Evolving Forum Shopping System

Electronic copy available at: http://ssrn.com/abstract=1596280

THE EVOLVING FORUM SHOPPING SYSTEM

Christopher A. Whytock

*

Forthcoming, Cornell Law Review, Vol. 96 (2010-2011)Draft: April 21, 2010A

BSTRACT

This Article challenges the widely held belief that the United States isexperiencing a transnational litigation explosion. According to conventionalwisdom, the United States has a forum shopping system with two featuresthat encourage plaintiffs to file claims in U.S. courts, even when thoseclaims involve foreign parties or foreign activity: a permissive approach to personal jurisdiction, which gives plaintiffs broad court access; and a strongtendency of U.S. judges to apply plaintiff-favoring domestic law. The forumshopping system is said to contribute to a rising tide of transnationallitigation in the United States. Scholars and interest groups have therefore proposed new anti-forum-shopping measures aimed at curtailingtransnational litigation in U.S. courts.Contrary to that understanding, this Article shows that the forumshopping system has evolved, and that it no longer encourages plaintiffs to pursue transnational claims in U.S. courts to the extent it supposedly oncedid; and it presents empirical evidence that transnational litigation in theUnited States may have actually decreased, not increased, over the last twodecades. The Article thus provides a new, empirically groundedunderstanding of the American forum shopping system and its impact ontransnational litigation. The analysis suggests that new anti-forum-shoppingmeasures are not as urgent or necessary as their advocates claim. If adopted, they would risk unduly limiting access to justice for bothAmerican and foreign citizens who, in our era of globalization, areincreasingly affected by transnational activity.

*

Associate Professor of Law, University of Utah S.J. Quinney College of Law; ActingProfessor of Law designate, University of California, Irvine, School of Law. For veryhelpful suggestions, I thank Tim Büthe, Paul Cassell, Kevin Clermont, Lincoln Davies,Kevin Johnson, Ralf Michaels, Rachel Moran, Austen Parrish, Tonya Putnam, Kirk Randazzo, Tony Smith, Michael Solimine, Alan Tauber, Louise Weinberg, and Jennifer Whytock. I also thank participants at the 2009 Annual Meeting of the American PoliticalScience Association, and at workshops at BYU Law School, University of California,Irvine, School of Law, and the University of Utah S.J. Quinney College of Law, where I presented earlier drafts of this Article. Finally, I thank Christine Poleshuk and Carter Maudsley for excellent research assistance; Meredith McNett for tracking down hard-to-find sources; and Mary Wheeler for help with the manuscript.

Electronic copy available at: http://ssrn.com/abstract=1596280

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THE EVOLVING FORUM SHOPPING SYSTEM

[23-Apr-10T

ABLE OF

C

ONTENTS

I

NTRODUCTION

........................................................................................................3



I. A

T

HEORY OF

F

ORUM

S

HOPPING

..........................................................................6



II. T

HE

F

ORUM

S

HOPPING

S

YSTEM AND

I

TS

C

ONSEQUENCES

:

T

HE

C

ONVENTIONAL

U

NDERSTANDING

...................................................................11



A.

The American Forum Shopping System

......................................................11



1.



Court Access......................................................................................12



2.



Choice of Law....................................................................................14



B.

The Transnational Litigation Explosion

.....................................................16



III. T

HE

F

ORUM

S

HOPPING

S

YSTEM AND

I

TS

C

ONSEQUENCES

:

A

N

EW

U

NDERSTANDING

..............................................................................................19



A.

The Current Forum Shopping System

.........................................................19



1.



Court Access......................................................................................20



2.



Choice of Law....................................................................................25



B.

Transnational Litigation: An Empirical Assessment

..................................27



1.



The Importance of Alienage Litigation.............................................28



2.



The Decline of Alienage Litigation...................................................29

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IV. A

C

LOSER

L

OOK AT THE

S

YSTEM

:

F

ORUM

N

ON

C

ONVENIENS IN

A

CTION

.........38



A.

Potential Determinants of Forum Non Conveniens Decisions

...................38

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B.

Empirical Findings

......................................................................................44

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C

ONCLUSION

............................................................................................................50

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23-Apr-10]

THE EVOLVING FORUM SHOPPING SYSTEM

3I

NTRODUCTION

The claim that the United States is experiencing a litigation explosionhas long been a fixture of American discourse.

1

Using careful empiricalanalysis, legal scholars and social scientists have challenged this claim and provided a more realistic picture of the American legal system.

2

As onescholar puts it, the litigation explosion is “more rhetorical than real.”

3

In our era of globalization, however, this claim has taken on a newtwist. It is now widely believed that the United States is experiencing anexplosion of

transnational

litigation—that is, litigation involving foreign parties or foreign activity.

4

Far from being merely rhetorical, a highly plausible logic supports this belief: Globalization entails increasinglyfrequent interactions between U.S. and foreign citizens, thus leading tomore transnational disputes.

5

The United States has substantive and procedural laws that are more advantageous to plaintiffs than those offered by other countries.

6

And, according to the conventional understanding, twofeatures of the U.S. legal system encourage plaintiffs to bring transnationaldisputes to the United States by holding out the promise of access to theseadvantages.

7

The first is a permissive approach to personal jurisdiction,which gives plaintiffs—both domestic and foreign—broad access to U.S.courts. The second feature is a strong tendency of U.S. judges to apply the

1

See, e.g.,

W

ALTER

K.

O

LSON

,

T

HE

L

ITIGATION