Intersystemic statutory interpretation in transnational litigation.

• Author: McLean, Nicholas M.
• Position: Response to Abbe Gluck, Yale Law Journal, vol. 120, p. 1898, 2011

In a recent article in the pages of this Journal, (1) Professor Abbe Gluck highlights an important phenomenon: federal courts do not generally apply state interpretive methodologies when construing state statutes. Gluck argues forcefully that this practice is incorrect as a doctrinal matter under Erie, and that the legal academy's failure to examine statutory interpretation from a self-consciously "intersystemic" perspective represents a significant gap in the literature. (2)

In this Comment, I extend Gluck's argument regarding the inconsistent and undertheorized nature of the federal approach to intersystemic statutory interpretation to a new context: federal courts' interpretation of the statutory law of foreign countries (3) in the course of transnational litigation. (4) I argue that when federal courts are called upon to interpret foreign statutes, they should make greater efforts to employ the interpretive approaches of the relevant foreign jurisdictions. This is particularly important because a number of foreign countries--like certain U.S. states, (5) but unlike the U.S. Supreme Court--accord the status of law (or, at least, law-like status) to methodologies of statutory interpretation. The practice of federal courts in this respect has been inconsistent, often disregarding key aspects of foreign interpretive methodology. Judicial practice is thus in tension with the policies that militate in favor of the use of foreign law in transnational litigation. (6)

1. FOREIGN LAW IN AMERICAN COURTS: CURRENT PRACTICE

   Amid the globalizing forces of the world economy, federal courts are often called upon to apply and to interpret the laws of foreign countries. (7) A court sitting in diversity might apply a state choice-of-law rule that requires the court to apply the tort law of a foreign nation. (8) In a contract dispute, a federal court might apply foreign substantive law pursuant to an international agreement's choice-of-law clause. (9) In the realm of corporate law, a court might find, based on an application of the internal affairs doctrine, (10) that a foreign nation's procedural requirements govern a shareholder derivative suit. (11) Even the direct application of certain federal statutes may require U.S. courts to interpret foreign law: for example, under the anti-bribery Foreign Corrupt Practices Act, (12) a defendant may present the affirmative defense that an allegedly improper payment to a foreign official was "lawful under the written laws and regulations of the foreign official's ... country." (13) A federal court might also be called upon to review federal agencies' interpretations of foreign law in the context of administrative adjudication. (14) As a general matter, various policy arguments militating in favor of applying foreign law in litigation in domestic forums have been advanced, including international comity, (15) reciprocity, (16) predictability, (17) fairness, (18) and discouragement of forum shopping. (19)

   In the United States, the process by which federal courts interpret foreign law is set out in Rule 44.1 of the Federal Rules of Civil Procedure:

   A party who intends to raise an issue about a foreign country's law must give notice by a pleading or other writing. In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court's determination must be treated as a ruling on a question of law. (20) Under the current procedural regime, which in some respects parallels the "all available data" test employed by federal courts when interpreting state law in the Erie context, (21) judges called upon to interpret foreign statutes have relied on a wide variety of sources. These sources have included foreign statutory text, (22) foreign case law, (23) and secondary materials. (24) In contrast to the state law determination process, however, expert testimony has also been a widely employed method of determining the content of foreign law; indeed, many courts regard expert testimony as the primary method for understanding foreign law. (25) In addition to basing a determination on the pleadings and evidence presented by the parties to the litigation, a court may also determine a question of foreign law on the basis of its own research (although it is not required to do so under Rule 44.1). (26)

2. TRANSNATIONAL INTERSYSTEMIC STATUTORY INTERPRETATION

   When federal courts are called upon to construe foreign statutes, they employ highly inconsistent interpretive practices. Just as some federal courts in the domestic Erie context seek to pair state statutes with the relevant state interpretive methodologies, (27) some federal courts have made clear efforts to adhere to the interpretive rules of the relevant foreign jurisdiction. (28) At other times, however, courts appear simply to twin the text of a foreign statute with the principles of statutory interpretation commonly relied on by federal courts when interpreting domestic law.

   For example, in United States v. Mitchell, (29) the Fourth Circuit noted that it "ha[d] drawn upon the canons of statutory construction with which we interpret our own laws" (30) in order to interpret Pakistani legislation. One later court, called upon to construe Chinese law, has described Mitchell as standing for the blanket proposition that "in making [a] foreign law determination, [the] court may draw upon the canons of statutory interpretation with which U.S. courts interpret American laws." (31) Courts may sometimes assume that no concession need be made to foreign interpretive practice: one authority suggests that "[i]f the issue is the law of England, for example, American judges have little difficulty reading English statutes and cases .... [T]he law of England may sometimes be treated like the law of an American sister state." (32) Such practices, however, risk neglecting the case law--and, in many cases, the codified interpretive rules--that guides foreign courts in the process of statutory interpretation. (33)

   In Anglo American Insurance Group, P.L.C. v. CalFed, Inc., (34) the court was called upon to determine whether a U.K. statute (35) permitted the indemnification of corporate officers against claims from third parties. In Called, the court (citing Second Circuit doctrine from the Erie-Klaxon (36) line of cases that was developed in the context of domestic conflicts of law) concluded that "[w]here the issue of foreign law has not been addressed by the courts of the foreign jurisdiction, ... a federal court must engage in the two-step process of determining what the courts of the forum state would predict that the courts of the foreign jurisdiction would find." (37) The federal court must, in other words, predict the forum state's prediction as to the meaning of the foreign law. (38)

   In the United Kingdom, a longstanding exclusionary rule barred citation to legislative history for the purposes of statutory interpretation prior to 1992. (39) In that year, the House of Lords case of Pepper v. Hart (40) carved out a limited exception to this rule for the purposes of statements made by ministers that "clearly disclose[] the mischief aimed at or the legislative intention lying behind ... ambiguous or obscure words." (41) In interpreting the U.K. statute, however, the CalFed court began by citing both a 1983 (pre-Pepper) edition of an English treatise and a U.S. Supreme Court opinion for the proposition that...