Whytock on The “Chevronization” of Transnational Litigation
Posted on September 24, 2013
Friend-of-Letters-Blogatory Chris Whytock, Professor of Law and Political Science at UC Irvine and adviser to the ALI on the Restatement (Fourth) of the Foreign Relations Law of the United States, has posted a new paper, Some Cautionary Notes on the “Chevronization” of Transnational Litigation, which is to be published in the Stanford Journal of Complex Litigation. The paper addresses many of the issues that were up for discussion in our 2012 symposium on forum non conveniens and the recognition of foreign judgments that will be of interest to Letters Blogatory readers. For example, Whytock reviews the law about extrinsic versus intrinsic fraud; the effect of forum non conveniens dismissals on later challenges to recognition and enforcement; and the distinction between case-specific and systemic challenges to due process in foreign lawsuits.
I want to highlight two points Whytock makes. First, he suggests that the proposal he and Cassandra Burke Robertson made in their leading paper, Forum Non Conveniens & The Enforcement of Foreign Judgments, should not be applied retroactively in the Lago Agrio case:
If, as Chevron alleges, plaintiffs’ counsel actively promoted and took advantage of corruption in the Ecuadorian judiciary, it would seem unfair to limit Chevron’s ability to pursue defenses against enforcement based on those allegations simply because Texaco earlier argued that the Ecuadorian system was adequate. Moreover, because under existing law claims of foreign judicial adequacy at the forum non conveniens stage are not necessarily inconsistent with claims of foreign judicial inadequacy at the enforcement stage, it would seem unfair to apply our proposals retroactively in this case.
I think what he is saying is that, contrary to my suggestion that Chevron had, essentially, assumed the risk that the political and judicial climate in Ecuador could turn against it, Chevron should not really have been aware, given the state of the law at the time it sought dismissal of the original case in New York, that its efforts to have the case transferred to Ecuador might bar it from challenging the judgment when the LAPs sought recognition in the US. My view is that there is a question of fact here that outsiders probably won’t ever be able to answer: are there memoranda in the bowels of Chevron’s legal department or its law firms’ files considering the risk of political changes in Ecuador from the time it was seeking FNC dismissal, or not? If so, then I think Whytock’s argument about fairness carries little weight; but it’s hard to know the truth of the matter.
Second, Whytock notes the unfortunate growing trend, at the US Chamber of Commerce and the Uniform Law Commission itself, towards allowing case-specific due process exceptions to recognition and enforcement of foreign judgments. I couldn’t agree more with Whytock’s take on this:
[I]f a foreign legal system is systemically adequate, it should be able to resolve case-specific issues itself; and if it is not systemically adequate, then the judgment debtor could rely on the systemic due process exception. Any further shift away from the traditional systemic approach and toward case-specific approaches should be based on careful consideration of the relevant policies rather than driven by exceptional cases—particularly exceptional cases such as Shell and Dole that resulted in non-enforcement anyway, without resort to case-specific exceptions.
Long-time readers will remember the discussion of this issue from the symposium. And I have pointed to some anecdotal evidence that US courts may tend to want to give foreign courts more comity than the trends Whytock has identified in the business community and the ALI suggests they should.
Kudos to Chris on an excellent new paper!