Author Archive for
Christopher A. Whytock

HILJ Online Symposium: Is There Really Judgment Arbitrage?

by Christopher A. Whytock

[Christopher A. Whytock is a Professor of Law and Political Science, University of California, Irvine, School of Law.]

This post is part of the HILJ Online Symposium: Volumes 54(2) & 55(1). Other posts in this series can be found in the related posts below.

In Ending Judgment Arbitrage, Professor Shill claims that non-U.S. plaintiffs “routinely” practice a three-step strategy called “judgment arbitrage”: (1) selection of a foreign country to litigate the merits and obtain a favorable judgment; (2) selection of a “receptive” U.S. state to obtain judicial recognition of the foreign judgment; and (3) selection of a more “protective” U.S. state to obtain enforcement against defendant’s assets there (p. 470 & Figure 3). Shill argues that this practice is a problem, and uses law market theory to argue that new federal legislation is needed to solve it.

Shill has written a fascinating article. To the extent judgment arbitrage exists, I agree that it would pose problems for both litigant fairness and interstate competition. In addition, Shill’s extension of law market theory to the law of foreign judgments is a valuable contribution.

But Shill does little to show that judgment arbitrage actually exists, and he clearly fails to demonstrate that the practice is “routine” or otherwise significant enough to require a response from the United States Congress. In fact, the article does not identify a single real-world example of judgment arbitrage. Given that judgment arbitrage is highlighted in the article’s title, the focus of its law market analysis, and the raison d’être of its legislative proposal, this is a significant omission. (more…)

Kiobel Insta-Symposium: After Kiobel: Human Rights Litigation in State Courts and Under State Law

by Christopher A. Whytock

[Christopher A. Whytock is a Professor of Law and Political Science at UC Irvine School of Law]

I do not think the Court’s opinion in Kiobel means that ATS litigation in federal courts is going away any time soon.

First, make no mistake, the “presumption against extraterritoriality” applied by the Court in Kiobel is a new creation that is likely to give rise to further litigation.  In at least three ways, the new presumption is different from the Morrison-style presumption used by the Court to determine whether a federal statute applies abroad: (1) the coverage of the new presumption is different (it covers recognition of causes of action under the ATS), (2) the new presumption can be overcome on grounds not available for the Morrison version of the presumption (e.g., if “the claims touch and concern the territory of the United States . . . with sufficient force to displace the presumption”), and (3) a case-by-case analysis seems necessary to determine whether the new presumption is displaced (see my comments on Tom Lee’s earlier post).  I agree with Anthony Colangelo that the creation of this new presumption is a bit of a “strange move,” and I think it creates more problems than it solves (as evident in the analytical tension I pointed out between Parts III and IV of Chief Justice Roberts’ opinion).  These problems may take many more years of federal ATS litigation to figure out.

Second, the door still appears open for ATS claims against U.S. corporations and other defendants with sufficient presence to subject them to general jurisdiction under Goodyear v. Brown (decided after the Kiobel case was originally filed), even when the claims arise out of extraterritorial conduct (see my comments on Julian Ku’s earlier post).

That said, the Kiobel decision obviously imposes significant new limits on ATS litigation in the federal courts.  I therefore agree with Roger Alford (and with Trey Childress) that there may be a new wave of human rights litigation in U.S. state courts in the form of transnational tort claims.  Roger’s post does an excellent job outlining the attractions of the state court transnational tort approach.  And, as Paul Hoffman and Beth Stephens remind us in a recent article, human rights claims have been litigated in state courts for decades.

But there are also potential barriers to this approach, which Trey, Michael Ramsey, and I discuss in After Kiobel: International Human Rights Litigation in State Courts and Under State Law, our foreword to a special issue of the UC Irvine Law Review on Human Rights Litigation in State Courts and Under State Law that just came out:

  • Personal Jurisdiction: In Goodyear v. Brown, decided in 2011, the Supreme Court limited the scope of general jurisdiction over corporate defendants.  This limitation is as much of a barrier in state courts as in federal courts.
  • Immunity and Act of State Doctrine: Foreign sovereign immunity and the act of state doctrine likewise impose limits in state courts as well as federal courts.
  • Removal: A defendant sued in state court may be able to remove the case to federal court.
  • State Forum Non Conveniens Doctrines: States have their own versions of the forum non conveniens doctrine that defendants can and do rely upon to seek dismissal of transnational tort claims.
  • Preemption: Federal foreign affairs preemption and other constitutional limits on state involvement in international matters may also pose barriers to human rights litigation in state courts and under state law—potentially even if styled as transnational tort claims.

As Roger notes, another issue is choice of law.  Different states use different choice-of-law methods to determine whether domestic law or foreign law provides the rule of decision in transnational tort cases.  Traditionally, American courts applied

SCOTUS Decides a Rare Forum Non Conveniens Case: Sinochem Int’l Co. Ltd. v. Malaysia Int’l Shipping Corp

by Christopher A. Whytock

[Chris Whytock is a Ph.D. candidate at Duke University and will join the faculty of the University of Utah S.J. Quinney College of Law in the fall. He has kindly agreed to lend his timely analysis of the Sinochem opinion to Opinio Juris readers]

On March 5, 2007, the U.S. Supreme Court announced one of its rare decisions on the doctrine of forum non conveniens. The decision has a somewhat narrow scope, and therefore is unlikely to give observers of transnational litigation quite as much to talk about as the court’s last major statement on the doctrine. Nevertheless, the decision is an interesting one, for it resolved a significant circuit split and, because of both what it addressed and what it failed to address, it may have broader implications for forum non conveniens practice.

The case, Sinochem International Co. Ltd. v. Malaysia International Shipping Corp., arose from a dispute over a bill of lading. Petitioner Sinochem, a Chinese state-owned company, ordered steel coils from Triorient Trading, Inc., an American manufacturer, pursuant to a contract requiring shipment by April 30, 2003. Triorient had the coils shipped on a vessel subchartered from respondent Malaysia International. Upon arrival in China, Malaysia International’s vessel was arrested by order of a Chinese admiralty court, based on a petition filed by Sinochem alleging that Malaysia International had falsely backdated the bill of lading to indicate an April 30 shipment, when in fact the shipment was not loaded until May. Malaysia International then sued Sinochem in the U.S. District Court for the Eastern District of Pennsylvania, alleging that Sinochem made misrepresentations to the Chinese admiralty court, leading to the vessel’s arrest.

Sinochem moved to dismiss the U.S. action. The U.S. district court determined that it had subject matter jurisdiction, but that discovery would be needed before it could determine whether it had personal jurisdiction over Sinochem. However, the court dismissed the case without resolving the personal jurisdiction question, reasoning that even if, hypothetically, it did have personal jurisdiction, dismissal was appropriate under the forum non conveniens doctrine.

Malaysia International appealed to the Court of Appeals for the Third Circuit, presenting the following issue: Whether a district court must determine that it has jurisdiction before dismissing a suit on forum non conveniens grounds? Noting a split among circuits (with the D.C. and Second Circuits, but not the Fifth, Seventh and Ninth Circuits, allowing forum non conveniens dismissals without prior resolution of jurisdictional issues), the circuit court held that forum non conveniens is a non-merits ground for dismissal, but that the district court nevertheless should have concluded its jurisdictional inquiry before dismissing under the doctrine. It therefore reversed. The circuit court’s logic was simple and formalistic. The essence of the forum non conveniens doctrine is the discretion it gives a court to abstain from exercising jurisdiction when there is a more appropriate foreign court. “As a court can only abstain from jurisdiction it already has, if it has no jurisdiction ipso facto it cannot abstain from the exercise of it.” 436 F.3d 349, 363. Thus, “the very nature and definition of forum non conveniens presumes that the court deciding this issue has valid jurisdiction.” Id. at 361. The circuit court also pointed to language from the Supreme Court’s opinion in one of its seminal forum non conveniens decisions, Gulf Oil Corp. v. Gilbert, stating that “[t]he doctrine . . . can never apply if there is absence of jurisdiction . . . .” Id.

In a unanimous decision, the Supreme Court reversed the Court of Appeals. The Supreme Court began by emphasizing the principle underlying its 1998 decision in Steel Co. v. Citizens for Better Environment and its 1999 decision in Ruhrgas AG v. Marathon Oil Co.: that jurisdiction is essential only when a court makes a decision on the merits of a case (slip op. at 7-8). It then characterized forum non conveniens dismissal as a determination denying the plaintiff a decision on the merits because the merits should be decided elsewhere—a determination that “does not entail any assumption by the court of a substantive law-declaring power” (slip op. at 8-9). Therefore, the Supreme Court concluded, forum non conveniens is a non-merits ground for dismissal for which jurisdiction need not be established. This means that “[a] district court . . . may dispose of an action by a forum non conveniens dismissal, bypassing questions of subject-matter and personal jurisdiction . . .” (slip op. at 8). Because Gilbert did not address the issue before the court in Sinochem—whether a court may dismiss on forum non conveniens grounds before deciding on jurisdiction—the Supreme Court argued that the language from Gilbert quoted by the circuit court was “no hindrance to the decision we reach today,” particularly when understood in context.

The decision strikes me as a small but significant victory for pragmatism in transnational litigation. As the Supreme Court argued, to require the district court to resolve the jurisdictional issue would have led to burden and delay—“[a]nd all to scant purpose: The District Court inevitably would dismiss the case without reaching the merits, given its . . . forum non conveniens appraisal.” Such an outcome also would disserve judicial economy and be in tension with one of the stated purposes of forum non conveniens: to reduce inconvenience. The circuit court acknowledged these concerns in its opinion, but concluded that its hands were tied by doctrine: “precedent, logic, and the very terms of the forum non conveniens doctrine dictate this result.” At the risk of reading too much into the Supreme Court’s interpretive methodology in the case, I would suggest that the decision may indicate a rejection of highly formalistic analysis of the rules of transnational litigation, and an embrace of a more purposive and functionally-oriented approach.