Apr 24, 2024
Apr 24, 2024
Continued from Previous Page
Forum shopping is not just a matter of scrutinizing substantive and procedural laws to evaluate the comparative prospective values of claims. It is also based on the expectations of plaintiff about two types of court decisions: (1) court access decisions and (2) choice-of-law decisions.
1. In a court access decision, a court decides whether it will allow a plaintiff’s claim to proceed in that court. For instance, court access decisions in the U.S. include subject matter jurisdiction, personal jurisdiction, and forum non conveniens [1] decisions. If a court grants a motion to dismiss a suit for lack of subject matter or personal jurisdiction, or based on the forum non conveniens doctrine, the plaintiff’s claim cannot proceed in that court. A plaintiff will usually not incur the costs of filing a lawsuit in a specific court unless he feels there is some probability of a favorable court access decision. In other words, ceteris paribus, the more strongly a plaintiff expects a particular court to make a favorable court access decision, the more likely is he to file a lawsuit in that court.
2. Another case that demonstrates that forum shopping is an inherent part of the U.S. judicial system is found in the court's opinion and the protesting opinion in Stewart Organization, Inc. v. Ricoh Corp. The issue in Stewart was whether a federal court should apply state or federal law in deciding a motion to transfer to a venue nominated by the parties in a forum-selection clause of their contract. The contract between the parties provided that dispute arising out of the contract shall be referred to a court in New York. In spite of this provision, one of the parties, an Alabama corporation, filed a suit arising out of the contract in federal court in Alabama. In response, the defendant moved to the court to transfer the case to the Southern District of New York, compatible with 28 U.S.C. § 1404(a), particularly relying on the forum selection clause to support the transfer.
The District Court applied Alabama law, which disapproves forum selection clauses, and rejected the motion with no scrutiny of the merits of the transfer. If the court had applied the applicable federal law, 28 U.S.C. § 1404(a), the court would have been obligated to decide the transfer motion in the light of the comfort of the parties and witnesses and the interest of justice, and the motion might have been granted. In fact, on appeal, the Supreme Court held that a District Court must apply federal law when that law is a federal statute that regulates the issue and the statute is a valid application of the constitutional powers of the Congress. Thus, the District Court was bound to apply § 1404(a) to the venue dispute in this case.
Forum Shopping Around The World
In the U.S., domestic forum shopping has been described as a national legal hobby. In the case of IP litigation, shopping is mostly common. In the US, plaintiffs have sued in courts based on factors such as ‘home advantage,’ the ‘convenience of trial counsel,’ and the alacrity with which courts dispose of cases.
In China, foreign IP owners have sued in big cities such as Beijing and Shanghai, as they are often headquartered there, and these cities supposedly have judges well-versed with advanced patent law concepts. In Italy, there was a case where a plaintiff, stationed near Milan, sued an alleged trademark infringer, stationed in Venice, in Milan. In Spain, a plaintiff located in Barcelona sued defendants, located in Madrid and Navarra, for patent infringement in Barcelona.
Factors That Determine The Existence Of Forum Shopping
A key factor in deciding the existence of forum shopping is the annoyance caused to the courts and the parties/litigants by the filing of similar cases to extensively claim the same reliefs. The justification against forum shopping is that a party should not be allowed to seek concurrent reliefs in two different fora. Filing numerous petitions or complaints comprises abuse of court processes, which tends to vitiate the administration of justice, inflicts mayhem upon orderly judicial procedure, and supplements the crowding of the heavily burdened dockets of the courts.
There is forum shopping when there exists the following:
1. identity of parties, or at least such parties that represent the same interests in both lawsuits.
2. identity of rights asserted and relief prayed for, with the relief being founded on the same facts, and
3. the identity of the two preceding particulars is such that any verdict delivered in the pending case, irrespective of which party is successful, would amount to res judicata in the other.
Reasons For Forum Shopping
There are four different reasons for forum shopping:
1. digressing party preferences
2. varying capabilities and power
3. government department’s specialization, and
4. varying degrees of judicialization. [3].
Before any form of forum shopping happening is the existence of numerous institutions with a similar issue scope. The institutions may either coincide or overlap, but none focuses out of the set of institutions. This intricacy of global regime increasingly allows parties or litigants to apply forum shopping strategies by modifying their chosen forum or venue for accomplishing specific policy objectives. However, parties also have the possibility to not only use or modify prevalent regimes, but also to create new institutions. Even though it necessitates large transaction costs, parties might find it opportune to establish a new institution if the existing institutions fail to satisfactorily deliver public welfare for which they were created. Due to the numerous costs and the ambiguity involved in establishing new institutions, such decisions are very infrequent.
Potentially Dangerous Impact of Forum Shopping
The practice of international forum shopping is extensively criticized. It is called ‘a dirty word,’ ‘evil,’ ‘deplorable,’ and something that ‘must be deterred.’ The U.S. Supreme Court mentions the practice with great contempt, promising to protect the U.S. courts from it. The U.S. Chamber of Commerce, one of global forum shopping’s most vocal opponents, regards global forum shopping as fraud and ‘out-of-court tactics.’
However, the unequivocal condemnation of global forum shopping has numerous flaws. First, the practice of global forum shopping is bemoaned but poorly defined. Critics frequently attach the disparaging term ‘forum shopping’ on forum choices or litigation that they simply dislike for numerous reasons. Second, critics seldom offer precise justifications as to why global forum shopping should be so extensively denounced. And third, critics disregard the possibility that global forum shopping has any pay-off virtues, whatsoever.
The Unsung Virtues of Global Forum Shopping
Though global forum shopping is denounced extensively by several critics worldwide, it also has its own unappreciated virtues, which are as follows:
- forum shopping’s significance in upholding access to justice
- bolstering regulatory enforcement, and
- triggering substantive and procedural reform.
First, regarding access to justice, Justice Jackson once pointed out in the domestic context that having numerous choices for filing suit can ensure the availability of at least one forum to uphold one’s rights. This can be all the more appropriate globally.
Second, with regard to regulatory enforcement, restricting forum choice can retard courts’ ability to enforce substantive laws through litigation. The Volkswagen instance corroborates that courts worldwide are increasingly called upon to serve this function.
Third, global forum shopping can promote legal reform. A perfect example appeared in 1980, when a team of public interest lawyers coaxed the Second Circuit to read a long-ignored federal statute to recognize jurisdiction over international human rights claims. Since then, courts have experimented with the scope of that jurisdiction, moving from a broad concept resembling universal jurisdiction, to a confined jurisdiction over cases that only ‘touch and concern’ the U.S. Irrespective of those debates, that 1980 Second Circuit decision led not only to multiple cases brought under the Alien Tort Statute pertaining to human rights violations, but also to global human rights initiatives, the law on the Torture Victim Protection Act, and an intensely held belief that U.S. courts should provide a forum for such cases.
Conclusion
The legal profession should honestly review what it expects of advocates and litigants with respect to forum selection and should limit forum choices to the extent that exercising one's power of selection is inadmissible. The incentive to forum shop is created whenever a litigant has a choice as to where to file his lawsuit, and advocates should not be expected to overlook such choices. Arguments against forum shopping that state that it is a waste of time, money, and resources are definitely logical to some extent when supporters are able to demonstrate cases of flagrant forum shopping when the parties and the court are engaged in months of litigation just to determine which court will dispute a case. However, a careful scrutiny of these cases indicates that the time spent litigating on issues involving the appropriate forum may not be so distasteful or unwelcome.
As long as there exists choice of venues, venue will likely be an issue that must be disputed by the courts, akin to evidentiary and other procedural issues that are disputed. Sometimes litigating venue will be pricey and will involve a considerable chunk of the court's time, while in most cases it will not be an issue. Venue is similar to any other issue in a lawsuit with regard to the attention it deserves and the variations that will exist from one case to another.
Some possible solutions for opponents of forum shopping include lawfully restricting venue choices, either by limiting the possible venues or ranking the available venue choices, generously applying transfer provisions and employing the doctrine of forum non conveniens to dismiss cases. Expecting lawyers to overlook their clients' best interests by failing to choose a favorable venue when it is available is asking them to commit misdeed, a move that would be more unwelcome than the ‘waste’ of time, money and resources, trying to be prevented.
Footnotes:
[1] Forum non conveniens is a discretionary power of the court that allows it to dismiss a case when there is another court, or forum that is better suited to hear the case. However, the dismissal does not preclude a plaintiff from re-filing his case in a forum that is more appropriate. This doctrine may be invoked either by the defendant or the court.
[2] Louise Weinberg holds the Bates Chair and is a Professor of Law at the University of Texas School of Law. She teaches and writes in Constitutional Law and Federal Courts. She has taught at Harvard, Brandeis, and Stanford, and has received the Texas Exes' Excellence in Teaching Award.
[3] The term ‘judicialization’ is substituted for ‘legalization’. ‘Legalization’ is the process of making legal, and may seem appropriate for the legislative process of law-making. The term ‘judicial’ and its etymology enable a distinction between the legislative and judicial wings of international organizations. It represents a process, rather than a state of affairs. ‘Degrees of judicialization’ imply that some forums have no judicial enforcement systems, whereas others have obligatory third-party adjudication.
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15-Aug-2020
More by : P. Mohan Chandran