Panel Holds That Fourteenth Amendment Standards Constrain Fifth Amendment Personal Jurisdiction Over a Foreign Defendant, But Urges Reversal En Banc

Ed note 7-2-21: The Fifth Circuit vacated this opinion and will hear it en banc. https://www.ca5.uscourts.gov/opinions/pub/20/20-30382-CV1.pdf

In Douglass v. Nippon Yusen Kabushiki Kaisha, No. 20-30379 (5th Cir. Apr. 30, 2021) (per curiam), the panel struggles with application of the federal due process personal jurisdiction test to a foreign defendant. While agreeing with the plaintiff in principle that the Fifth Amendment standard is more capacious than the Fourteenth Amendment, it also holds that a 2016 Fifth Circuit decision – Patterson v. Aker Sols., Inc., 826 F.3d 231 (5th Cir. 2016) – held to the contrary. Two panelists, in a separate opinion, urge en banc overruling of the 2016 decision.

The plaintiff estates filed wrongful death and survival actions in the Eastern District of Louisiana, concerning a collision at sea between a Japanese vessel (NYK Line) and “a U.S. Navy destroyer in Japanese territorial waters.” The claims were governed by a federal statute, the Death on the High Seas Act, 46 U.S.C. §§ 30301-08. A second case was filed for sailors injured in the collision.

“The plaintiffs-appellants in both cases asserted personal jurisdiction over NYK Line pursuant to Fed. R. Civ. P. 4(k)(2), alleging that, despite NYK Line’s status as a foreign corporation, its substantial, systematic, and continuous contacts with the United States should make NYK Line amenable to suit in federal court.” Fed. R. Civ. P. 4(k)(2) provides that for foreign defendants, “serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if (A) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and (B) exercising jurisdiction is consistent with the United States Constitution and laws.”

NYK Line filed and won a motion to dismiss on personal jurisdiction grounds, Fed. R. Civ. P. 12(b)(2). On appeal, the panel observes that “[w]e are asked to address whether the district court could constitutionally exercise personal jurisdiction over NYK Line. Because we are bound by the rule of orderliness, existing Fifth Circuit precedent leaves us with only one proper outcome, and we affirm.”

The panel observes that while “[n]o one disputes” that Fifth Amendment due process applies to this case, “the crux of this dispute” is “how the Fifth Amendment due process test is applied in the personal jurisdiction context, and whether—and to what extent—Fourteenth Amendment due process caselaw in that same context constrains a Fifth Amendment due process analysis.”

The panel finds much persuasive in the argument that the Fifth Amendment is far less protective of a foreign defendant’s right not to be haled into a federal court than the Fourteenth Amendment. The panel cites, in a footnote, an amicus brief in support of plaintiffs filed by Professors Helen Hershkoff, Arthur R. Miller, Alan B. Morrison, John E. Sexton, and Adam N. Steinman.

Under the plaintiffs’ argument, “in deciding whether a court’s exercise of personal jurisdiction over a defendant comports with the Fifth Amendment’s Due Process Clause, we ought not to turn to recent Supreme Court cases interpreting the Fourteenth Amendment specifically. Rather, we should look to a defendant’s national contacts and follow the basic dictates of International Shoe Co., v. Washington, 326 U.S. 310, 319 (1945).”

Applying the “proposed ‘national jurisdiction’ test, the inquiry is whether a foreign (i.e. non-U.S.) defendant, sued on a federal claim and not amenable to suit in any state court, was doing systematic and continuous business in the United States, and whether the claim at bar was related to that business.” Thus, using the Fifth Amendment analysis, “as amici put it, the court would ask ‘whether a non-U.S. defendant, sued on a federal claim and not amenable to suit in any state court, was doing systematic and continuous business in the United States, and whether the claim was related to that business.”

Despite that the panel finds the “national jurisdiction” test “persuasive,” the panel concludes that the case is controlled by Patterson. “It is well-settled in this circuit that the rule of orderliness prevents one panel of the court from overturning another panel’s decision, absent an intervening change in the law.” Because Patterson is “directly on point” – and held that the personal jurisdiction standards of the Fourteenth Amendment applied – the panel concludes that the district court lacked jurisdiction.

In a concurrence signed by two judges, the panel majority urges en banc rehearing to overrule the Patterson decision. “In Patterson, our court unwittingly limited Rule 4(k)(2) by collapsing the Fifth Amendment and Fourteenth Amendment due process analyses . . . . [There], the plaintiff did not contest the application of Fourteenth Amendment caselaw to explicate the Fifth Amendment standard, and thus the panel did not have the benefit of briefing about the important distinctions between Fifth and Fourteenth Amendment due process limitations on the exercise of personal jurisdiction . . . . Our decision today, compelled by Patterson, determines that a global corporation with extensive contacts with the United States cannot be haled into federal court for federal claims arising out of a maritime collision that killed seven United States Navy sailors.”

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