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Huddled Masses Yearning to Strike It Rich: Foreign Plaintiffs Shopping for Gold in American Courts
Special to Law.com
July 17, 2009
Bowman and Brooke's Paul Cereghini
Courtesy photo
Bowman and Brooke's John Sear
Courtesy photo
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"
-- Emma Lazarus, "The New Colossus"
(engraved on pedestal of Statue of Liberty)
Foreign litigants suing American companies for torts committed abroad hope the golden door swings open into American courtrooms, even when the conduct and events underlying their claims occurred in far-off lands and have no effect on U.S. citizens. With increased frequency, American companies conducting operations abroad face lawsuits in American courts by foreign plaintiffs seeking the benefits of the American system of justice.
Foreign plaintiff forum shopping affects not only the parties to the case, but impacts broader societal, economic and governmental interests as well. The Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce, contends that global forum shopping creates uncertainty for corporations operating in U.S. markets, discourages foreign investors in U.S. companies and compromises U.S. foreign relations by encouraging expansion of foreign court jurisdiction to counter American judicial expansion. (Global Forum Shopping Fact Sheet; last visited June 15, 2009).
Even the U.S. State Department has weighed in, arguing that lawsuits in American courts can have deleterious effects on foreign relations. See John B. Bellinger III, "The U.S. Can't Be the World's Court, Wall Street Journal, May 27, 2009, at A19, which discusses State Department opposition to a New York federal lawsuit against GM, Ford and IBM for allegedly "aiding and abetting crimes against humanity committed by the apartheid government in South Africa."
Relying upon the common law doctrine of forum non conveniens, however, defendants often secure dismissal of cases filed by foreign plaintiffs. Proponents of forum non conveniens dismissal argue that disputes ought to be resolved where they arise, while opponents counter that justice often eludes foreign plaintiffs in their homelands, where judicial systems are corrupt and litigation is laden with risk. The battle lines divide American companies operating in foreign countries on one side and, on the other, plaintiffs supported by their own government's legislation and even treaties with the U.S. designed to pry open the golden door to American courtrooms frequently slammed shut by forum non conveniens.
THE SHIMMER OF AMERICAN JUSTICE
What motivates foreign plaintiffs to file suit in American courts? The same things that motivate American plaintiffs. Commentators have identified a number of benefits that foreign plaintiffs see in the American civil litigation system compared to the systems of their own countries: the availability of strict liability for defective products, liberal and extensive pretrial discovery, jury trials, class actions, contingency fee arrangements and the "American rule" that the loser does not pay the winner's legal fees and expenses. See Todd Gattoni & Brian Oh, "The Recent Trend of 'Backdooring' Foreign Mass-Tort Claims Into U.S. Courts," 13 MED. DEVICES 1 (Jan. 8, 2007); Hal S. Scott, "What to Do About Foreign Discriminatory Forum Non Conveniens Legislation," 49 HARV. INT'L L.J. 95, 96 (Jan. 20, 2009).
Compensatory damage awards tend to be higher in the United States than in some foreign jurisdictions. See Eric A. Posner & Cass R. Sunstein, "Dollars and Death", 72 U. CHI. L. REV. 537, 580, 2005: ("Because tort law in other countries, like in the U.S., is mainly limited to compensating dependents, foreign tort awards usually undervalue the victim's loss. Because American courts generally defer to foreign law in cases of torts committed on foreign soil, the low tort awards in other countries are implicitly incorporated into American foreign policy.") It is no wonder foreign plaintiffs, with encouragement from American plaintiffs lawyers, prefer American justice.
