Article of the Day: Christina Weston on “The Enforcement Loophole”
Posted on August 18, 2011
The concern about what Professors Whytock and Robertson have called the transnational access to justice gap is front and center in a new student article in the Emory International Law Review by Christina Weston, called The Enforcement Loophole: Judgment-Recognition Defenses as a Loophole to Corporate Accountability for Conduct Abroad, 25 Emory Int’l L. Rev. 731 (2011). You can find a link to the paper at the journal’s website.
The most tantalizing claim in the paper, though one that is not, I think, adequately supported by the citations, is that corporate defendants that obtain dismissal on forum non conveniens grounds in US courts take steps to try to ensure that the judgment of the forum to which they successfully asked the US court to defer will not be entitled to recognition and enforcement in the US:
After obtaining [a forum non conveniens] dismissal to a foreign tribunal where the corporate defendant has no major assets, the corporate defendant then has the opportunity to tailor the foreign litigation so that it satisfies one of the exceptions to recognition in the United States. As a result, even though foreign-country judgments are generally recognized on nearly the same basis as sister-state judgments, the enforcement exceptions afford corporate defendants an opportunity to manipulate the foreign litigation so that the foreign-country judgment is unenforceable in the United States.
On the one hand, it would hardly be surprising if companies did take steps to try to minimize the risk that an adverse foreign judgment could be enforced in the United States. But I don’t think Weston has made the case that companies are actually manipulating the foreign proceedings so as to decrease the likelihood that the foreign judgments will be enforceable in the US. She focuses on two of the cases we have covered here: the Lago Agrio case in Ecuador, and the Osorio case in Nicaragua. In the Ecuadorian case, she points to the “secretly-taped videos involving formerly presiding Judge Nuñez and alleged briberies, and U.S. State Department reports describing the Ecuadorian judiciary as corrupt.” But as far as I know, Chevron didn’t create these facts. (It would be interesting to know whether companies lobby the State Department for revisions in its country-specific fact sheets. Letters Blogatory is on the case, and I will let you know what I find). In Osorio, Weston focuses on the plaintiffs’ claim that the defendants had “intentionally sabotaged their own defense in Nicaragua [by failing to make certain motions or present certain evidence] to artificially manufacture a defense to enforcement on due process grounds in a later enforcement action.” But as the District Court noted, the reason why the defendants didn’t introduce the evidence in question (e.g., expert testimony on causation) was that Nicaraguan law created an irrebutable presumption of causation that would have made an attempt to introduce such evidence futile. I more or less agree with the District Court’s read on this, and so I question whether the facts cited justify Weston’s claim that US defendants are “tailoring” or “manipulating” foreign litigations to avoid enforcement of the eventual judgments in the US.
All this being said, I think Weston’s article is an indication of the perceived lack of equity in the position US corporations take in boomerang litigation when they oppose recognition and enforcement of foreign judgments after successfully arguing forum non conveniens.