The unsung virtues of global forum shopping.

Author:Bookman, Pamela K.
 
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Forum shopping gets a bad name. This is even more true in the context of transnational litigation. The term is associated with unprincipled gamesmanship and undeserved victories. Courts therefore often seek to thwart the practice. But in recent years, exaggerated perceptions of the "evils" of forum shopping among courts in different countries have led U.S. courts to impose high barriers to global forum shopping. These extreme measures prevent global forum shopping from serving th ree unappreciated functions: protecting access to justice, promoting private regulatory enforcement, and fostering legal reform.

This Article challenges common perceptions about global forum shopping that have supported recent doctrinal developments. It traces the history of concerns about global forum shopping and distinguishes between domestic and global forum shopping to discern the core objections to the practice. It then identifies these unappreciated virtues of global forum shopping and suggests balanced ways for courts to protect them.

Introduction

In September 2015, Volkswagen announced it had rigged diesel emissions tests to make its "Clean Diesel" cars seem to comply with U.S. environmental regulations while they were being tested. (1) In fact, the cars emitted pollutants up to forty times more than U.S. law permits. After that announcement, which affected 11 million cars worldwide, (2) Volkswagen's market value dropped by about $25 billion, or thirty percent. (3) Volkswagen owners, car dealerships, and shareholders around the world started wondering how they could hold Volkswagen accountable.

Outside the United States, affected consumers, car dealerships, and shareholders are suing Volkswagen. (4) Aggregate litigation is pending in countries from Canada, (5) to Australia, (6) to South Korea. (7) In Europe, Volkswagen is facing litigation in many different countries on civil, criminal, and regulatory fronts. (8) Litigation funding firms and U.S. law firms are leading many of these efforts. (9) In Germany, Volkswagen faces private securities fraud litigation. (10) Consumer suits are in the works. (11)

Within the United States, groups of Volkswagen owners sued in many different state and federal courts, seeking the best forum under different criteria. (12) These efforts were examples of domestic forum shopping. Volkswagen shareholders around the world have also sought out the best possible forum for their securities litigation. Some who bought American Depositary Receipts (ADRs) on U.S. exchanges have sued in federal district court. (13) But many shareholders have filed suit in Germany, Volkswagen's home forum. (14) It is possible that as the litigation progresses, groups of shareholders may ultimately seek out a court in the Netherlands to recognize a global settlement. These choices are examples of transnational or global forum shopping.

From one perspective, these lawsuits represent efforts of scheming, opportunistic lawyers searching worldwide for the best forum for extorting the highest possible judgment or settlement out of Volkswagen. (15) From another perspective, however, Volkswagen's actions harmed parties all over the world; since many different nations empower private citizens to sue Volkswagen under such circumstances, it is only natural for those parties to hold Volkswagen accountable anywhere they can. Indeed, one might even view with sympathy affected parties' efforts to seek out courts that might consider experimenting with innovative approaches to affording them relief.

Nevertheless, the practice of global forum shopping is widely reviled. (16) It is called "a dirty word," (17) "evil," (18) "deplorable," (19) and something that "must be deterred." (20) The Supreme Court speaks of the practice with great disdain, vowing to protect U.S. courts from it. (21) One of global forum shopping's most vocal opponents, the U.S. Chamber of Commerce, equates global forum shopping with fraud and other "out-of-court tactics." (22)

This categorical denunciation of global forum shopping has several flaws. First, the practice of global forum shopping is deplored but poorly defined. Critics often pin the derogatory term "forum shopping" on forum choices or litigation that they simply do not like for any number of reasons. Second, critics rarely offer specific explanations as to why global forum shopping should be so widely condemned. And third, critics ignore the possibility that global forum shopping has any redeeming virtues whatsoever.

This Article responds to each of these flaws. It highlights three unappreciated virtues of global forum shopping: forum shopping's importance in protecting access to justice, promoting regulatory enforcement, and propelling substantive and procedural reform. First, concerning access to justice, Justice Jackson pointed out in the domestic context that having multiple choices for filing suit can ensure that there is at least one available forum to vindicate one's rights. (23) This can be all the more true transnationally. (24) Second, with respect to regulatory enforcement, limiting forum choice can impede courts' ability to enforce substantive laws through litigation. As the Volkswagen example shows, courts around the world are increasingly called upon to serve this function. (25)

Third, global forum shopping can facilitate legal reform. A classic example appeared in 1980, when a group of public interest lawyers persuaded the Second Circuit to read a long-neglected federal statute to recognize jurisdiction over international human rights claims. (26) Ever since, courts have experimented with the scope of that jurisdiction, going from a broad concept resembling universal jurisdiction, to a limited jurisdiction over only cases that "touch and concern" the United States. (27) Regardless of those debates, however, that 1980 Second Circuit decision led not only to numerous cases brought under the Alien Tort Statute (ATS) concerning human rights violations, but also to global human rights initiatives, (28) the enactment of the Torture Victim Protection Act, (29) and a deeply held conviction that U.S. courts should provide a forum for such cases. (30)

Transnational forum shopping can play a similar role in courts around the world. Take, for instance, an Austrian law student's suit against Facebook. In 2013, the student filed complaints with an Irish privacy regulator against Facebook Ireland Limited, the company that contracts with all Facebook users outside of the United States and Canada. (31) The student alleged that Facebook, through its participation in the U.S. government's Prism surveillance program, had violated European privacy laws. Unsatisfied with the slow pace of the Irish response, the student withdrew most of his complaints and refiled in Austria. (32) The student also advertised online that Facebook users all over the world should assign their claims to him, and through a claim-assignment procedure already recognized in Austrian courts, (33) he has created the largest putative class action in Europe, financed in part by crowd-sourced funding. (34) This case, which the Austrian Supreme Court recently referred to the Court of Justice of the European Union (ECJ), may make Austria and its courts confront some of the most perplexing procedural issues in transnational litigation, including claim aggregation, litigation funding, and law's extraterritorial reach.

In addition to calling attention to these virtues, this Article also seeks to draw out distinctions between domestic and global forum shopping. Domestically, the scholarly narrative about forum shopping tends to be more nuanced. There is a recognized tension between provisions that allow or even encourage forum shopping among state and federal courts, and the numerous laws and doctrines that try to thwart the practice. (35)

At a transnational level, domestic, foreign, and international law provide abundant opportunities for forum choice. (36) The U.S. Constitution recognizes the possibility of transnational forum shopping. (37) But the practice is nevertheless widely condemned. When courts believe that foreign plaintiffs are "guilty" of forum shopping, (38) they dismiss their cases and adopt doctrines to combat the practice. (39) In recent years, U.S. courts have been particularly active in erecting barricades against global forum shopping. (40) Through developments in a number of seemingly disparate doctrines, U.S. courts have sought to protect themselves from a perceived flood of litigation, especially transnational litigation. (41)

I have shown in earlier work that closing off U.S. courts to transnational litigation has unintended negative consequences for some of the U.S.-focused interests that these recent developments are supposed to promote. (42) Nevertheless, some commentators contend that the United States should erect even stronger barriers, for example, by strengthening forum non conveniens and modifying choice-of-law frameworks. (43)

In addition to contradicting their stated goals, these developments can end up expelling litigation from U.S. courts, including litigation that "has the United States written all over it." (44) The message of global-forum-shopping critics and U.S. courts seems to be that foreign plaintiffs should go elsewhere for their justice. Litigation isolationism thus contributes to an environment in which forum shopping in other countries' courts can thrive. (45) Perhaps surprisingly to some, (46) however, many countries are increasingly hospitable to litigation. Critics, meanwhile, also malign shopping for a forum in a foreign country, as shown by recent commentary urging that the United States adopt stricter standards regarding enforcement of foreign judgments. (47) In short, plaintiffs with choices among U.S. or foreign courts are criticized if they choose U.S. courts or if they choose foreign ones. (48) At times there is little daylight between anti-litigation and anti-forum-shopping...

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