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Intersystemic Statutory Interpretation in Transnational Litigation

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Intersystemic Statutory Interpretation in Transnational Litigation 303.MCLEAN.313.DOC10/11/2012 3:16:29 PM comment Intersystemic Statutory Interpretation in Transnational Litigation In a recent article in the pages of this Journal,1 Professor Abbe Gluck highlights an important phenomenon: federal courts do not generally apply state interpretive methodologies when construing state statutes. Gluck argues forcefully that this practice is incorrect as a doctrinal matter under Erie, and that the legal academy’s failure to examine statutory interpretation from a self- consciously “intersystemic” perspective represents a significant gap in the literature.2 In this Comment, I extend Gluck’s argument regarding the inconsistent and undertheorized nature of the federal approach to intersystemic statutory interpretation to a new context: federal courts’ interpretation of the statutory law of foreign countries3 in the course of transnational litigation.4 I argue that 1. Abbe R. Gluck, Intersystemic Statutory Interpretation: Methodology as “Law” and the Erie Doctrine, 120 YALE L.J. 1898 (2011). 2. Gluck suggests that in the domestic statutory interpretation context, “[n]either the federal nor the state courts have any consistent or well-articulated approach to the question of whether they are required to apply one another’s interpretive methodologies to one another’s statutes” and “[w]hat’s more, this phenomenon has gone mostly unnoticed, or no one seems to care.” Id. at 1901. 3. Throughout this Comment, I use the term “foreign law” to refer to the law of a foreign country, not (as is sometimes done in the domestic conflicts literature) the law of a non- forum U.S. state. For a typology of domestic courts’ uses of foreign law, and for background on the role of foreign law in transnational litigation, see Christopher A. Whytock, Foreign Law in Domestic Courts: Different Uses, Different Implications, in GLOBALIZING JUSTICE: CRITICAL PERSPECTIVES ON TRANSNATIONAL LAW AND THE CROSS-BORDER MIGRATION OF LEGAL NORMS 45 (Donald W. Jackson, Michael C. Tolley & Mary L. Volcansek eds., 2010). 4. In the transnational context, an intersystemic perspective on statutory interpretation has also generally been absent from the literature. For exceptions to this general rule, see Andrew N. Adler, Translating & Interpreting Foreign Statutes, 19 MICH. J. INT’L L. 37 (1997); and Marcus S. Quintanilla & Christopher A. Whytock, The New Multipolarity in 303 the yale law journal 122:303 2012 when federal courts are called upon to interpret foreign statutes, they should make greater efforts to employ the interpretive approaches of the relevant foreign jurisdictions. This is particularly important because a number of foreign countries—like certain U.S. states,5 but unlike the U.S. Supreme Court—accord the status of law (or, at least, law-like status) to methodologies of statutory interpretation. The practice of federal courts in this respect has been inconsistent, often disregarding key aspects of foreign interpretive methodology. Judicial practice is thus in tension with the policies that militate in favor of the use of foreign law in transnational litigation.6 i. foreign law in american courts: current practice Amid the globalizing forces of the world economy, federal courts are often called upon to apply and to interpret the laws of foreign countries.7 A court sitting in diversity might apply a state choice-of-law rule that requires the court to apply the tort law of a foreign nation.8 In a contract dispute, a federal court might apply foreign substantive law pursuant to an international agreement’s choice-of-law clause.9 In the realm of corporate law, a court might find, based on an application of the internal affairs doctrine,10 that a foreign nation’s Transnational Litigation: Foreign Courts, Foreign Judgments, and Foreign Law, 18 SW. J. INT’L L. 31, 43-44 (2011), which proposes a “simple” versus “contextualized” dichotomy in foreign law determination analogous to Roscoe Pound’s “law in books” versus “law in action” paradigm. 5. See, e.g., Portland Gen. Elec. Co. v. Bureau of Labor & Indus., 859 P.2d 1143 (Or. 1993) (establishing a standard methodological framework for statutory interpretation in Oregon); see also Abbe R. Gluck, Statutory Interpretation Methodology as “Law”: Oregon’s Path-Breaking Interpretive Framework and Its Lessons for the Nation, 47 WILLAMETTE L. REV. 539, 540 (2011) (discussing the Portland General Electric framework). 6. See infra notes 15-19 and accompanying text. 7. See Matthew J. Wilson, Demystifying the Determination of Foreign Law in U.S. Courts: Opening the Door to a Greater Global Understanding, 46 WAKE FOREST L. REV. 887, 893-95 (2011). 8. See, e.g., McGee v. Arkel Int’l, LLC, 671 F.3d 539 (5th Cir. 2012) (applying Louisiana choice- of-law rules to determine that Iraqi tort law governed a wrongful death suit brought by the Texas-resident parents of a U.S. servicemember killed in Iraq due to the alleged negligence of a Louisiana-domiciled government contractor). 9. See, e.g., Medline Indus. Inc. v. Maersk Med. Ltd., 230 F. Supp. 2d 857 (N.D. Ill. 2002) (finding that English law governs a breach of contract claim, pursuant to Illinois state choice-of-law rules governing the application of choice-of-law clauses in contracts). 10. See, e.g., RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 302 (1971); see also Frederick Tung, Before Competition: Origins of the Internal Affairs Doctrine, 32 J. CORP. L. 33 (2006) (providing background on and discussing the history of the internal affairs doctrine). 304 intersystemic statutory interpretation procedural requirements govern a shareholder derivative suit.11 Even the direct application of certain federal statutes may require U.S. courts to interpret foreign law: for example, under the anti-bribery Foreign Corrupt Practices Act,12 a defendant may present the affirmative defense that an allegedly improper payment to a foreign official was “lawful under the written laws and regulations of the foreign official’s . country.”13 A federal court might also be called upon to review federal agencies’ interpretations of foreign law in the context of administrative adjudication.14 As a general matter, various policy arguments militating in favor of applying foreign law in litigation in domestic forums have been advanced, including international comity,15 reciprocity,16 predictability,17 fairness,18 and discouragement of forum shopping.19 In the United States, the process by which federal courts interpret foreign law is set out in Rule 44.1 of the Federal Rules of Civil Procedure: 11. See, e.g., In re BP P.L.C. Derivative Litig., 507 F. Supp. 2d 302 (S.D.N.Y. 2007) (finding that English law governed whether a shareholder had standing to bring a derivative suit on behalf of a U.K.-domiciled firm). 12. 15 U.S.C. §§ 78m(b), (d)(1), (g)-(h), 78dd-1 to -3, 78ff (2006). 13. 15 U.S.C. § 78dd-2(c)(1). 14. See, e.g., Kaho v. Ilchert, 765 F.2d 877 (9th Cir. 1985) (affirming the district court’s reversal of a decision by the U.S. Board of Immigration Appeals on the basis of an erroneous interpretation of the law of customary adoption in the Kingdom of Tonga). 15. On comity generally, see Joel R. Paul, Comity in International Law, 32 HARV. INT’L L.J. 1 (1991). 16. See GARY B. BORN & PETER B. RUTLEDGE, INTERNATIONAL CIVIL LITIGATION IN UNITED STATES COURTS 688 (4th ed. 2007) (“One reason that U.S. courts should respect the sovereignty of foreign states [by applying foreign law] . is to increase the prospects that foreign states will respect U.S. sovereignty.”). 17. See, e.g., 1 JOSEPH H. BEALE, A TREATISE ON THE CONFLICT OF LAWS 4 (1935) (“International trade could not be carried on as has now become necessary unless the trader could be assured that he would not be placed absolutely at the mercy of the vagaries or unknown requirements of the local law, but would find a well-established body of law to protect his rights.”). 18. See Am. Banana Co. v. United Fruit Co., 213 U.S. 347, 356 (1909) (“For another jurisdiction, if it should happen to lay hold of the actor, to treat him according to its own notions rather than those of the place where he did the acts . would be unjust . .”). 19. See BORN & RUTLEDGE, supra note 16, at 689-90 (“[M]ost . choice of law rules . seek to ensure that different jurisdictions will apply the same substantive law to the same dispute. This reduces the risk of ‘forum shopping’ . .”); accord Giesela Rühl, Methods and Approaches in Choice of Law: An Economic Perspective, 24 BERKELEY J. INT’L L. 801, 807-16 (2006) (“Essentially four [economic] arguments can be made [for applying foreign law rather than the law of the forum]: first, application of foreign law enhances pre-litigation predictability, second, it discourages forum shopping, third, it promotes regulatory competition, and fourth, it preserves the comparative regulatory advantage of foreign jurisdictions.”). 305 the yale law journal 122:303 2012 A party who intends to raise an issue about a foreign country’s law must give notice by a pleading or other writing. In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court’s determination must be treated as a ruling on a question of law.20 Under the current procedural regime, which in some respects parallels the “all available data” test employed by federal courts when interpreting state law in the Erie context,21 judges called upon to interpret foreign statutes have relied on a wide variety of sources. These sources have included foreign statutory text,22 foreign case law,23 and secondary materials.24 In contrast to the state law determination process, however, expert testimony has also been a widely employed method of determining the content of foreign law; indeed, many courts regard expert testimony as the primary method for understanding foreign law.25 In addition to basing a determination on the pleadings and 20.
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