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Tuesday, October 21, 2008
The Effects Test and Transnational Litigation
Eric's post on the litigation from the Large Hadron Collider ("Could bad judging cause the earth to be sucked into a black hole? Maybe"), spurred this post on a slightly different issue.
The Hawaiin case that Eric mentions -- although dismissed on jurisdictional grounds -- is part of a larger trend. In recent years, litigants have increasingly sought to use domestic laws to regulate the activities of foreigners outside U.S. borders. In the United States, domestic laws have long regulated extraterritorial conduct in the commercial context (think antitrust and securities laws as classic examples), but over the last decade courts have appeared to be more willing to apply all sorts of public and private laws to activity occurring abroad, so long as the foreign conduct has some effect within the United States. Other countries have now also followed suit, applying their own laws extraterritorially (a famous example being the Yahoo! case, where a civil lawsuit was brought in France after Yahoo! auctioned Nazi memorabilia in the U.S.). In fact, American businesses are concerned over EU's growing intrusion into U.S. mergers and acquisitions (think of the Honeywell and Microsoft cases)
The growth in transnational litigation (and extraterritorial cases) may be an inevitable result of globalization and the spread of American style litigation. I tend to believe though that the trend of using domestic laws to regulate global activities is problematic and a threat to long-term American interests. The problems created by extraterritorial laws also seem to have been overly downplayed by legal academics. I have written two recent articles on the topic. The first will soon appear in the Vanderbilt Law Review -- The Effects Test: Extraterritoriality's Fifth Business. The second will appear early next year in the Minnesota Law Review -- Reclaiming International Law from Extraterritoriality. Both articles - although coming at the issue from different angles -- criticize the use of domestic laws to regulate foreign conduct.
What may be absurd then in cases like the Hawaiin particle collider case is not the merits of the claim (as Eric points out courts often confront significant environmental and scientific issues). Rather, what seems absurd is that a United States court could apply U.S. domestic law to regulate activities in Switzerland of non-U.S. citizens.
Posted by Austen Parrish on October 21, 2008 at 12:35 PM | Permalink
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Comments
Thanks for the comment. I can agree with you that moral concern ought not stop at our borders. It may also well be that there exists some universal values. I agree that the issue is largely whether there exists a source of legitimacy for regulating foreign conduct.
But your response does not explain why unilaterally applied domestic law -- rather than international law -- has that legitimacy or could have that legitimacy. As you point out, democracy remains organized territorially. And territorial constraints often serve as a proxy to protect other more specific concerns. It's difficult to see how there exists democratic legitimacy if say law enacted in Australia could prevent activity by U.S. citizens occurring in the U.S. If your point is that there exists univeral principles based on human rights law, that not so helpful when evaluating commercial or environmental claims. And it still leaves the question of why U.S. domestic laws should take priority over international laws when the activity at issue is not connected to the U.S.
The fact that globalization has decreased the relevance of the state, does not mean that territory should not play a role. In fact, it may well be that territorial constraints become more, not less, important in a globalized world. So this is not inconsistent with much of Sassen's or Teitel's work.
Lastly, a small nit. My statement was not that extraterritorial laws are "necessarily absurd." I was playing off Eric's post that said the particle collider lawsuits have been criticized by some as being absurd. I was trying to point out that regardless of the merits, it's less clear why a court in Hawaii should adjudicate this claim - rather than through an international forum or European courts where the collider is.
Posted by: AP | Oct 21, 2008 8:48:10 PM
Why is this necessarily absurd? It is only absurd if we simply assume classic understandings of territorial sovereignty, which have arguably been disrupted or destabilized by globalization (see the great work of Saskia Sassen on this subject) and/or by the human rights or humanity (Ruti Teitel's work, "Humanity's Law" Cornell Intl Law J.(2002) is here most relevant) revolution in international/transnational legal order, where the bond between the state, its territory and its citizens is no longer pivotal in the articulation and limitation of rights and duties. What are long term "American" interests? Who is "America"? What is an "American" corporation? There are no stable or self-evident answers-at least not any more-about what is "American" or "America" in these contexts. There are simply multivariate claims of many constituencies and actors on and/or against the exercise of power by the American state, or more precisely the multivariate actors that make up that "state". The question is really legitimacy. Not as such whether it is non-US citizens on non-US territory that are being regulated but whether there is a source of legitimacy for the regulation in question-which could come from values of a universal nature, for we know that there is no obvious reason, apart from the prejudice of statism, that moral concern ought to stop at our borders. I am not suggesting-and it would be very wrong to do so-that territory is irrelevant; to name just one very important consideration related to legitimacy, democracy remains organized territorially, in most relevant senses. It is only that assumptions about the "absurdity" of regulating the conduct of others that takes place elsewhere are not helpful in understanding the admitted complexity of the legitimation of power and law under conditions of globalization. See for some further reflexions on this complexity, my review essay in the Harvard L.R. last spring, "The End of the Globalization Debate."
Posted by: Rob Howse | Oct 21, 2008 8:21:12 PM
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