Transnational

Lawsuits brought by plaintiffs’ class action firms, public interest attorneys, and non-governmental organizations against U.S. companies or foreign companies with a substantial U.S. presence are sometimes premised on alleged injuries that occurred abroad. Such lawsuits raise the question of whether U.S. courts should be the venue for cases concerning conduct occurring outside U.S. borders.

Some of these cases are filed in federal courts under the 200-year old Alien Tort Statute (ATS), which provides federal jurisdiction over lawsuits brought by non-U.S. nationals for torts in violation of international law. Others are brought under state common law or in foreign jurisdictions, including countries with poorly developed legal systems, only to return to courts in the United States. This practice is known as Foreign Judgement Enforcement.

This area of litigation has developed into a business for plaintiffs’ lawyers who try to cash in against multinational companies using the U.S. legal system. Many of the suits take many years, halting international investment and imposing substantial legal and reputational costs on corporations.

To prevent abusive forum shopping, federal and state courts should exercise caution in interpreting and applying state law, even state common law, and extraterritoriality. States should strengthen their foreign judgment recognition and enforcement laws and Congress should adopt uniform federal standards to govern the recognition and enforcement of foreign judgments.

 

Alien Tort Statute (ATS)

Enacted in 1789 as part of the Judiciary Act, the Alien Tort Statute (ATS) provides federal jurisdiction over lawsuits brought by non-U.S. nationals. The ATS was intended to give federal courts of the new nation the power to resolve disputes arising from a very limited number of international law violations, such as piracy or assaults on ambassadors on U.S. soil.

Despite its original intent, the ATS has served for the past two decades as the fountainhead of litigation against multinational companies for human rights violations allegedly committed by foreign governments or other foreign actors in countries all over the world.

The U.S. Supreme Court has issued two important opinions restricting the ATS. Kiobel v. Royal Dutch Petroleum (2013) limited its extraterritorial scope and Jesner v. Arab Bank (2018) restricted corporate liability. These rulings have substantially limited the use of the ATS in transnational cases; however, this does not deter cases brought under state common law or through foreign judgment enforcement.

 

Foreign Judgment Enforcement (FJE)

In recent years, plaintiffs have filed numerous lawsuits against businesses and individuals in U.S. courts for alleged conduct occurring outside the U.S. The Supreme Court’s recent rulings limiting such cases including Daimler AG v. Bauman (2014), Kiobel v. Royal Dutch Petroleum (2013), and Morrison v. National Australia Bank (2010) will likely mean a new strategy for plaintiffs and their lawyers: bring lawsuits in foreign courts, attempt to enforce any judgments in those foreign courts in U.S. courts, and seize companies’ U.S. assets. This raises the troubling prospect of abusive and improper foreign judgments being enforced in the U.S.

To prevent abusive forum shopping, States should strengthen their foreign judgment recognition and enforcement laws. Congress should also adopt uniform federal standards to govern the recognition and enforcement of foreign judgments.

01/01/2019

Suggested Resources

Research

All Results for Transnational

  1. ILR Briefly COVID-19 Series: State Liability Problems and Solutions

    May 21, 2020 | Research

    As states reopen and continue to respond to the needs of their citizens and economies, it is important that they consider offering liability protections to prevent a wave of COVID-19 lawsuits at the state level. This edition of ILR Briefly documents major hot spots for COVID-19 litigation under state law and provides an array of policy solutions to prevent lawsuits from disrupting states' economic recoveries.... Read More

  2. ILR Briefly COVID-19 Series: Liability Overview

    April 23, 2020 | Research

    As Americans and businesses of all sizes are working together to get through the COVID-19 health crisis, plaintiffs' lawyers have already begun filing COVID-19-related lawsuits. Limiting litigation abuse is essential to making available the tools and resources needed to combat the virus, and ultimately to spurring economic recovery once the immediate health crisis has been resolved. This edition of ILR Briefly explores the current and anticipated types of litigation coming out of the COVID-19 pandemic.... Read More

  3. In The News today - April 9, 2020

    April 09, 2020 | News

    Third-Party Litigation Funders' Business Is Booming During Pandemic... Read More

  4. In the News Today -March 20, 2020

    March 20, 2020 | News

    Oklahoma Senate Votes to Put a Cap on Non-Economic Damages and TPLF Deal Raises Ethical Red Flags.... Read More

  5. In the News Today -March 11, 2020

    March 11, 2020 | News

    ILR Urges DC Bar to Reject Rules That Could Expand TPLF... Read More

  6. ILR Urges DC Bar to Reject New Rules That Could Expand TPLF

    March 10, 2020 | Blogs

    The U.S. Chamber Institute for Legal Reform (ILR), and three other associations, strongly urged the District of Columbia Bar Association to reject a proposed rule change that would further the influence of third party litigation funding (TPLF) in the District's legal system.... Read More

  7. In the News Today - March 6, 2020

    March 06, 2020 | News

    Bloomberg Law's 2019 Litigation Finance Industry Survey revealed that lawyers who are interested in litigation financing are more likely to obtain funding for a single case than for a portfolio of cases.... Read More

  8. NY City Bar Group Pushes to Allow Third Party Litigation Financing

    March 03, 2020 | News

    A working group of the New York City Bar Association released a report that calls for "less restricted access" to third-party litigation funding (TPLF), according to Bloomberg Law.... Read More

  9. Litigation Funding Bills Pop Up in State Legislatures

    February 18, 2020 | News

    According to an analysis by Claims Journal, several state legislatures are considering bills to "impose more controls on litigation funding companies."... Read More

  10. In the News Today - February 14, 2020

    February 14, 2020 | News

    States Reject First Opioid Settlement Offer; "ALI's Proposed Restatement of Copyrights has the Potential to Harm the Creative Industries;" Financial Times Columnist Says Burford Overstating Claims... Read More