"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 : www.themis.umontreal.ca Téléphone : (514) 343-6627 Télécopieur : (514) 343-6779 2000 Éditions Thémis Inc. Toute reproduction ou distribution interdite Disponible exclusivement à : www.themis.umontreal.ca
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
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. 3139 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. 3135 C.C.Q.)...43 b.lis Pendens (art. 3137 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
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
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...101 SECTION 1.Criteria for Determination of Jurisdiction of Foreign Authorities: Single, Double, or Triple Test?...103 a.the Substantial Connection Test...106 b.the Little Mirror Doctrine...107 SECTION 2.Some Troublesome Questions...110 a.internet Activities...111 b.submission to Jurisdiction (art. 3168 para. 6 C.C.Q.)...113 i. Using the Machinery of the Court Test...114 ii. Acts Necessary to Save One's Skin Test 115 c.corporate Affiliations and Jurisdiction...117 d.exclusive Jurisdiction...118 e.foreign Judgment Resulting from Class Actions...120 f.recognition and Enforcement of Foreign Provisional Orders or Injunctions...122
TABLE OF CONTENTS XV i.seizure of Assets Situated in Quebec (Foreign Attachment Orders)...123 ii.orders to Do or to Refrain from Doing Acts Outside the iii.restraining Orders Under Foreign Bankruptcy 124 g.permanent Foreign Injunctions...125 h.foreign Antisuit Judgments...125 i.foreign Transactions...126 PART II. RESPONDING EFFECTIVELY TO INAPPROPRIATE FOREIGN JURISDICTION CHAPTER 1. Dispute Prevention and Dispute Avoidance...135 SECTION 1.Preventive Law...135 SECTION 2.Preventing Transnational Contractual Disputes...136 a.selecting an Appropriate Law...137 b.selecting an Appropriate Forum...139 c.dispute Prevention Beyond Drafting...142 SECTION 3.Preventing Transnational Product Liability Disputes...142 SECTION 4.Preventing Intellectual Property Disputes...143
XVI RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION CHAPTER 2. Strategizing When Litigation in an Inappropriate Foreign Jurisdiction is Imminent : Rush to the Quebec Courthouse...145 SECTION 1.Suit for Declaratory Judgment (e.g. of nonliability) and Other Options (e.g. counterclaim)...145 SECTION 2.Antisuit Injunction...148 SECTION 3.Preliminary Injunction...149 CHAPTER 3. Strategizing When Litigation Has Commenced in an Inappropriate Foreign Forum...151 SECTION 1.Options in Quebec...151 a.distinguishing the Claims in the Foreign Lawsuit to Avoid Lis Pendens...151 b.declaratory Judgment of Nonliablity...152 c.antisuit Injunction...153 d.claiming Damages from Inexecution of Contractual Obligations...153 e.refusing Transmittal of Business Documents...154 f.combining Protective Procedures...156
TABLE OF CONTENTS XVII SECTION 2.Options in the U.S....156 a.constitutional and Jurisdictional Challenges...156 b.challenging Service...157 c.forum Non Conveniens...159 d.lis Alibi Pendens...159 e.avoid Attornment to Jurisdiction...159 CHAPTER 4. Challenging Recognition and Enforcement of a Judgment Rendered by an Inappropriate Foreign Court...161 SECTION 1.Lack of Jurisdiction...161 SECTION 2.Lis Pendens (art. 3155 para. 4 C.C.Q.)...163 SECTION 3.Public Order as Understood in International Relations (art. 3155 para. 5 C.C.Q.)...166 SECTION 4.Textual Interpretation of Art. 3157 C.C.Q....173 SECTION 5.Invalidity of Service (art. 3156 para. 1 C.C.Q.)...173 SECTION 6.Lack of Notice (art. 3156 para. 2 C.C.Q.)...173 SECTION 7.Contravention of Fundamental Principles
XVIII RESPONDING TO INAPPROPRIATE FOREIGN JURISDICTION of Procedure (art. 3155 para. 3 C.C.Q.)...174 SECTION 8.Foreign Tax Judgments...175 SECTION 9.Prescription...176 SECTION 10. Judgments for the Enforcement of a Third State Judgment...178 CHAPTER 5. Responding to a Foreign Judgment with a NAFTA Claim...179 CHAPTER 6. Restructuring Business Operations...183 SECTION 1.Operate under Doing Business, or Transacting Business Thresholds...184 SECTION 2.The Use of Subsidiaries...186 a.single Subsidiaries...186 b.multiple Subsidiaries...188 SECTION 3.Licensing...188 SECTION 4.Asset Protection...189 SECTION 5.Canadian Resident Owners Should Not Be Directors...189 SECTION 6.Risk Management...189 CHAPTER 7. De Lege Ferenda...191 SECTION 1.Improving the International Legal Framework For Transnational Litigation...191
TABLE OF CONTENTS XIX SECTION 2.Alternatives to Litigation of International Disputes...194 a. Arbitration...195 b. Mediation...196 i. Extra-Territorial Enforcement of Agreements to Mediate...198 ii.extra-territorial Enforcement of Agreements Reached GENERAL CONCLUSION...201
APPENDICE I. ARTICLES OF THE CIVIL CODE OF QUEBEC ON INTERNATIONAL JURISDICTION AND RECOGNITION AND ENFORCEMENT OF FOREIGN DECISIONS...205 APPENDICE II.PRELIMINARY DRAFT CONVENTION ON JURISDICTION AND F...213 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...243 APPENDICE VI.THE LOEWEN GROUP, INC. AND RAYMOND L. LOEWEN V. UN