Some Thoughts on the Lack of Consistency and Predictability in Federal Forum Non Conveniens Dismissals

The doctrine of forum non conveniens is applied with great inconsistency by federal district courts. The forum non conveniens analysis is, to quote Justice Scalia, “multifarious,” but what weight should be given to those factors is left to the trial court to decide, with a de novo standard of review sometimes leading to vastly divergent outcomes in practice. Despite Justice Ginsberg’s famous dictum that the Sinochem case was a “textbook,” example he Supreme Court’s Sinochem decision has been little help in providing a standard of what a forum non conveniens dismissal should look like.  There are many questions left unanswered about the proper application of the doctrine.  What does an “adequate alternative forum” look like, anyway?

The Supreme Court, in setting guidelines for granting a motion for forum non conveniens, has required the existence of an alternate adequate forum. However, beyond the condition that an adequate alternate forum is one where the defendant is “amenable to process,” the Supreme Court has not provided much further guidance. Various factors have been examined to determine whether there is any empirical evidence of what may constitute an adequate alternate forum. For example, there is evidence that district courts in the Third and Fourth Circuits are less likely to find a foreign forum to be adequate. District courts are more likely to consider cases based on diversity jurisdiction to be adequate to resolve in a foreign forum than cases based on federal question jurisdiction. Defense litigants themselves indicate a preference of litigating in the United States versus litigating in countries that lack civil liberties, lack political rights, are politically unstable, have ineffective governments, disregard the rule of law, cannot control corruption, and are not as economically developed. In addition, district courts have been less likely to find an adequate forum in countries with these conditions. Ultimately, there is not evidence that would suggest the legal system in another country, the foreign language spoken, or the amount in controversy have an effect in influencing a district court’s view on the adequacy of the foreign forum.[1]

Although Sinochem reaffirmed the lowered presumption in favor of a foreign plaintiff, there is still little guidance otherwise as to how the factors of a forum non conveniens analysis should be weighed against one another.  As is illustrated by the contrast among the cases discussed earlier, the high degree of judicial discretion renders it almost impossible to define precisely the “multifarious factors” that go into the forum non conveniens analysis.  There is no meaningful yardstick against which to compare a “textbook” case for an immediate forum non conveniens dismissal.  But why should this be a concern?  Some might argue that it would serve the interest of justice to grant the district court judge a wide berth for discretion.

As it stands, the doctrine of forum non conveniens presents an unnecessary obstacle to both parties in cases where it is an issue, and the absence of stricter appellate oversight directly facilitates this inefficiency.  In Sinochem, the Supreme Court has given the lower courts a tightened up version of the forum non conveniens analysis, but left them without the equipment necessary to properly oversee its inevitably inconsistent application.  In the wake of Sinochem, which reaffirmed the lowered presumption in favor of a foreign plaintiff in forum non conveniens analyses, the need for further clarification of the doctrine has already arisen.  This is already reflected by the competing interpretations of the “textbook” language, and more such ambiguities are likely to be found in the broad language of the Sinochem opinion.

Though there may be something to be said about the ease with which the current standard accommodates diplomatic concerns, it is hardly clear that this would satisfy the multifarious analysis as intended by the Sinochem court.  It has been observed that “if inconsistency is the rule – would it not be just as well for the parties to select some other method (perhaps flipping a coin?) to decide the outcome?”[2]  Currently the doctrine of forum non conveniens stands as an impediment to the important goals of predictability and consistency, and thereby affects the very foundation of fairness and efficiency on which the judicial process is based.  Furthermore, since there is no evidence that the competing goal of conservation of judicial resources (by means of docket clearing) is being advanced, it can hardly be said to justify of the problems of the doctrine in its present incarnation.

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[1] Michael T. Lii, An Empirical Examination of the Adequate Alternative Forum in the Doctrine of Forum Non Conveniens. 8 Rich. J. Global L. & Bus. 513 at 551 (2009).

[2] Robert J. Thornton and Perry A. Zirkel, The Consistency and Predictability of Grievance Arbitration Awards, 43 Industrial & Labor Relations Review 294.

Fix It Again, Treasury

An interesting piece in the Wall Street Journal, suggesting that the sun is setting on fiat money:

Forty years of persistent monetary interventionism have left the economy addicted to cheap credit and continuous asset inflation. Forty years of monetary expansionism have led to distorted prices, misdirected economic activity and unsustainable debt levels. Since Lehman Brothers we know that the accumulated imbalances have become so momentous that a market-driven liquidation of them is deemed politically unacceptable. Credit correction, debt deflation and liquidation—as much as the market is craving them to cleanse the economy of its dislocations—will not be allowed under any circumstances.

The central banks are now boxed in. There is no exit strategy. Low interest rates and further credit growth must be sustained at all cost, and as the private sector becomes reluctant to participate, the state is increasingly the “borrower of last resort” to the central bank’s “lender of last resort.” The Fed will engage in QE3, then in QE4. After mortgage-backed securities and Treasuries, it will be corporate bonds, auto loans and credit card debt that will also end up on the central bank’s balance sheet—and, of course, more Treasurys. The ECB will continue to accumulate the ever-growing debt of European sovereigns. But when the public realizes that the mirage of solvency is only being maintained by ever-faster money creation, the confidence in the state’s paper money will evaporate quickly.[1]

The United States began its monetary history under bimetallism, a monetary policy recognizing both silver and gold as money.  Indeed, gold was the advent, as silver was considered the “ancient money.”[2]  Gold- rarer and more valuable- ultimately came to prominence. But all this changed under President Roosevelt:

In 1933, the U.S. Congress passed the Joint Resolution of June 5, 1933 that abolished all gold clauses in all public and private contracts. This meant that contracts could not require payment in gold. The Gold Reserve Act of 1934 went further, withdrawing all gold coin from circulation to be formed into gold bars. Even the Treasury could not hold gold coin unless it was in the form of gold bullion.  The Gold Reserve Act was intended to “abolish[] gold coin as a component of our monetary system.” Gold was thereafter not money, but rather a commodity. The public could not get gold in the United States. Coin collectors were able to hold gold coins but only those of numismatic value.

Gold remained in circulation for international transactions involving the federal government until 1971 when the U.S. government ceased supplying gold to foreign central banks. In short, hard currency no longer exists in the U.S. monetary system except in the form of coinage. The U.S. government systematically, from 1933 to 1971, obliterated any notion of a value standard by refusing to permit the conversion of its paper money into gold and forcing the acceptance of its inferior paper currency. By putting an end to redeemability, policymakers eliminated an effective means for imposing discipline on government-issued money. The way was opened to abuse on a grand scale.[3]

The merits of returning to a commodity-backed currency has been discussed for decades:

[U]sing present-day terminology, gold was the principal international reserve asset, although after the Great War the increasing use of foreign exchange as reserves led the variant of the gold standard in operation from 1925 to 1933 to be called a “gold exchange” standard. However, the essential element in the international gold standard — and this is a crucial point in contemporary discussions of a return to the gold standard — was that there was a close link between the domestic money supply in each country and its gold holdings. It was an “essential element of the classical gold standard… that the money supply must be limited by the gold reserves and a change in the gold reserves should be followed by a change in monetary policy.”  In part this link was reflected in “gold cover requirements,” such as the provision of United States law specifying the value of gold that had to “back” issuances of currency. More fundamental were the institutional arrangements in each country causing increased or decreased public gold holdings to lead respectively to a larger or smaller money supply.[4]

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[1] Detlev S. Schlichter, Forty Years of Paper Money: Fiat currencies always end in hyperinflation and economic collapse. http://online.wsj.com/article/SB10001424053111903918104576500811399421094.html?mod=googlenews_wsj (August 15, 2011).

[2] For a fascinating discussion on this topic, see: Ali Khan, The Evolution of Money: A Story of Constitutional Nullifcation, 67 U. Cin. L. Rev. 393 at 402-403 (1993).

[3] Lewis D. Solomon, Local Currency: A Legal and Policy Analysis, 5 Kan. J.L. & Pub. Pol’y 59 at 64 (1996) [citations omitted].

[4] Kenneth W. Dam, From the Gold Clause Cases to the Gold Commission: A Half Century of American Monetary Law, 50 U. Chi. L. Rev. 504 at 508 (1983) [citations omitted].

Universal Jurisdiction, both “Ancient” and “Modern,” in United States Domestic Law

In the United States, a respect for the norms of international law has been part and parcel to domestic law since the framing of the Constitution; “[i]n fact, the Framers held the Constitutional Convention in large part due to the perceived inability of the Confederation to uphold American obligations under international law.”[1]  This was confirmed by the U.S. Supreme Court in the famous 1796 case of Ware v. Hylton.[2]  Significant in the case is a dictum by Justice Samuel Chase:

If Virginia as a sovereign state, violated the ancient or modern law of nations in making the law of 29 October 1777, she was answerable in her political capacity to the British nation, whose subjects have been injured in consequence of that law.”[3]

Here, Chase acknowledges the role played by the shifting norms of international law in the domestic law of the United States.  Both the “ancient” and “modern” norms are binding.  As the norms of international law change and expand with the times, so to does the law of the United States change with them.  And, as we can see by the offhandedness of the dictum, in 1796 this was not a controversial stance.  But the shifting nature of international law is a double-edged sword.  These norms can expand to encompass a broader respect for human rights (and we have seen almost uninterrupted progress in this regard for generations), but likewise there is a danger that the norms of international law can shrink, or regress as nations shirk their international obligations.

Indeed, jus cogens norms can decline as the standards of the international community decline.  But, likewise, these norms of the international community can become stronger and more vigorous, and on the whole the trend has been towards an increasing respect for human rights. Indeed, this is why it is all the more important to protect the ground that has been gained.  If crimes against jus cogens norms are not vigorously prosecuted, we run the risk that the progress made in the cause of human will simply slip away.

In the United States, there had been early attention to a significant number of international crimes that can be committed by private perpetrators and provide universal jurisdiction for criminal or civil sanctions, including piracy; war crimes; breaches of neutrality, territorial infractions, “aggression,” and other crimes against peace; unlawful capture of vessels; the slave trade; violence against foreign ministers and other officials; poisoners, assassins, and incendiaries[sic]; counterfeiters of foreign currency; banditti and brigands; terroristic publications; violation of passports; violation of safe-conducts; and more generally “all . . . trespasses committed against the general law of nations” and the treaties of the United States.

Today, the number of specific international crimes that can be committed by private individuals has increased from earlier categories to include, among others, the following: genocide; other crimes against humanity; apartheid; race discrimination; hostage-taking; torture; forced disappearance of persons; terrorism; terrorist bombings; financing of terrorism; aircraft hijacking; aircraft sabotage and certain other acts against civil aviation; certain acts against the safety of maritime navigation, including boatjacking; murder, kidnapping, or other attacks on the person or liberty of internationally protected persons; trafficking in certain drugs;  slavery;  and mercenarism.[4]

That the poisoners, assassins and arsonists of Vattel’s day might be tried in any court in any country was unlikely; in practice universal jurisdiction was most frequently applied to pirates, and later, slave-traders.
.  Today, these considerations are no longer academic, but practical.  The gains have been tremendous since the post-World War II era; horrendous practices such as apartheid, once carrying the full force of law in many places, is now considered a crime against the human race, punishable anywhere by means of universal jurisdiction.  Such offenders, who could previously be protected by sovereign immunity, now truly know no safe harbor.  In theory, at least.

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[1] Ryan Goodman & Derek P. Jinks, Filartiga’s Firm Footing: Federal Common Law and International Human Rights, 66 FORDHAM L. REV. 463 (1997) [citation omitted].

[2] According to the Court in Filártiga v. Peña-Irala, 630 F.2d 876 (2d Cir. 1980): “Thus it is clear that courts must interpret international law not as it was in 1789, but as it has evolved and exists among the nations of the world today.” See Ware v. Hylton, 3 U.S. (3 Dall.) 198, 1 L.Ed. 568 (1796) (distinguishing between “ancient” and “modern” law of nations.)” 630 F. 2d at 881.

[3] Ware v. Hylton, 3 U.S. (3 Dall. )199 at 223-4

[4] Jordan J. Paust, The Reality of Private Rights, Duties & Participation, 25 MICH. J. INT’L L. 1229 At 1237-40 [citations omitted].