E:\SPRING~1\Hartnell_Private International Law

4. You have three hours to complete this examination, which consists of two parts. Part I contains one fact pattern, and four related questions. Part II contains two essay questions. You must answer ALL questions in Parts I and II. Overall, the exam consists of SIX equally-weighted questions. Please observe the suggested times for each question (i.e. 30 minutes).

5. AT THE END OF THE EXAM, YOU MUST TURN IN THIS EXAMINATION BOOKLET AND ALL SCRATCH PAPER USED.

PART I

Total Recommended Time: 120 Minutes

Peter Piper (P) is a purveyor of pickled peppers and of paprika. which consists of peppers that have been dried and ground to a powder. During the socialist era, Peter was general manager of pickle and paprika production in Hungary. After communism ended after 1989, he was able to purchase the pickling plant when the Hungarian state privatized it in the early 1990s. Peter also set up a limited liability company under Hungarian law, Uborka Kft., which has its main office in Budapest. Peter transferred his ownership of the former state-owned pickling plant in Pecs (a city in southern Hungary) to Uborka. Peter owns 75% of the shares of Uborka; the remaining shares are owned by the Hungarian government. The agricultural land, where the peppers used to make pickles and paprika are produced, is still owned by the farming community that works the land. The paprika factory in Szeged (a city in southeast Hungary) is jointly owned by Uborka Kft. and the Hungarian government. Because of his excellent knowledge of the marketing end of the paprika business, Peter has been granted the exclusive right to sell output from the Szeged paprika factory for export sale outside of Hungary. The product from this production facility is packaged in red tins and bears the "SZEGED HUNGARIAN PAPRIKA" trademark.

Peter Piper has visited the U.S. frequently since communism ended, both on business and on holiday. He is especially fond of California, and brings his family every year on summer holiday. His business trips usually take him to New Jersey, where he has a long-standing business relationship with Varsany Co. (V), a food import business that was established in the late 1950s by a family that fled Hungary after the failed revolt of 1956. Varsany is incorporated in New Jersey, and has been purchasing Hungarian pickles and paprika from Peter since the "goulash communism" era in the late 1960s. Varsany also purchases pickles and paprika from other sellers besides Peter, when goods of comparable quality- are available on the world market. Varsanv distributes the goods it imports throughout the U.S. and Canada.

In December 2000, Varsany purchased a shipment of "SZEGED HUNGARIAN PAPRIKA" from Molnar Ltd. (M), a London-based company. This shipment of paprika ended up in Bay Area grocery stores. Ilonka Borsodi (B) purchased one tin, so that she could make goulash for her friend Gabor's birthday dinner. The goulash was delicious, though the paprika seemed unusually bitter. Later that night, Ilonka, Gabor, and all other dinner guests ended up in the hospital with food poisoning. It turns out that the tin Ilonka had purchased did not contain paprika at all, but rather contained ground-up poison that had been colored red to look like paprika.

After being released from the hospital, Ilonka comes to you seeking legal advice. Ilonka wants to sue for her own injuries, but is also concerned that she might herself be sued for poisoning her dinner guests. Ilonka believes that she has claims based in tort (i.e. strict product liability) and in contract (i.e. breach of warranty). Ilonka knows that she can sue the U.S.-based parties in the U.S. (i.e. the store where she bought the paprika and Varsany, the New-Jersey based importer). However, Ilonka also wants to be able to sue Peter Piper, the Hungarian company (Uborka Kft.) and/or the English company (Molnar Ltd.), since they are the ones who (she believes) should bear ultimate responsibility for her injuries, and who she believes should indemnify her in case she is held liable to any of her dinner guests.

Ilonka has done some research. She discovered that there was a paprika scandal a few years ago in which unidentified persons (with alleged mafia connections) were selling poisoned "paprika" in tins bearing the "SZEGED HUNGARIAN PAPRIKA" trademark.

I.A. Would the U.S. District Court in San Francisco have jurisdiction over P, Uborka Kft. and/or Molnar Ltd. in a case claiming damages based on tort or contract? Would you try to use "tag" jurisdiction %i-hen P comes to California on holiday later this month? (30 minutes)

I.B. Where could Ilonka sue in Europe? Assume for purposes of this answer that Hungary has concluded a treaty with the European Union (EU) that extends the principles of the former Brussels Convention (now Regulation) to Hungary, which has applied for EU membership. (30 minutes)

I.C. If Ilonka decides to go forward with her initial plan to file a lawsuit in the U.S. District Court in San Francisco, how would you serve process on the Hungarian defendants'? (30 minutes)

I.D. Assume that the lawyer for Peter Piper and Uborka Kit. appears in the U.S. District Court in San Francisco to contest jurisdiction over the two Hungarian parties. In order to respond to these jurisdictional arguments. you decide to ask the court to order production of evidence concerning past business activities of P and Uborka in the U.S. In addition, you want to obtain records that would show where Molnar Ltd. obtained the tainted (poisoned) goods that were shipped into the U.S., and whether there have been any past business dealings between P or Uborka and Molnar. Assume that Hungary is not a party to the Hague Evidence Convention, but that the United Kingdom is a party to this treaty. What arguments would you make to pcrsuade the court to grant your request? (30 minutes)

PART II

Total Recommended Time: 60 Minutes

The following two questions are short, but ask you to synthesize some of the broader themes we have discussed this semester.

II.A. Territoriality continues to play a key role in private international law, despite the expansion of the borderless realm of cyberspace. We have discussed the problem of "extraterritoriality" in a number of different contexts during the semester. For example, we studied the topic of "extraterritorial application of lave" using the example of U.S. antitrust law. The senior partner in the law firm where you work knows that you have an interest in transnational dispute resolution. Over lunch, he tells you how happy he is that you have joined the firm, since he is confident that you can explain "extraterritorial jurisdiction" to him. He asks you to prepare a memorandum for him in which you clarify the meaning of "extraterritoriality" in private international law. In addition to explaining the basic concept, you should also identify some of. the concrete situations in which "extraterritoriality" becomes problematic, and mention techniques that have been developed by individual countries and by the international community to resolve such problems. (30 minutes)

II.B. Based on your experience in discussing the draft Hague Convention on International Jurisdiction and the Effects of Foreign Judgments in Civil and Commercial Matters (HJC) with other members of the class, please explain why it is so difficult to achieve a multilateral treaty solution to the problems of recognition and enforcement of foreign judgments. Provide a BALANCED analysis of the perspectives of the developing world, of developed nations (including Europe and the U.S.), and (if you wish) of any other nations or regions of the world, but DO NOT reveal which negotiating group you were in on the last day in class. In formulating your answer, it may be helpful to consider the importance of the Convention to different countries. What (if anything) do the Hague Service and Evidence Conventions teach us about using multilateral treaties to solve private international law problems? (30 minutes)