Jeffrey A. Talpis. On peut se procurer le présent ouvrage à :

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1 "If I am from Grand-Mère, why am I being sued in Texas?" Responding to Inappropriate Foreign Jurisdiction in Quebec-United States Crossborder Litigation Jeffrey A. Talpis On peut se procurer le présent ouvrage à : Les Éditions Thémis Faculté de droit, Université de Montréal C.P.6128, Succ. Centre-Ville Montréal (Québec), H3C 3J7 Canada Courriel : themis@droit.umontreal.ca Site Internet : Téléphone : (514) Télécopieur : (514) Éditions Thémis Inc. Toute reproduction ou distribution interdite Disponible exclusivement à :

2 TABLE OF CONTENTS FOREWORD...vii INTRODUCTION...1 PART I. APPROPRIATE JURISDICTION TO ADJUDICATE CHAPTER 1. Jurisdiction to Adjudicate in Quebec...17 SECTION 1.Provisional and Protective Measures...17 a.measures Relating to Acts or Assets Located in Quebec...17 b.measures Relating to Acts or Assets Located Outside Quebec...18 SECTION 2.Personal Jurisdiction in Actions of a Patrimonial Nature...19 a.constitutional Issues...19 b.grounds for Jurisdiction...20 i.domicile and Residence of the Defendant...22 ii.establishment of Foreign Defendant in Quebec 23 iii.corporate Affiliations and Jurisdiction 25 A. Alter Ego...25 B.Agency...26

3 XII RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION iv...consumer and Employment Contracts 27 v.internet Activities...27 vi...forum Selection Clauses 29 vii...submission to Jurisdiction 32 A.Submission Per Se...32 B.Distinguishing Waiver from Submission...34 viii.exclusive Jurisdictions...35 ix... Sovereign Immunity 35 c.multiple Parties...36 i.principal Demand Against Multiple Defendants...36 ii.incidental Demands and Cross-Demands (art C.C.Q. iii...third-party Interventions 39 iv...class Actions 40 SECTION 3.Conflicts of Jurisdiction Concurrent Jurisdiction...42 a.forum Non Conveniens (art C.C.Q.)...43 b.lis Pendens (art C.C.Q.)...51 c.suit Seeking Declaratory Judgment (e.g. of nonliability)...58 d.antisuit Injunctions...63 CHAPTER 2. Personal Jurisdiction in the United States...71 SECTION 1.Prejudgment Attachments...71

4 TABLE OF CONTENTS XIII SECTION 2.General and Specific Jurisdiction...72 a.general Jurisdiction...72 b.specific Jurisdiction...74 c.statutory and Common Law Sources of General and Specific Jurisdiction...74 SECTION 3.Constitutional Issues...76 a.mimimum Contacts and General Jurisdiction Based on Doing Business...77 b.mimimum Contacts and Specific Jurisdiction Based on Transacting Business...77 c.procedure for Determining Constitutionally Valid Personal Jurisdiction...80 SECTION 4.Corporate Affiliations and Jurisdiction...82 SECTION 5.Application to Activities Over the Internet...83 SECTION 6.Doctrine of State Immunity...86 SECTION 7.Forum Selection Clauses...86 SECTION 8.Discretionary Powers...87 a.forum Non Conveniens...87 b.antisuit Injunctions...94 c.proceedings Seeking Declaratory Judgments (e.g. Negative Declarations)...97

5 XIV RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION d.lis Alibi Pendens...98 CHAPTER 3. Jurisdiction of Foreign Authorities in Relation to Recognition and Enforcement of Foreign Judgments in Quebec SECTION 1.Criteria for Determination of Jurisdiction of Foreign Authorities: Single, Double, or Triple Test? a.the Substantial Connection Test b.the Little Mirror Doctrine SECTION 2.Some Troublesome Questions a.internet Activities b.submission to Jurisdiction (art para. 6 C.C.Q.) i. Using the Machinery of the Court Test ii. Acts Necessary to Save One's Skin Test 115 c.corporate Affiliations and Jurisdiction d.exclusive Jurisdiction e.foreign Judgment Resulting from Class Actions f.recognition and Enforcement of Foreign Provisional Orders or Injunctions...122

6 TABLE OF CONTENTS XV i.seizure of Assets Situated in Quebec (Foreign Attachment Orders) ii.orders to Do or to Refrain from Doing Acts Outside the iii.restraining Orders Under Foreign Bankruptcy 124 g.permanent Foreign Injunctions h.foreign Antisuit Judgments i.foreign Transactions PART II. RESPONDING EFFECTIVELY TO INAPPROPRIATE FOREIGN JURISDICTION CHAPTER 1. Dispute Prevention and Dispute Avoidance SECTION 1.Preventive Law SECTION 2.Preventing Transnational Contractual Disputes a.selecting an Appropriate Law b.selecting an Appropriate Forum c.dispute Prevention Beyond Drafting SECTION 3.Preventing Transnational Product Liability Disputes SECTION 4.Preventing Intellectual Property Disputes...143

7 XVI RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION CHAPTER 2. Strategizing When Litigation in an Inappropriate Foreign Jurisdiction is Imminent : Rush to the Quebec Courthouse SECTION 1.Suit for Declaratory Judgment (e.g. of nonliability) and Other Options (e.g. counterclaim) SECTION 2.Antisuit Injunction SECTION 3.Preliminary Injunction CHAPTER 3. Strategizing When Litigation Has Commenced in an Inappropriate Foreign Forum SECTION 1.Options in Quebec a.distinguishing the Claims in the Foreign Lawsuit to Avoid Lis Pendens b.declaratory Judgment of Nonliablity c.antisuit Injunction d.claiming Damages from Inexecution of Contractual Obligations e.refusing Transmittal of Business Documents f.combining Protective Procedures...156

8 TABLE OF CONTENTS XVII SECTION 2.Options in the U.S a.constitutional and Jurisdictional Challenges b.challenging Service c.forum Non Conveniens d.lis Alibi Pendens e.avoid Attornment to Jurisdiction CHAPTER 4. Challenging Recognition and Enforcement of a Judgment Rendered by an Inappropriate Foreign Court SECTION 1.Lack of Jurisdiction SECTION 2.Lis Pendens (art para. 4 C.C.Q.) SECTION 3.Public Order as Understood in International Relations (art para. 5 C.C.Q.) SECTION 4.Textual Interpretation of Art C.C.Q SECTION 5.Invalidity of Service (art para. 1 C.C.Q.) SECTION 6.Lack of Notice (art para. 2 C.C.Q.) SECTION 7.Contravention of Fundamental Principles

9 XVIII RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION of Procedure (art para. 3 C.C.Q.) SECTION 8.Foreign Tax Judgments SECTION 9.Prescription SECTION 10. Judgments for the Enforcement of a Third State Judgment CHAPTER 5. Responding to a Foreign Judgment with a NAFTA Claim CHAPTER 6. Restructuring Business Operations SECTION 1.Operate under Doing Business, or Transacting Business Thresholds SECTION 2.The Use of Subsidiaries a.single Subsidiaries b.multiple Subsidiaries SECTION 3.Licensing SECTION 4.Asset Protection SECTION 5.Canadian Resident Owners Should Not Be Directors SECTION 6.Risk Management CHAPTER 7. De Lege Ferenda SECTION 1.Improving the International Legal Framework For Transnational Litigation...191

10 TABLE OF CONTENTS XIX SECTION 2.Alternatives to Litigation of International Disputes a. Arbitration b. Mediation i. Extra-Territorial Enforcement of Agreements to Mediate ii.extra-territorial Enforcement of Agreements Reached GENERAL CONCLUSION...201

12 APPENDICE I. ARTICLES OF THE CIVIL CODE OF QUEBEC ON INTERNATIONAL JURISDICTION AND RECOGNITION AND ENFORCEMENT OF FOREIGN DECISIONS APPENDICE II.PRELIMINARY DRAFT CONVENTION ON JURISDICTION AND F APPENDICE III.DRAFTING CLAUSES TO AVOID DISPUTES AS TO APPLICAB APPENDICE IV.REPUBLIC OF BOLIVIA V. PHILIPP MORRIS COMPANIES IN APPENDICE V. CONFESSION OF JUDGMENT APPENDICE VI.THE LOEWEN GROUP, INC. AND RAYMOND L. LOEWEN V. UN

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