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How Litigation Imports Foreign Regulation

Guest Post by Diego A. Zambrano, Assistant Professor of Law, Stanford Law School

For years now, the concept of a “Brussels Effect” on global companies has become widely accepted. A simple version of the story goes as follows: the European Union sets global standards across a range of areas simply by virtue of its large market size and willingness to construct systematic regulatory regimes. That is true, for instance, in technology where European privacy regulations force American companies (including Facebook, Google, and Apple) to comply worldwide, lest they segment their markets. As Anu Bradford has expertly argued, it is also true in environmental protection, food safety, antitrust, and other areas. When companies decide to comply with European regulations across markets, the European Union effectively “exports” its regulatory regimes abroad, even to the United States.

In a forthcoming article, How Litigation Imports Foreign Regulation, I argue that foreign regulators not only shape the behavior of American companies—they also influence American litigation. From the French Ministry of Health to the Japanese Fair Trade Commission and the European Commission, I uncover how foreign agencies can have a profound impact on U.S. litigation. In this sense, the “Brussels Effect” is a subset of broader foreign regulatory influence on the American legal system.
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European and International Civil Procedural Law: Some views on new editions of two leading German textbooks

For German-speaking conflict of law friends, especially those with a strong interest in its procedural perspective (and this seems to apply to almost all of them by now, I guess), the year 2021 has begun beautifully, as far as academic publications are concerned. Two fantastic textbooks were released, one on European civil procedural law, and one on international civil procedural law:

After more than ten years the second edition of Burkhard Hess’s 2nd edition of  his textbook on „Europäisches Zivilprozessrecht“ is now on the table, 1026 pages, a plus of nearly 300 pages and now part of the renowned series „Ius Communitatis“ by DeGruyter. It is a fascinating account of the foundations („Grundlegung“, Part 1, pp. 3 – 311) of European civil procedure as well as a sharp analysis of the instruments of EU law („Europäisches internationales Zivilprozessrecht“, Part 2, pp. 313 – 782). Part 3 focuses on the interplay between autonomous and European procedural law (pp. 783 – 976). Extensive tables of the cases by the ECJ and the ECtHR as well as a large subject index help to access directly the points in question. The foreword rightly points out that European civil procedural law has reached a new phase. Whereas 10 years ago, the execution of the agenda under the then still new competency in (now) Article 81 TFEU was at issue, today enthusiasm and speed have diminished. Indeed, the ECJ had to, and still has to, defend „the fundamental principles of EU law, namely mutual trust and mutual recognition, against populist attacks and growing breaks of taboos by right-wing populist governments in several Member States“ (Foreword, p. 1, translation here and all following ones by myself; see also pp. 93 et seq. on the struggle for securing independence of the national judge in Hungary and Poland as a matter of the EU‘s fundamental values, Article 2 TEU). At the same time, the EU legislator and the ECJ had shown tendencies towards overstreching the legitimatory potential of the principle of mutual trust before the EU returned to „recognition with open eyes“ (as is further spelled out at para. 3.34, at p. 119), as opposed to blind trust – tendencies that worried many observers in the interest of the rule of law and a convincing balancing of the freedom of movement for judgments and other juridical acts. The overall positive view by Hess on the EU’s dynamic patterns of judicial cooperation in civil matters, combined with the admirable clarity and comprehensiveness of his textbook, will certainly contribute considerably to address these challenges.

Equally admirable for its clarity and comprehensiveness is Haimo Schack’s 8th edition of his textbook on „Internationales Zivilverfahrensrecht“, including international insolvency and international arbitration, 646 pp., now elevated from the „short textbook series“ to the „large textbook series“ at C.H.Beck. The first part addresses foundations of the subject (pp. 1 – 68), the second part describes the limits of adjudicatory authority under public international law (pp. 69 – 90), the third part analyses all international aspects of the main proceedings (pp. 91 – 334), the fourth part recognition and enforcement (pp. 335 – 427), the fifth and sixth part deal with insolvency (pp. 428 – 472) and arbitration (pp. 473 – 544). Again, an extensive table of cases and a subject index are offered as valuable help to the user. Schack is known for rather sceptical positions when it comes to the narrative of mutual trust. In his sharp analysis of the foundations of international procedural law, he very aptly states that the principle of equality („Gleichheit“) is of fundamental relevance, including the assumption of a principal equivalence of the adminstrations of justice by foreign states, which allows trust in and integration of foreign judicial acts and foreign laws into one’s own administration of justice: „Auf die Anwendung eigenen Rechts und die Durchführung eines Verfahrens im Inland kann man verzichten, weil und soweit man darauf vertraut, dass das ausländische Recht bzw. Verfahren dem inländischen äquivalent ist“ (We may waive the application of our own law and domestic proceedings because and as far as we trust in the foreign law and the foreign proceedings are equivalent to one’s own, para. 39, at p. 12) – a fundamental insight based, inter alia, on conceptual thinking by Alois Mittermaier in the earlier parts of the 19th century (AcP 14 [1831], pp. 84 et seq., at pp. 95, justifying recognition of foreign judgments by the assumption that the foreign judge should, in principle, be considered „as honest and learned as one’s own“), but of course also on Friedrich Carl v. Sagigny, which I allowed myself to further substantiate and transcend elsewhere to the finding: to trust or not to trust – that is the question of private international law (M. Weller, RdC, forthcoming). In Schack’s view, „the ambitious and radical projects“ of the EU in this respect „fail to meet with reality“ (para. 126, at p. 50). Equally sceptical are his views on the HCCH 2019 Judgments Convention („Blütenträume“, para. 141, at p. 57, in translation something like „daydreams“).

Perhaps, the truth lies somewhere in the middle, namely in a solid „trust management“, as I tried to unfold elsewhere.

European Parliament Resolution on corporate due diligence and corporate accountability

Our blog has reported earlier on the Proposal and Report by the Committee on Legal Affairs of the European Parliament for a Resolution on corporate due diligence and corporate accountability. That proposal contained recommendations to amend the EU Regulations Brussels Ia (1215/2015) and  Rome II (864/2007). The proposals were discussed and commented on by Jan von Hein, Chris Tomale, Giesela RühlEduardo Álvarez-Armas and Geert van Calster

On 10 March 2021 the European Parliament adopted the Resolution with a large majority. However, the annexes proposing to amend the Brussels Ia and Rome II Regulations did not survive. The Resolution calls upon the European Commission to draw up a directive to ensure that undertakings active in the EU respect human rights and the environment and that they operate good governance. The European Commission has already indicated that it will work on this.

Even if the private international law instruments are not amended, the Resolution touches private international law in several ways.

*  It specifies that the “Member States shall ensure that relevant provisions of this Directive are considered overriding mandatory provisions in line with Article 16 of Regulation (EC) No 864/2007” (Art. 20). It is a bit strange that this is left to national law and not made an overriding mandatory provision of EU law in line with the CJEU’s Ingmar judgment (on the protection of commercial agents – also a Directive). Perhaps the legislator decides otherwise.

* It proposes a broad scope rule covering undertakings “operating in the internal market” and encompassing activities of these undertakings or “those directly linked to their operations, products or services by a business relationship or in their value chains” (Art 1(1)). It thus imposes duties on undertakings to have due diligence strategies and communicate these even if the undertakings do not have their seat in an EU Member State. In this way it moves away from traditional seat theories and place of activities tests.

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Out Now: Aristova, Tort Litigation against Transnational Corporations. The Challenge of Jurisdiction in English Courts

Ekaterina Aristova (Bonavero Institute of Human Rights, University of Oxford) is the author of the ‘Tort Litigation against Transnational Corporations: The Challenge of Jurisdiction in English Courts’ (OUP 2024), which has just been published in the Oxford Private International Law series. She has kindly shared the following summary with us:

The book examines the approach of the English courts to the question of jurisdiction in civil liability claims brought against English-based parent companies and their foreign subsidiaries as co-defendants (e.g., Lubbe v Cape, Lungowe v Vedanta, Okpabi v Shell, etc.). While the book is written from the perspective of English law, the book also draws on examples of similar cases in Australia, Canada, EU Member States, and the US to broaden the discussion.

The assertion of jurisdiction in parent company liability claims based on a nexus with the forum state presents a challenge to the courts. The territorial focus of the adjudicative jurisdiction is often contrary to the transnational nature of cross-border business activities. Transnational corporations (TNCs) have the flexibility to spread operations over multiple jurisdictions and create a legal separation between the subsidiary’s activities and the home state of the parent company. Courts rely on various private international law rules and doctrines to resolve the question of jurisdiction in parent company liability claims, including forum non conveniens doctrine in common law legal systems, the mandatory rule of domicile under EU law, and the presumption against extraterritoriality in US jurisprudence. The broad disparities in the issues of civil jurisdiction among domestic legal regimes and the considerable controversy surrounding the exercise of extraterritorial regulation over corporate operations often lead to the creation of a ‘jurisdictional veil’ for the parent company and a significant degree of autonomy, largely free from the control of any national jurisdiction.

To address this puzzle, this book seeks to answer three questions: 1) To what extent can English courts, under existing rules, exercise jurisdiction over English parent companies and their foreign subsidiaries as co-defendants? 2) Is England a suitable forum for deciding parent company liability claims? 3) Should the jurisdictional competence of the English courts be broadened through a new connecting factor derived from the ‘economic enterprise’ theory?

The book aims to offer a new angle to the discourse by placing the discussion of parent company liability claims in the context of the topical debate about the changing role of private international law in a globalised world. The transnational adjudication of disputes, cross-border activities of non-state actors and expansion of private law-making challenge several conventional assumptions of the discipline of private international law, including its focus on territoriality and geographical connecting factors and its capacity to interact with public mechanisms. Home state courts have become the fora for struggles between TNCs and vulnerable communities from the host states, raising complex questions about (il)legitimate forum shopping, the appropriate forum, and the limits of judicial discretion. Parent company liability claims impact how we think about private international law and its function, and the reader is invited to explore these challenging dynamics.

The Bonavero Institute of Human Rights in Oxford will celebrate the publication of the book by hosting a (hybrid) book launch and wine reception on 5 June 2024.

Registration Now Open: The Hague Academy of International Law’s Winter Courses 2025

Registration for the 2025 programme of The Hague Academy of International Law’s renowned Winter Courses on International Law (6-24 January 2025) is now open. In contrast to the summer courses, this program combines aspects of both Public and Private International Law and therefore provides for a particularly valuable academic experience.

Following the Inauguaral Lecture by Bhupinder Singh Chimni (O.P. Jindal Global University), this year’s General Course in Private International Law will focus on “International Law in the Times of Globalization: Contexts, Networks, Practices” and will be delivered by Mónica Pinto (University of Buenos Aires). Furthermore, Special Courses will be offered in English by Mohamed S. Abdel Wahab (Cairo University), Payam Akhavan (University of Toronto), Enrico Milano (University of Verona) and Catherine Rogers (Bocconi University), while Niki Aloupi and Sébastien Touzé (Paris-Panthéon-Assas) will deliver their presentations in French. As always, all lectures will be simultaneously interpreted into English or French and vice versa. If you are interested in alternative dispute resolution, the lecture on “The Concept of Arbitrator Impartiality” seems particularly interesting.

Advanced Students, especially those who are ambitious to sit for the prestigious Diploma Exam, are highly encouraged to apply for the Academy’s Directed Studies as well. The French edition of these interactive afternoon seminars will be directed by Emanuel Castellarin (University of Strasbourg), while English-speaking candidates are taught by María Carmelina Londoño Lázaro (University of La Sabana).

Registration is open from  1 May 2024 to 1 October 2024 via the institution’s own Online Registration Form . Students who whish to apply for the Academy’s scholarship opportunities need to submit their application by 31 July 2024. For further information on the HAIL 2024 Winter courses and the Academy in general, please consult the HAIL Homepage or refer to the attached PDF Programme.

Job Vacancy at the University of Bonn (Germany): Research fellow in International Civil Procedural Law and/or International Commercial Arbitration

The Rhenish Friedrich Wilhelm University of Bonn is an international research university with a wide education and research profile. With a 200-year history, approximately 33,000 students, more than 6,000 staff, and an excellent reputation at home and abroad, the University of Bonn is one of the most important universities in Germany and is recognized as a university of excellence.

The Institute for German and International Civil Procedure is looking for a highly skilled and motivated PhD candidate and fellow (Wissenschaftliche/r Mitarbeiter/in) to work in the fields of International Civil Procedural Law and/or International Commercial Arbitration on a part-time basis (50%) to start as soon as possible.

(c) Volker Lannert / Universität Bonn

Responsibilities:

  • Supporting research and teaching on Private International Law, International Civil Procedure and/or International Commercial Arbitraiton as well as German civil law (required by the Faculty, therefore an excellent command of German and profound knowledge of German civil law equivalent to the “First State Examination” is mandatory)
  • Teaching obligation of two hours per week during term time (Semester)

Your Profile:

  • You hold the First or Second German State Examination in law with distinction (or its international equivalent)
  • If possible, you already had contact with International Civil Procedure Law and/or Commercial Arbitration Law
  • You are interested in the international dimension of private law, in particular International Civil Procedural Law, and/or International Commercial Arbitration
  • Excellent command of the English language (next to German)
  • You are commited, flexible, team-oriented and interested in further professional development opportunities

We offer:

  • Varied and challenging assignments with one of the largest employers in the region
  • Opportunity to conduct your PhD or research project (according to the Faculty’s regulations) under the supervision of the Director of the Institute Prof Dr Matthias Weller, Mag.rer.publ., MAE
  • Occupational pension scheme (VBL)
  • Numerous offers of the University Sports Programme (Hochschulsport)
  • Easy access to the public transport system and direct road link to the Autobahn due to the central location in Bonn as well as the possibility to use inexpensive parking facilities
  • Flexible working hours; remote working options are available
  • Renumeration according to German public service salary scale E-13 TV-L (50%); initial contract period is one year at least and up to three years, with an option to be extended.

The University of Bonn is committed to diversity and equal opportunity. It is certified as a family-friendly university. Its goal is to increase the proportion of women in areas where they are underrepresented and to particularly promote their careers. It therefore strongly encourages applications from relevantly qualified women. Applications are handled in accordance with the State Equal Opportunity Act. Applications from suitable persons with proven severe disabilities and persons treated as such are particularly welcome

If you are interested in this position, please send your application (cover letter in German; CV; and relevant documents and certificates, notably university transcripts and a copy of the German State Examination Law Degree) to Prof Dr Matthias Weller (weller@jura.uni-bonn.de).

For additional information, please refer to the attached pdf document (in German) or visit the Institute’s homepage.

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