conflict of laws

Animal Science Products, Inc., et al., v. Hebei Welcome Pharmaceutical Co. Ltd., et al.

Issues

Is a court bound to defer to a foreign government’s interpretation of its domestic law when appearing before the court?

 

This case will decide whether American courts are bound to accept a foreign government’s interpretation of its own laws. Animal Science Products Inc. (“Animal Science Products”) argues that a “binding deference standard”, which requires courts to accept an appearing foreign government’s description of its laws, inhibits a court’s ability to independently reach an accurate determination of foreign law. Furthermore, Animal Science contends, the lower court’s decision to uphold binding deference misapplied the Supreme Court’s holding in United States v. Pink. Hebei Welcome Pharmaceuticals (“Hebei”) counters that requiring courts to accept an appearing foreign government’s reasonable statement of its laws appropriately balances judicial independence and international comity concerns. Moreover, Hebei asserts that the court below was correct in finding United States v. Pink to support binding deference. This issue affects how federal courts interpret foreign law in international litigation. Accordingly, this case will impact international litigation strategy and entities with operations that are regulated outside of the U.S.

Questions as Framed for the Court by the Parties

Whether a court may exercise independent review of an appearing foreign sovereign’s interpretation of its domestic law (as held by the Fifth, Sixth, Seventh, Eleventh, and D.C. Circuits), or whether a court is “bound to defer” to a foreign government’s legal statement, as a matter of international comity, whenever the foreign government appears before the court (as held by the opinion below in accord with the Ninth Circuit).

In 2005, Animal Science Products, Inc. and various Vitamin C producers in the United States (“Animal Science Products”) filed suit in the Eastern District of New York against Hebei Welcome Pharmaceuticals Co. (“Hebei”), a Chinese pharmaceutical company and its holding company, alleging that Hebei was a co-conspirator who established an illegal cartel for price-fixing purposes. Animal Science Products, Inc., et al. v. Hebei Welcome Pharmaceutical Co. Ltd., et al., 837 F.3d 175, 179 (2d Cir. 2016) at 5–6.

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Great Lakes Insurance SE v. Raiders Retreat Realty Co., LLC

Issues

Is a provision of a maritime contract specifying which state’s substantive law applies in case of a contract dispute unenforceable if that choice is contrary to the strong public policy of another state whose law would otherwise apply?

This case asks the Supreme Court to decide whether state public policy can impact the enforcement of a choice-of-law provision in a maritime contract. Great Lakes Insurance disputed an insurance claim for Raiders Retreat’s yacht and contends that under the choice-of-law provision in their contract, federal maritime law or, alternatively, New York law applied. Great Lakes argues that such provisions are presumptively enforceable under federal maritime law unless they are contrary to federal public policy. Raiders argues that state public policy can override the presumption of enforceability of choice-of-law provisions, and the state law or Restatement provisions followed by many states should apply. The outcome of this case bears important consequences on whether federal or state law should govern questions of maritime commerce, and whether courts should prioritize uniformity of law over state sovereignty.

Questions as Framed for the Court by the Parties

Whether, under federal admiralty law, a choice-of-law provision in a maritime contract can be rendered unenforceable if enforcement is contrary to the “strong public policy” of the State whose law is displaced.

Raiders Retreat Realty (“Raiders”) is a company headquartered in Pennsylvania. Great Lakes Ins. SE v. Raiders Retreat Realty Co. (“Third Circuit”) at 227. Raiders owns a yacht, which has its hailing port in Pennsylvania. Brief for Respondent, Raiders Retreat Realty Co.

Acknowledgments

The authors would like to thank Professor Diogo Magalhães for his insights into this case.

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Parker Drilling Management Services, Ltd. v. Newton

Issues

Under the Outer Continental Shelf Lands Act’s choice-of-law provision, does state law apply only where federal law does not address the issue; or, does state law also apply when it addresses the issue and it is not pre‑empted by, or inconsistent with, federal law?

The Supreme Court will determine whether state wage-and-hour laws may supplement existing federal wage-and-hour laws for disputes arising on the Outer Continental Shelf (“OCS”) of the United States. The Outer Continental Shelf Lands Act (“OCSLA”) provides that state law that is “applicable and not inconsistent” with federal law may apply to cases on the OCS. The Fifth and Ninth Circuits, however, are split as to whether the OCSLA requires state law to only be used as a gap-filling device when federal law is not on point, or if state law may be used even when it supplements or overlaps with existing federal law. Petitioner Parker Drilling Company, Ltd. (“Parker Drilling”) argues that the text and legislative history of the OCSLA, as well as Supreme Court precedent, requires state laws to only be used as a gap-filling device when federal law does not address the issue. Parker Drilling also contends that even if state law can be used to supplement existing federal law, California wage-and-hour laws cannot be used because they are inconsistent with federal wage-and-hour laws. Brian Newton (“Newton”) counters that the text of the OCSLA allows for a more expansive use of state law that also includes supplementing existing federal law, as long as there is no conflict. Newton further asserts that California wage‑and‑hour laws can be applied here because they are relevant and compatible with existing federal wage‑and‑hour laws. From a policy perspective, this case is important because it may have implications for offshore drilling employer‑employee relationships and the responsibilities of federal officials administering the OCSLA.

Questions as Framed for the Court by the Parties

Whether, under the Outer Continental Shelf Lands Act, state law is borrowed as the applicable federal law only when there is a gap in the coverage of federal law, as the U.S. Court of Appeals for the Fifth Circuit has held, or whenever state law pertains to the subject matter of a lawsuit and is not pre‑empted by inconsistent federal law, as the U.S. Court of Appeals for the Ninth Circuit has held.

Beginning in January 2013, Respondent Brian Newton (“Newton”) worked for Petitioner Parker Drilling Management Services (“Parker Drilling”) on drilling platforms for approximately two years. Newton v. Parker Drilling Mgmt.

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Warner-Lambert Co. v. Kent

 

Under Michigan law, individuals may bring personal injury suits against manufacturers of FDA-approved prescription drugs only if the plaintiffs can show that FDA approval depended on fraudulent submission or withholding of information. 27 Michigan residents sued Warner-Lambert Co., claiming personal injury arising from using Rezulin, Warner-Lambert's FDA-approved drug for diabetes treatment. Warner-Lambert argues that Michigan law is preempted by federal law because permitting state courts to second-guess the FDA's product-approval and fraud-detection processes interferes with the agency's essential functions and promotes regulatory uncertainty. The Michigan plaintiffs respond that federal preemption does not apply to traditional state tort claims. The decision in this case will clarify the scope of FDA autonomy in policing the drug-approval process and plaintiffs' freedom to assert state tort claims in areas regulated by federal entities.

Questions as Framed for the Court by the Parties

1. Whether, under the conflict preemption principles in Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001), federal law preempts state law to the extent that it requires the fact-finder to determine whether the defendant committed fraud on a federal agency that impacted the agency's product approval, where the agency-which is authorized by Congress to investigate and determine fraud-has not found any such fraud, and thus-as in Buckman-the state requirement would interfere with the agency's critical functions.

2. Whether, under the conflict preemption principles in Buckman, federal law preempts the provision in a Michigan statute that allows a product liability claim to be maintained against a manufacturer of an FDA approved drug where, without an FDA finding of fraud on that agency, the fact-finder is required to make a finding under state law as to whether the manufacturer committed fraud-on-the-FDA and whether, in the absence of that fraud, the FDA would not have approved the drug.

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