April 06, 2013
Lessons from Chevron: Symposium Videos
For those who were unable to attend the "Lessons from Chevron" symposium at Stanford Law School in February, the conference website now has links to videotapes of the panels. Some of the panels focused directly on the Chevron-Ecuador environmental litigation itself, while others used that litigation as a springboard to consider such issues as litigation financing, transnational legal ethics, forum non conveniens, judgment enforcement, international discovery, and international arbitration. The participants included a mix of players in the litigation, journalists who have followed the litigation, and scholars interested in various aspects of transnational litigation: Deborah Hensler, Graham Erion, Theodore Boutros, Judith Kimerling, Burt Neuborne, Martin Redish, Maya Steinitz, Nora Freeman Engstrom, Morris Ratner, Catherine Rogers, Patrick Keefe, Jenny Martinez, Howard Erichson, Manuel Gomez, Christopher Whytock, Janet Martinez, Michael Goldhaber, Richard Marcus, and S.I. Strong.
April 05, 2013
The Chevron-Ecuador Litigation and Forum Non Conveniens
I have posted a new paper on SSRN entitled The Chevron-Ecuador Dispute, Forum Non Conveniens, and the Problem of Ex Ante Inadequacy. Here is the abstract:
This essay, written for the 2013 Stanford Journal of Complex Litigation symposium on lessons from the Chevron-Ecuador environmental litigation, urges that we not take the wrong lesson concerning the doctrine of forum non conveniens. The paper highlights the irony of the forum battles in the litigation. The plaintiffs sued in the United States, the defendants won dismissal on grounds of forum non conveniens (arguing that the dispute should be adjudicated by the courts of Ecuador), the plaintiffs obtained a massive judgment in Ecuador, and the defendants challenged the judgment on grounds of fraud and corruption in the Ecuadorian proceedings. Despite the temptation to see the Chevron-Ecuador litigation as a cautionary tale about forum non conveniens, this essay argues that the “adequate alternative forum” standard for forum non conveniens should remain exceedingly low. Ex ante, deference to foreign legal systems should prevail, even as we permit ex post challenges to recognition of judgments on grounds of fraud and corruption.
The essay was prepared for the Stanford Lessons from Chevron symposium, which took place in February. On this blog, the long-running environmental dispute has come up a number of times, including a recent reference to Michael Goldhaber's work and earlier reports here, here and here.
March 22, 2013
Goldhaber on the Chevron-Ecuador Litigation
At Corporate Counsel, there's an interesting piece by journalist Michael Goldhaber entitled Kindergarten Lessons from Chevron in Ecuador. Goldhaber, who has been following this massive and messy litigation for years, offers what he sees as some of the true and false lessons from the ongoing litigation concerning Texaco-Chevron's involvement in oil drilling in Ecuador.
In a nutshell, the litigation involves claims that a Texaco subsidiary caused environmental damage to the Oriente region of Ecuador. Plaintiffs originally sued in the Southern District of New York, but their suit was dismissed on grounds of forum non conveniens. Plaintiffs then filed a lawsuit in Ecuador and won an $18 billion judgment. Chevron contends that the Ecuadorian judgment was obtained by fraud and corruption, and has resisted enforcement of the judgment. Chevron sued plaintiffs' attorney Stephen Donziger and others, asserting RICO and fraud claims. An international arbitration tribunal weighed in pursuant to the Ecuador-US bilateral investment treaty. Plaintiffs are seeking to enforce the judgment in Canada, Argentina, Brazil and elsewhere. This mess of a litigation has been going on for nearly 20 years.
Goldhaber, in prior work, has articulated a strong view that the Ecuadorian judgment was the product of fraud and corruption. In the new article, Goldhaber takes as his starting point the Stanford Journal of Complex Litigation symposium that took place in February. He goes through the basic lessons offered by the participants -- plaintiffs' lawyer Graham Erion, defense lawyer Theodore Boutros, and a host of scholars including myself.
The strongest lesson (and here I am in complete agreement with Goldhaber): "Be careful what you wish for." The irony of this litigation is overwhelming. Texaco fought to have the case dismissed on grounds of forum non conveniens, arguing that Ecuador was a more appropriate forum. The plaintiffs argued that the Ecuadorian courts could not handle the case and that it should remain in the U.S. Ever since the massive judgment, however, the positions have been flipped -- with the plaintiffs insisting that the judgment deserves respect and the defendant contending that the Ecuadorian courts were corrupt. Goldhaber has referred to this as "forum shopper's remorse."
But I do not agree with Goldhaber's next step. Noting that "the abuse of transnational litigation would never have happened had the U.S. held on to the case," he suggests that the doctrine of forum non conveniens be altered to take into account the stakes and political significance of a case:
The great blunder in this dispute was to ship it to Ecuador in the name of forum non conveniens. The U.S. courts could have saved everyone a lot of grief had they recognized that a case is more prone to abuse when the issues are (a) high-stakes or (b) politicized. I learned from Russia's Yukos affair that, even if a weak judicial system has made significant progress, it does not deserve trust in a hot-button case of great magnitude. It was reckless to expect Ecuador (even if it had just adopted a new set of corruption reforms) to handle a huge case pitting gringo oil companies against indigenous rights. My modest suggestion is to incorporate these factors into the FNC analysis.
The adequate alternative forum prong of the forum non conveniens analysis is a low threshold, and deliberately so. A lawsuit alleging environmental harm to Ecuadorian land and medical harm to Ecuadorian citizens, and involving control over Ecuadorian natural resources, belongs in Ecuador. That is the very point of forum non conveniens. A U.S. court should be loath to say that it will hear the case in the U.S. because it thinks the Ecuadorian courts just cannot handle it. A judgment obtained by fraud should not be enforceable elsewhere, but this is better addressed ex post, which is exactly what the current litigation -- albeit in a rather ugly fashion -- is doing. But to have said, ex ante, that the case should be heard in the United States despite all of the public and private interest factors that pointed to Ecuador, would have been a mistake.
January 30, 2013
Hiroko Tanaka Photo Essay on Effects of Agent Orange on Vietnamese Children
CNN.com has a photo essay by Hiroko Tanaka showing deformed Vietnamese children whose conditions may stem from Agent Orange herbicide sprayed by the United States during the Vietnamese War. The story accompanying the photos discusses the difficulties in tracing causation. For more on the diseases potentially caused by Agent Orange, see the U.S. Department of Veteran Affairs' webpage on Veterans' Diseases Associated with Agent Orange.
Should scholars be thinking about inter-generational mass torts as a distinct subfield, perhaps not only including Agent Orange, but also DES? Will increasingly global mass tort litigation enable new claims based on the spraying of Agent Orange decades ago?
October 20, 2012
U.S. Chamber of Commerce 13th Annual Legal Reform Summit
The conference will take place on October 24, 2012 in Washington, D.C., and includes panels on third-party litigation financing and global litigation (including the Chevron Ecuadoran litigation and the adoption of class actions in other countries).
October 19, 2012
Kiobel and the Alien Tort Statute
Interesting article in the Harvard Law Bulletin on the Supreme Court argument in Kiobel and the Alien Tort Statute generally.
October 13, 2012
The Economist on Global Fake and Substandard Pharmaceuticals
The Economist discusses the growing global problem of fake and substandard pharmaceuticals in Fake pharmaceuticals: Bad medicine -- The world's drug supply is global. Governments have failed to keep up. Absent from The Economist's discussion of government regulators and industry self-policing is the role of private litigation. Couldn't emerging global tort litigation also deter wrongdoers and be part of the solution?
October 05, 2012
Current Issues in Global Tort Litigation
Those interested in a quick overview of many of the recent issues in global tort litigation might be interested in the following article from the Legal Intelligencer: Is Growth of Foreign Class, Mass Actions Changing Products Law?, by Amaris Elliot-Engel (registration required). I was happy to be quoted in the article along with leading practitioners, but even happier that my current Global Tort Litigation seminar course was mentioned.
Kiobel and the Alien Tort Statute
The Supreme Court of the United States heard oral argument this week in Kiobel v. Royal Dutch Petroleum Co., which concerns corporate liability under the Alien Tort Statute. Today, the Court posted the audio from the argument. More generally on the case can be found at SCOTUSblog.
UPDATE -- The Economist reports on the Kiobel oral argument in Law's Long Arm: A Review of Extreme Extraterritoriality.
July 18, 2012
Thomas J. Donahue on "Tort Tourism" in Foreign Courts
Thomas J. Donahue, President and CEO of the U.S. Chamber of Commerce, has an op-ed entitled, U.S. Firms Prone To 'Tort Tourism' In Foreign Courts, in Investor's Business Daily. The op-ed particularly discusses the Chevron case in Ecuador.
May 17, 2012
$300 Million Punitive Damages Award Against Iran and Syria for Terrorism Injuries
The United States District Court for the District of Columbia has awarded $300 million in punitive damages to plaintiffs bringing tort claims against Syria and Iran in connection with their alleged role in a 2006 suicide bombing attack in Israel; the recovering plaintiffs were all U.S. citizens. The opinion is noteworthy not only for the size of the punitive-damages award, but also for the opinion's application of the terrorism exception to the Foreign Sovereign Immunities Act and the opinion's finding that the organization allegedly responsible for the attack was acting as an agent of Iran and Syria. The Jurist also has an article on the opinion.
Although executing on such a judgment is likely difficult and sensitive matters of foreign policy may be implicated, the use of tort law (here, the claims included battery and intentional infliction of emotional distress) seems promising as a way to hold foreign states responsible for terrorism. Indeed, multiple such claims have been litigated recently in the District of Columbia. Apart from general attempts to execute on assets of the defendants seized abroad, perhaps payment of such claims might be raised by the U.S. Department of State in connection with any future regime change and new government in the defendant countries.
May 15, 2012
Chevron, Ecuador, and Allegations of Misconduct
In yesterday's Wall Street Journal, Mary Anastasia O'Grady has an article, Chevron's Ecuador Morass: The U.S. oil company charges that the $18 billion judgment against it was secured by fraud, which discusses Chevron's attempts in federal district court in Miami to obtain records to show bribery of a court expert.
Another article in today's Wall Street Journal discusses recent decisions from the Southern District of New York. In one opinion, the court allowed certain claims by Chevron, including RICO claims, to proceed against attorney Steven Donziger in connection with Donziger's alleged role as advisor in the Ecuadoran lawsuit, but in the other opinion, the court denied Chevron's motion to attach various assets.
February 02, 2012
Ronald Brand on Access-to-Justice Analysis on a Due Process Platform
Ronald Brand (Pittsburgh) has posted to SSRN his article, Access-to-Justice Analysis on a Due Process Platform. Here is the abstract:
In their article, Forum Non Conveniens and The Enforcement of Foreign Judgments, Christopher Whytock and Cassandra Burke Robertson provide a wonderful ride through the landscape of the law of both forum non convenience and judgments recognition and enforcement. They explain doctrinal development and current case law clearly and efficiently, in a manner that educates, but does not overburden, the reader. Based upon that explanation, they then provide an analysis of both areas of the law and offer suggestions for change. Those suggestions, they tell us, are necessary to close the “transnational access-to-justice gap” that results from apparent differences between rules applied in a forum non conveniens analysis and rules applied to the question of recognition of foreign judgments. While the analysis is good, it ignores core differences among legal systems, particularly the due process core of U.S. jurisdictional jurisprudence and the “access to justice” approach to jurisdiction, particularly of European civil law systems (from which most other civil law systems draw their origins). This distinction involves a fundamental difference, with U.S. doctrine focusing on the rights of the defendant and the civil law doctrine focusing on the rights of the plaintiff. So long as this difference exists, it will not be possible to wrap the process of declining jurisdiction and the process of recognition of foreign judgments in the same cloak of doctrine in order to provide common or connected analysis.
January 29, 2012
PIP Breast Implants and Mass Torts in Europe
According to this article from CNN, French authorities have arrested Jean-Claude Mas, the founder of Poly Implant Protheses (PIP), in connection with alleged manslaughter and involuntary harm to a woman who died from cancer and had PIP breast implants. The article notes that 300,000 women in 65 countries received PIP breast implants, and that questions have been raised about the use of non-medical-grade silicon and PIP went bankrupt in late 2010.
The PIP breast-implants controversy may present an opportunity to observe non-U.S.-style mechanisms for what here would likely have been a mass tort litigation. Since the PIP breast implants were not permitted to be sold in the U.S., litigation may be concentrated abroad. In general, my sense is that the European approach is more reliant on criminal law than tort for deterrence, compensatory damages are limited because of the comparatively extensive governmental social insurance, punitive damages are unavailable, and class actions are traditionally not embraced (though class actions appear to be on the rise globally -- see, e.g., the Stanford Global Class Actions Exchange).
Interestingly, according to the article, one French woman who received PIP breast implants said, "Too bad we do not have a justice system like they do in the United States which allows the accumulation of penalties...because the small punishment he will receive for what he did to 300,000 to 400,000 women, is not much compared to what we have suffered because of him."
(H/t to my Mass Tort Litigation student Abigail Anderson for sending me the CNN story.)
January 21, 2012
Chevron Appeals $8.6 billion Judgment to Ecuador's National Court
CNN reports that Chevron has appealed the $8.6 billion environmental judgment to Ecuador's National Court. The case has been closely watched not only for its high dollar amounts, but for the questions raised by Chevron about the integrity of Ecuador's courts. Questions of foreign-court bias may be more frequent as mass tort litigation increasingly becomes global tort litigation, and disputes against large, deep-pocketed corporations are brought by foreign claimants in foreign courts.
February 01, 2011
Chevron's Use of U.S. Discovery to Aid Defense of Ecuadoran Environmental Litigation
AmLaw Daily has an interesting article on Chevron's use of 28 U.S.C. s. 1782, which allows U.S. discovery in aid of foreign litigation, in the ongoing litigation concerning alleged pollution in Ecuador. The article is The Global Lawyer: The Mystery of the Ghostwritten Report, by Michael D. Goldhaber.
March 08, 2010
Amicus Brief - Cert Petition: Legislative Jurisdiction/Extraterritoriality
My colleague at Southwestern Law School, Austen Parrish, is asking that law professors contact him if they might be interested in signing on to an amicus brief in support of a petition for writ of certiorari in British American Tobacco v. United States. See the notice, below, for details.
UPDATE -- The links are fixed in the notice below and should now work.
Amicus Brief – Extraterritoriality and Legislative Jurisdiction
Max Huffman (Indiana) and Austen Parrish (Southwestern) have written an amicus brief in the case British American Tobacco v. United States in support of a petition for cert. The cert. petition is part of a massive case brought by the U.S. against the tobacco companies. Various cert. petitions have been filed, including a government petition seeking recovery of a $280 billion disgorgement award. Details about the underlying case can be found on SCOTUSblog.
The amicus brief focuses only on the narrow issue of how a court should approach issues of extraterritorial jurisdiction. They are looking for full-time law professors at U.S. law schools to sign on to the brief. If you would consider signing on to the amicus brief, please email Austen Parrish at email@example.com, and he can send you a draft for review. There’s a tight deadline and the brief will be finalized this week: the deadline for providing notice to file the amicus is this Friday and the brief will likely go to the printer early next week. Because the effects test applies in a number of contexts (antitrust, securities, trademark, labor law, environmental law, criminal law etc.), the D.C. Circuit's decision could have far-reaching implications. This would be a good opportunity for the Court to clarify what is now a confused area of law.
Quick Overview of Case and Issues
The petitioner's cert petition implicates the question of whether RICO applies to the overseas conduct of foreign corporations. The D.C. Circuit did not directly address whether Congress intended RICO to apply extraterritorially -- an issue on which the lower courts are divided. Instead, it found: (1) that when domestic effects are felt in the United States, regulation of foreign conduct of a foreign corporation does not implicate extraterritorial jurisdiction; and (2) that it need not decide whether RICO applies extraterritorially so long as the foreign conduct has substantial effects in the United States. Because the D.C. Circuit found a domestic effect, it presumed that Congress intended RICO to regulate abroad. The case raises interesting questions about the role of the presumption against extraterritoriality, the effects test, and international law. It implicates at least a three-way circuit split on how the courts determine legislative (prescriptive jurisdiction).
The amicus brief focuses on how a court should interpret the geographic reach of federal law (the extraterritoriality question). The brief is being submitted to encourage the Court to grant certiorari. After explaining the confusion that exists in the lower courts on the issue of legislative jurisdiction, the brief clarifies the history and application of the effects test and shows how that history bears upon the proper interpretation of whether Congress intended a statute to reach extraterritorial conduct. The brief does not take a position on the underlying merits: the federal government's use of RICO to prevent and restrain an alleged scheme to deceive American consumers about the health risks of smoking. The amicus brief argues that courts should not use the effects to create a presumption in favor of extraterritorial regulation, but rather that the effects test sets the outer limit of Congressional power under international law (assuming one of the other bases for jurisdiction under international law does not exist). The brief highlights how assuming that legislation applies extraterritoriality can cause harm and undermine the meaningful development of international law.
Professors Huffman and Parrish have previously written about these issues, which forms the basis for the amicus brief. Professor Huffman’s article on the Foreign Trade Antitrust Improvements Act can be found here. Professor Parrish has written two pieces. The first, Reclaiming International Law from Extraterritoriality can be found here. The second, The Effects Test: Extraterritoriality’s Fifth Business can be found here.
January 19, 2010
Update on Collective Redress in England and Wales
Back in November of 2008, England and Wales asked Lord Justice Jackson to review civil litigation costs and how those costs affected access to justice. He recently issued his final report (a hefty 584 pages). BBC News calls the report a "radical plan[ ] to shake up costs of civil cases." Here's an excerpt of the story:
Lord Justice Jackson's Review of Civil Litigation Costs is a result of a recognition that it is simply too expensive for many people and small companies to bring or defend civil cases.
"What I want to do is to focus the system so less money is paid to intermediaries and others in the process, and more money is paid to victims," he told the BBC.
"I am concerned about individuals, small businesses and others who need to use the courts."
His proposals are radical. He has looked at the factors forcing costs up in civil actions, and in particular he has focussed on Conditional Fee Agreements (CFAs), more commonly known as "no win, no fee" agreements.
Despite BBC's headline, the final report was ultimately less radical than the preliminary one, which leaned toward abolishing England's cost-shifting "loser pays" rule. The final report concludes that cost shifting should remain the norm (even in collective actions), but excepts personal injury claims from the norm. Whether personal injury claims are brought individually or collectively, the final report recommends "qualified one-way costs shifting" where winning claimants could recover their costs from the defendant, but generally do not have to pay the defendant's costs if they lose.
Of additional import, the final report recommends that solicitors and barristers should be allowed to enter into contingency fee arrangements, which are currently prohibited. Before entering into such an arrangement, the report recommends that claimants receive independent advice. It also suggests capping the fees at 25%.
Finally, the report recommends making third-party funding available to personal injury claimants (including those involved in collective actions). It defines third party funding as "The funding of litigation by a party who has no pre-existing interest in the litigation, usually on the basis that (i) the funder will be paid out of the proceeds of any amounts recovered as a consequence of the litigation, often as a percentage of the recovery sum; and (ii) the funder is not entitled to payment should the claim fail." (Final Report at p. 17). Very interesting.