Personal Jurisdiction over Foreign Manufacturers

State v LG Electronics, Wash app, div 1, January 12, 2015:150112 State-v-LG-Electronics There has been ongoing debate in the courts over how much contact foreign manufacturers must have with a state for the state court to assert personal jurisdiction over foreign manufacturers and make the foreign manufactures defend in the state’s courts. The state’s power is constrained by the due process clause of the Fourteenth Amendment. The foundational case is International Shoe Co. v. Washington, 326 U.S. 310 (1945), in which the United States Supreme Court] held that a state may authorize its courts to exercise personal jurisdiction over an out-at-state defendant if the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” The courts have subsequently developed two concepts of personal jurisdiction: (1) General Jurisdiction and (2) Specific Jurisdiction. General jurisdiction “permits the exercise of personal jurisdiction over a nonresident defendant where the defendant’s ‘continuous corporate operations within a state (are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.'” Daimler AG v Bauman, 134 S. Ct. at 754-55 (2014). Specific jurisdiction, which since International Shoe “has become the centerpiece of modern jurisdictional theory,” requires that suit arise out of or relate to the defendant’s contacts with the forum. Daimler, 134 S. ct. at 754-55. Specific Jurisdiction requires proof of three elements (1) minimum contacts; (2) action “arises” from minimum contacts; and (3) asserting jurisdiction does not offend traditional notions of fair play and substantial justice. In State v LG...

Why Organize Early?

Although many company founders are reluctant to take the plunge into creating a corporate entity, often putting this step off for as long as possible, there are some good reasons to consider forming as soon as possible. Holding Period Stock Value The IRS will look at the time between forming and value given for stock at that time, and the company’s value at any financing or liquidity event. Hypothetically, if founders gave $.01 of value for their shares at formation, and they receive a funding round that values the company at $.50/share a week later, they need to be able to convince the IRS in an audit that they created enough value in the company in that one week to warrant the 50x increase in the value of the company. In a situation like this, your company is more than likely to arouse the suspicion that you sold yourselves shares at below market value. The General Partnership Many states, including Washington, have ratified some version of the Uniform Partnership Act (UPA). Washington’s is codified as chapter 25.05 of the Revised Code of Washington. Although the preferred form of entity for most startups is a C corporation, a founder should also be attentive to the provisions of the UPA or its equivalent in his or her state. The reason for this is that many of these acts contain provisions similar to the following from RCW 25.05.055:   (1) Except as otherwise provided in subsection (2) of this section, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not...

USCIS Issues Fliers About Executive Actions on Immigration

USCIS Issues Fliers About Executive Actions on Immigration Immigration services has just released the first official rules for the President’s new immigration programs. (en Español as well!) They are providing the first concrete rules of what the President proposed last November. Among the highlights: DACA applicants can now be any age, instead of being limited to those born after June 15, 1981. So if you’re 34 or older, you can now apply for DACA as well. Our first solid rules governing who can apply for DAPA (Deferred Action for Parents of American citizens and legal permanent residents), such as their children having to be born before November 20, 2014 and that the parents need to have continuously resided here in the states since January 1, 2010. An expansion of the Provisional Waiver for Unlawful Presence program to people related to lawful permanent residents (Previously, the program only applied to people related to US citizens). A promise to work on the work Visa system to clarify and provide guidance for businesses and applicants. It’s all very exciting news. I can’t wait to learn more about these programs as they start to come online. (Remember: the expanded DACA doesn’t open up for applicants until late- February and DAPA won’t open until late May). In the mean time, talk with a lawyer about what you can do to get ready to apply. Share...

Whistleblower Protection: Dodd-Frank and SOX

by John Jacob Tollefsen1The author practices law in Oregon, Washington, California, Texas, D.C., and New York. He has been lead counsel on several SOx § 806 cases including Tides v. The Boeing Co., 644 F.3d 809 (C.A.9, Wash. 2011), cert. den. 132 S.Ct. 518 (2011) and Reid v The Boeing Company, 2009-SOX-27 (ARB Mar. 30, 2012).  Overview of Whistle Blower Protection under Dodd-Frank and SOX including the SEC Bounty Program The Sarbanes Oxley Act of 2002 (“SOx”) § 8063SOx § 806 is codified as 18 U.S.C. § 1514A(a)(1). was designed to protect certain employees who reasonably believe they are reporting a violation of a law, rules, or regulation listed in § 806. Due to drafting issues and the hostility of courts and administrative judges, few whistleblowers prevailed. The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 add additional protections designed to increase the whistleblowers chances of success. This article provides a brief overview of federal whistleblower protection under Sox and Dodd-Frank including the Securities and Exchange Commission bounty program.2There are numerous other whistleblowing protection provisions in federal law that may be helpful in a particular case including aircraft safety and environmental issues that are not covered by this article. Prepare to have your career ruined As a practical matter, whistleblowing protection has not been favored by judges. This is to be expected. For many people, a “whistleblower” is a “snitch”.4The English language is rife with pejorative terms for whistleblower like informer, fink, stoolpigeon, stoolie, sneak, blabbermouth, tattler, tattletale, squealer, mole, betrayer, rat, and rat fink. Even lawyers fight rules (like ABA proposed ethical rules) making reporting of...

The First Rule of Immigration- Patience!

The number one thing that I tell my clients who come to me with immigration matters is this: Have patience. It is the first rule of handling an immigration matter. I say this because not a lot of people know just how long the process can be to get a visa or to get a hearing time. It’s common for immigration matters to take a minimum of a year to resolve, whether it’s waiting to hear back about an application or to have your hearing date set to get out of detention. And those are ideal scenarios! for some people, they’ve been waiting 20 years for a green card. Why is this? What has caused such a backlog of immigration work? I think there are three reasons: Immigration is a massive segment of the US Government, the entities that make it up have been underfunded for years, and congress has limited the number of people that can be admitted each year. Immigration is a truly massive entity in the Federal bureaucracy. The three big organizations, USCIS, USICE, and USCBP have a combined budget of $12 Billion dollars and employ more than 96,000 people. They are in charge of 57 immigration courts, monitor 8,000 miles of our borders, and naturalized more than 1.4 million people in the last two years alone. Entities this large have many layers of management and require more time to accomplish tasks than smaller entities. Added on to this is the fact that these are also public organizations, whose oversight by Congress adds another layer of decision making that most private entities don’t have to deal...

Personal jurisdiction asserted over out of state officer

Failla v FixtureOne Corporation (SC WA, October 2, 2014 Decision: 141002-Failla-v-FixtureOne In a dispute over unpaid wages, Washington State’s Supreme Court held that personal jurisdiction can exist over an out of state officer who had never set foot in Washington State. “[E]mploying a Washington resident to perform work in Washington constitutes the “transaction of any business within this state” under RCW 4.28.185( 1)( a)”. “we do not hold today that any corporate officer of a nonresident corporation may be subject to the state’s jurisdiction. Rather, Schutz was the officer directly responsible for the hiring, firing, promotion, and payment of Failla’s wages”. Schultz was sued under RCW 49.52.050 and .070. Together these statutes create a cause of action against [a]ny employer or officer, vice principal or agent ojany employer . .. who … [w]ilfully and with intent to deprive the employee of any part of his or her wages, [pays] any employee a lower wage than the wage such employer is obligated to pay such employee by any statute, ordinance, or contract. RCW 49.52.050(2) The sole dissent argued: “The United States Supreme Court has “consistently rejected attempts to satisfy the defendant-focused ‘minimum contacts’ inquiry by demonstrating contacts between the plaintiff (or third parties) and the forum State.” ld. (emphasis added). In fact, no matter how “significant the plaintiff’s contacts with the forum may be,” they cannot be decisive when determining whether the defendant had minimum contacts. ld. As described above, the employer’s only contacts with Washington were his contacts with the plairitiff. He took no actions related to this state. The majority’s inquiry is focused on the defendant’s contact with the plaintiff,...