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Last term, the U.S. Supreme Court decided a number of cases involving foreign claims and foreign parties, cases that had almost no U.S. connection at all. In F. Hoffmann-La Roche Ltd. v. Empagran S.A., for example, the high court considered whether U.S. antitrust laws extend to non-U.S. market activity for foreign parties and foreign claims. And in Republic of Austria v. Altmann, the Court was asked to decide if U.S. law provided an avenue of recovery against Austria for assets lost in the Holocaust. While these cases may appear unremarkable, they represent a nascent trend in litigation: U.S. court calendars are increasingly booked with cases and controversies involving non-U.S. litigants. A variety of factors contribute to this emerging reality. We are facing a global economy that’s increasingly interconnected. U.S. statutes and treaties offer more lucrative recovery schemes. Overall, too, there is a fundamental lack of clarity on jurisdictional issues both under American and international law. But with this new tide in litigation comes a distinctively American flavor that foreign companies are beginning to recognize � the influence public opinion has on U.S. litigation. In Republic of Austria v. Altmann, the Supreme Court heard a case against the Austrian government for the recovery of Holocaust-era assets. The plaintiff argued that although she was an Austrian citizen during World War II, the United States was the only jurisdiction in the world in which justice could be secured � because of the reach of U.S. laws and the inevitable media attention the case would garner for her. A second case, Empagran, involved allegations of price-fixing in the global vitamins market. The Supreme Court considered whether U.S. antitrust laws provided jurisdiction for claims brought by citizens of Ukraine, Ecuador, Panama, and Australia against companies based largely in Western Europe. Use of the U.S. federal court system was eagerly sought by the plaintiffs bar because U.S. antitrust laws provide treble damages for successful claims, making the United States the most lucrative global venue both for plaintiffs lawyers and their clients. The plaintiffs also recognized that articles and reports in the media that would likely be spawned by the price-fixing claims would be a source of embarrassment for the global defendants and could facilitate an accelerated and higher settlement. BLESSING AND CURSE The “court of public opinion” is turning out to be both a blessing and a curse for foreign companies. But while some foreign companies are actively seeking resolution in U.S. courts while others are resisting it, they are all acknowledging that litigation in the United States involves more than the bench, the bar, and the litigants. They know now that they can’t ignore it. It is no great surprise, therefore, that litigation was a major concern of senior executives in Hill & Knowlton’s 2004 Corporate Reputation Watch, a global survey of opinions on corporate reputation management. In fact, 70 percent of survey respondents � more than half of whom are expatriates � noted that, compared with five years ago, litigation has become a growing concern, both in terms of reputation and costs. This is a particularly salient finding because many of the international companies litigating critical business interests in the United States are encountering, often for the first time, an alien culture for the adjudication of disputes. Interestingly, it is neither the U.S. court system nor American society that has created this culture shock. Rather, it is the unfamiliarity and profound discomfort that foreign companies seem to have with communicating with the press, industry analysts, business media, employees, shareholders, directors, and other stakeholders. The result is that the scions of businesses abroad are now eagerly searching for the best lawyers in America. Unlike the legal systems of Western Europe, Australia, and parts of Asia, the United States is the only jurisdiction in the world in which public opinion can wield as much influence on a case as the judge and jury. Other countries of the world have no precedent for a situation in which an industry analyst might recommend the sale of securities because the company is embroiled in litigation � even if the case has had no large financial impact on the company. Similarly, most foreign companies are not prepared to discuss and respond, in any detail, to questions from employees, shareholders, and potential investors about the concerns that arise from a newspaper’s business section story about litigation in which they are currently involved. Finally, global companies are unaccustomed to a drop in sales resulting from a broadcast news report that merely mentions that the company has been sued, with little or no coverage of the details of the case. DUMBFOUNDED Hill & Knowlton has seen this pattern in representing foreign-based companies in U.S. litigation matters. Japanese clients, Australian clients, Swedish clients, French clients, and others are invariably dumbfounded by the extent to which business media, Wall Street, the public, Capitol Hill, and other interested audiences can influence the genesis and outcome of litigation. Recently, a Japanese client was shocked to learn that American plaintiffs lawyers could generate enough attention in Washington and among American veterans and non-American POWs to create a potential class for claims stemming from World War II corporate labor practices. While our foreign-based clients find the public dimension of our litigation system “arbitrary and capricious,” they are slowly realizing that the American “litigation game” requires their active participation in the court of public opinion. Their finances and reputation hang in the balance. A substantial majority of these companies are either listed on U.S.-based stock exchanges or trade their securities through American Depository Receipts. In other words, all of our foreign clients rely on, and benefit from, the U.S. economy. And nearly all of them view the United States as a source of investment and venture capital, market capitalization, and a robust consumer of their goods and services. Many of our litigation clients are now realizing that their reputation in the global marketplace can very easily be “made in America.” Consequently, a growing number of internationally based companies are entering, albeit gingerly, what they perceive to be the chilly waters of multi-stakeholder litigation communications. They are taking on, in other words, a public relations offensive, to try to steer the court of public opinion in their direction. For instance, Hill & Knowlton was engaged last year on behalf of a company based in Sweden that produces software and infrastructure for the electronic trading of securities and other financial instruments. Although the claims involved technical and seemingly unexciting assertions of copyright infringement, the Swedish client learned that the plaintiff, a large American brokerage and online trading firm, had a habit of using the media to try cases. The plaintiff’s cookie-cutter approach to “litigation by intimidation,” which included a press release accompanying the filing of the complaint, meetings with the appropriate business reporter to preview the case in detail, and an online fact sheet describing the parade of horrible results that would be proven in court, generally worked. Research also revealed that the opponent had quickly settled over a dozen cases involving foreign companies, believing that the unique American litigation process and its open door policy for public opinion would bully their unsuspecting foes into settling cases quickly and expensively. Our Swedish client was unwilling to capitulate to this style of play. Instead, they adopted a pre-emptive strategy which included a full vetting of their defense of the IP matter and its frailties with board members, majority shareholders, business media employees, relevant U.S. regulatory bodies, and industry analysts. The case has received little public attention and is not a significant concern for any client stakeholders. Slowly, foreign companies are anticipating the potential impact that high-stakes and high-profile U.S. litigation can have on corporate reputation and earnings. While strategic and pre-emptive litigation communications remain an acquired taste and an alien craft for many of them, nondomestic companies should understand that the courtroom is only one of many critical points on the map when they turn to litigation in the United States. Harlan Loeb is U.S. director of litigation at Hill & Knowlton and an adjunct professor of law at Northwestern University Law School.

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