Are There Ways out of the Current Forum Non Conveniens Impasse Between the United States and Latin America?

• Author: Dante Figueroa
• Position: Is a Chilean attorney, with LL.M. degrees from the Washington College of Law and the University of Chile Law School.
• Pages: 10

Dante Figueroa is a Chilean attorney, with LL.M. degrees from the Washington College of Law and the University of Chile Law School. He is a member of the New York Bar and the D.C. Bar in the category of Special Legal Consultant. He has practiced law for ten years in Chile in the public sector, as a consultant for the Chilean government, and in private practice as the principal environmental attorney of a law firm. He has taught courses on international public law, maritime law, introduction to U.S. law and environmental law in Chile. He taught the Latin American law seminar during the Spring semester 2004, and currently teaches the International Business Transactions in Latin America seminar, both at the Washington College of Law. He has published various articles on environmental law, as well as a book on international arbitration and a book on environmental law. Mr. Figueroa may be reached via e-mail at figueroa@wcl.american.edu.

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I Introduction

GLOBALIZATION MEANS MORE TRADE, easier communications, faster means of transportation, increased international commerce, and also more litigation for U.S. companies doing business overseas. Since there are no courts with worldwide jurisdiction to resolve disputes among private individuals who are nationals of two or more states, these must be resolved by a national forum. Currently, there are no international treaties providing for the international transfer of cases or addressing the issue of convenience in international disputes. Therefore, international plaintiffs have engaged in what has been called "international forum shopping," choosing the forum most convenient and beneficial to their case. For a variety of reasons, the U.S. courts are often the preferred forum for plaintiffs in international disputes. U.S. courts have consistently prevented foreign plaintiffs from trying their cases in U.S. fora, invoking the doctrine of forum non conveniens ("FNC"). The effect, both intended and inadvertent, of the FNC doctrine has been to shield U.S. multinational corporations doing business in Latin America from liability resulting from torts or product injury caused to Latin American plaintiffs by barring access to U.S. courts. FNC dismissals have forced Latin American plaintiffs to re-file their complaints in their home fora. Latin American jurisdictions have responded, in turn, by refusing to hear remanded cases on various grounds, the principal being that the plaintiffs' re-filing has not been a product of their free will and thus is null and void. This impasse is still current, and there seems to be no way out of it.

In this context, this article analyzes current developments in the FNC doctrine as applicable to Latin America, and the different options available to address the FNC deadlock between Latin America and the United States. Part I reviews the U.S. law on conflicts of jurisdiction involving foreign plaintiffs in the context of the FNC doctrine. Part II discusses the Latin American rule on jurisdiction, the consequences of FNC dismissals in Latin America, and the responses to FNC in the form of judicial retaliation and blocking statutes. Part III focuses on proposals for the re-formulation of the FNC doctrine in the United States, and also offers views on the avenues available in Latin America for the FNC impasse. Finally, the article concludes that a more lasting solution to the FNC impasse should come from within the judiciary of the United States or new international treaties.

II Forum Non Conveniens as a Procedural Tool to Dismiss International Litigation

A The FNC Doctrine in International Lawsuits

Neither the United States Constitution, nor federal statutes address the issue of jurisdiction in cases where foreign plaintiffs sue United States citizens or lawful residents based on a tort that occurred overseas. Therefore, for the most part, the FNC doctrine is judge-made law.¹ In its essence, FNC gives courts discretional power to discriminate on the basis of the plaintiff 's citizenship in order to retain jurisdiction over a case. In fact, courts give United States plaintiffs greater deference than a non-United States plaintiff when choosing a forum.² "[C]ourts should look at the reasons or motivation that led the plaintiff to choose a particular forum," to determine whether a forum was chosen for "legitimate reasons" or for "tactical advantage." ³ In fact, the Second Circuit stated that deference is not accorded based "bias in favor of U.S. residents. It is rather because the greater the plaintiff 's ties to the plaintiff 's chosen forum, the more likely that the plaintiff would be inconvenienced by a requirement to bring the claim in a foreign jurisdiction. Also, while our courts are of course required to offer equal justice to all litigants, a neutral rule that compares the convenience of the parties should properly consider each party's residence as a factor that bears on the inconvenience that party might suffer if required to sue in a foreign nation."⁴ Therefore, the problem with FNC seems to be its lack of predictability arising from the broad discretion given to trial courts, and the lack of de novo review of FNC decisions by appellate courts.⁵

For foreign plaintiffs, the FNC doctrine regulates access to U.S. courts. With respect to Latin America, federal and state Page 43 courts apply the FNC doctrine either when they are petitioned by a United States defendant, or ex sua sponte in the following circumstances: (i) the United States defendant, usually a multinational corporation doing business in Latin America, causes injury abroad; (ii) the Latin American plaintiff sues the United States defendant in a United States court; (iii) the Latin American defendant alleges that a breach of contract or a tort occurred in Latin America; and (iv) there are no international treaties, either multilateral or bilateral, between the United States and the plaintiff 's country that provides equal access to United States courts.⁶

In these cases, the FNC doctrine acts as a jurisdictional rule that bars access to United States courts. Unlike in the United States system, a FNC dismissal of an international lawsuit does not transfer venue. That is, foreign plaintiffs do not have the option, as United States plaintiffs do, of re-filing their lawsuits in another venue within the United States. Basically, Latin American plaintiffs must re-file their lawsuits in their country's courts.

Latin American plaintiffs have tried to persuade United States courts to retain jurisdiction over cases involving FNC disputes in product-injury cases, claiming that the United States is the convenient forum. They have argued that the U.S. public maintains an interest in regulating malfunctioning products that injure foreign citizens to prevent similar situations on United States soil.⁷ However, this argument is not persuasive because when accidents involving United States products occur overseas, manufacturers rush to remedy the problems to avoid a similar disaster in the United States, where they risk millions of dollars in liability. Realistically, Latin American plaintiffs covet United States courts due to shorter litigation and higher damage recoveries.

B FNC Dismissals

U.S. Courts have underscored the effects of foreign litigation on U.S. taxpayers who bear the costs involved in litigation brought by a foreign plaintiff in the United States. Courts have been eager to halt such a deviation of resources and potential docket congestion.⁸ Not without reason, FNC dismissals are one of the most effective docket clearing devices.⁹ For example, the Florida Supreme Court has sustained that "[W]hile it is true that the Florida Constitution guarantees every person access to our courts for redress of injuries ... that right has never been understood as a limitless warrant to bring the world's litigation here ... Put another way, if a potential remedy exists in the alternative forum, then the ?remedy requirement' of article I, section 21 [of the Florida Constitution] actually is being honored."¹⁰ But this is a false dilemma, since only cases with minimum contacts to the U.S. would be eligible for being tried in the U.S., and only if subject matter and personal jurisdiction requirements were satisfied.

In order to ameliorate the devastating effects that FNC dismissals have caused on, among other, Latin American plaintiffs, U.S. courts have contrived the mechanism of conditional FNC dismissals. These conditional dismissals include the "waiver of defendant's statute of limitations defense, admissions of liability, and/or retention of jurisdiction under the proper control of the dismissing court."¹¹ Another condition has been that "the defendant consent to liberal, U.S.-style discovery."¹² Of all these conditions, the requirement that the foreign forum retain jurisdiction over the case is the one generating most controversies over FNC. For example, in one case, a district court granted a motion to dismiss on FNC on the condition that the foreign courts do not refuse "to hear the case on forum non conveniens grounds.¹³

Some commentators have adopted a rather nave approach to conditional FNC dismissals, arguing...