www.dykema.com

Featured Article

Mass Tort Imports: U.S. Defendants Face Rising Tide of Foreign Class Actions

When plaintiffs' lawyers in a medical-device class action case were deciding where to file suit, their choice of venue was obvious.

The lead plaintiff was a citizen of Ireland. Irish doctors implanted and removed the allegedly faulty device, which was approved by European regulators. Moreover, all members of the putative class were residents of the European Union.

The attorneys did not, however, file their lawsuit in Ireland, but the United States.

As U.S. manufacturing companies are learning, American courts are becoming the world's dumping ground for mass-tort lawsuits. Even when the alleged injuries occur abroad, plaintiffs' lawyers are filing mass-tort and class-action lawsuits in American courts. The consequences are predictable: rising litigation costs for U.S. companies, and clogged court dockets.

In a recent podcast featuring an interview with Dykema attorney Todd Gattoni (www.insidecounsel.com/dykemaondemand), InsideCounsel learned the most important factor driving this trend is money. "The U.S. court system affords jackpot-type verdicts that are uncommon in other countries," says Gattoni, a member of Dykema's litigation practice group in Detroit. "So it's not surprising that plaintiffs' attorneys have taken their referral act global."

Global-Class Jackpot
Class-action lawyers file these cases in U.S. courts on the grounds the alleged harm was caused by products originating in the United States. The forum-non-conveniens doctrine allows courts to send such cases back to courts in their plaintiffs' home countries, but judges have considerable discretion under that doctrine – and many are accepting foreign mass-tort cases (See "Sending Them Home: Forum Non Conveniens and Global Class Actions.")

"Some U.S. judges may be intrigued by the possibility of adjudicating high-profile international cases that provide a break from mundane local cases," Gattoni says. "But when they accept jurisdiction of these foreign-plaintiff cases, they shift the burden from foreign courts to U.S. courts."

They also are exposing U.S. businesses to even greater cost burdens, putting them at a disadvantage against foreign competitors who don't face the same risk.

What attracts foreign plaintiffs to the American court system? Civil trials in American courts are structured in ways that favor plaintiffs in class-action lawsuits. Civil-court juries are more likely to favor "underdog" plaintiffs than wealthy corporate defendants. Liberal pre-trial discovery processes allow plaintiffs to exhaust defendants with depositions and discovery motions. And, of course, U.S. verdicts can include many penalties for losing defendants with no "loser-pays" tradition to discourage junk lawsuits.

Further, the American court system provides relatively quick results for plaintiffs, particularly in cases filed in special "complex" jurisdiction courts.

Finally, class actions are simply not available in some other countries. This difference is part of the rationale for filing in American courts—plaintiffs' attorneys argue U.S. Federal Rule of Civil Procedure 23 creates an efficient mechanism for coordinating a mass proceeding in one arena that doesn't exist in the plaintiffs' country of origin.

Limiting Jurisdiction
The effects of global class actions on American companies are self-evident: more high-stakes litigation translates into rising legal costs and liability for damages. And because these cases involve events and evidence in other countries, discovery processes are even more complicated and expensive than they are in cases involving local plaintiffs.

Less obvious is the effect on U.S. courts. At a time when court systems are straining under budget shortfalls and expanding caseloads, an influx of complicated lawsuits involving foreign plaintiffs increases the burden on courts and juries.

Despite these onerous effects, however, the trend likely will grow before policy changes will stem the tide of foreign class actions. Although the Class Action Fairness Act of 2000 made incremental improvements that reduced the worst abuses, it did nothing to prevent foreign plaintiffs from accessing U.S. courts. And the current political environment in Washington, D.C., provides little hope for legislative reform.

State-level legislation could provide relief in locations that don't already observe the federal courts' forum-non-conveniens doctrine. A more uniform national standard would help defendants argue against importing class action cases.

Ultimately, however, the decision whether to accept these cases rests with judges. "As long as plaintiffs are not deprived of all remedies or are treated unfairly, their home forums can be adequate," Gattoni says. "Judges should vigorously apply the forum-non-conveniens doctrine in dismissing these cases and sending them back to their rightful countries."

Back to top

Back to:
Dykema on Demand Main Page

Featured Articles :

• Mass Tort Imports: U.S. Defendants Face Rising Tide of Foreign Class Actions
  When plaintiffs' lawyers in a medical-device class action case were deciding where to file suit, their choice of venue was obvious.

• Sending Them Home: Forum Non Conveniens and Global Class Actions
  Plaintiffs' attorneys are going global in their efforts to assemble class-action lawsuits.

For more information on our litigation practice, contact:

View professionals