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Washington and Lee Law Review - Student Notes

Note

If the Shoe Fits: Rethinking Minimum Contacts and the FSIA Commercial Activity Exception

by Jacqueline M. Fitch

This Note considers whether, under the direct effect clause of the FSIA commercial activities exception, a foreign sovereign must have minimum contacts with the United States in order for a U.S. court to assert personal jurisdiction over the entity.

When United States citizens initiate legal action against a foreign entity, they face a significant jurisdictional obstacle—the Foreign Sovereign Immunities Act (FSIA). The FSIA provides a general grant of immunity to foreign states and their instrumentalities from United States court jurisdiction; however, it establishes a number of exceptions where a foreign sovereign’s acts are subject to adjudication in the United States. Prior to the FSIA, the United States exercised absolute sovereign immunity, leaving any citizen injured by foreign state action with no remedy. But increased international commerce during the twentieth century led to the application of a more restrictive interpretation of immunity and the adoption of the FSIA’s commercial activities exception. The commercial activities exception contains three clauses, each providing grounds for lifting a foreign state’s immunity when a state’s commercial act impacts the United States. This Note examines the third clause of the commercial activities exception—the “direct effect” clause. The direct effect clause provides an exception to the grant of immunity for “an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States.” This note argues that recognizing foreign sovereigns as “persons” under the Due Process Clause is improper, and that reading a minimum contacts test into the direct effect clause is contrary to the structure and intent of the FSIA commercial activities exception.

 

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Facing the Inevitable: The Inevitable Disclosure Doctrine and the Defend Trade Secrets Act of 2016

by M. Claire Flowers

Multiple federal courts have recognized and applied the inevitable disclosure doctrine in cases brought by employers against former employees under the DTSA. The inevitable disclosure doctrine allows a business to temporarily enjoin the new employment of a former employee by a competitor on the theory that the employee learned confidential information while working for that business which the employee cannot possibly forget or refrain from relying on during her employment with the competitor. The application of this doctrine under the DTSA is controversial for two reasons. First, some states refuse to recognize the inevitable disclosure doctrine due, in part, to its restrictive effect on labor mobility. Secondly, the application is controversial because some practitioners thought that the language of the DTSA preempted the application of this doctrine at the federal level.

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Student Note

Condemning Clothes: The Constitutionality of Taking Trademarks in the Professional Sports Franchise Context

by Mitchell D. Diles

The resurgence in franchise free agency in the National Football League (NFL) potentially implicates the loss of a significant source of local identity and tradition for multiple cities. In January 2016, NFL owners approved the relocation of the Rams franchise from St. Louis, Missouri, to Los Angeles, California, by a vote of thirty-to-two. The owners’ vote also potentially implicates the relocation of the San Diego Chargers and the Oakland Raiders. Though applauded by numerous sports commentators, athletes, and fans, the vote reflects the failure of negotiations between the City of St. Louis and the Rams organization. The approval also sets the stage for a new generation of controversies over valuable team property. This includes disputes over team logos and other trademarks.

Although cities and fans may appear helpless when faced with franchise relocation, one powerful, although rarely invoked, point of leverage for local governments is the threat of exercising eminent domain power. In theory, this action could prevent a team from relocating. During the 1980s and 1990s, efforts to prevent professional sports franchises from moving, which included condemnation proceedings initiated by multiple cities, largely failed. Given the current, broad interpretation of the public use language in the Takings Clause, however, it is unclear whether another eminent domain action could succeed. Moreover, it is unclear whether an eminent domain action could seize a moving franchise’s trademarks given the “propertization” of trademarks and other forms of intellectual property.

This Note examines whether a city could exercise its eminent domain powers to acquire the intangible intellectual property rights associated with a professional sports franchise, specifically a team’s trademarks and associated goodwill. In doing so, it examines the unresolved issue of whether trademarks constitute constitutionally protected private property under the Takings Clause of the Fifth Amendment. If trademarks constitute constitutionally protected private property, the Fifth Amendment provides users of the mark with enhanced protection against government seizures. In the context of professional sports franchises, this would give teams greater protection upon relocation.

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