Before Business, Do Due Diligence

Feb 282012
 

Attorneys routinely assist clients in disputes with business entities; however, when the business entity involved is a foreign-based company or subsidiary, successfully resolving the dispute may be more complicated than you think.

Many foreign companies have offices and assets in the United States, but many do not have substantial US-based holdings (i.e. cash and other assets).  When this occurs, American plaintiffs often have limited options.

Many US plaintiffs sue a foreign-based company in a United States court.  If the plaintiff wins, there are legal safeguards to assist in collecting their judgment, but they are not always beneficial.  Often, even after the plaintiff attempts to enforce the judgment under international treaties, the plaintiff is left empty-handed.

Before entering a substantial transaction or business relationship with a foreign entity, it can be beneficial to dutifully research whether the company is foreign-based and whether or not they have a substantial presence within the United States.  This type of due diligence is especially important when conducting transactions on-line.

If you find yourself in a dispute with a foreign-based entity, it may be beneficial to consult a knowledgeable attorney dealing in litigation with foreign-based companies.   They will be able to help you determine whether you have a high probability of collecting a judgment, should you be victorious in court.

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The information in this blog post is not intended to serve as legal advice or as a guarantee, warranty, or prediction regarding the outcome of any legal matter.  The information is subject to change and may be incomplete and/or contain errors.  Do not rely on this information without consulting a qualified attorney to discuss the specific facts relating to your case.

Movin’ On Up?

Feb 242012
 

Here is a brief update on the multi-jurisdictional dispute between Chevron and Ecuadorian plaintiffs:

You might remember that Ecuadorian plaintiffs accused Chevron (well, technically Texaco until Chevron bought Texaco) of dumping waste and causing illness in their country.  The case moved from the United States to Ecuador and back to the United States.  Each side has been trading shots, with Chevron claiming it did not receive a fair trial in Ecuador.

As I previously reported, Chevron is faced with an $18 billion judgment by an Ecuadorian court.  In an effort to block enforcement of the judgment, Chevron got a US arbitration firm to freeze the Ecuadorian judgment.  Of course, this week the Ecuadorian court rejected the arbitrator’s decision (surprise!).

The dispute may be movin’ on up… a federal court has referred Chevron’s appeal to the United States Supreme Court.

This saga is long from over and could impact the liability of United States based companies operating abroad.  This saga is long from over…

[A link to the news sans legal analysis can be found here.]

More Developments in the Chevron Case

Sep 152010
 

As Chevron continues to fight an Ecuadorian lawsuit in US courts, the Ecuadorian plaintiffs have begun fighting Chevron using the same tactics.  Ecuador has asked a San Francisco court to allow discovery regarding an allegedly secretly-videotaped ex parte conversation with an Ecuadorian judge.

Businesswire covers the news as does Daniel Fisher’s blog on Forbes.com.

Ecuador and the Ecuadorian plaintiffs argue, as Businesswire suggests, that Chevron has engaged in extensive fraud, including attempting to trap a judge in scandal.  The attorney for Ecuador claims that both Chevron and Ecuadorian agents met ex-parte with court officials, and that it does not violate any Ecuadorian legal regulations.

The plaintiffs may indeed show fraudulent activity by Chevron’s agents; however, Chevron’s fraud theory is not solely based on the existence of ex-parte communication, but whether there was collusion between the Ecuadorian court and the plaintiffs/plaintiffs’ attorneys on key elements of the trial, namely the court-appointment of a crucial expert witness.

The End of Enforcement of Foreign Defamation Judgments?

Mar 012010
 

It could happen, primarily in reaction to the United Kingdom’s hostile libel laws.

England’s stringent libel law places the burden of proof on the defendant, making British courts  a desirable venue for defamation plaintiffs.  The result is expensive litigation and a unusually  high number of defamation judgments in favor of the plaintiff.  Parliament is currently reviewing England’s archaic libel law in reaction to inefficiency and foreign hostility.

The US Congress is considering prohibiting enforcement of foreign defamation judgments,  which is causing reverberations across the Atlantic.  According to the Washington Post:

“Over the years, England has attracted waves of aggrieved plaintiffs, from U.S. celebrities to  Ukrainian businessmen, who have sought to use English laws that make libel defense difficult  and expensive. (Welsh libel laws are the same as England’s; Scotland and Northern Ireland have their own procedures.) The burden of proof here is on the defendant, not the plaintiff — just the opposite of U.S. law. The U.S. Congress is considering legislation that would prohibit enforcement of libel judgments from outside the United States, a move aimed at England. The proposal follows the lead of several states, including New York, home to many prominent publishers, which have already adopted similar laws.”

Will either Parliament or Congress act?

The complete Washington Post article can be found here.