[A-List] US imperialism: Germany & extraterritoriality

["Michael Keaney" <michael.keaney@xxxxxx>]

U.S. courts like to try foreign companies
Class-action suits against German businesses called 'legalized bribery'

By Joachim Jahn
Frankfurter Allgemeine Zeitung Weekly, March 28 2003

European companies have to live with "omni-responsible U.S. courts" even
though the "system of excessive jurisdiction and particularities" of U.S.
civil law proceedings amounted to "legalized bribery," Stuttgart lawyer Rolf
A. Schütze said recently before Berlin's Legal Study Society. Schütze is an
honorary professor at the University of Tübingen and a partner at the German
law firm Thümmel, Schütze & Partner.
With a view to the class-action suits which former forced laborers,
apartheid victims and descendants of Namibia's Herero tribe have conducted
against German companies in the United States, Schütze spoke of a "simmering
legal conflict" between the two countries.
The list of examples could easily be extended and has continued to grow
since U.S. "victim lawyers" have discovered the immense profitability of
class-action suits. In addition, German lawyers are now also rallying German
investors on behalf of proceedings against German issuers in the United
States.
Schütze also criticized the German government, expressing surprise at the
government's relaxed stance toward "this degradation of the German
administration of justice and the moral slap from Californian lawmakers."
In 1999, California's parliament claimed the right to decide on the claims
of Holocaust victims and their descendants - which are subject to German
law - although they had no relation to California. The reasoning: The
victims should be allowed fair proceedings to push through their claims.
A year earlier, the state of California had enacted a law on jurisdiction
over insurance claims from insurance policies concluded in Europe between
1920 and 1945.
Schütze called "impudent" this "chauvinistic expression of U.S. legal
superiority" by local lawmakers.
According to the German lawyer, these lawsuits would have had little chance
of success in Germany, yet they lacked any relation to the United States.
After all, he said, the United States had nothing to do with bringing
Russian and Polish forced laborers to Germany, had no involvement in the
Herero war in Southwest Africa or any influence on German banks' lending
policy toward South Africa.
Nonetheless, the plaintiffs were drawn to America. "The weaker the case, the
greater the lure of U.S. courts," Schütze noted, adding that there were
several reasons for this "forum shopping." For one, the right to a jury
decision is usually a constitutional right in the United States, and these
"lay judges" tend to favor plaintiffs, for example in the product liability
case of a German paraplegic who was himself to blame for his accident.

Schütze also pointed to the influence of judges, who are directly elected in
23 U.S. states and often get their election campaigns financed by lawyers.
In addition, pre-trial discovery, which allows lawyers for both parties to
demand evidence and question potential witnesses, is not allowed under
German law because it is considered to prejudice the attorneys. Finally, the
level of damages can largely be estimated, and punitive damages come on top.

Plaintiffs carry basically no risk: Lawyers fees depend on their success,
and those who lose a case don't even have to reimburse the opponent for his
costs.

Even where jurisdiction of U.S. courts for foreign cases is not ensured by
special laws - such as in California - the reasoning is pretty easy.
According to Schütze, all it takes is the service of a writ to business
people who happen to be on holiday, at a conference or simply changing
planes in the relevant U.S. jurisdiction.

In one case, a defendant merely flew over the state of Arkansas when a
co-traveler handed him a legal document. In most cases, courts base their
jurisdiction on companies' U.S. business activities. In the case of the
forced laborer suits, the courts referred to a law of 1789 which created
jurisdiction for "acts of piracy" on world seas.

Yet when foreigners sue U.S. companies, Schütze said, U.S. courts like to
send the plaintiffs back to their own legal authorities, which are "closer
to the case matter."