Lit Alerts—September 2019

Author:Mr Kenneth Chernof, John D. Lombardo, Daphne Morduchowitz, Andrew K. Solow, David J. Weiner, Paul Beavers, Michael S. Bullerman, Tommy Huynh, Michael E. Kientzle and Colleen S. Lima
Profession:Arnold & Porter

Forum-Selection: Ninth Circuit Holds Idaho Policy Against Forum-Selection Clauses Invalidates Contract Provision

In Gemini Technologies, Inc. v. Smith & Wesson Corp., the Ninth Circuit held that a clause specifying Delaware as the forum for any disputes between the contracting parties was invalid based on an Idaho statute. Idaho Code § 29-110(1) states that it is against the public policy of Idaho for a contract to restrict a party's ability to enforce its rights in Idaho tribunals. An Idaho-based company filed the case in the US District Court for the District of Idaho against diverse defendants. The district court held that the forum-selection clause applied and required the case to be heard in a Delaware court. The Ninth Circuit disagreed and reversed, holding that the Idaho law overrode the traditional policy in favor of enforcing forum-selection clauses.

The Ninth Circuit rejected the defendants' argument that the Supreme Court's decision in Atlantic Marine Constr. Co. dictated that the court enforce the forum-selection clause. In particular, the Ninth Circuit held that the Supreme Court's earlier decision in M/S Bremen v. Zapata Off-Shore Co. required enforcement of the Idaho statute because Bremen holds a forum-selection clause is unenforceable if it is against the "strong public policy of the forum in which suit is brought, whether declared by statute or judicial decision." Because the Idaho statute establishes a strong public policy of the forum against enforcing the forum-selection clause, the clause could not be enforced and the case had to remain in Idaho.

White Collar: Second Circuit Declines to Extend McDonnell "Official Act" Standard to FCPA Cases

In United States v. Ng Lap Seng, No. 18-1725-ct (Aug. 9, 2019), the Second Circuit ruled that the high bar set by McDonnell v. United States, 136 S. Ct. 2355 (2016), for certain domestic bribery cases does not apply in cases involving foreign bribery.

McDonnell involved an appeal from a conviction under the Hobbes Act, which criminalizes, inter alia, public corruption. The Supreme Court carefully examined the definition of bribery in the context of public corruption in the United States and "adopt[ed] a more bounded interpretation of 'official act' . . . [u]nder...

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