“The right understanding of any matter and a misunderstanding of the same matter do not wholly exclude each other.”
–Franz Kafka, 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
That is an interesting (and unfortunate) conundrum. It would be difficult to make sense of this inconsistency. Let me try. (I haven’t read the article closely, so i’m probably restating obvious points.)
I can think of two defensible justifications for differences in rules. First, in one situation, you are reviewing the matter ex ante, the other ex post. In the former you consider courts in the abstract; in the latter, you consider how the courts actually adjudicated your particular claim.
Practically speaking, it seems like it would be really hard to establish that a forum is unavailable in an abstract way (empirics? ancedotes?) as opposed to whether it was unfair in a particular instance. It is easier to find fault if considering a particular set of facts than considering an abstract issue. I’m not well versed in the psychological literature, but intuitively it seems that we are more likely to second-guess when given specific facts as opposed to general. And I think it is fair (comity, etc) to have a rebuttable presumption that foreign courts are adequate, and require something rather concrete to reject that presumption. Unfortunately, that something “concrete” is more likely to be application to a particular case.
This is not a strange idea in our law. We trust state courts, for example, to resolve various controversies on the presumption that they will do so fairly and in accordance with federal law; but we still have 2254 habeas (such as it is) to check on their work after the fact.
I see that the authors identify the ex post/ex ante issue and address it by placing the risk with the FNC movant (i.e. defendant), absent an unforeseeable change in law. I’m not convinced that this is a workable solution. It treats foriegn courts as monolithic, but there are differences between judges and venue that are potentially significant as to the fairness that can be provided. And sometimes courts just have a “bad day.” We might expect in the abstract that state courts follow the constitution, but the regularity of habeas relief teaches that state courts often unreasonably apply clearly established law. I wouldn’t say that this renders the forum unfair as a general matter, but it was for certain individuals. Let’s say 100 judges are in a jurisdiction, and 10 are unforgiveably and obviously biased. Is 10% enough for it to be reasonably foreseeable? What about 1 judge? How foreseeable is it that there be a bad draw? (And how manageable of a test is foreseeability?)
Another counter argument is that different interests are at play at different stages. There is generally a presumption against invoking federal courts’ coercive authority (i.e. standing, implied causes of action, etc.). Pro-defendant FNC and enforceability standards, then, are really anti-federal court rules.
I think it is defensible to have a presumption against the courts doing something. The plaintiff almost always has the burden of proof in causes of action for this reason. Before a court intervenes and disrupts the status quo, it makes sense that the burden is on whomever seeks to invoke the change. True, this tendency towards the status quo slightly favors power individuals who can obtain non-judicial relief. and there seems to be a good argument that the burden on plaintiff is too high. Or maybe judges are just lazy and don’t want to hear cases…