Transnational

Over the past 15 years, there has been a sharp rise in lawsuits brought against American companies, as well as foreign companies with a substantial U.S. presence, that are premised on alleged personal or environmental injuries occurring abroad. These cases raise the question of whether U.S. courts should be the venue for cases concerning conduct occurring outside the territory of the United States. They have also been characterized by controversial and abusive tactics by plaintiffs and their lawyers.

Many of those transnational lawsuits have been filed in the U.S. by plaintiffs’ class action firms, public interest attorneys and non-governmental organizations.  Some have been filed in federal courts under the 200-year old Alien Tort Statute (ATS), while many more have been brought in state courts under common law theories of liability. 

These cases raise several concerns. One is the use of U.S. courts for adjudicating disputes that occurred outside of the country. It is a generally established principle that U.S. courts should not hear cases involving foreign conduct unless there is a significant nexus to the United States. By undermining this principle, these cases set a precedent that could be used to expose Americans to litigation in foreign courts over conduct occurring in the United States.

Equally troubling are the tactics used in these cases. According to ILR’s study Think Globally, Sue Locally, transnational cases are characterized by a number of features, including aggressive media tactics, organized protests and boycotts of corporate defendants, political pressure and, in some cases, outright fraud and abuse by plaintiffs’ lawyers. In the major transnational case against Chevron in Ecuador, four federal courts have found the proceedings tainted by fraud.

In April 2013, the U.S. Supreme Court ruled in Kiobel v. Royal Dutch Petroleum that claims of wrongful conduct on foreign soil cannot be brought in U.S. courts under the ATS.  This ruling has substantially limited the use of the ATS in transnational cases, but does not deter cases brought under state common law. A complete list of lawsuits against corporations under the Alien Tort Statute can be found here

 

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  1. Senators Introduce The Litigation Funding Transparency Act

    February 14, 2019 | News

    National Law Journal reports that Sens. Chuck Grassley (R-IA), John Cornyn (R-TX), Thom Tillis (R-NC), and Ben Sasse (R-NE) reintroduced the Litigation Funding Transparency Act, which would require third party litigation funding arrangements to be disclosed in litigation.... Read More

  2. Senators Move to Shine a Light on the Litigation Funding Industry

    February 13, 2019 | Blogs

    Billions of dollars are being invested in lawsuits by sophisticated hedge funds that, according to some of these firms, yield huge money for them. Yet neither the defendant, nor in many cases the actual plaintiffs, have any idea that this is happening.... Read More

  3. Legal Officers and GCs Ask for Litigation Funding Transparency

    February 01, 2019 | News

    A group of 30 chief legal officers and general counsel sent a letter to the chief counsel and secretary of the Federal Rules Committee calling for full disclosure of third party litigation funding (TPLF), The Recorder reports.... Read More

  4. 30 General Counsel Urge Transparency for Litigation Funding

    January 31, 2019 | Blogs

    As bone-chilling cold grips a large part of the country, a group of 30 general counsel and senior litigators from major U.S. companies gave a cool reception to third party litigation funding (TPLF) in a letter sent today to the Advisory Committee on Civil Rules. The letter supports a petition to the Committee, led by the U.S. Chamber Institute for Legal Reform (ILR) and co-signed by 29 other trade associations, advocating a rule requiring transparency for funding agreements in federal civil lawsuits. ... Read More

  5. U.S. Litigation Funder Enters The Australian Market

    January 29, 2019 | News

    In the latest sign of the explosive growth of the litigation funding industry, the Australian Broadcasting Corporation reports that U.S.-based litigation funder Burford Capital is entering the Australian market.... Read More

  6. London Judge Stops Litigation Funder's Quick Attempt To Collect

    January 04, 2019 | News

    A London judge rejected an attempt by litigation funder Vannin Capital to collect the £14 million ($17.7 million) they believed they are owed from funding a lawsuit against the Royal Bank of Scotland (RBS), Law360 reports.... Read More

  7. In the News Today - December 21, 2018

    December 21, 2018 | News

    U.K.-Based Litigation Funders Have War Chest Larger Than $1.6 Billion... Read More

  8. Hey UK, Don't Follow in Our Footsteps on Collective Actions

    December 20, 2018 | Blogs

    In June 2019, a UK court will decide if two different huge collective actions will be allowed to move forward, giving plaintiffs' lawyers and litigation financiers massive paydays, while consumers get next to nothing.... Read More

  9. "Rise of Litigation Finance Companies Raises Legal and Ethical Concerns"

    December 05, 2018 | News

    An ABA Journal "In-Depth" story shows how litigation financing has grown into a "multi-billion-dollar global industry," and the "legal and ethical concerns" that come from it.... Read More

  10. Australian Litigation Funder Announces New $500 Million U.S. Fund

    December 03, 2018 | News

    The U.S. branch of Australian litigation funder IMF Bentham announced a new U.S.-focused fund that is expected to hit $500 million by the end of the year and potentially grow as high as $1 billion, Law360 reports.... Read More