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. Burford Controversy Might "Cool Down The Hype" Around Litigation Funding

    August 15, 2019 | News

    Some legal experts told Law.com the third party litigation funding industry "might not look the same in the aftermath" of the short-selling and accounting controversy that has embroiled industry leader Burford Capital.... Read More

  2. In the News Today - August 13, 2019

    August 13, 2019 | News

    Litigation Funder, Short Seller, Race To Regulator To Urge Probes... Read More

  3. In the News Today - August 12, 2019

    August 12, 2019 | News

    "London's Largest Divorce" Offers New Questions About Litigation Funding... Read More

  4. Litigation Funding Back "In The Spotlight" Thanks To Burford Crisis

    August 09, 2019 | News

    The accusations of misleading accounting facing Burford Capital have "raised broader questions" about the litigation funding industry, the Financial Times writes.... Read More

  5. Short-seller Alleges Enron-esque Accounting Practices at Industry-Leading Litigation Funder

    August 08, 2019 | News

    Burford Capital, the largest player in the litigation funding industry, is scrambling to respond to short-seller Muddy Waters' scathing report from earlier this week. The report alleges "Enron-esque" accounting practices at Burford, including incomplete portrayals of the value of ongoing funded litigation that did not account for "potentially recovery-killing" developments in the cases concerned, Bloomberg Law reports.... Read More

  6. Short-Seller Says Litigation Funding Giant Overstates Investment Returns

    August 07, 2019 | News

    Short-seller Muddy Waters said Burford Capital, a third party litigation funding industry giant, has been overstating its investment returns and has questionable reporting and governance practices, Bloomberg reports.... Read More

  7. In the News Today - July 31, 2019

    July 31, 2019 | News

    Litigation Funder Sues Firm It Hired To Investigate Plaintiffs' Lawyer It Was Also Taking Action Against; Florida-Backed Insurer Finalizes Rate Increases, Which Show "Significant Reductions" After AOB Law... Read More

  8. In the News Today - July 22, 2019

    July 22, 2019 | News

    Australian Corporation Argues Funding Deal Gives Too Much Control To Funders; California Assemblyman Says Decision To Take Labels Off Coffee Was "Right"... Read More

  9. In the News Today - July 8, 2019

    July 08, 2019 | News

    Louisiana Tort Laws "Encourage Claims And Litigation," Insurer Association CEO; For Funders And Plaintiffs' Lawyers, It's "Game On" In Australia... Read More

  10. In The News Today - July 2, 2019

    July 02, 2019 | Blogs

    GDPR "Holding European Businesses Back," Data Think Tank Analyst Says; TPLF Driving Growth of Australian Class Actions... Read More