The case of the day is Sea Hope Navigation, Inc. v. Novel Commodities, SA (S.D.N.Y. 2013). Sea Hope claimed that it had chartered a vessel to Novel. Holders of a bill of lading later asserted claims against Sea Hope for damage to the cargo caused by “rough handling.” Sea Hope commenced an arbitration against Novel in London, seeking indemnification. Novel never responded to the notice of appointment of Sea Hope’s arbitrator, so the arbitration proceeded before a sole arbitrator, who awarded damages to Sea Hope. Sea Hope then sought confirmation of the award in New York and served the summons and the petition on Novel’s registered agent for service of process in New York. Novel defaulted, and Sea Hope sought a default judgment. The court ordered Sea Hope to send a copy of the papers to the address given on Novel’s website, which it did. Novel, seventeen days after receipt of the papers, entered an appearance and opposed the motion for entry of a default judgment (which the court treated also as a motion to vacate the default). Novel claimed that it had never received notice of the action and indeed, that it had never received notice of the arbitration!
One of the factors a defendant seeking relief from a default must show is that it has a potentially meritorious defense. Thus not only was the supposed lack of notice of the confirmation proceeding at issue; Novel’s claim that it had never received notice of the arbitration is also relevant, because under Article V(1)(B) the lack of notice is a basis for refusing to confirm an award.
The magistrate judge gave Novel the benefit of the doubt on this issue. Sea Hope had sent the notice to what Novel described as “a generic Novel email address, which was not actively monitored by anyone at Novel,” and that it received no notice by post or other means. Sea Hope submitted an affidavit that cast doubt on Novel’s account, but the judge refused to consider the credibility of the competing affidavits when determining, for default purposes, whether the defendant has a meritorious defense. Weighing this and the other relevant factors, the judge held that Novel was entitled to relief from the default.
The case of the day is In re Application of Lee-Shim (N.D. Cal. 2013). Jean-Michael Lee-Shim was implicated in a criminal bribery investigation in Mauritius and the United Kingdom. In the investigation, emails that came from Lee-Shim’s personal email account (he used Yahoo as his service provider) were relevant. Lee-Shim asserted than an unauthorized person had accessed his account and sent the inculpatory emails. He sought leave to serve a subpoena on Yahoo in order to determine the times and locations from which the account had been accessed.
The case is interesting because it is quite uncommon for the targets of criminal investigations to seek to make use of § 1782 before criminal charges are brought (at least as far as I have seen). Foreign governments, of course, can make use of mutual legal assistance treaties to obtain evidence in the United States. But since § 1782 plainly applies to criminal investigations as well as formal criminal proceedings, there is at least an argument that (potential) future criminal defendants should be able to make use of the statute. If this is right, then foreign criminal defendants may be better situated than targets of US criminal investigations. I am not a criminal defense lawyer, but I think it’s the case that when the government is investigating a crime, the grand jury can issue subpoenas but the potential defendant has no such power. It may be that this anomaly is a reason why § 1782 should not be read to permit potential defendants such as Lee-Shim to make such use of the statute.
The judge undertook a more or less cursory Intel analysis and granted the application. I think the case presents an interesting issue, and I hope to see it further developed.
Judge Hillman has denied Alexander Hilton’s petition for a writ of habeas corpus, in which Hilton had challenged a magistrate judge’s decision that he could be extradited to the United Kingdom to face trial on charges of the attempted murder of Robert Forbes, a fellow student at St. Andrews University. I covered the petition here and the government’s response to the petition here.
The decision was more or less as expected. Hilton had argued that Scots criminal procedure, specifically the rule allowing a majority jury verdict rather than requiring a unanimous verdict, would violate his due process rights. The judge held that under the rule of non-inquiry, the court could not inquire into the fairness of criminal procedure in Scotland; such questions are for the executive, not the judiciary. The judge rejected Hilton’s arguments that the rule of non-inquiry should not apply because the Senate was unaware of Scotland’s jury rules when it ratified the US/UK extradition treaty, and it rejected his argument that an exception to the rule of non-inquiry existed because the case was exceptional. “The United Kingdom is one of this country’s most trusted treaty partners, not a country likely to have procedures so unfair that the Court should disregard an established rule,” the judge noted.
The judge also rejected Hilton’s arguments that because he suffers from mental illness, he should not be extradited on humanitarian grounds. Again, such questions are for the executive, not the judiciary. This is so even when the United Kingdom itself has refused to extradite defendants to the United States on such grounds. Even if the UK has violated the rule of reciprocity, any response is a matter for the executive, not the judiciary.
Hilton has a right of appeal to the Court of Appeals for the First Circuit, and I think we will likely see a notice of appeal filed. It’s not entirely clear to me whether the magistrate judge’s stay of extradition continues in effect, so we may see some motion practice on that question, too.