FHM Prevails on Jurisdiction

On June 17, 2017, there was a collision between the USS Fitzgerald and the ACX Crystal in Japanese territorial waters.  Following the collision, the estates of seven U.S. Navy sailors and more than forty current and former U.S. Navy sailors filed two lawsuits in the U.S. District Court for the Eastern District of Louisiana, demanding $287 million in damages.

We filed pre-answer motions to dismiss the lawsuits, arguing that the Court could not exercise personal jurisdiction over our client, a Japanese corporation that has its principal place of business in Japan.  The District Court granted our motions.  Alcide v. Nippon Yusen Kabushiki Kaisha  19-13691 (E.D.LA 2020) and  Douglass v. Nippon Yusen Kabushiki Kaisha 19-13688 (E.D.LA 2020).  On April 30, 2021, the U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s decisions.  Stephen Douglas, et al. v. Nippon Yusen Kabushiki Kaisha, 20-30382 c/w 20-30379 (5th Cir. 2021).

Plaintiffs appealed to the full Fifth Circuit Court of Appeal, which Affirmed that the Circuit Precedent in the Fifth Circuit remains consistent with every other Circuit to have decided the issue of general personal jurisdiction under the Fifth Amendment. In the Court’s August 16, 2022 decision, Stephen Douglas, et al. v. Nippon Yusen Kabushiki Kaisha, 20-30382 c/w 20-30379 (5th Cir. Aug. 16, 2022), Judge Edith Jones writing for the Court explained that as to general personal jurisdiction the Fifth Amendment and Fourteenth Amendment “use the same language and serve the same purpose, protecting individual liberty by guaranteeing limits on personal jurisdiction. Every court that has considered this point agrees that the standards mirror each other.” Quoting Justice Frankfurter, the Fifth Circuit explained that “To suppose that ‘due process of law’ meant one thing in the Fifth Amendment and another in the Fourteenth is too frivolous to require elaborate rejection.”  

The Court completely rejected each of Plaintiff’s and their Amici’s arguments. The Court held that foreign corporations such as NYK Line enjoy the protection of the Fifth Amendment’s due process clause when appearing in a U.S. court for the purpose of challenging that court’s jurisdiction over it. They rejected an expansive reading of Fed. R. Civ. P. 4(k)(2) that would have converted the rule into an independent basis for jurisdiction, and explained that the rule governed service, is textually and expressly subservient to constitutional due process, and accordingly does not control the constitutional due process inquiry into personal jurisdiction over a defendant.  Rejecting the Plaintiff’s and Amici’s arguments that personal jurisdiction had a basis outside due process, and with this en banc decision, the Second, Fifth, Sixth, Seventh, Eleventh, Federal, and D.C. Circuits have all held that there is no meaningful difference between the Fifth and Fourteenth Amendments’ minimum contacts analyses.  The court applies that “at home” analysis and ordinarily looks to place of incorporation and principal place of business.  In an exceptional case, a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in the United States.  The court reaffirmed the dichotomy between general personal jurisdiction and specific personal jurisdiction, rejecting Plaintiff’s attempt to create a blended test.  On the facts before it, the Fifth Circuit affirmed that NYK Line, a Japanese company with its place of incorporation and principal place of business in Japan is not subject to general personal jurisdiction in the Courts of the U.S.  

The majority of the Court ended its decision by embracing the position we argued and maintained throughout the proceedings; “Under the Supreme Court’s reigning test for personal jurisdiction, the district court’s well-reasoned judgment absolving NYK from appearing in federal court is AFFIRMED.”

Judge James Ho joined the majority and wrote separately to emphasize that the textual parallel between the Fifth and Fourteenth Amendments is undeniable, and that is why the majority construes “due process of law” to mean the same thing under the Fifth and Fourteenth Amendments.  He also explained that such an approach is sensible because it makes for simple federal constitutional law. He added that “[o]ur legal system is already complex enough for litigants and lawyers, without additionally forcing people to navigate two distinct bodies of federal constitutional rights, depending on who’s on the right side of the “v.””

Judge Jennifer Walker Elrod wrote a vigorous and lengthy dissent, but notably the dissent too rejected Plaintiffs’ arguments, explaining that while Plaintiff’s had argued that Fourteenth Amendment case law does not bind the court in the Fifth Amendment context, they had nonetheless argued that the basis of the analysis should be International Shoe Co. v. Washington, 326 U.S. 310 (1945) a Fourteenth Amendment case, while ignoring the later precedent following that case. The dissent disagreed with that approach because they rejected an analysis of the Fifth Amendment that rises out of Fourteenth Amendment case law. 

The motions below and on appeal were handled by Freehill partners Thomas Canevari and Eric Matheson and associates Cody King and Veronica Dunlop, with partners Robert Murphy and Peter Tompkins and associate Tarryn Walsh of Murphy, Rogers, Sloss, Gambel and Tompkins as local New Orleans counsel.

Click Here to read the full decision.