Rules that Only a Mother (or Kafka) Could Love: Whytock and Robertson on the Doctrinal Mismatch Between Forum Non Conveniens and the Enforcement of Foreign Judgments

“The right understanding of any matter and a misunderstanding of the same matter do not wholly exclude each other.”

–Franz Kafka, The Trial

The Trial

When Kafka penned these words, the doctrine of forum non conveniens (FNC) was probably the furthest thing from his mind.  But for those hearty souls who study FNC, the plight of Joseph K. — struggling for sense within the senseless — may seem all too familiar.  Add in the rules surrounding enforcement of foreign judgments, and we have ourselves another fine example of life imitating art.

Thankfully, Professors Christopher Whytock (UC Irvine School of Law) and Cassandra Burke Robertson (Case Western Reserve University School of Law) have not only exposed the Kafkaesque nature of this little corner of the law, they have also mapped out some solutions.  Download the full paper here.  (My own work on FNC is available here and here.)

The Problem

For folks who study FNC, the problem starts out in familiar way:  Foreign plaintiffs bring suit in U.S. court against a multinational corporation; even though the U.S. court has both subject-matter and personal jurisdiction, the defendant moves for dismissal on FNC, and the court obliges.  At this point, the conventional wisdom — the very wisdom the defendant relied upon when filing its motion — calls this a win for the defense.  There is a reason why the plaintiffs filed the suit in U.S. court, and the defendant has just stripped them of that advantage.  The case, presumably, will settle out of court, go away, or, even if it is litigated, the foreign court will not have the pro-plaintiff features associated with its U.S. counterpart.

But what happens when things don’t play out according to plan?  What happens if, as occurred in the Chevron-Ecuador case, the foreign court flips the script and throws the book at the corporate defendant?  If the defendant has considerable assets in the foreign jurisdiction, it may just have to accept its losses.  But what if, as is often the case, the assets needed to satisfy the judgment are back in the U.S., and the plaintiff brings an action to enforce the judgment in U.S. court?

One might presume that the arguments and judicial determinations that informed the FNC decision — that the foreign court was available and adequate — would preclude the defendant from attacking the enforceability of the judgment.  If the foreign forum was legitimate enough to hear the case, doesn’t it  follow logically that the resulting judgment is enforceable?  Certainly, the defendant at the enforcement stage shouldn’t be able to argue that the court was politicized and biased, incapable of rendering a just verdict.  These arguments would be flatly inconsistent with the arguments made at the FNC stage.  The law can’t possibly allow this sort of backpedaling, right?

As Whytock and Robertson explain, “under existing law these seemingly inconsistent arguments are not necessarily inconsistent at all.”  Rather, they are spawned and given life by a doctrinal mismatch between the rules of FNC and those of enforcement of foreign judgments.  How can this be?  Whytock and Robert break it down like this:

The forum non conveniens doctrine’s foreign judicial adequacy standard is lenient, plaintiff-focused and ex ante, but the judgment enforcement doctrine’s standard is relatively strict, defendant-focused, and ex post. Therefore, the same foreign judiciary may be adequate for a forum non conveniens dismissal, but inadequate for purposes of enforcing an ensuing foreign judgment.

The upshot is rather disturbing:

[T]hese different standards can create a transnational access-to-justice gap:  A plaintiff may be denied both court access in the United States and a remedy based on the foreign court’s judgment.

If that isn’t Kakfkaesque, then I don’t what is.

Ways Forward

Rather than just exposing the problem — important work in its own right — Whytock and Robertson offer up some sensible ways to extricate ourselves from this mess.  They propose doctrinal modifications at both the FNC stage and at the judgment enforcement stage, summarizing the adjustments as follows:

At the forum non conveniens stage, U.S. courts should apply the same foreign judicial adequacy standard that they apply at the judgment enforcement stage; insist on adequacy not only for the plaintiff, but also for the defendant; rigorously apply the Supreme Court’s enforceability factor; require a supporting certification from the defendant; and include a so-called “return jurisdiction clause” in orders dismissing suits on forum non conveniens grounds. At the enforcement stage, when the defendant has successfully moved to dismiss a suit in favor of a foreign court on forum non conveniens grounds and the foreign court has entered a judgment against the defendant, courts should apply estoppel principles to prevent defendants from changing positions regarding the adequacy of its proposed foreign judiciary; they ordinarily should not accept case-specific defenses against enforcement; they should impose the risks of reasonably foreseeable postdismissal changes in foreign judicial adequacy on defendants; and they should expedite enforcement proceedings.

These are common-sense, practical solutions.  I urge my readers to check out the full article and give it some thought.

-NF

Talking TIPNIS

Today I had the pleasure of speaking with a group of law students about the TIPNIS conflict.  Whenever I begin to feel down about this and other environmental challenges, fresh conversation always seems to inspire.  People care. We make mistakes over and over, but I’m convinced every day that the human spirit is characterized more profoundly by compassion than by indifference.   That’s my pole star, and it’s not a bad one to have.

-NF

TIPNIS Video from Yale Environment 360

And again I’m late to the punch.  This video, released by Yale Environment 360 and produced by Noah Friedman-Rudovsky, captures the essence of the conflict in a powerful way.  Please take a look.

-NF

By Any Means Necessary: NACLA on the Bolivian Government’s Latest Efforts to Push the Road Through TIPNIS

Emily Achtenberg of the North American Congress on Latin America (NACLA) has the latest on the TIPNIS conflict.  Here are some highlights:

On October 6, Bolivian President Evo Morales signed a new construction contract for the first segment of a controversial highway that would bisect the TIPNIS Indigenous Territory and National Park, ramping up the stakes in the conflict as indigenous resistance and community divisions continue.

The contract covers the 28-mile road segment leading to the park’s southern border, one of three sections comprising the original highway contract with Brazilian company OAS (see map).  Construction on this segment was halted last April when Morales revoked the entire contract, leading Brazil to withdraw its $332 million loan covering 80% of the $415 million project.

. . . . .

The new $32.5 million contract was awarded without a competitive solicitation to EBC, a state-owned contractor, and AMVI, a community enterprise owned by three cocalero union federations. Funding will be provided from the federal Treasury.

According to the government, the no-bid contract was justified by the need to complete OAS’s unfinished work before the rainy season and by AMVI’s unique experience with regional construction issues. For lowland indigenous groups who oppose the road, it’s just another example of government support for the pro-road cocalero sector (as well as a conflict of interest for Morales, who remains as president of the cocalero union federations).

The new contract ups the ante in the TIPNIS conflict as indigenous resistance, to both the consultation process and its apparent results, continues. The government insists that it has consulted 48 of 69 communities in the TIPNIS, with 47 approving the road, providing a strong two-thirds mandate. TIPNIS leaders dispute these results, citing their own surveys showing that 52 communities reject both the road and the consulta. Ongoing resistance, including river blockades centered in the community of Gundonovia, has paralyzed the consulta in the park’s northeast section. In San Ramoncito, located near the center of the park, a consulta brigade arriving by helicopter was prevented from entering the community.

Read the rest here.

In sum, the government appears more determined than ever to build the road as planned.  As I have maintained from the beginning, this is short-term thinking at its worst.  Even if the government is able to construct its road through the park, how much will it have lost in the way of legitimacy, how much in the way of local and international support, how much in terms of its legacy?  I refuse to believe that there is not a viable alternative route around TIPNIS that would reconcile the government’s interest with community rights.

-NF

Bolivia Plans to Issue $500 Million Global Bond

So reports The Wall Street Journal.  The bond would be Bolivia’s first in nearly a century.  The Morales administration is working with BofA and Goldman Sachs on the deal.

-NF

George Foster on UNDRIP and How It Might Be Applied to Private Actors

Professor George K. Foster, a colleague of mine at Lewis & Clark Law School, has just published a fascinating paper on the UN Declaration on the Rights of Indigenous Peoples (UNDRIP) and how it might be used to regulate some of the more troubling aspects of commercial projects headed by private enterprise on native lands.  Download the full paper here.

Though non-binding, UNDRIP has rightly been praised as the most significant document released by the international community on the rights of indigenous peoples.  In addition to important recognition of political rights (self-determination, juridical pluralism, and so forth), UNDRIP responds forcefully to the growing pressures on native lands.  As Foster explains, this trend is, in many ways, nothing new:  It was not only colonizing states that claimed native territory and resources as their own; they were joined in the effort by private actors like the East India Company and the Hudson’s Bay Company.   What is different today is the fact that, while state-sponsored colonization is a thing of the past, the influence of private actors is only growing.  The Chevron-Ecuador dispute, which I’ve blogged about in the past, is but one example.  Not all private operations in indigenous territory are so troubling, of course.  Yet many are, and so it was with pleasure that I read Foster’s proposal to use UNDRIP as a regulatory tool vis-à-vis private actors.

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A Look Back on the Police Strikes in Bolivia: Just the Latest in the Enduring Strain of Quasi-Autonomous Militaries in Latin America

Just as I was preparing to make the move from Cochabamba to Portland, things got heavy between the Bolivian police and military.  Between June 20 and June 26, rank-and-file police officers engaged in a mutiny.  That’s really the only word for it.  They took over their barracks wielding guns and donning ski masks, demanding an increase of their pitifully low wages.   Thankfully, the government never sent in the army.  Instead, after a few days, the government gave in to the demands – to a degree at least – agreeing to pay police some $15 more per month.  Despite the government’s allegations of an attempted coup, there is no real evidence to suggest that this was more than a labor struggle, albeit an armed one.

Police on strike in Bolivia. Photo Credit: Los Tiempos

So where does the military fit in with all this?  You see, it’s not just that the police were upset with their wages, but rather that their wages were so low relative to those of the military.  Many people in Bolivia, not just the police, struggle to pull down a living wage.  Alone, that condition might not be enough to spark armed mutiny.  But when your counterparts in camouflage are seemingly performing many of the same functions yet pulling down far more money, your level of frustration might just reach the boiling point.

As I explain below, this most recent conflict is not some isolated event.  It is an episode in a longer narrative that viewers watch over and over.

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Month in Links

After a long summer break from blogging, I’m back in the saddle and ready to roll.  To bring readers up to speed, I offer the following links to August coverage of the ongoing TIPNIS controversy:

  • The North American Congress on Latin America, led by Rebel Currents blogger Emily Achtenberg, has tracked the story here, here, and here.
  • Carwil Without Borders describes the shenanigans that went down in La Paz just as I was leaving.  In a nutshell, the government is doing everything in its power to ensure the road gets built through TIPNIS.  With so much manipulation, we may never know how the indigenous park community actually feels.

-NF

 

Saying goodbye to Cochabamba (at least for the time being)

As I write this entry, I find myself still reeling from reverse culture shock.  Here I am back in the United States, and things are pretty much as they were when I left for Bolivia a year or so back.  But, despite the familiarity of the scene, it’s not a stretch to state that I see things around me in a new light.  Yes, even a short year abroad can touch the way you think and feel — and it can certainly enrich your life.

I have returned to the U.S. with a mixture of anticipation and sadness in my heart.  Above all, I’m excited for the opportunity that brought me back.  Beginning in about a month, I will join the faculty at Lewis & Clark Law School as a Visiting Assistant Professor, in which capacity I will teach and write on environmental law and policy.  My time in Bolivia has gone a long way to prepare me for this opportunity, and I look forward to leveraging that experience in the classroom and in my writings.

But therein lies the sadness:  I will miss Bolivia.  I will miss the people I met, the friends I made, and even the awkward situations in which I sometimes found myself.  When your old habits and default behaviors don’t apply, you have no choice but to grow.

With my move and new job, this blog will undoubtedly see some changes.  I have no plans to scrap it or to change the basic focus, but the pace will probably slow down (as it already has) and, unfortunately, on-the-ground reports of Bolivian happenings will become scarce.  On the up side, I hope to supplement that loss with fresh content and (with any luck) some quality guest posts.

-NF

Police Mutiny in Bolivia, Evo Speaks of Coup

I’ve avoided blogging on this topic in favor of publishing a longer article, but the situation now demands immediate attention.  For now, I can do no more than provide a rough sketch of what’s happening.

Rank-and-file police in Bolivia are paid very little.  The current salary for an entry-level officer is $178 per month.  Even if the officer is single, that makes for very tight living.  More than austere, the salary invites widespread corruption.

Nevertheless, given that so many others in Bolivia earn similar wages, low pay for police might be otherwise tolerated but for one factor: the wages doled out to the military. It’s common knowledge in Bolivia that military men and women make far more than their counterparts in the police.  I don’t have comprehensive data, but this article reports that an entry-level soldier makes twice the salary of his police counterpart.  The general feeling is that this difference in wages is not at all justified.

And so, over the last few days, the police have gone on strike or, in the words of most reports, they have launched a “mutiny.”  Indeed, mutiny is probably the better term, as it’s the rank-and-file officers who have refused to work and taken over barracks.

If this doesn’t sound serious, you don’t have to take my word for it.  Here’s what Evo said today:

“Seguramente esa gente que privatizó (empresas del Estado en el pasado) usa a algunos hermanos policías para preparar un golpe de Estado, para hacer matar al ministro de Gobierno y para enfrentar a las Fuerzas Armadas con bombas molotov”, sostuvo Morales en un acto con mineros en el altiplano de La Paz.

My rough translation: “Surely these people that privatized (what are now national enterprises) use some brothers in the police to lead the way to a coup, to kill the Minister of Government, and to confront the armed forces with Molotov cocktails.”

More on this to come (though I may save most of my thunder for a longer article).

-NF

UPDATE (6/24/12):  I just located this piece on the mutiny in the Miami Herald.  The figures on wages are a bit different than what I’ve seen in Bolivian papers, but the gist is essentially the same.

UPDATE (6/25/12):  My trip to downtown Cochabamba today revealed the presence of no police officers.  According to the cab drivers, it’s pretty much a free-for-all in terms of transit enforcement — if you get in a fender-bender, good look finding an officer to assist. (To be fair, traffic enforcement is always lacking, though today seems worse than usual.)

Late last night, the government signed a deal with representatives of rank-and-file police, only to see the deal rejected by their constituent officers this morning.  The rejected deal proposed to set the monthly salary for an entry-level officer at around 1,400 Bolivianos (approx. $200), along with a monthly bonus of around 600 Bolivianos (just shy of $90).

Meager as it sounds, the police probably would have accepted the deal had the total monthly amount (2,000 Bolivianos) all been allocated to salary.  Why does this matter?  It’s the salary amount — not the larger salary-plus-bonus figure — that is used for pension purposes.

According to the latest poll in Los Tiempos (Cochabamba), 84% of respondents are backing the police.

For more on this story in Spanish, click here (Los Tiempos).  For more in English, this piece (AFA) does a nice job of summarizing the latest.