Mass Tort Litigation Blog

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. 

BGS 

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.

BGS

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.)

BGS

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.

BGS

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.

BGS

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.

BGS

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 protected], 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.

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.

For additional commentary on the report, here are links to Lovells, the UK's Financial Times, and BBC News.  Whether the suggested reforms will be implemented remains to be seen.

ECB