Tag Archives: litigation

Two Legal Changes Which Would Bolster Israel’s Protection of Whistleblowers

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Like many other jurisdictions around the world, Israel has long recognized the value of whistleblowers who report and expose illegal acts in their workplaces. Without such whistleblowers, it is almost certain that Israeli citizens and law enforcement would never have learned, for example, about alleged corruption in the Israel Tax Authority, municipalities, Israel Aerospace Industries, the Ministry of Transport and Road Safety, and others. In order to encourage more whistleblowers to come forward, Israel has developed several legal instruments, the strongest and most central being the Protection of Workers (Exposure of Offenses and of Harm to Integrity or to Proper Administration) Law (PoWL) (see here and here). The PoWL, originally enacted in 1997 and amended three times since then, civilly and criminally forbids employers from retaliating against employees for whistleblowing, and establishes an employee-friendly mechanism for the victims of such retaliation to seek damages. These cases are heard by Israel’s specialized Labor Courts. In addition to awarding compensatory damages, the courts are also authorized to order employers to pay exemplary (that is, punitive) damages, and may also invalidate the whistleblower-plaintiff’s dismissal, or order that the whistleblower be moved to “another appropriate position” in the workplace.

While at first glance the PoWL seems to offer strong protections for whistleblowers, the PoWL suffers from two major weaknesses that significantly compromise its effectiveness. These problems must be addressed if the PoWL is to provide whistleblowers with adequate protections against retaliation: Continue reading →

Legal Remedies for Grand Corruption

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In too many nations, ruling elites rob the populace on a grand scale, awarding friends and relatives lucrative government contracts, siphoning off revenues from oil and other natural resources, even writing checks to themselves on the central bank.  Curbing such “grand corruption” will require much: an active, informed citizenry; coordinated international action; vigorous diplomacy; shrewd application of international sanctions.

A new volume from the Open Society Justice Initiative, pictured below, describes how civil society can mobilize courts of law in the struggle.  It recounts efforts that range from using international tribunals to force government to address corruption, as the Nigerian NGO SERAP’s case before the court of Justice of the Economic Community of West African States illustrates, to bringing suit against a kleptocratic ruler in a foreign jurisdiction, as Sherpa and TI-France did against Equatorial Guinean Vice President Teodoro Obiang, to the creative use of domestic law doctrines common to most legal systems to force wrongdoers to answer for their crimes in their own courts.

Grand corruption is behind many of the globe’s most pressing problems: massive environmental degradation, gross human rights abuses, large-scale emigration. Taming it must be a priority for the global community.  Legal Remedies for Grand Corruption offers an important set of tools for doing so.

Legal Remedies for Grand Corruption

CREW’s Long-Shot Emoluments Clause Lawsuit Against Trump: Calculated Risk or Reckless Gamble?

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After the events of the last ten days, worrying about the potential conflicts of interest created by the Trump organization’s business dealings with foreign governments seems almost quaint. It appears that under the Trump Administration, constitutional crises don’t get resolved, they just get overshadowed by bigger constitutional crises; such are the strange times in which we live. But I did want to return to the topic I wrote about a couple of weeks ago, concerning the pending lawsuit brought by the Citizens for Responsibility & Ethics in Washington (CREW) alleging that the Trump Organization’s business relationships with foreign governments violate the Constitution’s Foreign Emoluments Clause. In my post a couple of weeks ago, I predicted that U.S. courts are likely to toss the suit out on jurisdictional grounds, without reaching the merits of the claim. That assessment appears to be shared by the overwhelming majority of legal experts who have weighed in (see here, here, here, here, here, and here), though the consensus is not quite universal.

Several people have suggested to me that even if the suit has little chance of success, it was good that CREW filed it. They’ve offered two arguments for this assessment: First, even if there’s only a very small chance of success, the costs of bringing the suit are relatively low, and the benefits if the suit does end up succeeding are enormous—so what’s the harm in trying? Second, the mere act of filing the suit, even if it’s ultimately dismissed on jurisdictional grounds, will generate attention to the underlying constitutional and ethical issues, and help both educate and mobilize the citizenry. My colleague Larry Tribe, who is one of the parties who filed the CREW brief, laid out this position clearly and succinctly in an interview shortly after the brief was filed:

Litigation can help bring important principles to light… It helps me teach my students, and it performs an educational function vis-à-vis the public. Of course, I don’t take on causes that I feel confident I will lose purely for educational purposes. But win or lose, we’re going to help educate the public on something that’s very important.

Much as I wish those arguments were true, and much as I wish the CREW lawsuit had some chance of succeeding, I respectfully and reluctantly disagree. I hope that events will prove me wrong, but at the moment I fear that CREW’s decision to file this lawsuit was not only a long shot, but was a serious tactical blunder that will probably hurt the cause overall. Continue reading →

How Corrupt Are Your Courts? Too Corrupt To Be Fair?

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In complex transnational litigation, ensuring the rights of all parties is especially challenging. Consider the following situation: A plaintiff brings a lawsuit against a US multinational in US court, alleging wrongful conduct in some foreign country; the defendant corporation moves to dismiss the case on the ground that the courts of the country where the alleged conduct took place are a more appropriate forum for adjudicating the suit, and the plaintiff should therefore be required to pursue the suit there; but the plaintiff opposes the motion to dismiss on the grounds that the foreign country’s courts are so corrupt that it would be impossible to get a fair trial. What should the US court do when confronted with that sort of situation?

The technical legal term for a motion to dismiss a case because the plaintiff ought to file the suit in a different (and more convenient) judicial forum is the forum non conveniens motion. To successfully win on such a motion in a US federal court, the defendant must convince the court that an alternative forum would provide “basic fairness.” When the alternative forum is the judiciary of a foreign country, plaintiffs sometimes try to oppose these motions by pointing to judicial corruption in the foreign forum. But as one court highlighted, “the argument that the alternative forum is too corrupt to be adequate does not enjoy a particularly good track record.” Indeed, as I noted in my previous post on the Chevron-Ecuador litigation, the district judge in that case rejected the plaintiff’s claim that Ecuadorian judicial corruption made it impossible to get a fair trial in Ecuador, remarking that “the courts of the United States are properly reluctant to assume that the courts of a sister democracy are unable to dispense justice.” Even when confronted with clear and undisputed evidence of corruption in a foreign court, US courts have generally been unwilling to accept this as a sufficient reason to keep the case in US court. (In one case a US court reaffirmed a forum non conveniens decision even after the plaintiff successfully bribed a Mexican judge to have the case sent back to the US court.) Consistent with this deferential approach, there are very few cases where a US court has found a foreign forum inadequate due to credible allegations of widespread judicial corruption. (There are admittedly a handful of such cases, including Bhatnagar v. Surrendra Overseas, Ltd., in which the court found that the extensive delay, unreliability, and general corruption of the Indian judiciary made it an inadequate forum for the plaintiff.)

By contrast, other jurisdictions take allegations of foreign judicial corruption more seriously as a reason not to dismiss a lawsuit and insist that it remain in the forum of the plaintiff’s choice. Notably, although the forum non conveniens analysis is very similar in US and Canadian courts, Canadian courts have been more willing to find foreign forums inadequate because of pervasive corruption. For example, in Norex Petroleum Limited v. Chubb Insurance Company of Canada, a US court dismissed the case on forum non conveniens grounds, while the Canadian court took jurisdiction, denying the defendant’s forum non conveniens motion in light of the Canadian court’s finding that—even though every other factor weighed heavily in favor of Russia as the better forum—extensive judicial corruption in Russia would prevent the plaintiff from accessing a fair and impartial court. It’s certainly not the case that Canadian courts have been consistently receptive to these sorts of arguments—for example, a recent Canadian ruling found Guatemala an appropriate forum despite significant corruption concerns—but the contrast between Canada and the US demonstrates that the US courts’ “see no evil” approach is far from inevitable.

Although it may be helpful for the purposes of international comity for courts to presume that foreign judiciaries are fair, and there are legitimate reasons to dismiss a case in favor a foreign forum (such as easier access to evidence and witnesses), the reluctance of US courts to accept credible allegations of judicial corruption as a reason to deny a forum non conveniens motion likely goes too far. Respect for foreign courts is a good thing in principle, but in practice it can undermine the ability of plaintiffs to get a fair hearing. US courts should hesitate before dismissing cases to foreign forums when there are plausible claims of corruption for two reasons:  Continue reading →

US Courts’ Evaluation of Foreign Judicial Corruption: Different Stages, Different Standards

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Last August, a US appeals court may have finally brought to a close a case that the court described as “among the most extensively chronicled in the history of the American federal judiciary”: a lawsuit, initially filed in 1993, seeking damages for adverse environmental and health consequences of oil exploration and drilling by Texaco (later acquired by Chevron) in the Ecuadorian Amazon. Chevron and the plaintiffs each have their own version of the long, complicated, and contentious litigation. (For a concise, relatively balanced summary see here.) For present purposes, the essential facts are as follows: After eight years of US litigation, in 2001 Chevron persuaded a US court to send the case to Ecuador. In 2011, after an additional decade of litigation in Ecuador, the Ecuadorian courts ultimately found in favor of the plaintiffs, ordering Chevron to pay an $18.5 billion judgment (later reduced to $9 billion). Unfortunately for the plaintiffs, Chevron doesn’t have any assets in Ecuador, so the plaintiffs have been trying to enforce their judgment in a number of other jurisdictions, including the United States. In its August ruling, the US appeals court affirmed the district court’s 2014 holding that the Ecuadorian judgment could not be enforced in the United States because it was a product of fraud and corruption—including the shocking finding that plaintiff’s attorneys had bribed the judge with a promise of $500,000, and ghostwrote the multi-billion dollar judgment.

At first glance, there appears to be a contradiction, or at least a tension, between how the US courts treated allegations of judicial corruption in Ecuador at two different stages in the proceedings. After all, Chevron was able to successfully persuade a US court to send the case to Ecuador in 2001 because Chevron had successfully argued that Ecuador’s judiciary was sufficiently insulated from corruption to prevent injustice, yet in the most recent ruling, Chevron convinced the court not to enforce the judgment on the grounds of judicial corruption in an Ecuadorian court. But what might at first glance appear to be a contradictory set of rulings can be explained by the fact that US courts apply divergent standards when assessing judicial corruption at different stages of litigation.  Continue reading →

Corrupt Land Grabbing: A Cambodian Response

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For the vast majority living in developing nations the principal source of wealth is  land: whether the plot where their house is located, the fields they farm, or the forestlands that provide daily sustenance.  The first effects of economic development often show up as sharp increases in the value of this property.  Once valuable only as a place to locate a small village or to eke out a living in subsistence agriculture, land prices suddenly skyrocket when an airport, ocean terminal, or other significant new infrastructure is to be located nearby.  While offering neighboring property holders a chance to escape poverty, these investments can also put them at great risk.  Land registries in poor countries are often not well-kept and registry staff poorly paid, making the doctoring or forging of ownership records possible.

An example what can happen occurred recently near Sihanoukville City, Cambodia.  After plans to expand the city’s port were announced, a powerful official connected to the port authority began a campaign to evict residents of a nearby village from land they live on and which their families have farmed for generations.  Strategically placed bribes have given him a colorable claim to the land, and he has mobilized local authorities to try and force the residents off the property.

Although all too often Cambodians in a similar situation have surrendered, a group of villagers decided to fight and turned to Bunthea Keo, a young Cambodian public interest lawyer, for help.  Thea brought suit to halt the eviction, and in a paper written for the Open Society Foundations’ Justice Initiative he explains not only the legal theories behind the case but the organizational and financial issues involved in bringing a public interest suit on behalf of a large group of citizens in Cambodia.  It is the ninth in a series of papers the Justice Initiative has commissioned on civil society and anticorruption litigation following earlier ones on i) standing by GAB editor-in-chief Matthew Stephenson, ii) civil society litigation in India by Vidhi Centre for Legal Policy Director Arghya Sengupta, iii) private suits for defrauding government by Houston Law School Professor David Kwok, iv) private prosecution in the U.K. by Tamlyn Edmonds and David Jugnarain, v) damages for bribery under American law by this writer, vi) public trust theory by Professor Elmarie van der Schyff, a professor of law at South Africa’s North-West University, vii) private suits for procurement corruption by Professor Abiola Makinwa of the Hague University of Applied Sciences, and viii) international tribunals as a means for forcing government action on corruption by Adetokunbo Mumuni, Executive Director of the Social and Economic Rights Project.  All papers are available here.

What Others Can Take from Anticorruption Litigation in India

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As Ken Hurwtiz of the Open Society Justice Initiative explained here in February, the Justice Initiative has commissioned a series of papers on civil society and anticorruption litigation to, among other things, alert anticorruption activists and litigators in one country to legal developments in another they can adapt, if not borrow wholesale, for use in cases they are pursuing.

The second paper in the series, Arghya Sengupta’s “Anti-Corruption Litigation in the Supreme Court of India,” just released and now available on the JI web site, fills this bill admirably.   As Sengupta, Founder and Research Director of the Vidhi Centre for Legal Policy in Delhi, explains, there is much in the Indian experience of value to lawyers in other nations.  Since the late 1990s Indian courts have issued a series of extraordinary, precedent setting decisions to address the rampant corruption that infects India’s public sector.  In response to cases brought by civil society, they have ordered law enforcement authorities to investigate grand corruption cases they had been ignoring, appointed civil society monitors to ensure the investigations are faithfully conducted, and invalidated executive actions tainted by corruption.

Sifting through the massive number of precedents to find ones useful elsewhere would be a daunting task for the non-Indian jurist or researcher.  Sengupta’s paper makes it easy.  He organizes the cases by theme and summarizes the holdings of the key decisions.  He notes too where the courts’ decisions have had unintended effects and where critics argue that the cost of a court’s intervention may have exceeded the benefit. While litigators in other common law countries will find the paper an invaluable guide to cases they can lift directly, lawyers in civil law countries will be able to make great use of it as well, suggesting innovative arguments for a judicial solution to the chronic corruption problems affecting their nations.

Legal Strategies for Anticorruption Litigation by Civil Society

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GAB is pleased to welcome this guest post by Ken Hurwitz, Senior Legal Officer, Anticorruption, the Open Society Justice Initiative, announcing the publication of a series of papers on civil society and anticorruption litigation sponsored by the Initiative:

Those of us working with civil society groups that seek to combat transnational grand corruption have what might be called a love-hate relationship with the law. Yes, sometimes we can push magistrates and prosecutors to hold perpetrators to account, provided the right conditions are met. But at the same time we too often see existing law and law enforcement mechanisms protecting those responsible for high-level corruption:  bribing business actors, self-dealing kleptocrats, and the financial, legal and business intermediaries who often profit from and facilitate the crime.

This post introduces a series of papers the Open Society Justice Initiative  commissioned to explore how civil society can see that the law holds the corrupt to account rather than protects them from any sanction. Continue reading →

Individual FCPA Liability: A Risky Proposition for FCPA Enforcement Proponents?

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Both supporters and skeptics of aggressive enforcement of the Foreign Corrupt Practices Act have criticized the fact that the act is enforced much more often against corporations than against individuals. Some critics of FCPA enforcement often assert that it is unfair for the government to insist on corporations acknowledging criminal liability when the government is unwilling or unable to prosecute the individuals who committed the actual crimes. At the same time, supporters of aggressive FCPA enforcement argue that the failure to hold individuals personally liable, and to impose criminal penalties (including prison time) on those culpable actors undermines the FCPA’s deterrent effect. And they have a point: many doubt that fines and other monetary sanctions on corporations—at least at the levels that can be imposed under the FCPA—are sufficient to deter bribery, and there is evidence to support this claim.

Of course, individual FCPA liability is hardly novel; a number of past FCPA cases have included criminal convictions of individual company employees. But many have called for dramatically ramping up focus on individuals, and there are some signs that the U.S. Department of Justice may be heeding those calls. For someone like me, who tends to think that FCPA enforcement needs to be even more robust, this would seem like welcome news. And for the most part it is… but I do have a nagging worry, which may be entirely groundless, but that I want to try to flesh out in this post. The worry goes something like this: Continue reading →