds, was being sold day in and day out to foreign pedophiles. Through persistence and prayer, IJM was able to work with the police to rescue this particular girl from her horrific situation. A few months later, the pimp, a strikingly tall Vietnamese man, was arrested for arranging these elicit and illegal encounters with pedophiles.

From the time of her rescue, the young girl lived in a shelter due to the danger of further abuse if returned to her family. As she spent more and more time at the shelter she became better able to verbalize what had happened to her. This is a testament both to the strength of the young girl and to the effectiveness of the care she received from the shelter’s counselors and staff. Sitting in on the trial preparation well over a year after her rescue, I was amazed to see the ease with which she discussed the crimes committed against her. And in a moment of downtime she exhibited her comfort and conversancy with these sensitive topics when she picked up a large picture book and began instructing those in the room on the differences between appropriate and inappropriate behavior with children. At that point, I pinched myself, and to my relief, I was indeed awake witnessing a miraculous development. I prayed at the time that she could pull upon this strength to provide testimony at the trial that was to take place the following week.

On the morning of trial, which was scheduled for the week before Christmas, she appeared calm, cool and collected. But when the perpetrator entered the courtroom, everything fell apart for this young girl. She began shaking and crying uncontrollably, gripped with fear at the sight of the imposing man who had been the vehicle for years of sexual abuse. As counselors comforted her, the court kindly provided a screen to shield the young girl from the perpetrator’s intimidating glares.

There was another victim, a fourteen-year-old girl, there that day who had been sold by this perpetrator several years earlier. Due to this girl’s family situation, she had remained in a shelter all this time and was able to provide lucid, strong and incriminating testimony against the perpetrator. The younger girl watched intently as the fourteen year old gave her testimony. She saw the courageous testimony and when it concluded, said, “I want to be brave like she was.” Without any tears or hesitation she stood up and walked around the protective screen to the center of the well of the court. For her small stature, she stood tall, with no more than five feet between her and the perpetrator on one side and the same distance separating her from a large table set up on a platform with three judges staring at her on the other. She then explained in great detail to each of her inquisitors (including the defense attorney) how the perpetrator or his friends would pick her up from her home and take her to be sexually abused by foreigners. She even explained how the perpetrator taught her what to do and how he negotiated prices. This small and vulnerable child had provided powerful and overwhelming evidence of the perpetrator’s guilt.

A week after the trial, on Christmas Day, the verdict was handed down — the perpetrator was found guilty and sentenced to 10 years in prison. In a small dusty courtroom in an overlooked corner of the world, justice was done. And for one young girl that meant all the world.

Please remember this girl and many like her who regularly face their fears by facing their abusers in courtrooms. And please pray for this girl and this case as it will no doubt be appealed requiring the victims to appear in court again to provide further testimony.”

by Roger Alford

The proposed anti-homosexuality legislation introduced by Ugandan parliament back-bencher David Bahati is creating an international outcry. The bill–introduced as a private member’s bill without government support–would impose the death penalty for “aggravated homosexuality,” defined as “sex with a minor or a disabled person, where the offender is HIV-positive, a parent or a person in authority over the victim, or where drugs are used to overpower the victim.” It otherwise imposes a penalty of life imprisonment for homosexuality, and includes lesser punishment of seven years for promoting homosexuality and three years for failing to report offenses.

The proposed legislation has caused an international outcry, so much so that the Ugandan President Museveni has publicly called for a delay of the legislation, saying that

“I told them that this bill was brought up by a private member and I have not even had time to discuss it with him. It is neither the Government nor the [ruling] NRM party. It is a private member…. This is a foreign policy issue and we have to discuss it in a manner that does not compromise our principles but also takes care of our foreign policy interest.”

My friend who just returned from Uganda said that those words were designed to kill the bill before more damage was done to Uganda’s reputation.

The proposed legislation is, in the words of evangelical pastor Rick Warren, “unjust, extreme and un-Christian toward homosexuals.” In an open letter to Ugandan pastors, he urged opposition to the bill:

“the freedom to make moral choices, and our right to free expression are gifts endowed by God. Uganda is a democratic country with a remarkable and wise people, and in a democracy everyone has a right to speak up. For these reasons, I urge you, the pastors of Uganda, to speak out against the proposed law.”

The proposed bill also has generated a huge media outcry, as well as threats to withdraw foreign aid, and diplomatic protests from many quarters, including Prime Minister Gordon Brown and U.S. Secretary of State Hillary Clinton.

Because the law is so extreme, it highlights the sharp cultural divide between the West and Latin America, on the one hand, and Africa and the Middle East on the other. This map draws about as stark a geographic divide as one could imagine. The issue of homosexual rights vs. traditional family values therefore provides an extremely useful prism about norm entrepreneurship across cultures and continents. While I know of no one who would defend this bill, how much cultural and ideological pluralism should be allowed in the slow and steady progress of international human rights? What “margin of appreciation” is permissible on an issue such as this?

Finally, as a foreign relations matter, the proposed legislation also raises the significant practical issue of pragmatic transnational norm advocacy. What is the most effective response for those in the West who wish to defeat this bill? Is it threats of economic sanctions, démarches from European diplomats, or pastoral letters from one (famous) clergyman to another? Is the best recipe for success a mix of carrots and sticks, or a soft appeal to reason and conscience? I for one have little doubt that on an issue like this someone like Rick Warren carries more weight with local Ugandans than, say, Amnesty International. But I also doubt his words have more weight than a 45-minute phone call between President Museveni and Hillary Clinton.

The goal of scrapping the draconian bill of a Ugandan backbencher should be easily achievable. But what is the best means to that end?

by Roger Alford

Paul Caron at Tax Prof Blog has just published the annual rankings for law professor blogs. There is some very useful information, including overall traffic numbers and details on which blogs are growing and declining in numbers. (Opinio Juris is now ranked 16th overall and is among the top ten in percentage annual increases).

As I have reported before, it is one thing to have good traffic numbers and another to be well read. Here are the rankings of the stickiest law professor blogs (with Caron’s rankings in parenthesis):

1. 3:30 Althouse (3)
2. 3:10 Jack Bog’s Blog (9)
3. 2:40 Antitrust & Competition Policy Blog (34)
4. 2:35 Election Law Blog (33)
5. 2:27 Mirror of Justice (28)
6. 2:25 The Right Coast (19)
7. 2:23 Sentencing Law & Policy (11)
8. 2:21 Religion Clause (24)
9. 2:17 Sports Law Blog (25)
10. 2:15 Legal History Blog (27)
11. 2:13 Dissenting Justice (26)
12. 2:10 Prawfsblawg (13)
13. 2:05 Faculty Lounge (15)
14. 2:01 Opinio Juris (16)
15. 2:00 Balkinization (14)
16. 1:49 Patently-O (7)
17. 1:46 The Conglomerate (22)
18. 1:41 Immigration Prof Blog (23)
19. 1:40 White Collar Crime Prof Blog (20)
20. 1:40 Workplace Prof Blog (17)
21. 1:36 Legal Profession Blog (31)
22. 1:29 Wills, Trusts & Estates Prof Blog (21)
23. 1:22 Concurring Opinions (11)
24. 1:16 Legal Writing Prof Blog (30)
25. 1:15 CrimProf Blog (32)
26. 1:13 Leiter Law School Reports (12)
27. 1:07 Ideoblog (29)
28. 1:06 Discourse.net (18)
29. 1:04 Leiter Reports: Philosophy (6)
30. 0:32 Hugh Hewitt (4)
30. 0:32 Tax Prof Blog (5)
32. 0:31 Volokh Conspiracy (2)
33. 0:23 Legal Insurrection (8)
34. 0:00 Instapundit (1)

by Roger Alford

The transcript for the oral argument in Abbott v. Abbott is out, raising the difficult question of what constitutes a right of custody within the meaning of the Hague Convention on the Civil Aspects of International Child Abduction. The treaty grants a parent the right to have a child returned to the child’s country of habitual residence if the child has been removed in violation of that parent’s rights of custody. The case raises the difficult issue of whether the non-custodial parent who has visitation rights has “custody rights” within the meaning of the treaty by virtue of a ne exeat clause prohibiting one parent from removing the child from the country without the other’s consent.

The case arose out of Chile. A British father and American mother had a child in 1995 and together the family moved to Chile in 2002. In 2003 the couple separated and the mother was granted custody and the father visitation rights. In addressing custodial issues, the Chilean court prohibited the child’s removal from Chile by either the father or mother without their mutual consent. The mother fled to Texas and the father filed an action in Texas for return of the child, alleging that his “ne exeat” rights to prevent removal from Chile was a “right of custody” within the meaning of the Convention.

Among the more interesting issues was Scalia’s colloquy regarding comparative interpretation of the treaty provision. In keeping within his views in Olympic Airways, Scalia expressed the view that the Court should interpret the treaty in a manner consistent with the general consensus of all the signatory states, assuming one could divine such a consensus. Here is Scalia’s exchange with Karl Hays, counsel for respondent Jacquelyn Abbott (pp. 43-48):

Justice Scalia: Most courts in countries signatory of the treaty have come out the other way and agree that a ne exeat right is a right of custody, and those courts include U.K., France, Germany, I believe Canada, very few come out the way you—how many come out your way?

Mr. Hays: Actually, Your Honor, the United States and Canada do, and the analysis—

Justice Scalia: Well, wait … You’re writing our opinion for us, are you?

Mr. Hays: … There have only been seven courts of last resort that have heard this issue. There are some 81 countries that belong—

Justice Scalia: Yes, but, still, in all, I mean, they include some biggies, like the House of Lords, right? And … the purpose of a treaty is to have everybody doing the same thing, and … if it’s a case of some ambiguity, we should try to go along with what seems to be the consensus in … other countries that are signatories to the treaty.

Mr. Hays: If, in fact, there were a consensus, but … there is not a consensus in this instance….

Justices Breyer and Ginsburg then enter the fray with Justice Scalia and the three start counting countries, whether Canada or Germany or Australia should count on one side of the ledger or the other, depending on whether the language in the case was dicta or whether it was a court of last resort, etc.

Hays then concludes with the comment, “the point that we are making, however, is that, if you have one or two or even three countries that have gone one way and then you have other countries that have gone the other way, that there’s not a clear-cut overwhelming majority of the other jurisdictions that have ruled in favor of establishing ne exeat orders….” To which Scalia responds, “We will have to parse them out, obviously.”

The exchange raises a great question of country-splits in treaty interpretation. Several justices appeared willing to interpret an ambiguous treaty provision consistent with the general consensus of signatory nations. But respondent argues that there is no clear consensus and only a handful of countries out of 81 signatories have even addressed the issue.

So even assuming the Court takes the approach suggested by Justice Scalia in Olympic Airways and looks for signatory consensus, what’s the Court to do when there are few voices from abroad and those voices are not consistent? Is there still a role for comparative interpretive analysis in that context?