Transnational

Lawsuits brought by plaintiffs’ class action firms, public interest attorneys, and non-governmental organizations against U.S. companies or foreign companies with a substantial U.S. presence are sometimes premised on alleged injuries that occurred abroad. Such lawsuits raise the question of whether U.S. courts should be the venue for cases concerning conduct occurring outside U.S. borders.

Some of these cases are filed in federal courts under the 200-year old Alien Tort Statute (ATS), which provides federal jurisdiction over lawsuits brought by non-U.S. nationals for torts in violation of international law. Others are brought under state common law or in foreign jurisdictions, including countries with poorly developed legal systems, only to return to courts in the United States. This practice is known as Foreign Judgement Enforcement.

This area of litigation has developed into a business for plaintiffs’ lawyers who try to cash in against multinational companies using the U.S. legal system. Many of the suits take many years, halting international investment and imposing substantial legal and reputational costs on corporations.

To prevent abusive forum shopping, federal and state courts should exercise caution in interpreting and applying state law, even state common law, and extraterritoriality. States should strengthen their foreign judgment recognition and enforcement laws and Congress should adopt uniform federal standards to govern the recognition and enforcement of foreign judgments.

 

Alien Tort Statute (ATS)

Enacted in 1789 as part of the Judiciary Act, the Alien Tort Statute (ATS) provides federal jurisdiction over lawsuits brought by non-U.S. nationals. The ATS was intended to give federal courts of the new nation the power to resolve disputes arising from a very limited number of international law violations, such as piracy or assaults on ambassadors on U.S. soil.

Despite its original intent, the ATS has served for the past two decades as the fountainhead of litigation against multinational companies for human rights violations allegedly committed by foreign governments or other foreign actors in countries all over the world.

The U.S. Supreme Court has issued two important opinions restricting the ATS. Kiobel v. Royal Dutch Petroleum (2013) limited its extraterritorial scope and Jesner v. Arab Bank (2018) restricted corporate liability. These rulings have substantially limited the use of the ATS in transnational cases; however, this does not deter cases brought under state common law or through foreign judgment enforcement.

Click here to read a full summary of the Nestle USA, Inc. v. Doe I (2019). or through foreign judgment enforcement.

Foreign Judgment Enforcement (FJE)

In recent years, plaintiffs have filed numerous lawsuits against businesses and individuals in U.S. courts for alleged conduct occurring outside the U.S. The Supreme Court’s recent rulings limiting such cases including Daimler AG v. Bauman (2014), Kiobel v. Royal Dutch Petroleum (2013), and Morrison v. National Australia Bank (2010) will likely mean a new strategy for plaintiffs and their lawyers: bring lawsuits in foreign courts, attempt to enforce any judgments in those foreign courts in U.S. courts, and seize companies’ U.S. assets. This raises the troubling prospect of abusive and improper foreign judgments being enforced in the U.S.

To prevent abusive forum shopping, States should strengthen their foreign judgment recognition and enforcement laws. Congress should also adopt uniform federal standards to govern the recognition and enforcement of foreign judgments.

01/01/2019

Suggested Resources

Research

All Results for Transnational

  1. Litigation Funders Join Together To Form Global Advocacy Group

    September 10, 2020 | News

    The twelve leading litigation finance firms have set up the International Legal Finance Association (ILFA) according to a report on Law.com.... Read More

  2. Study: Mass Tort Plaintiffs Paying Dearly For Loans, Regulation Needed

    September 01, 2020 | News

    ... Read More

  3. TPLF, Short-Seller Use Undermines Securities Class Actions

    August 26, 2020 | News

    Two factors in the securities class action arena are exacerbating the potential for conflicts of interest according to an expert analysis by Nessim Mezrahi in Law 360. ... Read More

  4. ILR Briefly: Third Party Litigation Funding in Qui Tam False Claims Act

    July 17, 2020 | Research

    In addition to investing in portfolios of private lawsuits, third party litigation funders have started financing qui tam False Claims Act cases brought on behalf of the U.S. government. The catch is that up until very recently, the government had no insight into whether funders were involved or the level of control they exerted. That changed in June 2020, when the Department of Justice announced a policy change to start shedding some light on this opaque practice.... Read More

  5. In the News Today - July 7, 2020

    July 07, 2020 | News

    ICYMI: DOJ Eyes Requirement That False Claims Act Whistleblowers Disclose Litigation Funding... Read More

  6. Litigation Funder Gave $100K To Plaintiff, Expects $2 Million Back

    July 02, 2020 | News

    A lawsuit in New York shows what happens when a litigation funder's client hits a jackpot and decides not to settle up, according to a report in Legal Newsline. ... Read More

  7. ILR Research Review Volume 7 Issue 1

    June 29, 2020 | Research

    This edition of the ILR Research Review contains research examining the myriad liability challenges flowing from COVID-19 and describing potential administrative and legislative solutions, as well as papers dedicated to the ongoing crisis in securities litigation, the growth of and problems with the third party litigation funding industry, and insights into the strategy behind trial lawyer advertising.... Read More

  8. From the President's Desk: International Litigation Trends Taking Center Stage Across the Globe

    June 08, 2020 | News

    In his most recent blog post, ILR President Harold Kim highlights some major international developments that could have an impact on the business community, notably in the United Kingdom and Australia.... Read More

  9. ILR Briefly COVID-19 Series: State Liability Problems and Solutions

    May 21, 2020 | Research

    As states reopen and continue to respond to the needs of their citizens and economies, it is important that they consider offering liability protections to prevent a wave of COVID-19 lawsuits at the state level. This edition of ILR Briefly documents major hot spots for COVID-19 litigation under state law and provides an array of policy solutions to prevent lawsuits from disrupting states' economic recoveries.... Read More

  10. ILR Briefly COVID-19 Series: Liability Overview

    April 23, 2020 | Research

    As Americans and businesses of all sizes are working together to get through the COVID-19 health crisis, plaintiffs' lawyers have already begun filing COVID-19-related lawsuits. Limiting litigation abuse is essential to making available the tools and resources needed to combat the virus, and ultimately to spurring economic recovery once the immediate health crisis has been resolved. This edition of ILR Briefly explores the current and anticipated types of litigation coming out of the COVID-19 pandemic.... Read More