Justia U.S. 3rd Circuit Court of Appeals Opinion Summaries

Articles Posted in International Law

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Dominguez moved to Dutch Sint Maarten in 2007. Dominguez met Didon and moved into his Dutch Sint Maarten apartment in 2009. In 2010, A.D. was born; in 2011, Dominguez’s daughter from a previous relationship, J.D., joined them. Didon and Dominguez successfully petitioned the French consulate to change J.D.’s birth certificate to list Didon as her father. The family resided in Dutch Sint Maarten, Didon worked and the children attended school in French Saint Martin. In 2014, Dominguez took the children to New York for her sister’s wedding, showing Didon round-trip tickets. Dominguez did not return with the children. Didon pursued a custody action. A French court granted him full custody of both children in an ex parte order. Didon’s investigator located them in Pennsylvania. Didon filed a Hague Convention petition. Following an ex parte telephone hearing, the Pennsylvania district court ordered the U.S. Marshals Service to serve Dominguez, and to confiscate the passports of Dominguez, A.D., and J.D. After hearings at which both parties presented evidence, the court granted Didon’s petition. The Third Circuit vacated. The Hague Convention on the Civil Aspects of International Child Abduction allows a parent to petition for the return of a child when that child has been removed or retained from her “habitual residence” country in violation of the parent’s custody rights in that country. The Hague Convention is recognized by French Saint Martin but is not recognized by Dutch Sint Maarten. Rejecting an argument that a child could have two concurrent “habitual residence” countries, the court concluded that the children were habitual residents only of the country in which they “lived”—Dutch Sint Maarten. View "Didon v. Castillo" on Justia Law

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CCC, an investment fund incorporated in Guernsey, a British Crown dependency in the English Channel, invested in residential mortgage-backed securities issued by Fannie Mae and Freddie Mac. Moonmouth purchased CCC shares for $60 million under a 2006 Subscription Agreement, which contained a forum selection clause giving Delaware state courts exclusive jurisdiction over any action and specifying that Delaware law was to govern. In 2008, CCC entered liquidation. A Guernsey court appointed liquidators, who sued Carlyle and others (plaintiffs in this action) in Guernsey for breach of fiduciary duties owed to CCC. Subsequent Transfer Agreements involving the parties released then-existing claims against Carlyle. In 2012, a Dutch law firm representing Moonmouth sent letters alleging that plaintiffs took unacceptable risks in connection with CCC-managed investments and that they would hold plaintiffs liable for damages sustained by investors in connection with CCC. Plaintiffs sought to enforce the Subscription Agreement’s forum selection clause and the Transfer Agreements’ releases. After removal to federal court, the district court remanded to state court. The Third Circuit affirmed. The Subscription Agreement’s forum selection clause pertains to the case, may be enforced against defendants, and may be invoked by plaintiffs; the Transfer Agreement provides an alternative ground supporting remand. View "Carlyle Inv, Mgmt., LLC v. Moonmouth Co., SA" on Justia Law

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From 2004-2008, Georgiou and co-conspirators engaged in a stock fraud scheme resulting in more than $55 million in actual losses. The scheme centered on four stocks, all quoted on the OTC Bulletin Board or the Pink OTC Markets Inc. The conspirators opened brokerage accounts in Canada, the Bahamas, and Turks and Caicos, which they used to trade stocks, artificially inflating prices. They were able to sell their shares at inflated prices and used the shares as collateral to fraudulently borrow millions of dollars from Bahamas brokerage firms. In 2006, Waltzer, a co-conspirator, began cooperating in an FBI sting operation. A jury convicted Georgiou of conspiracy, securities fraud, and wire fraud. The district court sentenced him to 300 months’ imprisonment, ordered him to pay restitution of $55,823,398, ordered a special assessment of $900, and subjected Georgiou to forfeiture of $26,000,000. The Third Circuit affirmed, rejecting an argument that the securities and wire fraud convictions were improperly based upon the extraterritorial application of United States law. The securities were issued by U.S. companies through U.S. market makers acting as intermediaries for foreign entities. The court also rejected claims of Brady and Jencks Act violations and of error on evidentiary and sentencing issues. View "United States v. Georgiou" on Justia Law

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Freidrich and Davis, both American citizens, were passengers on a U.S. Airways flight in 2010 from Philadelphia to Munich, Germany. Davis formerly lived in Pennsylvania, but now lives in Germany. On his 2012 Registration and Ballot Request form, Davis checked a box that declared his intent to return to the U.S. Freidrich alleges that, during the flight, Davis left his seat and, while standing in the aisle waiting to use the lavatory, he fell on her, breaking her arm. In 2012, Freidrich filed suit against Davis for her injuries in the U.S. District Court for the Eastern District of Pennsylvania based on diversity jurisdiction. The court dismissed for lack of subject matter jurisdiction. The Third Circuit affirmed. Freidrich argued that, because Davis manifested his intent to return to the U.S., he did not produce sufficient evidence to rebut the presumption that his domicile continued to be Pennsylvania. Rejecting the argument, the court upheld a finding of a German domicile, based upon both Davis’ actions and his declarations of intent. View "Freidrich v. Davis" on Justia Law

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In 1975, a pistol manufactured by MKEK malfunctioned, firing a bullet through Ohntrup’s hand while he loaded the gun. The court held the seller, Firearms Center and MKEK, which is wholly owned by the Republic of Turkey, jointly liable for $847,173.97 and required MKEK to indemnify Firearms Center. The Morgan law firm represented MKEK, but after appeal, sought to withdraw. The court permitted the individual lawyers to withdraw but required the firm to remain as counsel of record until MKEK hired substitute counsel. The Third Circuit affirmed, characterizing MKEK as an intractable litigant and stating that a communication gap would hamper post-judgment proceedings. The Ohntrups tried to collect their judgment; MKEK disregarded the Ohntrups’ discovery requests. The Ohntrups sought assistance from the State Department and pursued MKEK in Turkish courts, to no avail. In 2007, Ohntrup’s widow obtained a $16 million civil contempt judgment against MKEK that grows by $10,000 annually. Ohntrup’s judgments against MKEK are now worth about $25 million. In 2011, Ohntrup’s lawyers learned of a $16.2 million transaction in which a Minneapolis-based company. (Alliant), agreed to sell munitions manufacturing components to MKEK. Ohntrup obtained some discovery from Alliant, but the district court denied subsequent discovery requests. When Ohntrup renewed her post-judgment discovery efforts, Morgan was granted leave to withdraw. The Third Circuit affirmed the order granting leave to withdraw, but remanded the discovery order. The court erred when it relied upon the uncertainty surrounding the judgment creditor’s ability to attach the targeted property. View "Ohntrup v. Makina Ve Kimya Endustrisi Kur" on Justia Law

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The client was the target of a grand jury investigation into alleged violations of the Foreign Corrupt Practices Act. The grand jury served a subpoena on the client’s former attorney and the government moved to enforce this subpoena and compel testimony, under the crime-fraud exception to the attorney-client privilege. The client sought to quash the subpoena by asserting the attorney-client privilege and work product protection. After questioning the attorney in camera, the district court found that the crime-fraud exception applied and compelled testimony. The Third Circuit affirmed, holding that the district court applied the correct standard in determining whether to conduct an in camera examination of a witness, requiring a showing of a factual basis adequate to support a good faith belief by a reasonable person that in camera review of the materials may reveal evidence to establish the claim that the crime-fraud exception applies. The court did not abuse its discretion in applying that standard, in determining procedures for the examination, or in ultimately finding that the crime-fraud exception applied. View "In Re: Grand Jury Subpoena" on Justia Law

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In 2011, Shulman and his companies, Kisano and Trasteco, filed suit in the Western District of Pennsylvania against Lemster and his company, Steel Equipment, claiming violations of the Racketeer Influenced Corrupt Organizations Act, intentional interference with contract, unjust enrichment, and breach of fiduciary duty. Shulman added his business partner, Sapir, and certain of his entities as defendants, with claims of fraud. A magistrate recommended that the action be dismissed on forum non conveniens grounds, reasoning that Israel would be the more appropriate forum and the court dismissed “on the understanding that the case may be refiled in Israel and that the defendants waived certain statute of limitations defenses.” The Third Circuit affirmed, holding that the district court properly considered public interest factors and the “oppressiveness and vexation” standard. View "Kisano Trade & Inv. Ltd. v. Lemster" on Justia Law

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CS manufactures and sells X-ray and metal detection devices for use in public facilities around the world. Tecapro is a private, state-owned company that was formed by the Vietnamese government to advanced technologies into the Vietnamese market. In 2010, Tecapro purchased 28 customized AutoClear X-ray machines from CS for $1,021,156. The contract provides that disputes shall be settled at International Arbitration Center of European countries for claim in the suing party’s country under the rule of the Center. Tecapro initiated arbitration proceedings in Belgium in November 2010. In December 2010, CS notified Tecapro of its intention to commence arbitration proceedings in New Jersey. In January 2011, CS filed its petition to compel arbitration in New Jersey and enjoin Tecapro from proceeding with arbitration in Belgium. The district court concluded that it had subject matter jurisdiction under the U.N.Convention on the Recognition and Enforcement of Foreign Arbitral Awards, that it had personal jurisdiction over Tecapro, and that Tecapro could have sought to arbitrate in Vietnam and CS in New Jersey. The latter is what happened, so “the arbitration shall proceed in New Jersey.” After determining that it had jurisdiction under the Federal Arbitration Act, 9 U.S.C. 1, the Third Circuit affirmed. View "Control Screening LLC v. Technological Application & Prod. Co." on Justia Law

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Nortel employed about 24,000 people worldwide when it filed Chapter 11 petitions. Its affiliates entered insolvency proceedings in Canada and the U.K. The Bankruptcy Court recognized the foreign proceedings as triggering the automatic stay of 11 U.S.C. 362(a). Nortel entities from several countries entered into an Interim Funding and Settlement Agreement, approved by the Bankruptcy Court, providing for cooperation in sales of business units and that proceeds of any sale will be held in escrow. Claims filed in the U.S. asserted that U.S. debtors might be required to provide financial support for U.K. pension obligations under the U.K. Pensions Act 2004. The claims were contingent and unliquidated, based on the outcome of the U.K. proceedings. U.S. debtors sought to enforce the stay, to prevent participation in U.K. proceedings concerning their liability. The court granted the motion, holding that the police power exception to the automatic stay did not apply because neither the Trustee nor the U.K. agency is a governmental unit under 11 U.S.C. 101(27) and that U.K. proceedings do not pass the public policy or pecuniary purpose tests because the focus is a benefit for a private party, the Trustee. Canadian courts reached the same conclusion. The district court affirmed the stay. In U.K. proceedings, the debtors were ordered to secure financial support for the plan. The Third Circuit affirmed the stay. View "In Re: Nortel Network" on Justia Law

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Defendant boarded a plane in New York City and flew to Hamburg. Six months after his arrival in Germany, he sexually molested a 15-year-old boy. After serving 19 months in a German prison, defendant returned to the United States and was convicted of engaging in noncommercial illicit sexual conduct in a foreign place (18 U.S.C. 2423(c) and (f)(1)) and sentenced to 30 years in prison. The Third Circuit affirmed. The offense began when defendant boarded a plane, but the bulk of the offense was not committed in any district in the United States, so venue was proper in the Delaware district where the arrest occurred. Rejecting a facial challenge to the statute, the court stated that the statute is within the authority of Congress under the Foreign Commerce Clause.