Workshop jointly organized by the Robert Schuman Centre for Advanced Studies in cooperation with the New York University School of Law and the Vanderbilt School of Law, dedicated to the memory of professor Richard A. Nagareda.

The workshop addressed the array of problems that appeared for civil procedure, substantive law, judicial cooperation, and the legal profession as the result of the emergence of global litigation – characteristically, lawsuits over some form of market activity that transcends the boundaries of a single territory.  Attention to this topic was especially timely in light of the emergence of significant interest on the part of Europeans in the formulation of processes for the handling of civil claims on a mass basis.  With only a few exceptions, nonetheless, the general trend in mass claim processes within Europe has been to steer clear of opt-out class actions on the U.S. model.

The workshop placed itself in the midst of general issued raised by the phenomenon of global litigation:

– How has the introduction of mass litigation processes in Europe affected litigation strategies – for example, the selection of disputes to be litigated, or the use of European fora for suit?

– What are the implications of global litigation and mass litigation processes for the legal profession in both Europe and the U.S. – in particular, the plaintiffs’ bar?

– What considerations influence strategic choices with respect to litigation that has a global dimension?  Specifically, what role do the following matters play:  principles for the transnational recognition of judgments; choice of law; the prospects, in some European systems, for mass litigation at the behest of a collective organization; the possibility of plaintiff classes or other kinds of claimant groupings that are subdivided by nation; and the available modes of financing for litigation?

– What options are available for cooperation among judges in different nations when global litigation is not capable of being centralized in the courts of any single jurisdiction?  To what extent can such cooperation be formalized, via international convention or otherwise?

Discussion of these overarching issues was structured by reference to three hypothetical problems drawn from real-world events that, in turn, highlighted the difficulties of legal regulation of harms that have transnational components.  In each case, the harms highlighted conflicts in the underlying substantive and procedural laws of all the countries involved.  Each of these hypothetical situations were addressed from three perspectives: (a) that of a practical lawyer seeking to advance the interests of a client in litigation; (b) that of a judge seeking to achieve the best result for society within the framework of existing legal rules, and (c) that of a rule-maker who has the power to write new or revised rules to achieve better outcomes going forward.

Summary of Hypotheticals

(1) The first hypothetical scenario concerns global litigation concerning securities fraud.  Global Bank is a global financial institution based in the E.U. with wholly-owned subsidiaries that operate in various nations across the world.  One such subsidiary is accused of engaging in various fraudulent activities in connection with the collapse of the subprime mortgage market in the U.S.  The subsidiary is a substantial operation and is among the largest mortgage brokers in the U.S.  It is staffed in part by representatives of the E.U. parent bank.  The various underlying mortgages are issued in the U.S., but the disclosures to the investing public are made by Global Bank, from its worldwide headquarters in the E.U.  What are the prospects for litigation to be brought on behalf of all purchasers of Global Bank shares who allege that they have suffered financial losses as a result of the disclosure of the fraud in connection with the U.S.-based subsidiary?  Do (or should) those prospects depend upon a legal determination of where the underlying fraud occurred?  How – if at all – could litigation on behalf of all affected shareholders be brought?  Would litigation instead need to take the form of multiple actions for different subgroups of shareholders in the courts of different nations – say, depending upon the various shareholders’ place of residence or where they purchased Global Bank shares?  What mechanisms are available for coordination of such multi-nation proceedings?  What effect do choices as to procedural design stand to have upon the likely terms of settlement for the dispute?  This first hypothetical is drawn, in part, from the situation presented in Morrison v. National Australia Bank, a case that the U.S. Supreme Court is expected to decide shortly.  But the problem of transnational financial fraud litigation is by no means confined to the U.S. setting.

(2) The second hypothetical scenario focuses on prescription drug litigation with transnational dimensions.  Beta Corporation is a major pharmaceutical firm based in the E.U., with corporate affiliates in various regions worldwide.  Beta Corporation develops and its affiliates then market worldwide (with approval from relevant regulatory bodies) a new prescription drug designed to reduce cholesterol levels in the human body.  The drug is effective for its intended purpose and quickly becomes a huge commercial success.  After the product is marketed on a widespread basis, however, physicians across the world start to report instances in which some patients among the millions who were prescribed the drug unexpectedly suffer heart attacks, from which some such patients die.  Some medical experts believe that a general causal relationship may exist between heart attacks and consumption of the drug – specifically, that everyone who consumed the drug stands at an elevated risk of a heart attack, when viewed from an aggregate perspective.  The patients who were prescribed the drug, however, already had elevated cholesterol levels in their bodies, a condition well understood to increase the risk of heart attack.  As a result, there is considerable controversy over specific causation in individual cases.  In addition to claims for personal injury, moreover, additional claims allege various forms of economic injury – for instance, artificial inflation in the price of the drug due to the alleged lack of adequate disclosure of information concerning its risks or related claims of overcharge brought by third-party insurers or other entities that paid for consumers’ drug prescriptions.

(3)  The third hypothetical scenario looks to transnational antitrust litigation.  The setting is the airfreight shipping industry.  Plaintiffs are purchasers of airfreight shipping services who allege that defendants – various airlines that provide such shipping services – have conspired to fix prices for their services through the imposition of surcharges and other anticompetitive behaviors. The shipment routes in question include thousands of routes throughout the world, including flights to, from, and within both the U.S. and the E.U.  Litigation concerning the alleged price fixing takes place in the aftermath of a coordinated global antitrust investigation launched by European and U.S. competition authorities, among other public enforcement bodies worldwide.  The reports generated by the investigation precipitate significant numbers of cases – including multiple actions that seek to proceed on some form of aggregate basis – in courts spread across the various nations of the E.U. and both state and federal courts in the U.S.  This scenario thus raises questions about judicial coordination of the various pending lawsuits (both as to information gathering and as vehicles for settlement), the possibility of settlement in a given forum by some subset of defendants or plaintiffs, the potential preclusive effect of such a partial settlement, and the handling of the litigation overall among the many plaintiffs’ law firms involved.