Opinion ID: 815610
Heading Depth: 3
Heading Rank: 1

Heading: Foreign Entities

Text: First Investment argues that foreign entities that are neither present nor have property in the United States are not entitled to due process protections. We find no support for this proposition in current caselaw. The decisions First Investment relies on are clarified by later circuit decisions or are superseded by the Supreme Court’s recent decision in Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846 (2011). The first case First Investment relies on is People’s Mojahedin Organization of Iran v. U.S. Department of State, in which the court held that “[a] foreign entity without property or presence in [the United States] has no constitutional rights, under the [D]ue [P]rocess [C]lause or otherwise.” 182 F.3d 17, 22 (D.C. Cir. 1999). But that holding was recently clarified by the D.C. Circuit in GSS Group Ltd. v. National Port Authority, where the court reasoned that “[w]hen a foreign corporation is summoned into court, it is being forced to defend itself” and “[i]n opposing personal jurisdiction on due process grounds the corporation, through its attorney, makes itself present.” 680 F.3d 805, 816 (D.C. Cir. 2012) (citing Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Thus, having “been forced to appear in the United States . . . [the foreign corporation] is entitled to the protection of the Due Process Clause.” Id. (citing Zadvydas v. Davis, 533 U.S. 678, 693 (2001)).3 The GSS Group court ultimately did not have to rely on this reasoning because the Supreme Court had already reaffirmed that foreign corporations are entitled to due process protections, regardless of whether they have contacts with the United States. Id. at 816-17 (citing Goodyear, 131 S. Ct. at 2853). 3 Alternatively, the court reasoned that due process protections might attach because “when a United States court exercises jurisdiction over a foreign corporate defendant it inflicts damage on that defendant . . . in the United States.” GSS Grp., 680 F.3d at 816. 6 No. 12-30377 First Investment next relies on Al Haramain Islamic Foundation, Inc. v. U.S. Department of Treasury, 686 F.3d 965 (9th Cir. 2012). There, the court observed that “many (and likely most) of the designated persons [in this case] are not United States citizens or entities” and so “[m]any of those persons likely cannot assert the due process protections that are available to . . . a United States entity.” Id. at 984 (citing Nat’l Council of Resistance of Iran v. Dep’t of State, 251 F.3d 192, 201 (D.C. Cir. 2001)). The Al Haramain court did not, however, discuss the Supreme Court’s decision in Goodyear, which we find controlling here. The Goodyear Court addressed whether “foreign subsidiaries of a United States parent corporation [are] amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State[.]” 131 S. Ct. at 2850. The Court held that because the district court lacked both specific and general jurisdiction, the court could not exercise personal jurisdiction over the subsidiaries. Id. at 2851. By engaging in a minimum contacts analysis where the foreign entities were not registered in the forum state, did not solicit business there, and did not design, manufacture, or advertise products in the forum state, the Court made clear that such foreign corporations could avail themselves of the protections of the Due Process Clause. Id. at 2852-54; see also GSS Grp., 680 F.3d at 813 (“Both the Supreme Court and this court have repeatedly held that foreign corporations may invoke due process protections to challenge the exercise of personal jurisdiction over them.”). Thus, there is no basis to conclude that a party’s status as a foreign entity permits a court to ignore personal jurisdiction or exercise such jurisdiction without first establishing sufficient contacts between the defendant and the forum state. 7 No. 12-30377