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. Recent Cases Underscore Problems With TPLF

    September 16, 2013 | News and Blog

    "Investing in high-stakes lawsuits isn't for the faint of heart," writes Jennifer Smith in the Wall Street Journal.... Read More

  2. Improving the Environment for Business in Australia

    September 12, 2013 | Research

    In recent years, the use of third party litigation financing ("TPLF") in Australia has resulted in a notable proliferation of class actions and other funded lawsuits. The growth of the lawsuit investment industry has occurred largely without government oversight, giving rise to serious issues yet to be addressed. As a result, the increase in TPLF-financed litigation has in turn increased the cost of doing business in Australia, a trend which will continue if the current situation remains unchanged.... Read More

  3. Australian Press Highlights New ILR Proposal for Reforming Oversight of Third Party Litigation Financing

    September 12, 2013 | News and Blog

    In recent years, the use of third party litigation financing ("TPLF") in Australia has resulted in a notable proliferation of class actions and other funded lawsuits.... Read More

  4. U.S. Chamber Commends Supreme Court for Reining In Abuses of Alien Tort Statute

    April 17, 2013 | Press Release

    Decision limits the ability of plaintiffs to import foreign lawsuits into U.S. courts... Read More

  5. In the News Today - March 24, 2014

    March 24, 2013 | News and Blog

    "We're particularly concerned about developments here in third-party litigation financing," ILR president Lisa Rickard told the Australian Financial Review. ... Read More

  6. John B. Bellinger, III on Transnational and Extraterritorial Litigation

    October 26, 2012 | Video | Watch

  7. U.S. Chamber of Commerce President Thomas J. Donohue's Remarks at the 13th Annual Legal Reform Summit

    October 24, 2012 | Video | Watch

  8. Monetizing Litigation Claims: What will they think of next?

    October 24, 2012 | Video | Watch

  9. John H. Beisner on Third-Party Investments in Litigation

    October 24, 2012 | Video | Watch

  10. Stopping the Sale on Lawsuits: A Proposal to Regulate Third-Party Investments in Litigation

    October 24, 2012 | Research

    Third-party investments in litigation represent a clear and present danger to the impartial and efficient administration of civil justice in the United States. Such third-party litigation financing ("TPLF") occurs when a specialized investment company provides money to a plaintiff (or counsel) to finance the prosecution of a complex tort or business dispute. In exchange for this financial assistance, the plaintiff (or counsel) agrees to pay the investor a portion of any proceeds obtained through the litigation.... Read More