Litigating in Foreign Jurisdictions vs. in Florida
By: Michael R. Holt
01.01.00U.S.-based product manufacturers and service providers routinely do business throughout Latin America. This subjects them to potential legal problems in the event of a product failure or other accident. The claimant may initiate litigation in a foreign country but quite often, the defendant finds itself litigating in one of Florida's state or federal courts. This situation presents a labyrinth of critical decisions the defendant must make early in the litigation.
How does one determine which applies –U.S. or foreign law?
Courts make choice of law determinations on an issue-by-issue basis, so it is critically important to evaluate and recognize up-front what those issues are and what the most likely outcome might be in terms of applicable law. Although the case might be filed in the U.S. system, state and federal courts employ a choice of law analysis to the underlying claims. Courts have broad discretion in determining choice of law matters, and in federal court, may take evidence in reaching ultimate determinations. Thus, this is one area where consulting with a local expert in the substantive law of the accident site is crucial.
What are some of the differences between U.S. courts and those in Latin America?
Latin American countries have vastly different legal systems than the U.S. Many are Civil Code states. This means that they do not follow the common law as courts do in the US. Causes of action are created by statute. If a statute does not authorize a cause of action, a plaintiff can’t bring the claim. Because American tort law is generally more expansive, this may lead a claimant to plead US-based causes of action which they could not bring in their own country, and seek damages not authorized by the foreign forum. If a Plaintiff pleads as US-based cause of action, a motion to dismiss may be appropriate if it does not fall within the parameters of what a foreign jurisdiction might allow.
Why consider litigating the case in Florida?
Parties must consider certain protections they may loose if they litigate in a foreign jurisdiction. Two examples illustrate this point. Many jurisdictions, like Florida, have abolished joint and several liability and apportion fault amongst individual tortfeasors. They also may well permit defendants to plead, prove and ultimately apportion the fault of non-parties, including employers and bankrupt entities. This critical protection may not be available in a foreign state.
Another example pertains to damages. Many states, including Florida have some type of economic loss rule which prohibits a party to a product liability action from claiming certain damages. Thus a litigant in foreign jurisdiction may well be able to claim economic damages which they could not recover in Florida or other US jurisdictions. Likewise, many states apply the economic loss rule to contract disputes, disallowing tort-based damages. This distinction may allow parties to circumvent contracts and make open-ended damage claims in certain instances.
What damages does the foreign jurisdiction allow?
Getting a handle on the potential damages and comparing that to damages recoverable in other jurisdictions will help litigants understand the realities they may face and help them make critical decisions early in the case.
How does a client decide where to litigate?
Choice of law principles may require the same laws no matter where the parties litigate, but the choice of forum still remains an important consideration. A multi-step analysis will help guide the defendant in this regard. For example:
Does the US forum have any connection to the defendant’s home? In certain instances, lawsuits involving Latin American accidents find their way to Florida courts.
This may be the result of various factors, including the accessibility to Spanish-Speaking counsel and for the convenience of counsel as well.
The US-based company may not, however, have any connection to Florida. If that is the case, defendants must evaluate the Plaintiff’s chosen forum and determine whether to seek a change.
In certain instances, even though it might be less convenient to litigate in Florida, defendants will choose to remain there. Others may prefer to seek a transfer based on convenience of the parties and witnesses. This may be a tough challenge , however, because in the case of a manufacturer, there will likely be very little contact other than documents and the defendant’s employee witnesses.
Can the defendant seek an outright dismissal based on forum non conveniens?
This may seem attractive as it eliminates the litigation, at least temporarily. However, parties should think carefully about this, as dismissal may mean that the litigation will begin again, only this time in a potentially more hostile environment.
Will access to documents be a problem?
If litigating in any US-based court system, access to documents possessed or controlled by the opposing party should not be an issue. But that may only be a portion of the document universe. Critical documents may be in the possession of other foreign non-parties to the litigation.
Access to any documents located outside the U.S. may be difficult. The defendant will need to understand what method the foreign country follows – if any – to allow access to non-party documents. Many countries follow the Hague Convention, but obtaining documents this way can be difficult and time-consuming.
Local counsel may be able to help expedite the process and/or gain quicker access to certain publically – available materials. The defendant must immediately take stock of what they think they need and allow for plenty of lead time
What is the best way to handle documents that are not in English? How much of a burden does it add to litigation?
With a US-based corporation, a great deal of information will be easily readable by any English-speaking consultant. But if the matter involves a large-scale project, for example a building or highway system, there may be thousands of foreign-language documents to gather and analyze. Translation costs are steep and US courts require the use of English documents.