Federalism, Forum Shopping, and the Foreign Injury Paradox

ABSTRACT This Article explores the contours of state regulatory power in the foreign injury context. The Supreme Court has long declined to question forum choice in domestic cases, apparently concluding that any other response would be inconsistent with our federalism. But move the injury offshore and the judicial deference to state regulatory supremacy evaporates. Federal judges subject forum choice in transnational tort actions to exacting scrutiny, routinely dismissing such claims on forum non conveniens grounds with no examination of the state interests at stake. This Article first considers whether the offshore nature of a foreign injury diminishes or even extinguishes traditional state regulatory interests in a dispute. In fact, the states retain substantial deterrence interests in such personal injury claims. From a state's perspective, it is often irrelevant whether an out-of-state injury occurs in a sister state or a foreign state. This Article then demonstrates that neither the Constitution nor customary international law supports the federal courts' use of forum non conveniens in these international diversity actions. The federal forum non conveniens doctrine should thus be abandoned as inconsistent with American federalism. TABLE OF CONTENTS INTRODUCTION I. THE DOMESTIC FORUM SHOPPING SCENE II. FORUM SHOPPING BY FOREIGN INJURY LITIGANTS III. THE RELEVANCE OF FEDERALISM TO INTERNATIONAL FORUM CHOICE OVERSIGHT A. Substantive State Interests in Foreign Injuries B. External Limits on State Jurisdiction to Prescribe 1. Customary International Law a. State Jurisdiction to Prescribe Under the Restatement b. Applying the Restatement to Global Goods Litigation 2. The Foreign Affairs Powers 3. Due Process and Full Faith and Credit CONCLUSION INTRODUCTION Forum shopping in the United States is a "national legal pastime." (1) It comes in various styles depending on whether the shopper is the plaintiff or the defendant. We offer horizontal forum shopping, allowing litigants to choose among the state courts or federal district courts if diversity jurisdiction exists. We offer vertical shopping, allowing eligible litigants to choose between state and federal court. Sometimes we even allow litigants to shop more than once in a single case. Consider Piper Aircraft Co. v. Reyno, (2) involving a plane crash in Scotland. The Piper plaintiffs engaged in some aggressive horizontal shopping--though the case could logically have been brought in Pennsylvania, Ohio, or even Scotland, the Piper plaintiffs settled on California state court. (3) Defendants then countered with a vertical-horizontal shopping stratagem, first removing the case to federal district court in California and then obtaining transfer "in the interest of justice" and "[f]or the convenience of parties and witnesses" to a federal court in Pennsylvania. (4) Shortly thereafter the defendants found that Pennsylvania was not so convenient after all and successfully moved to dismiss the case on forum non conveniens grounds. (5) The judiciary is openly critical of forum shopping in general and plaintiff forum shopping in particular. (6) Like indulgent parents, however, the federal courts turn a blind eye toward horizontal forum shopping by plaintiffs in domestic disputes. (7) This tolerance encompasses not simply shopping among the various state courts, but horizontal forum shopping in federal diversity actions as well. (8) Vertical shopping, on the other hand, provokes overt hostility from the federal bench. (9) Fueled by decades of Erie indoctrination, (10) the federal courts have set about to eliminate incentives and opportunities for successful vertical shopping by domestic litigants. (11) Erie Railroad Co. v. Tompkins (12) was itself a case about vertical forum shopping. And the cases following in Erie's wake such as Guaranty Trust Co. …