1. UK and other non-US based individuals and companies may welcome the further confirmation and clarification of the substantially restrictive test for establishing jurisdiction to sue them in New York courts to be found in the 31 August 2016 decision of the Second Circuit Court of Appeals in Waldman v. Palestine Liberation Organization. Although this important decision mostly confirms previous Supreme Court and Second Circuit decisions, its significance arises from the fact that most of the grounds and arguments for jurisdiction are considered in turn and clarified.
  2. In Waldman the appellate court vacated a judgment for $655.5 million under the Anti-Terrorism Act against the Palestine Liberation Organization and the Palestinian Authority in favour of Am  test for establishing jurisdiction to sue them in New York courts to be found in the 31 August 2016 decision of the Second Circuit Court of Appeals in Waldman v. Palestine Liberation Organization. Although this important decision mostly confirms previous Supreme Court and Second Circuit decisions, its significance arises from the fact that most of the grounds and arguments for jurisdiction are considered in turn  erican families whose members had been killed or wounded in terror attacks in Israel, on the ground that the court lacked personal jurisdiction over the defendants. The decision overturned numerous contrary decisions by lower courts in the litigation between 2004 and 2016, including those made after the US Supreme Court decision in Daimler AG v. Bauman, 143 S.Ct. 746 (2014), which, the appellate court said, “significantly narrowed the general personal jurisdiction test”. Notwithstanding that the issue on appeal was the district court’s finding of general personal jurisdiction1, the Court of Appeal decided to determine the question of specific personal jurisdiction2 as well, as it had been “sufficiently briefed and argued” before the Court.
  3. An important issue that arose on appeal was the distinction, if any, between the due process analysis under the Fifth and Fourteenth Amendments to the US Constitution, on the ground that the former regulates disputes under federal law with foreign nations whilst the latter was intended more restrictively to referee jurisdictional disputes between sovereign States. The Court held that “the minimum contacts and fairness analysis is the same under the Fifth Amendment and the Fourteenth Amendment in civil cases”, the principal difference being that “under the Fifth Amendment the court can consider the defendant’s contacts throughout the United States, while under the Fourteenth Amendment only the contacts with the forum state may be considered”, citing Chew v. Dietrich, 143 F.3d 24. This is an important issue to foreign defendants sued in US courts under US federal legislation, when it was previously argued that jurisdiction under the Fifth Amendment can more easily be established.
  4. The Court of Appeal also confirmed that the ‘at home’ test for general personal jurisdiction, analogized in Daimler to “an individual’s domicile”, applied equally to individual, corporate and other entities (the defendants in the case before the Court being non-sovereign unincorporated associations). The domicile analogy, the Court held, confirmed that save in exceptional circumstances, a defendant will generally have only one ‘home’, and in the Waldman case this was held to be Palestine. It follows that it will be rare for a plaintiff to be able to establish that a foreign-based defendant is “at home” in a US forum.
  5. On the question of specific personal jurisdiction, the Court of Appeals applied the reasoning in Walden v. Fiore 134 S.Ct. 1115, that the inquiry into jurisdiction “focuses on the relationship among the defendant, the forum, and the litigation”, and that jurisdiction requires that a defendant’s “suit-related conduct must create a substantial connection with the forum State”. Further, the Court said, the relationship between the defendant and the forum must arise out of contacts that “the defendant himself” creates with the forum, and the minimum contacts analysis looks to the defendants’ contacts with the forum State itself, not the defendant’s contacts with persons who reside there. In the case before the Court it was held that the defendants’ actions connected with the terrorist attacks in Israel “as heinous as they were, were not sufficiently connected to the United States to provide specific personal jurisdiction in the United States”. The fact that the plaintiffs resided in or were citizens of the United States was “an insufficient basis for specific jurisdiction over the defendants”.
  6. The Court went on to reject the argument that the “effects test” applied, under which a defendant acting entirely outside the United States is subject to jurisdiction if the defendant expressly aimed its conduct at the United States, where its effect arose. Walden v. Fiore, the Court said, foreclosed this argument. Walden held that it is insufficient to rely on a defendant’s “random, fortuitous, or attenuated contacts” or on the “unilateral activity” of a plaintiff with the forum to establish specific jurisdiction. The random and fortuitous nature of the terror attacks precluded a finding of jurisdiction in the case before the Court. The Court cited Licci v. Lebanese Canadian Bank, SAL 673 F.3d 50, in which another Second Circuit Court of Appeals stated that the constitutional exercise of personal jurisdiction over a foreign defendant turned on conduct that “occur[ed] within the forum”, namely (in that case) the repeated use of bank accounts in New York to support the alleged wrongs for which the plaintiffs sued.
  7. In the same way, the Court dismissed the plaintiffs’ argument that the defendants met the “purposeful availment” test by establishing a continuous presence in the United States – mostly in Washington DC - and lobbying for their desired United States government policy. The Court of Appeals, applying Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S.         (2011), held that the defendants cannot be made to answer in New York “with respect to matters unrelated to the forum connections”. Thus the defendants were held not to be subject to specific jurisdiction in New York on the purposeful availment theory because the plaintiffs’ claims did not arise from the defendants’ activity in the forum.
  8. Finally, the Court of appeals addressed the argument that the defendants consented to personal jurisdiction by appointing an agent to accept process in the forum, as (it was argued) meeting a statutory requirement for service of process suffices to establish jurisdiction. The due process analysis, the Court held, comprising considerations of minimum contacts and reasonableness, “applies even when federal service-of-process statutes are satisfied” and general or specific jurisdiction may fail on due process grounds regardless of compliance with service-of-process requirements.
  9. The decision in Waldman is a fundamental addition to the arsenal of US case law available to foreign entities subject to or threatened with civil claims in US courts.