U.S. discrimination law – Title VII extraterritoriality and forum non conveniens (Part 3)

I got a little nasty-gram overnight on yesterday’s topic, so I just want to be sure, to whoever sent it, that they understand how silly what the big corporation is proposing truly is.

To shorten this a bit and not bore my regular readers, let me reproduce the key part of the 1991 Civil Rights Act amendment again:

Let’s look at this really carefully: Congress is clearly saying that it means the United States civil rights laws cover an American who is working in a foreign country. The part I don’t include today is about how it must be for a company that is “controlled” by an American company, and the Radio Union case tests for whether those companies are considered a single employer.

But the meat of it is, Congress meant that the law applied to events that happen outside of America.

Along comes the big law firm with its Super Lawyers. (Super Lawyers is a controversial advertising club.) One of the Super Lawyers says that when a matter happens in another country, it is the subject of forum non conveniens (FNC), the “inconvenient forum” rule that I discussed yesterday and in April.

The Congress said that the U.S. District Court is available to extraterritorial incidents of Title VII violations, that is, when discrimination happens outside of America to U.S. citizens who work for the “controlled” company.

The Super Lawyer is saying that anything happening outside of America should not be in U.S. District Court because it is an “inconvenient forum” to the defendant, who in turn, by the way, is an American company that “controls” the foreign affiliate. (So, you would have to sue the American company outside of America.)

So what is the strategic value of putting forth an argument that, in other times and places, might be characterized as frivolous? (For example, if the roles were reversed and it was a pro se plaintiff arguing something which was 180 degrees opposite of what Congress had said?) It seems to me that it is a useful Hail Mary pass if you are trying to shut someone out of justice–except it relies on an appellate court not overturning the decision.

There are relatively few Title VII cases that deal with extraterritoriality, and only one that I know of that involved Japan, which was Rajoppe v. GMAC Corporation Holding Corp. None of them have said that an extraterritorial Title VII claim gives rise to FNC. The Rajoppe may have gone forward or settled, but the result was that the district court in the Eastern District of Pennsylvania let the Title VII claim go forward. So there isn’t a lot of precedent since 1991 to go along with the clear wording of the statute. What is there clearly goes with what Congress committed to words.

The supposed magic of this FNC gambit, I feel, has to do with the standard of review at the appellate level. That is, what will the appellate court use as the measuring stick to judge the decision that was made in the first (trial) court?

Consider some of the more common reasons a case like an extraterritorial Title VII one might not succeed in a district court. Here is a handy chart:

Sorry for the legal jargon, but the 12(b)(6) means “failure to state a cause of action”–that the words of the pleading are not enough to show that the Title VII claim is even there. A foreign law issue is one where the U.S. district court is called upon to interpret foreign law. Personal jurisdiction goes to whether a party can be properly brought before the district court. Summary judgment is where you are not able to put material facts out there, for your side, so that you could win a trial. FNC is short for forum non conveniens, of course.

In all the categories listed, you notice that the review at the court of appeals, which in New York is the U.S. Court of Appeals for the Second Circuit, is: de novo. It means: as if the case were brand new–although, in reality, it might not be treated as shiny brand new. As a generality, it is the best standard of review to face if you are the appellant (the person who lost). You get three new judges and have to convince two of them.

The very best result, of course, is not having to appeal at all. We are just talking about what happens if you don’t win.

Notice that FNC does not have a de novo standard, but instead something called “abuse of discretion”–which can be a very high hurdle. This is probably what the Super Lawyer is going towards. Get the District Judge to say “FNC” and then argue to the Circuit Court that the standard is abuse of discretion.

You might ask: If Congress OKed Americans bringing extraterritorially-based Title VII claims in federal district court, and the judge wouldn’t allow it in, isn’t that abuse of discretion? Hasn’t the judge basically gutted the statute for no reason except that he or she doesn’t want to hear the case?

It sounds nutty, right? And I don’t have the answer for that–because it would clearly be abuse of discretion. But, I guess, when that’s what you have, that’s what you go with.

Maybe the “Super Lawyer” thing gets you over.

[Note: How does the big American company get a cause of action on it in Japan? Good question. FNC presupposes that you actually have a colorable claim in the other jurisdiction. The other jurisdiction doesn’t even have jurisdiction over the big American company. We have to wait and see what the Super Lawyer has to say.]

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