1.

EEOC v ARAMCO
Petitioner Boureslan, a naturalized United States citizen born in Lebanon and working
in Saudi Arabia, was discharged by his employer, respondent Arabian American Oil
Company, a Delaware corporation. After filing a charge with petitioner Equal
Employment Opportunity Commission (EEOC), he instituted suit in the District Court,
seeking relief under, inter alia, Title VII of the Civil Rights Act of 1964, on the ground
that he had been discriminated against because of his race, religion, and national
origin. In dismissing this claim, the court ruled that it lacked subject matter
jurisdiction because Title VII's protections do not extend to United States citizens
employed abroad by American employers. The Court of Appeals affirmed.
Held: Title VII does not apply extraterritorially to regulate the employment practices
of United States firms that employ American citizens abroad. Petitioners' evidence,
while not totally lacking in probative value, falls short of demonstrating the clearly
expressed affirmative congressional intent that is required to overcome the well-
established presumption against statutory extraterritoriality.
(a) Petitioners argue unpersuasively that Title VII's "broad jurisdictional language" --
which extends the Act's protections to commerce "between a State and any place
outside thereof" -- evinces a clear intent to legislate extraterritorially. The language
relied on is ambiguous, does not speak directly to the question presented here, and
constitutes boilerplate language found in any number of congressional Acts, none of
which have been held to apply overseas. Petitioners' argument also finds no support
in this Court's decisions, which have repeatedly held that even statutes containing
broad language in their definitions of "commerce" that expressly refer to
"foreign commerce" do not apply abroad.
Title VII to apply overseas, it would have addressed the subject of conflicts with
foreign laws and procedures, as it did in amending the Age Discrimination in
Employment Act of 1967 (ADEA) to apply abroad. Pp. 499 U. S. 253-256.
(c) Petitioners' contention that this Court should defer to the EEOC's position that
Title VII applies abroad is rejected. The EEOC's interpretation does not fare well under
the deference standards set forth in General Electric Co. v. Gilbert, 429 U. S. 125, 429
U. S. 140-146, since the interpretation has been neither contemporaneous with Title
VII's enactment nor consistent with an earlier contrary position enunciated by the
EEOC closer to the date the statute came into law, since the EEOC offers no basis in
its experience for the change, and since the interpretation lacks support in the
statute's plain language. Although this Court does not wholly discount the
interpretation, it is of insufficient weight, even when considered in combination with
petitioners' other arguments, to overcome the presumption against extraterritorial
application. Pp.
(d) Congress' awareness of the need to make a clear statement that a statute applies
overseas is amply demonstrated by the numerous occasions on which it has
legislated extraterritoriality, including its amendment of the ADEA. Congress may
similarly amend Title VII, and, in doing so, will be able to calibrate its provisions in a
way that this Court cannot. Pp. 499 U. S. 258-259.
892 F.2d 1271 (CA 5 1990), affirmed.

(b) Petitioners also argue unpersuasively that Title VII's "alien exemption" clause --
which renders the statute inapplicable "to an employer with respect to the
employment of aliens outside any State" -- clearly manifests the necessary
congressional intent to cover employers of United States citizens working abroad. If
petitioners were correct, there would be no statutory basis for distinguishing
between American employers and foreign employers. Absent clearer evidence of
congressional intent, this Court is unwilling to ascribe to Congress a policy which
would raise difficult international law issues by imposing this country's employment
discrimination regime upon foreign corporations operating in foreign commerce. This
conclusion is fortified by other factors suggesting a purely domestic focus, including
Title VII's failure even to mention foreign nations or proceedings, despite a number
of provisions indicating a concern that the sovereignty and laws of States not be
unduly interfered with, and the Act's failure to provide any mechanisms for its
overseas enforcement. It is also reasonable to conclude that, had Congress intended
2. SMALL v UNITED STATES (b) There is no convincing indication to the contrary here. The statute’s language
suggests no intent to reach beyond domestic convictions. To the contrary, if read to
Petitioner Small was convicted in a Japanese Court of trying to smuggle firearms and
include foreign convictions, the statute’s language creates anomalies. For example,
ammunition into that country. He served five years in prison and then returned to
in creating an exception allowing gun possession despite a conviction for an antitrust
the United States, where he bought a gun. Federal authorities subsequently charged or business regulatory crime, §921(a)(20)(A) speaks of “Federal or State” antitrust or
Small under 18 U.S.C. § 922(g)(1), which forbids “any person … convicted in any
regulatory offenses. If the phrase “convicted in any court” generally refers only to
court … of a crime punishable by imprisonment for a term exceeding one year … to …
domestic convictions, this language causes no problem. But if the phrase includes
possess … any firearm.” (Emphasis added.) Small pleaded guilty while reserving the
foreign convictions, the words “Federal or State” prevent the exception from
right to challenge his conviction on the ground that his earlier conviction, being
applying where a foreign antitrust or regulatory conviction is at issue. Such
foreign, fell outside §922(g)(1)’s scope. The Federal District Court and the Third
illustrative examples suggest that Congress did not consider whether the generic
Circuit rejected this argument.
phrase “convicted in any court” applies to foreign convictions. Moreover, the
Held: Section 922(g)(1)’s phrase “convicted in any court” encompasses only statute’s legislative history indicates no intent to reach beyond domestic convictions.
domestic, not foreign, convictions. Pp. 2—9. Although the statutory purpose of keeping guns from those likely to become a threat
to society does offer some support for reading §922(g)(1) to include foreign
(a) In considering the scope of the phrase “convicted in any court” it is appropriate convictions, the likelihood that Congress, at best, paid no attention to the matter is
to assume that Congress had domestic concerns in mind. This assumption is similar reinforced by the empirical fact that, according to the Government, since 1968, there
to the legal presumption that Congress ordinarily intends its statutes to have have fewer than a dozen instances in which such a foreign conviction has served as a
domestic, not extraterritorial, application, see, e.g., Foley Bros., Inc. v. Filardo, 336 predicate for a felon-in-possession prosecution. Pp. 5—8.
U.S. 281, 285. The phrase “convicted in any court” describes one necessary portion
of the “gun possession” activity that is prohibited as a matter of domestic law. 333 F.3d 425, reversed and remanded.
Moreover, because foreign convictions may include convictions for conduct that
domestic laws would permit, e.g., for engaging in economic conduct that our society
might encourage, convictions from a legal system that are inconsistent with
American understanding of fairness, and convictions for conduct that domestic law
punishes far less severely, the key statutory phrase “convicted in any court of, a crime
punishable by imprisonment for a term exceeding one year” somewhat less reliably
identifies dangerous individuals for the purposes of U.S. law where foreign
convictions, rather than domestic convictions, are at issue. In addition, it is difficult
to read the statute as asking judges or prosecutors to refine its definitional
distinctions where foreign convictions are at issue. To somehow weed out
inappropriate foreign convictions that meet the statutory definition is not consistent
with the statute’s language; it is not easy for those not versed in foreign laws to
accomplish; and it would leave those previously convicted in a foreign court (say of
economic crimes) uncertain about their legal obligations. These considerations
provide a convincing basis for applying the ordinary assumption about the reach of
domestically oriented statutes here. Thus, the Court assumes a congressional intent
that the phrase “convicted in any court” applies domestically, not extraterritorially,
unless the statutory language, context, history, or purpose shows the contrary.
Pp. 2—5.
3. SIM v NLRC
Facts:
Corazon Sim filed a case for illegal dismissal with the Labor Arbiter, alleging that she
was initially employed by Equitable PCI-Bank in 1990 as Italian Remittance Marketing
Consultant to the Frankfurt Representative Office. Eventually, she was promoted to
Manager position, until September 1999, when she received a letter from Remegio
David -- the Senior Officer, European Head of PCIBank, and Managing Director of
PCIB- Europe -- informing her that she was being dismissed due to loss of trust and
confidence based on alleged mismanagement and misappropriation of funds.
Equitable denied any employer-employee relationship between them, and sought
the dismissal of the complaint. The Labor Arbiter dismissed the case for lack of merit
and/or want of jurisdiction stating that the labor relations system in the Philippines
has no extra-territorial jurisdiction and it is limited to the relationship between labor
and capital within the Philippines. On appeal, the National Labor Relations
Commission (NLRC) affirmed the Labor Arbiter's Decision and dismissed petitioner's
appeal for lack of merit. Without filing a motion for reconsideration with the NLRC,
petitioner went to the Court of Appeals (CA) via a petition for certiorari under Rule
65 of the Rules of Court. The the CA dismissed the petition due to petitioner's non-
filing of a motion for reconsideration with the NLRC. Petitioner filed a motion for
reconsideration but it was nonetheless denied by the CA. Hence, the present
recourse under Rule 45 of the Rules of Court.
in the certiorari proceedings have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court; (c) where
there is an urgent necessity for the resolution of the question and any further delay
would prejudice the interests of the Government or of the petitioner or the subject
matter of the action is perishable; (d) where, under the circumstances, a motion for
reconsideration would be useless; (e) where petitioner was deprived of due process
and there is extreme urgency for relief; (f) where, in a criminal case, relief from an
order of arrest is urgent and the granting of such relief by the trial court is
improbable; (g) where the proceedings in the lower court are a nullity for lack of due
process; (h) where the proceeding was ex parte or in which the petitioner had no
opportunity to object; and (i) where the issue raised is one purely of law or public
interest is involved. 10 (If her case falls under these exceptions, no need to file MR)
2. Yes. Under express provision of law (Section 62 of the Omnibus Rules and
Regulations Implementing R.A. No. 8042, Section 10 of Republic Act (R.A.) No. 8042,
or the Migrant Workers and Overseas Filipinos Act of 1995, and Article 217 of the
Labor Code), it is clear that labor arbiters have srcinal and exclusive jurisdiction over
claims arising from employer-employee relations, including termination disputes
involving all workers, among whom are overseas Filipino workers.

Issues:

1. Whether or not a prior motion for reconsideration is indispensable for the filing
of a petition for certiorari under Rule 65 of the Rules of Court with the CA.

2. Does the Labor Arbiter have jurisdiction over labor dispute between a Philippine
corporation and its employee which it assigned to work for a foreign land?

Ruling:

1. Yes. The filing a motion of reconsideration is an indispensable condition to the filing

of a special civil action for certiorari in order to allow the erring court or tribunal to
correct itself. Furthermore, the remedy of filing a special civil action for certiorari
under Rule 65 is available only when there is no appeal; or any plain, speedy, and
adequate remedy in the ordinary course of law.

A motion for reconsideration of the assailed order or resolution is an available plain

and adequate remedy. Moreover, the petitioner was not able to prove that her case
falls under the exceptions to the foregoing rule, to wit: (a) where the order is a patent
nullity, as where the court a quo has no jurisdiction; (b) where the questions raised
4. KIRTSAENG v JOHN WILEY & SONS INC.
This Court held that petitioner Supap Kirtsaeng could invoke the Copyright Act’s
“first-sale doctrine,” see 17 U. S. C. §109(a), as a defense to the copyright
infringement claim filed by textbook publisher John Wiley & Sons, Inc. Having won
his case, Kirtsaeng returned to the District Court to seek more than $2 million in
attorney’s fees from Wiley under the Copyright Act’s fee-shifting provision. See §505.
The District Court denied Kirtsaeng’s application because, it reasoned, imposing a fee
award against a losing party that had taken reasonable positions during litigation (as
Wiley had done) would not serve the Act’s purposes. Affirming, the Second Circuit
held that the District Court was correct to place “substantial weight” on the
reasonableness of Wiley’s position and that the District Court did not abuse its
discretion in determining that the other factors did not outweigh the reasonableness
finding.
Held:
1. When deciding whether to award attorney’s fees under §505, a district court
should give substantial weight to the objective reasonableness of the losing party’s
position, while still taking into account all other circumstances relevant to granting
fees. Pp. 3–11.
(a) Section 505 states that a district court “may . . . award a reasonable attorney’s fee
to the prevailing party.” Although the text “clearly connotes discretion” and eschews
any “precise rule or formula,” Fogerty v. Fantasy, Inc., 510 U. S. 517, the Court has
placed two restrictions on that authority: First, a court may not “award[ ] attorney’s
fees as a matter of course,” id., at 533; and second, a court may not treat prevailing
plaintiffs and prevailing defendants differently, id., at 527. The Court also noted
“several nonexclusive factors” for courts to consider, e.g., “frivolousness, motivation,
objective unreasonableness[,] and the need in particular circumstances to advance
considerations of compensation and deterrence,” id., at 534, n. 19, and left open the
possibility of providing further guidance in the future, id., at 534–535.
This Court agrees with both Kirtsaeng and Wiley that additional guidance respecting
the application of §505 is proper so as to further channel district court discretion
towards the purposes of the Copyright Act. In addressing other open-ended fee-
shifting statutes, this Court has emphasized that “in a system of laws discretion is
rarely without limits,” and it has “found” those limits by looking to “the large
objectives of the relevant Act.” Flight Attendants v. Zipes, 491 U. S. 754. In accord
with such precedents, this Court must determine what approach to fee awards under
§505 best advances the well-settled objectives of the Copyright Act, which are to
“enrich[ ] the general public through access to creative works” by striking a balance
between encouraging and rewarding authors’ creations and enabling others to build
on that work. Fogerty, 510 U. S., at 527, 526. Fee awards should thus encourage the
types of lawsuits that advance those aims. Pp. 3–6.
(b) Wiley’s approach—to put substantial weight on the reasonableness of a losing
party’s position—passes this test because it enhances the probability that creators
and users (i.e., plaintiffs and defendants) will enjoy the substantive rights the Act
provides. Parties with strong positions are encouraged to stand on their rights, given
the likelihood that they will recover fees from the losing (i.e., unreasonable) party;
those with weak ones are deterred by the likelihood of having to pay two sets of fees.
By contrast, Kirtsaeng’s proposal—to give special consideration to whether a suit
meaningfully clarified copyright law by resolving an important and close legal issue—
would produce no sure benefits. Even accepting that litigation of close cases
advances the public interest, fee-shifting will not necessarily, or even usually,
encourage parties to litigate those cases to judgment. While fees increase the reward
for a victory, they also enhance the penalty for a defeat—and the parties in hard
cases cannot be confident if they will win or lose.
Wiley’s approach is also more administrable. A district court that has ruled on the
merits of a copyright case can easily assess whether the losing party advanced an
unreasonable position. By contrast, a judge may not know whether a newly decided
issue will have broad legal significance. Pp. 6–10.
(c) Still, objective reasonableness can be only a substantial factor in assessing fee
applications—not the controlling one. In deciding whether to fee-shift, district courts
must take into account a range of considerations beyond the reasonableness of
litigating positions. Pp. 10–11.
2. While the Second Circuit properly calls for district courts to give “substantial
weight” to the reasonableness of a losing party’s litigating positions, its language at
times suggests that a finding of reasonableness raises a presumption against granting
fees, and that goes too far in cabining the district court’s analysis. Because the District
Court thus may not have understood the full scope of its discretion, it should have
the opportunity to reconsider Kirtsaeng’s fee application. On remand, the District
Court should continue to give substantial weight to the reasonableness of Wiley’s
position but also take into account all other relevant factors. Pp. 11–12.
605 Fed. Appx. 48, vacated and remanded
5. BMW OF NORTH AMERICA v GORE
After respondent Gore purchased a new BMW automobile from an authorized
Alabama dealer, he discovered that the car had been repainted. He brought this suit
for compensatory and punitive damages against petitioner, the American distributor
of BMW's, alleging, inter alia, that the failure to disclose the repainting constituted
fraud under Alabama law. At trial, BMW acknowledged that it followed a nationwide
policy of not advising its dealers, and hence their customers, of predelivery damage
to new cars when the cost of repair did not exceed 3 percent of the car's suggested
retail price. Gore's vehicle fell into that category. The jury returned a verdict finding
BMW liable for compensatory damages of $4,000, and assessing $4 million in punitive
damages. The trial judge denied BMW's post-trial motion to set aside the punitive
damages award, holding, among other things, that the award was not "grossly
excessive" and thus did not violate the Due Process Clause of the Fourteenth
Amendment. See, e.g., TXO Production Corp. v. Alliance Resources Corp., 509 U.S.
443, 454. The Alabama Supreme Court agreed, but reduced the award to $2 million
on the ground that, in computing the amount, the jury had improperly multiplied
Gore's compensatory damages by the number of similar sales in all States, not just
those in Alabama.
Held: The $2 million punitive damages award is grossly excessive and therefore
exceeds the constitutional limit. Pp. 7-26.
(a) Because such an award violates due process only when it can fairly be categorized
as "grossly excessive" in relation to the State's legitimate interests in punishing
unlawful conduct and deterring its repetition, cf. TXO, 509 U. S., at 456, the federal
excessiveness inquiry appropriately begins with an identification of the state
interests that such an award is designed to serve. Principles of state sovereignty and
comity forbid a State to enact policies for the entire Nation, or to impose its own
policy choice on neighboring States. See e.g., Healy v. Beer Institute, 491 U.S. 324,
335-336. Accordingly, the economic penalties that a State inflicts on those who
transgress its laws, whether the penalties are legislatively authorized fines or
judicially imposed punitive damages, must be supported by the State's interest in
protecting its own consumers and economy, rather than those of other States or the
entire Nation. Gore's award must therefore be analyzed in the light of conduct that
occurred solely within Alabama, with consideration being given only to the interests
of Alabama consumers. Pp. 7-13.
(b) Elementary notions of fairness enshrined in this Court's constitutional
jurisprudence dictate that a person receive fair notice not only of the conduct that
will subject him to punishment but also of the severity of the penalty that a State
may impose. Three guideposts, each of which indicates that BMW did not receive
adequate notice of the magnitude of the sanction that Alabama might impose, lead
to the conclusion that the $2 million award is grossly excessive. Pp. 13-14.
(c) None of the aggravating factors associated with the first (and perhaps most
important) indicium of a punitive damages award's excessiveness--the degree of
reprehensibility of the defendant's conduct, see e.g., Day v. Woodworth, 13 How.
363, 371--is present here. The harm BMW inflicted on Gore was purely economic; the
presale repainting had no effect on the car's performance, safety features, or
appearance; and BMW's conduct evinced no indifference to or reckless disregard for
the health and safety of others. Gore's contention that BMW's nondisclosure was
particularly reprehensible because it formed part of a nationwide pattern of tortious
conduct is rejected, because a corporate executive could reasonably have
interpreted the relevant state statutes as establishing safe harbors for nondisclosure
of presumptively minor repairs, and because there is no evidence either that BMW
acted in bad faith when it sought to establish the appropriate line between minor
damage and damage requiring disclosure to purchasers, or that it persisted in its
course of conduct after it had been adjudged unlawful. Finally, there is no evidence
that BMW engaged in deliberate false statements, acts of affirmative misconduct, or
concealment of evidence of improper motive. Pp. 14-20.
(d) The second (and perhaps most commonly cited) indicium of excessiveness--the
ratio between the plaintiff's compensatory damages and the amount of the punitive
damages, see e.g., TXO, 509 U. S., at 459--also weighs against Gore, because his $2
million award is 500 times the amount of his actual harm as determined by the jury,
and there is no suggestion that he or any other BMW purchaser was threatened with
any additional potential harm by BMW's nondisclosure policy. Although it is not
possible to draw a mathematical bright line between the constitutionally acceptable
and the constitutionally unacceptable that would fit every case, see, e.g., id., at 458,
the ratio here is clearly outside the acceptable range. Pp. 20-23.
(e) Gore's punitive damages award is not saved by the third relevant indicium of
excessiveness--the difference between it and the civil or criminal sanctions that could
be imposed for comparable misconduct, see, e.g., Pacific Mut. Life Ins.
Co. v. Haslip, 499 U.S. 1, 23--because $2 million is substantially greater than
Alabama's applicable $2,000 fine and the penalties imposed in other States for similar
malfeasance, and because none of the pertinent statutes or interpretive decisions
would have put an out of state distributor on notice that it might be subject to a
multimillion dollar sanction. Moreover, in the absence of a BMW history of
noncompliance with known statutory requirements, there is no basis for assuming
that a more modest sanction would not have been sufficient. Pp. 23-25.
(f) Thus, BMW's conduct was not sufficiently egregious to justify the severe punitive
sanction imposed against it. Whether the appropriate remedy requires a new trial or
merely an independent determination by the Alabama Supreme Court of the award
necessary to vindicate Alabama consumers' economic interests is a matter for that
court to address in the first instance. Pp. 25-26.

646 So. 2d 619, reversed and remanded.

6. SPECTOR v NORWEGIAN CRUISE LINE LTD.
Respondent NCL is a cruise line operating foreign-flag ships departing from, and
returning to, United States ports. The petitioners, disabled individuals and their
companions who purchased tickets for round-trip NCL cruises from Houston, sued
NCL under Title III of the Americans with Disabilities Act of 1990 (ADA), 42 U.S.C. §
12181 et seq., which prohibits discrimination based on disability in places of “public
accommodation,” §12182(a), and in “specified public transportation services,”
§12184(a), and requires covered entities to make “reasonable modifications in
policies, practices, or procedures” to accommodate disabled persons,
§§12182(b)(2)(A)(ii), 12184(b)(2)(A), and to remove “architectural barriers, and
communication barriers that are structural in nature” where such removal is “readily
achievable,” §§12182(b)(2)(A)(iv), 12184(b)(2)(C). Though holding Title III generally
applicable, the District Court found that the petitioners’ claims regarding physical
barriers to access could not go forward because the federal agencies charged with
promulgating ADA architectural and structural guidelines had not done so for cruise
ships. The court therefore dismissed the barrier-removal claims, but denied NCL’s
motion to dismiss the petitioners’ other claims. The Fifth Circuit held that Title III does
not apply to foreign-flag cruise ships in U.S. waters because of a presumption, which
the court derived from, e.g., Benz v. Compania Naviera Hidalgo, S. A., 353 U.S. 138,
and McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, that
absent a clear indication of congressional intent, general statutes do not apply to
foreign-flag ships. Emphasizing that Title III does not contain a specific provision
mandating its application to such vessels, the court sustained the dismissal of the
petitioners’ barrier-removal claims and reversed on their remaining claims.
Held: The judgment is reversed, and the case is remanded.
356 F.3d 641, reversed and remanded.
Justice Kennedy delivered an opinion concluding that except insofar as Title III
regulates a vessel’s internal affairs, the statute is applicable to foreign-flag cruise
ships in U.S. waters. Parts II—A—1 and II—B—2 of that opinion held for the Court:
(a) Although Title III’s “public accommodation” and “specified public
transportation” definitions, §§12181(7)(A),(B)(I),(L), 12181(10), do not expressly
mention cruise ships, there is no doubt that the NCL ships in question fall within both
definitions under conventional principles of interpretation. The Fifth Circuit
nevertheless held Title III inapplicable because the statute has no clear statement or
explicit text mandating coverage for foreign-flag ships in U. S waters. This Court’s
cases, particularly Benz and McCulloch, do hold, in some circumstances, that a
general statute will not apply to certain aspects of the internal operations of foreign
vessels temporarily in U.S. waters, absent a clear statement. The broad clear
statement rule adopted by the Court of Appeals, however, would apply to every facet
of the business and operations of foreign-flag ships. That formulation is inconsistent
with the Court’s case law and with sound principles of statutory interpretation.
Pp. 5—6.
(b) Title III defines “readily achievable” barrier removal as that which is “easily
accomplishable and able to be carried out without much difficulty or expense,”
§12181(9). The statute does not further define “difficulty,” but the section’s use of
the disjunctive indicates that it extends to considerations in addition to cost.
Furthermore, Title III directs that the “readily achievable” determination take into
account “the impact … upon the [facility’s] operation,” §12181(9)(B). A Title III
barrier-removal requirement that would bring a vessel into noncompliance with the
International Convention for the Safety of Life at Sea or any other international legal
obligation would create serious difficulties for the vessel and would have a
substantial impact on its operation, and thus would not be “readily achievable.”
Congress could not have intended this result. It is logical and proper to conclude,
moreover, that whether a barrier modification is “readily achievable” must take into
consideration the modification’s effect on shipboard safety. Title III’s
nondiscrimination and accommodation requirements do not apply if disabled
individuals would pose “a significant risk to the health or safety of others that cannot
be eliminated by a modification of policies, practices, or procedures.” §12182(b)(3).
It would be incongruous to attribute to Congress an intent to require modifications
threatening others’ safety simply because the threat comes not from the disabled
person but from the accommodation itself. Pp. 12—13.
Justice Kennedy, joined by Justice Stevens and Justice Souter, concluded in Parts
II—A—2, II—B—1, II—B—3, and III—B:
(a) As a matter of international comity, a clear statement of congressional intent is
necessary before a general statutory requirement can interfere with matters that
concern a foreign-flag vessel’s internal affairs and operations. See, e.g., Wildenhus’s
Case, 120 U.S. 1, 12. In Benz and McCulloch, the Court held the National Labor
Relations Act (NLRA) inapplicable to labor relations between a foreign vessel and its
foreign crew not because foreign ships are generally exempt from the NLRA, but
because that particular application of the NLRA would interfere with matters that
concern only the ship’s internal operations. These cases recognized a narrow rule,
applicable only to statutory duties that implicate the foreign vessel’s internal order
rather than the welfare of American citizens. E.g., McCulloch, supra, at 21. In
contrast, the Court later held the NLRA fully applicable to labor relations between a
foreign vessel and American longshoremen because this relationship, unlike the one
between a vessel and its own crew, does not implicate a foreign ship’s internal order
and discipline. Longshoremen v. Ariadne Shipping Co., 397 U.S. 195, 198—201. This
narrow clear statement rule is supported by sound principles of statutory
construction. It is reasonable to presume Congress intends no interference with
matters that are primarily of concern only to the ship and the foreign state in which
it is registered. It is also reasonable, however, to presume Congress does intend its
statutes to apply to entities in U.S. territory that serve, employ, or otherwise affect
American citizens, or that affect the peace and tranquility of the United States, even
if those entities happen to be foreign-flag ships. Cruise ships flying foreign flags of
convenience but departing from and returning to U.S. ports accommodate and
transport over 7 million U.S. residents annually, including large numbers of disabled
individuals. To hold there is no Title III protection for the disabled would be a harsh
and unexpected interpretation of a statute designed to provide broad protection for
them. Pp. 6—9.
(b) Plainly, most of the Title III violations alleged below–that NCL required disabled
passengers to pay higher fares and special surcharges; maintained evacuation
programs and equipment in locations not accessible to them; required them, but not
other passengers, to waive any potential medical liability and to travel with
companions; reserved the right to remove them from ships if they endangered other
passengers’ comfort; and, more generally, failed to make reasonable modifications
necessary to ensure their full enjoyment of the services offered–have nothing to do
with a ship’s internal affairs. However, the petitioners’ allegations concerning
physical barriers to access on board–e.g., their assertion that most of NCL’s cabins,
including the most attractive ones in the most desirable locations, are not accessible
to disabled passengers–would appear to involve requirements that might be
construed as relating to internal ship affairs. The clear statement rule would most
likely come into play if Title III were read to require permanent and significant
structural modifications to foreign vessels. Pp. 9—12.
(c) Because Title III does not require structural modifications that conflict with
international legal obligations or pose any real threat to the safety of the crew or
other passengers, it may well follow that Title III does not require any permanent and
significant structural modifications that interfere with cruise ships’ internal affairs. If
so, recourse to the internal affairs clear statement rule would not be necessary. Cases
may arise, however, where it is prudent for a court to invoke that rule without
determining whether Title III actually imposes a particular barrier-removal
requirement entailing a permanent and significant structural modification interfering
with a foreign ship’s internal affairs. Conversely, where it is not obvious that a
particular physical modification relates to a vessel’s basic architecture and
construction, but it is clear the modification would conflict with an international legal
obligation, the court may simply hold the modification not readily achievable,
without resort to the clear statement rule. Pp. 13—14.
(d) The holding that the clear statement rule operates only when a ship’s internal
affairs are affected does not implicate the Court’s holding in Clark v. Martinez, 543
U.S. ___, ___, that statutory language given a limiting construction in one context
must be interpreted consistently in other contexts, “even though other of the
statute’s applications, standing alone, would not support the same
limitation.” Martinez applied a canon for choosing among plausible meanings of an
ambiguous statute, not a clear statement rule that implies a special substantive limit
on the application of an otherwise unambiguous statutory mandate. Pp. 16—18.
Justice Kennedy, joined by Justice Stevens, Justice Souter, and Justice Thomas,
concluded in Part III—A that if Title III imposed a requirement that interfered with a
foreign-flag cruise ship’s internal affairs, the clear statement rule would come into
play, but that requirement would still apply to domestic ships, and Title III
requirements having nothing to do with internal affairs would continue to apply to
domestic and foreign ships alike. This application-by-application approach is
consistent with how the clear statement rule has traditionally operated. If the rule
restricts some NLRA applications to foreign ships (e.g., labor relations with foreign
crews in Benz and McCulloch), but not others (e.g., labor relations with American
longshoremen in Ariadne Shipping), it follows that its case-by-case application is also
required under Title III. The clear statement rule, if it is invoked, would restrict some
applications of Title III to foreign ships (e.g., certain structural barrier modification
requirements), but not others (e.g., the statute’s prohibition on discriminatory ticket
pricing). The rule is an implied limitation on a statute’s otherwise unambiguous
general terms. It operates much like other implied limitation rules, which avoid
applications of otherwise unambiguous statutes that would intrude on sensitive
domains in a way that Congress is unlikely to have intended had it considered the
matter. See, e.g., EEOC v. Arabian American Oil Co., 499 U.S. 244, 260. An all-or-
nothing approach would convert the clear statement rule from a principle of
interpretive caution into a trap for an unwary Congress, requiring nullification of the
entire statute, or of some arbitrary set of applications larger than the domain the rule
protects. Pp. 14—16.
7. PENNOYER v NEFF Discussion. Here the Supreme Court of the United States is distinguishing between
suits in personam, and in rem. An in personam suit is a suit against a person, whose
Brief Fact Summary. Defendant Neff was being sued by Mitchell in Oregon for unpaid
purpose is to determine the personal rights and obligations of the defendant. An in
legal fees. A default judgment was entered against Defendant for his failure to come
rem action, meanwhile, is an action where jurisdiction pertains to property. Thus the
to court or otherwise resist the lawsuit, despite the fact that he was not personally court reasoned that constructive service is sufficient to inform parties of action taken
served with process, nor was a resident of Oregon. Later, in an attempt to collect
against any properties owned by them within the forum state, because property is
upon his judgment, Mitchell attached land located in Oregon belonging to Defendant,
always in possession of the owner, and seizure of the property will inform the owner
and had it sold to Plaintiff Pennoyer through a Sheriff’s sale.
of legal action taken against him.
Synopsis of Rule of Law. Proceedings in a court of law to determine the personal
rights and obligations of parties over whom the court has not jurisdiction are invalid
for want of due process of law.

Facts. Mitchell, a lawyer, sued Defendant, his client, in Oregon state court for unpaid
legal fees. At the time Defendant was a non-resident of the state who was not
personally served with process. Constructive service was issued upon Defendant by
publication. Defendant did not come to court or otherwise resist the lawsuit, and
default judgment was entered against him. After the default judgment, Defendant
acquired 300 acres of land in Oregon. To satisfy his judgment against Defendant,
Mitchell had the sheriff seize and sell Defendant’s land. The land was purchased by
Plaintiff, who received a sheriff’s deed as evidence of title. The sheriff then turned
the sale proceeds over to Mitchell. Shortly after the sheriff’s sale, Defendant
discovered what had happened to his land and brought suit against Plaintiff to
recover the land. This appeal followed after Defendant lost his suit against Plaintiff.

Issue. Can judgments obtained against non-residents who fail to appear in court be
sustained by default judgments where service of process is accomplished solely
through publication (i.e. constructive service)?
Is constructive service sufficient notice to attach property within the forum state
owned by a non-resident?

Held. No. The personal judgment recovered in the state court of Oregon against
Plaintiff was without validity, and the decision of the Court of Appeals overturning
that judgment was affirmed.
When a suit is merely in personam (i.e. against a person), constructive service
through publication upon a non-resident is ineffective.

No state can exercise direct jurisdiction and authority over persons or property
without its territory. However, a state may subject property within its boundaries to
the payments of its citizens, even when the land is owned by a non-resident, without
infringing upon the sovereignty of the state of residency of the landowner.
8. ASIAVEST LIMITED v CA because the suit against him was in personam. Neither can we apply Section 18,
which allows extraterritorial service on a resident defendant who is temporarily
Facts:
absent from the country, because even if Heras be considered as a resident of Hong
1. The plaintiff Asiavest Limited filed a complaint against the defendant Antonio Kong, the undisputed fact remains that he left Hong Kong not only temporarily but
Heras praying that said defendant be ordered to pay to the plaintiff the amounts for good.
awarded by the Hong Kong Court Judgment. The action filed in Hong Kong against
Heras was in personam, since it was based on his personal guarantee of the obligation
of the principal debtor.

2. The trial court concluded that the Hong Kong court judgment should be recognized
and given effect in this jurisdiction for failure of HERAS to overcome the legal
presumption in favor of the foreign judgment.

3. Asiavest moved for the reconsideration of the decision. It sought an award of

judicial costs and an increase in attorney's fees with interest until full payment of the
said obligations. On the other hand, Heras no longer opposed the motion and instead
appealed the decision to CA.

4. The Court of Appeals (CA) agreed with Heras that notice sent outside the state to a
non-resident is unavailing to give jurisdiction in an action against him personally for
money recovery. Summons should have been personally served on Heras in Hong
Kong,

Issue: Whether or not the judgment of the Hong Kong Court has been repelled by
evidence of want of jurisdiction due to improper notice to the party

YES.

1. Asiavest cannot now claim that Heras was a resident of Hong Kong at the time
since the stipulated fact that Heras "is a resident of New Manila, Quezon City,
Philippines" refers to his residence at the time jurisdiction over his person was being
sought by the Hong Kong court. Accordingly, since Heras was not a resident of Hong
Kong and the action against him was, ne in personam, summons should have been
personally served on him in Hong Kong.

The extraterritorial service in the Philippines was therefore invalid and did not confer
on the Hong Kong court jurisdiction over his person. It follows that the Hong Kong
court judgment cannot be given force and effect here in the Philippines for having
been rendered without jurisdiction.

2. On the same note, Heras was also an absentee,hence, he should have been served
with summons in the same manner as a non-resident not found in Hong Kong. Section
17, Rule 14 of the Rules of Court providing for extraterritorial service will not apply
9. BANCO DO BRASIL v CA

333 SCRA 545 – Conflict of Laws – Private International Law – Service of Summons in
In Personam Cases

In 1989, Cesar Urbino, Sr. sued Poro Point Shipping Services for damages the former
incurred when one of the latter’s ship ran aground causing losses to Urbino. Urbino
impleaded Banco Do Brasil (BDB), a foreign corporation not engaged in business in
the Philippines nor does it have any office here or any agent. BDB was impleaded
simply because it has a claim over the sunken ship. BDB however failed to appear
multiple times. Eventually, a judgment was rendered and BDB was adjudged to pay
$300,000.00 in damages in favor of Urbino for BDB being a nuisance defendant.

BDB assailed the said decision as it argued that there was no valid service of summons
because the summons was issued to the ambassador of Brazil. Further, the other
summons which were made through publication is not applicable to BDB as it alleged
that the action against them is in personam.

ISSUE: Whether or not the court acquired jurisdiction over Banco Do Brasil.

HELD: No. Banco Do Brasil is correct. Although the suit is originally in rem as it was
BDB’s claim on the sunken ship which was used as the basis for it being impleaded,
the action nevertheless became an in personam one when Urbino asked for damages
in the said amount. As such, only a personal service of summons would have vested
the court jurisdiction over BDB. Where the action is in personam, one brought against
a person on the basis of his personal liability, jurisdiction over the person of the
defendant is necessary for the court to validly try and decide the case. When the
defendant is a non-resident, personal service of summons within the state is essential
to the acquisition of jurisdiction over the person. This cannot be done, however, if
the defendant is not physically present in the country, and thus, the court cannot
acquire jurisdiction over his person and therefore cannot validly try and decide the
case against him.
10. REGNER v LOGARTA
537 SCRA 277 – Conflict of Laws – Private International Law – Service of Summons –
Personal Action – Real Action – Extraterritorial Service
Cynthia Logarta and Teresa Tormis were the daughters of Luis Regner in his first
marriage with Anicita Regner. Victoria Regner is the second wife of Luis.
In 1999, Victoria alleged that Cynthia and Teresa with the help of another sibling
defrauded Luis, who was then very ill and was unable to write, into placing his
thumbmark into a Deed of Donation. In said Deed, Luis purportedly donated a
Proprietary Ownership Certificate pertaining to membership shares in the Cebu
Country Club. Victoria alleged that said Deed is void because the placing of
thumbmark by Luis was done without the latter’s free will and voluntariness
considering his physical state; that it was done without Luis’s lawyer; that the
ratification made by Luis before he died is likewise void because of similar
circumstances.
In the same year, Victoria filed a complaint to annul said deed with the RTC of Cebu.
The sheriff could not deliver the summonses against Cynthia and Teresa because
apparently, although they are Filipinos, they are not residing here; they are residing
in California. It was only in the year 2000 that one of the summonses was served to
one of the sisters, Teresa, when she came back to the Philippines.
Teresa immediately filed a motion to dismiss on the ground that Victoria failed to
prosecute her case for an unreasonable length of time. Naturally, Victoria opposed
the MTD. Teresa, in her rejoinder, alleged that the case should be dismissed because
Cynthia, who is an indispensable party, was not issued any summons, hence, since an
indispensable party is not served with summons, without her who has such an
interest in the controversy or subject matter there can be no proper determination
of the case. The trial court ruled in favor of Teresa; this was affirmed by the Court of
Appeals.
ISSUE: Whether or not the dismissal of Victoria’s complaint is correct.
HELD: Yes. The Supreme Court agreed with the arguments presented by Teresa. The
Supreme Court also emphasized:
There are generally two types of actions: actions in rem and actions in personam. An
action in personam is an action against a person on the basis of his personal liability,
while an action in rem is an action against the thing itself, instead of against the
person.
The certificate, subject of the donation, is a personal property. The action filed by
Victoria is therefore a personal action. So in order for the court to acquire jurisdiction
over the respondents, summons must be served upon them. Further, the certificate
is indivisible, Cynthia’s and Teresa’s interests thereto can only be determined if both
are summoned in court.
In personal actions, if the respondents are residents of the Philippines, they may be
served summons in the following order:
1. Personal Service;
2. If (1) is not possible, Substituted Service;
3. If respondent can’t be found because he is abroad but still a resident of the
Philippines, by publication with leave of court.
In personal actions still, if the respondents are non-residents, they may be served
summons in the following manner:
1. Personal service through the Philippine embassy;
2. By publication in a newspaper of general circulation in such places and for
such time as the court may order, in which case a copy of the summons and
order of the court should be sent by registered mail to the last known
address of the defendant; or
3. in any other manner which the court may deem sufficient.
The above must be with leave of court.
In the case at bar, Cynthia was never served any summons in any of the manners
authorized by the Rules of Court. The summons served to Teresa cannot bind Cynthia.
It is incumbent upon Victoria to compel the court to authorize the extraterritorial
service of summons against Cynthia. Her failure to do so for a long period of time
constitutes a failure to prosecute on her part.
What if the petition is an action in rem? What are the applicable rules?
If the action is in rem or quasi in rem, jurisdiction over the person of the defendant
is not essential for giving the court jurisdiction so long as the court acquires
jurisdiction over the res. If the defendant is a nonresident and he is not found in the
country, summons may be served extraterritorially in the following instances:
1. when the action affects the personal status of the plaintiff;
 2. when the action relates to, or the subject of which is property within the
Philippines, on which the defendant claims a lien or an interest, actual or
contingent;

3. when the relief demanded in such action consists, wholly or in part, in

excluding the defendant from any interest in property located in the
Philippines; and

4. when the defendant non-resident’s property has been attached within the
Philippines.

In the above instances, summons may be effected by:

1. personal service out of the country, with leave of court;

2. publication, also with leave of court; or

3. any other manner the court may deem sufficient.