Litigation isolationism.

Author:Bookman, Pamela K.
Position:Introduction through II. Foreign Developments A. The Developments, p. 1081-1115

INTRODUCTION I. TRANSNATIONAL LITIGATION IN U.S. COURTS A. The Growth of Transnational Litigation Avoidance 1. Personal jurisdiction 2. Forum non conveniens 3. Abstention comity 4. Presumption against extraterritoriality B. Stated Goals 1. Separation of powers 2. International comity 3. Defendants' convenience II. FOREIGN DEVELOPMENTS A. The Developments B. The Resulting Legal Landscape III. JUDGING AVOIDANCE A. Separation of Powers and International Comity B. Consequences for U.S. Interests 1. Suits against U.S. defendants 2. Suits against foreign defendants 3. Suits brought by U.S. plaintiffs C. Isolationism in Context IV. REFINING AVOIDANCE A. Attainable (and Unattainable) Goals B. Guiding Principles C. Incorporating Territoriality and Personality 1. Personal jurisdiction 2. Forum non conveniens 3. Abstention comity 4. Presumption against extraterritoriality CONCLUSION INTRODUCTION

In the 1990s, thousands of banana workers sued Dow Chemical Company in courts throughout the United States over alleged exposure to DBCP, a Dow-manufactured pesticide claimed to cause sterility. (1) Dow fought for years to have the cases dismissed on forum non conveniens grounds, arguing that the workers home countries courts would be the more natural forum for these suits. (2) It did so likely assuming that once dismissed from U.S. court, the cases would effectively be over, because the plaintiffs' home courts held no promise 1 2 of damages awards sufficient to make it worthwhile to continue litigating. (3) But after a series of forum non conveniens dismissals, Nicaragua enacted a special law to enable its nationals to obtain U.S.-style relief for DBCP injuries (requiring, for example, a minimum damages award of $125,000 based on minimal evidentiary showings). (4) Nicaraguan courts issued over $2 billion in judgments. (5)

Back in U.S. court, Dow appeared to have "forum shopper's remorse" over having requested dismissal. (6) It sued groups of Nicaraguan plaintiffs, seeking a declaratory judgment that it was not liable for their injuries and that the Nicaraguan judgments were unenforceable. (7) These attempts failed for lack of personal jurisdiction over the Nicaraguan "plaintiffs" (now the defendants in the declaratory judgment action)." (9) When Nicaraguan plaintiffs later sued Dow to enforce a similar Nicaraguan judgment in Florida, that court made the highly unusual move of refusing to enforce the judgment because (among other things) it was "rendered under a system which does not provide ... procedures compatible with the requirements of due process." (10) Had the foreign procedures had some bare hallmarks of legitimacy, however, U.S. courts likely would have rubber-stamped the foreign judgments. U.S. states have relatively permissive regimes for enforcing foreign money judgments.

The DBCP case is just one of many examples of the transnational cases that abound in U.S. courts. (11) Transnational suits--cases involving foreign parties, foreign conduct, foreign law, or foreign effects--and the law that governs them have growing significance in the United States and around the world. (12) There are countless other examples. Plaintiffs sue U.S. manufacturers alleging that their airplanes crashed overseas due to propellers malfunctioning. (13) They sue alleging that foreign-owned companies plotted securities fraud in the United States. (14) They sue alleging that foreign firms exported dangerous products to the United States that caused injury there. (15) Perhaps most controversially, they sue alleging that corporations aided and abetted human rights violations in foreign countries. (16)

In such cases, defendants, like Dow, whether they are foreign or domestic, typically rely on a set of defenses that I call "transnational litigation avoidance doctrines, or avoidance doctrines" for short. These defenses--most prominently, lack of personal jurisdiction, forum non conveniens, "abstention comity (the power to abstain based on international comity concerns), and the presumption against extraterritoriality--permit or require a court to dismiss a case because it is too "foreign." (18)

Over the past few decades, American courts have become increasingly responsive to requests like these, expanding the salience of avoidance doctrines. These doctrines represent a hodgepodge of approaches to the decision of whether to entertain transnational litigation, addressing prescriptive jurisdiction, (19) adjudicative jurisdiction, (20) and discretionary bases. But they all have a common effect: the dismissal of a case at least in part because of its "foreignness." And careful analysis of the cases reveals that they all purport to serve a common set of goals: promoting separation of powers and international comity (by keeping the courts away from disputes involving delicate foreign affairs issues), and protecting the interests of defendants (by sparing them the burdens of transnational litigation in U.S. courts). (21) I call this combination of common stated goals and effects "litigation isolationism." (22)

Some scholars have begun to take note of the Supreme Court's transnational litigation avoidance decisions. David Noll, for example, argues that developments in avoidance doctrines and other areas of the law have created a new way in which U.S. courts manage regulatory conflict. (23) As Noll recognizes, (24) these developments can be explained as part of a larger trend of growing "hostility to litigation," which some scholars believe has driven many decisions by the Rehnquist and Roberts Courts, (25) but this is not the only explanation. As consequences of these and other developments, scholars have identified decreased burdens for foreign defendants in U.S. courts, (26) an emerging market for transnational law, (27) and an evolving forum shopping system in which U.S. courts are losing popularity. (28)

But scholarship has thus far neglected to focus on those doctrines that target transnational litigation and their particular stated goals. Nor has it assessed whether the doctrines are even capable of achieving these goals either on their own terms or in the context of foreign courts' evolving attitudes toward transnational litigation. (29)

This Article evaluates these questions. It starts by placing transnational litigation avoidance doctrines in context--vis-a-vis both each other and the changing transnational litigation landscape abroad. Understanding this context is essential to ensuring that these doctrines work toward establishing a level of transnational litigation in U.S. courts that is consistent not only with separation of powers and international comity, but also with U.S. sovereign interests, fairness, and efficiency (if not "convenience") for all parties.

The Article then seeks to fill these gaps in courts' and scholars' understandings of the role of avoidance doctrines in transnational litigation. It evaluates the success of avoidance on the doctrines' own terms and concludes that avoidance either fails to serve or positively undermines the values that the doctrines purport to advance. It concludes that the doctrines tend to be overbroad. In seeking to exclude cases that are "too foreign," courts end up dismissing cases that are in fact quite domestic. When a case involves American parties or events on U.S. territory, the United States is likely to have a strong interest in having that case proceed in U.S. court and in applying its procedures, and the public policies behind them, to the suit. (30) By excluding those cases along with others that lack almost any domestic contacts, courts are forgoing their ability to apply those procedures to such cases.

This Article proceeds in four parts. Part I describes the four avoidance doctrines highlighted here and their common effects and stated goals. It traces the history of the American view of what kind of nexus is required to permit a case to proceed in U.S. courts from its origins in territoriality to the incorporation of international law concepts of reasonableness and, in recent years, a partial return to territoriality. This Part demonstrates that, in the name of preserving separation of powers, international comity, and defendants' convenience, courts have developed broad rules that exclude substantial amounts of litigation that the United States has a sovereign interest in keeping in U.S. courts.

Part II places these developments in a global context. It describes foreign courts' growing attractiveness to transnational litigants. Political scientists and legal academics have begun to document the rise of American-style litigation features in many foreign countries, especially in Europe and Canada. These features include, most prominently, higher damages awards, aggregate litigation, and alternative litigation funding. This Part brings together insights from political science and legal scholarship with analysis of trends in foreign substantive law and prescriptive jurisdiction rules. It shows that foreign courts are growing more attractive as a forum not just for civil litigation in general, but also for transnational litigation in particular. The resulting legal landscape is one in which plaintiffs have increasingly diverse options for bringing suits. The rise of American litigation isolationism, therefore, encourages plaintiffs not only to sue abroad once a case is dismissed from a U.S. court, but also to sue abroad instead of suing in a U.S. court, or at the same time in a parallel litigation.

Part III analyzes whether avoidance doctrines have achieved their stated goals of protecting separation of powers, international comity, and the interests of defendants. It concludes that, particularly in light of the foreign developments described in Part II, avoidance falls short on all of these counts. Instead, the doctrines undermine both these values and other important U.S. sovereign interests. First, judicially driven avoidance developments are ill equipped to address the...

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