September 3, 2020 - This Week at the Ninth

This Week at the Ninth: Long Arms and Sore Backs

This week, the Ninth Circuit explains when courts have personal jurisdiction over foreigners who contract with U.S.-based businesses, and whether severe pain can qualify as a disability under the Longshore and Harbor Workers’ Compensation Act.

GLOBAL COMM. TRADING GRP. v. BENEFICIO DE ARROZ CHOLOMA
The Court holds that a non-resident may be subject to personal jurisdiction in a forum when it has engaged in an ongoing course of business with a forum resident and visited the forum multiple times as part of that business relationship.

Panel: Chief Judge Thomas, and Judges W. Fletcher and Miller, with Judge Fletcher writing the opinion.

Key highlight: “We hold that the district court had personal jurisdiction over both the corporate and individual defendants and that litigation in the Eastern District of California would not result in disproportionate inconvenience.”

Background: California-based Global Commodities Trading Group sold more than fifty million dollars in agricultural commodities to Honduran importer Beneficio de Arroz Choloma (known as “Bachosa”) between 2008 and 2012. Bachosa defaulted on its payments, and Global sued the corporation along with two of its officers in the Eastern District of California. The defendants moved to dismiss for lack of personal jurisdiction and for forum non conveniens. After limited jurisdictional discovery, the district court dismissed Global’s claims for lack of personal jurisdiction and denied the forum non conveniens motion as moot.

Result: The Ninth Circuit reversed the district court’s order dismissing the action for lack of personal jurisdiction, vacated its orders on the parties’ remaining motions, and remanded with instructions to deny the forum non conveniens motion on the merits. With respect to personal jurisdiction over the corporate defendant, the Court explained that while a contract between a forum resident and a non-resident doesn’t necessarily give rise to personal jurisdiction over the non-resident, the facts of this case showed sufficient connections to the forum. Bachosa entered into hundreds of contracts over many years for goods inspected in California under American standards, it made payments on those contracts in California, and its officers made promises central to the dispute with Global on a trip to California. In sum, the Court said, “Those contacts gave rise to this dispute, and it was reasonable for Bachosa to expect that it would be haled into court in California to fulfill its obligations and to account for harm it foreseeably caused there.” As for Bachosa's officers, the Court reached largely the same conclusion. The officers had repeatedly traveled to California as part of the ongoing business relationship with Global, and had negotiated the disputed contracts there. They had even gone so far as to personally assume liability for some of Bachosa’s obligations. Because the officers were “key players in Bachosa’s years-long business relationship with Global … they could have reasonably foreseen that they would be haled into California’s courts.” Finally, the Ninth Circuit held that the defendants’ non forum conveniens motion must fail. Evidence of the parties’ negotiations was more accessible in California, and travel there would be safer than trips to Honduras. The parties’ agreement was likely governed by California law, not Honduran law, and a plaintiff’s choice of its home forum “is entitled to considerable deference.” Accordingly, the Court said, Bachosa faced “no more than the ordinary burdens any foreign defendant will bear when called to defend an action in the United States against a domestic plaintiff.”

JORDAN v. SSA TERMINALS, LLC
The Court holds that claimants are “disabled” within the meaning of Longshore and Harbor Workers’ Compensation Act (“LHWCA”) if they cannot perform a job without severe pain.

Panel: Judges R. Nelson, Bress, and Block (E.D.N.Y.), with Judge Block writing the opinion.

Key highlight: “We hold, as a matter of first impression, that credible complaints of severe, persistent, and prolonged pain can establish a prima facie case of disability, even if the claimant can literally perform his or her past work.”

Background: Jordon worked for SSA as a longshoreman. After a crane lifted and then dropped a tractor he was driving, Jordan suffered a severe back injury that ultimately required spinal fusion surgery. Between the time of the accident and the surgery, Jordan continued working for his own landscaping company and (according to surveillance videos) engaged in physical activities like doing push-ups. On that basis, SSA and its insurer asserted that Jordan was not entitled to disability benefits under the LHWCA during this period. An ALJ agreed, finding that Jordan had not been totally disabled. Although the ALJ credited Jordan’s testimony that performing many physical tasks caused him serious pain, it concluded that he nevertheless had failed to demonstrate that he could not work. The Benefits Review Board affirmed, and Jordan petitioned for review.

Result: The Ninth Circuit granted the petition and remanded. As the Court explained, the central issue was whether complaints of pain could satisfy the LHWCA’s definition of disability: “incapacity because of injury to earn the wages which the employee was receiving at the time of injury in the same or other employment.” 33 U.S.C. § 902(10). Joining a number of other Courts of Appeals, the Ninth Circuit held that “pain can be disabling.” As the Court explained, that did not mean that “any amount of pain was per se disabling.” Nor, for that matter, need a claimant suffer pain that would qualify as “excruciating”—after all, the Court observed, “[t]orture should not be the benchmark for disability.” Rather, the Court held, the requisite threshold of pain lies in this “vast middle ground between occasional discomfort and torture”: the “level of pain must be sufficiently severe, persistent, and prolonged to significantly interfere with the claimant’s ability to do his or her past work.” As the Court further explained, it suffices if the pain “would make a reasonable employee stop doing the activity,” and so a claimant need not make any “‘extraordinary effort’” to overcome such pain. Because the ALJ had not applied that legal standard, the Ninth Circuit remanded for further proceedings consistent with its opinion.