Minding The Gap
Posted on May 30, 2012
Cassandra Burke Robertson is Associate Professor at Case Western Reserve University School of Law.
The Lago Agrio case may be the most salient case to illustrate the doctrinal gap between the doctrines of forum non conveniens and judgment enforcement, but it is part of a growing trend of “American lawyers outsmarting themselves” by seeking dismissal from U.S. courts in favor of a foreign forum, only to subsequently challenge the resulting foreign judgment in a U.S. court. Ted Folkman has blogged about Hubei Gezhouba Sanlian Indus. Co. v. Robinson Helicopter Co., for example, in which defendant Robinson Helicopter moved for dismissal in favor of a Chinese forum, failed to appear for the trial in China, and then objected to enforcement of the Chinese judgment. The Ninth Circuit affirmed the district court’s judgment enforcement. In our article, Professor Chris Whytock and I discuss the Chevron and Hubei Gezhouba cases as well as additional “boomerang” lawsuits that were dismissed from the U.S. under the doctrine of forum non conveniens, reached trial in Brazil and Nicaragua, and ultimately returned to the U.S. for attempted judgment enforcement.
This forum-choice maneuvering tends to evoke different reactions. In analyzing the Chevron case, Professor Kevin Jon Heller articulated one common response, which views the procedural wrangling as disingenuous posturing. Professor Doug Cassel, on the other hand, has described the procedural actions as ordinary client advocacy, noting that Chevron’s predecessor “agreed only to be sued, not defrauded, in Ecuador.” But regardless of their perspective, most observers agree that the current gap between the standards for forum non conveniens dismissal and judgment enforcement is, at best, highly inefficient. Each of these cases was pending for many years, as the cases went through forum non conveniens hearings in the U.S., trial in a foreign country, and judgment-enforcement proceedings back in the U.S. And for those cases in which the foreign judgment ultimately proves to be unenforceable in the U.S., the years of legal wrangling will have been entirely without benefit.
Our article explains that the forum non conveniens and judgment enforcement doctrines create an access-to-justice problem for plaintiffs whose claims fall into the gap between them. Our article does not take a stand on the propriety of past litigation conduct, but instead argues that going forward, the doctrines should be aligned so that the standard for forum non conveniens dismissal more clearly matches up to the standard for judgment enforcement. In a nutshell, it would make forum non conveniens dismissal slightly more difficult, but, for those cases that would be subject to dismissal, it would streamline procedures for enforcing the resulting judgment. Professor Ron Brand has addressed some of the downsides of this recommendation. He points out that the current doctrinal difference may be appropriate, given the U.S. Constitution’s focus on protecting the due process rights of defendants and given the U.S. interest in preventing “free-rider problems that would likely hamper the United States in any future negotiation of conventions related to issues of jurisdiction and the recognition of judgments.”
Even aside from the access-to-justice rationale, however, there are pragmatic reasons in support of aligning the standards for forum non conveniens and judgment enforcement. As Professor Whytock has noted, “there is evidence suggesting that the influence of U.S. courts in transnational judicial governance may be declining as the transnational litigation system becomes increasingly multipolar.” A more multipolar landscape will necessarily affect forum-selection practices, and it may be that the gap begins to close even without formal doctrinal change. Plaintiffs may be somewhat less likely to file suit in the United States. Defendants, on the other hand, may find that litigating in the U.S. offers the advantages of procedural predictability and a familiar legal environment, and may therefore file fewer forum non conveniens motions when plaintiffs do choose a U.S. forum.
In addition, as I have described elsewhere, the use of third-party litigation funding is growing and may further hasten the trend toward multipolarity. One of the reasons that U.S. courts have historically been so attractive to foreign litigants is the availability of contingency-fee litigation. Third-party financing, however, may play a very similar role in helping plaintiffs avoid fronting the cost of litigation. When these cases are brought against U.S. corporations with a multinational presence, plaintiffs may be able both to obtain a judgment and to enforce that judgment entirely outside of the United States.
In a more multipolar world, the litigation strategy of forum choice therefore becomes more difficult and more changeable. It is unlikely that U.S. courts will lose their magnetic effect entirely; plaintiffs are still likely to prefer the liberal discovery rules and (at least perceived) higher damage awards. But it is no longer as predictable that plaintiffs will necessarily want to litigate in the U.S. or that defendants will necessarily seek dismissal from U.S. courts. Aligning the standards for forum non conveniens and judgment enforcement increases the efficiency of that forum-choice decision for both sides, preserving litigation options in a way that discourages procedural gamesmanship and encourages resolution of the cases on the merits.