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Transnational Forum Shopping as a Trade and Investment Issue

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  • Alan O. Sykes

Abstract

Plaintiffs regularly bring cases in U.S. courts seeking damages for harms that have occurred abroad, attracted by higher expected returns than are available in the jurisdiction in which the harm arose. This paper focuses on the potential distortion of trade and investment patterns that can result from implicit discrimination in the applicability of liability rules to producers or investors of different nationalities due to such forum shopping. These distortions are akin to those caused by discriminatory tariff or tax policies and can reduce global economic welfare. In appropriate cases, the welfare costs can be averted by limiting foreign tort plaintiffs to the law and forum of the jurisdiction in which their harm arose, although such a rule is not efficient in all cases. The analysis has implications for a number of areas of legal doctrine, including the doctrine of forum non conveniens, the construction of the Alien Tort Statute, and the rules governing choice of law in transnational tort cases. (c) 2008 by The University of Chicago. All rights reserved.

Suggested Citation

  • Alan O. Sykes, 2008. "Transnational Forum Shopping as a Trade and Investment Issue," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 339-378, June.
    • Handle: RePEc:ucp:jlstud:v:37:y:2008:i:2:p:339-378
    DOI: 10.1086/589664
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    References listed on IDEAS

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    1. Michelle J. White, 2006. "Asbestos Litigation: Procedural Innovations and Forum Shopping," The Journal of Legal Studies, University of Chicago Press, vol. 35(2), pages 365-398, June.
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    Cited by:

    1. Baumann, Florian, 2015. "Freier Warenverkehr und unverfälschter Wettbewerb in der Europäischen Union: Der Beitrag der europäischen Produkthaftung," DICE Ordnungspolitische Perspektiven 75, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    2. Paul B. Stephan, 2013. "The Political Economy of Extraterritoriality," Politics and Governance, Cogitatio Press, vol. 1(1), pages 92-101.
    3. Christopher A. Whytock, 2022. "Transnational Litigation in U.S. Courts: A Theoretical and Empirical Reassessment," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(1), pages 4-59, March.
    4. Patrick Bayer & Christopher Marcoux & Johannes Urpelainen, 2014. "Choosing international organizations: When do states and the World Bank collaborate on environmental projects?," The Review of International Organizations, Springer, vol. 9(4), pages 413-440, December.

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