In Herederos de Roberto Gomez Cabrera, LLC v. Teck Resources Ltd., 2022 U.S. App. LEXIS 22473 (11th Cir. Aug. 12, 2022), the Eleventh Circuit held that the “minimum contacts” analysis applied to determine the existence of personal jurisdiction under the Fourteenth Amendment also applies when jurisdiction is asserted under the Fifth Amendment.
The case involved a claim by a Florida LLC that the defendant Canadian company, Teck Resources, violated the Helms-Burton Act by trafficking in property that had been confiscated by the Cuban government. Teck moved to dismiss for lack of personal jurisdiction. The district court granted the motion, and the plaintiff appealed.
The Eleventh Circuit, in an opinion written by Judge Newsom and joined by Judge Marcus and by Judge Virginia M. Hernandez Covington, visiting from the Middle District of Florida, affirmed. The court began by noting the parties’ agreement that Teck was not subject to jurisdiction in any state’s courts of general jurisdiction. Consequently, the first condition of Fed. R. Civ. P. 4(k)(2) applied, and the only relevant question was whether exercising personal jurisdiction would be consistent with the Constitution, see Fed. R. Civ. P. 4(k)(2). “In the more usual case,” the court observed, that inquiry would concern the Fourteenth Amendment. But because the defendant was not subject to any state court’s jurisdiction, the Fifth Amendment, rather than the Fourteenth, applied.
The plaintiff argued that the court should apply a different jurisdictional analysis under the Fifth Amendment than it would under the Fourteenth Amendment, in the form of an “arbitrary or fundamentally unfair” standard rather than the more stringent “minimum contacts” analysis. The court disagreed. “[A] close review” of the cases cited by the plaintiff in support of its argument, the court said, showed that those cases were not about personal jurisdiction at all, but about so-called “legislative jurisdiction”—that is, the extent to which Congress may regulate conduct extraterritorially (in international waters, for example). The jurisdictional test, the Court held, is the same whether the Fifth or the Fourteenth Amendment applies.
On the merits, the court found insufficient contacts to support the exercise of jurisdiction over Teck. The court rejected the argument that harm suffered by a plaintiff in the United States is sufficient to confer jurisdiction: “The incidental effects of a defendant’s actions are not by themselves sufficient to justify jurisdiction over the defendant in the forum.” And there was no basis to attribute to Teck the contacts of its U.S.-based subsidiaries, because those subsidiaries “are legally distinct entities and observe all corporate formalities,” and thus none of them could be considered Teck’s alter ego.
Posted by Valerie Sanders.