‘Territoriality’ plays a central role under our current paradigm of jurisdictional thinking. Indeed, a State’s rights and responsibilities are largely defined by reference to territoriality. States have exclusive powers in relation to everything that occurs within their respective territories, and this right is combined with a duty to respect the exclusive powers of other States over their respective territories.
The post The concept of ‘extraterritoriality’: widely used, but misguided and useless appeared first on OUPblog.
By Stacie Strong
To paraphrase the Bard, the course of class arbitration never did run smooth. Ever since its inception in the early 1980s and 1990s, the development of class arbitration has been both complicated and controversial. For example, in 2003, the US Supreme Court decision in Green Tree Financial Corp. v. Bazzle, was read as providing implicit approval of class arbitration and resulted in the massive expansion of the procedure across the country. Seven years later, the Court took the opposite tack and decided to curtail the procedure with its opinion in Stolt-Nielsen S.A. v. Animal Feeds International Corp., which was followed by equally problematic decisions in AT&T Mobility LLC v. Concepcion, Oxford Health Plans LLC v. Sutter, and American Express Co. v. Italian Colors Restaurant.
One result of the Supreme Court’s recent activity has been the diminution in the number of class arbitrations that are being filed with arbitral institutions. However, the Court’s decisions have done little to silence either the policy debates or the litigation surrounding class arbitration. Indeed, approximately 80 federal court opinions and 40 state court opinions have been rendered on this subject in the last 12 months alone, which suggests that the United States’s struggle with large-scale arbitration is far from over.
Most observers recognize that the debate about class arbitration in the United States is closely tied to concerns about judicial class actions. However, other countries are beginning to expand the number and type of mechanisms used to provide relief for large-scale legal injuries at precisely the same time that the United States is pulling back from class actions and arbitrations. These other legal systems have created a variety of means of addressing mass injuries, including several types of large-scale arbitration. Furthermore, efforts to adopt large-scale arbitration in other jurisdictions typically do not generate the same type of animosity and opposition that is seen in the United States. This phenomenon suggests that there is much that the United States can learn by studying the mechanisms used in these other legal systems.
One jurisdiction that has come out strongly in favor of large-scale arbitration is Brazil, which has created a constitutional right to large-scale arbitration in labor disputes. The Brazilian legislature is also currently contemplating a bill (No. 5139/2009) that would extend the right to large-scale arbitration to other types of mass legal disputes. In many ways, Brazilian acceptance of class and collective arbitration is unsurprising, since Brazil also embraces various types of large-scale litigation. However, US courts and policymakers could find it useful to consider the way in which Brazil differentiates between matters that are appropriate for court and matters that are appropriate for arbitration, since some of these analyses may also be relevant in the United States.
Spain also provides for large-scale arbitration, although the Spanish procedure is statutory rather than constitutional in nature. The Spanish approach involves a non-representative collective procedure that addresses many of the concerns commonly enunciated by respondents, particularly with respect to the issue of consent. Because the Spanish statute on collective arbitration is limited to consumer disputes, the legislature was able to tailor the mechanism narrowly to suit the needs of the participants. This type of subject-specific approach could prove instructive to those in the United States who are concerned about the problems associated with a trans-substantive procedure or with questions of consent.
Some commentators have suggested that class arbitration in the United States has experienced difficulties because the procedure was created through non-democratic (i.e. judicial) means rather than through legislative measures. This theory would discount the usefulness of the Brazilian and Spanish procedures because they were implemented through democratic processes. However, other countries have adopted large-scale arbitration through judicial action and have nevertheless avoided the kinds of ongoing difficulties seen in the United States.
The Republic of Colombia was the first jurisdiction outside the United States to adopt large-scale arbitration through judicial means. Both the Supreme Court of Justice and the Constitutional Court have suggested that class claims are arbitrable, and at least one arbitral tribunal is known to have rendered an award in a group action. Although other jurisdictions, most notably Canada, have declined to adopt class arbitration through judicial means, Colombia’s acceptance of class arbitration suggests that the United States is not an outlier in terms of the way in which class arbitration has developed.
This conclusion is borne out by the fact that several other legal systems have authorized large-scale arbitration through judicial measures. For example, the German Federal Court of Justice authorized arbitration of shareholder disputes in 2009, after having decided against doing so in 1996. The earlier decision was based on the belief that the legislature should be the one to determine whether these types of issues were arbitrable. However, when the democratically elected officials failed to take action one way or another, the judicial branch decided to step in. As a result of the 2009 decision, the German Institution of Arbitration (DIS) created its Supplementary Rules for Corporate Law Disputes (DIS-SRCoLD), which allow for a unique type of non-representative collective arbitration. Although the rules are aimed primarily at so-called “traditional” multiparty disputes (i.e., those that involve only a handful of participants), some of the procedural elements could be usefully adopted in matters involving larger numbers of parties.
Large-scale proceedings have also been adopted by arbitral tribunals acting without the guidance of a court. The most well-known example of this phenomenon was seen in the context of investment arbitration. In 2011, the arbitral tribunal in Abaclat v. Argentine Republic allowed 60,000 Italian bondholders to join together and bring their claims in a single proceeding. The resulting procedure has been characterized as “mass” arbitration rather than class arbitration, since it contains both representative and aggregative features. Although no other mass arbitration has yet been seen in the investment realm, the award in Abaclat was cited with approval by the tribunal in Ambiente Ufficio v. Argentine Republic, which involved ninety claimants.
As the preceding suggests, large-scale arbitration takes many forms and arises in many different ways. Although the US Supreme Court has attempted to curtail one particular mechanism (class arbitration), there are a multitude of other means of allowing large numbers of similarly-situated parties to join together to assert their claims. Indeed, parties in the United States have already begun to experiment with various types of non-class arbitration. For example, some parties have successfully brought large-scale, non-representative (collective) arbitrations, while other parties have resorted to filing large numbers of bilateral arbitrations simultaneously so as to drive respondents to the settlement table. These techniques underscore the need for scholars, policy-makers and practitioners to continue to debate and discuss the various issues relating to large-scale arbitration in the United States. In so doing, a comparative analysis would be beneficial, since the best solution to these problems may be found in procedures developed in other jurisdictions.
Stacie Strong is Associate Professor of Law at the University of Missouri School of Law. She is the author of Class, Mass, and Collective Arbitration in National and International Law and Research and Practice in International Commercial Arbitration: Sources and Strategies.
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The post Class arbitration at home and abroad appeared first on OUPblog.
By Elvin Lim
In 2004, the Republican’s hot button political issue du jour was same-sex marriage. 11 states approved ballot measures that defined marriage as a union between a man and a woman. Last week, a federal judge struck down California’s Proposition 8 (passed in 2008) because it “fails to advance any rational basis for singling out gay men and lesbians for denial of a marriage license.”
However, Republicans politicians are not taking the bait to revisit this hot button political issue, despite Rush Limbaugh’s encouragement. One explanation is that Republican voters are already angry and motivated this year, and they are concerned about the economy and jobs. There is no need for Republicans to exploit a get-the-vote-out issue this year.
But, that is exactly what some Republicans have done, just not on the marriage issue. Instead, prominent Republicans like Senator Lindsay Graham and presidential hopeful Tim Pawlenty are directing their attention this year on repealing the 14th Amendment, and in particular the provision guaranteeing birthright citizenship.
So is it or is it not “the economy, stupid,” for Election 2010? I think it’s about something even bigger than the economy. It’s about the power of the federal government, which increased dramatically with the passage of the 14th Amendment.
Consider that the first sentence of Section 1 of the 14th Amendment (“All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside”), which established the priority of national citizenship over state citizenship. While there were references to citizenship in the Constitution of 1789, the Framers did not define the content of citizenship in part because there was little need, at the time, to consider the idea of national citizenship as opposed to state citizenship. The nation as we know it today was not fully developed until the Civil War.
Read in totality, the first Section of the 14th Amendment isn’t so much a grant of birthright citizenship – the content of the first sentence – but a constraint on states’ rights, the point of the second: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.” We know this to be historically accurate. Since the 1930s, the “equal protection” and “due process” clauses have been used against state actors to extend the scope and depth of federal governmental powers.
Fast forward to the 2010, and it is no coincidence that almost everything up for political debate today and in November has something to do with the power of federal government versus states’ rights, whether it be Arizona taking it upon itself to write its own immigration policy and the Obama administration insisting that immigration policy is a federal prerogative, or Missouri primary voters rejecting the federal (“Obamacare”) mandate that all individual citizens must buy health insurance, or Californians deciding in Proposition 8 that only marriages between a man and a woman are valid in their state. If the unifying thread in these agitations is the perception of a bloated, out-of-control federal government, it is also worth noting that the major resource for the aggrandizement of the government has been the 14th Amendment.
The Republican Party of 2010 is not the Republican Party of 1868, the year the 14th Amendment was ratified. The GOP, back then, believed in federal preemption of states’ rights. Democrats were the ones who were wary of federal power. The Rep
