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Defending Actions in the United States Arising From Alleged Foreign-Based Torts

Scott A. Edelman, William E. Thomson, Gregory J. Kerwin, Proceedings of 57th Annual Rocky Mountain Mineral Law Institute (2011)

Multinational companies that manage or invest in natural resource development or other large commercial projects in a developing country face legal risks that can include uncertain or changing legal rules and [8-4] enforcement systems governing their development work. For contractual relationships, dispute resolution provisions including arbitration clauses can mitigate such legal risk with business partners and sometimes foreign governments. In addition, foreign governments sometimes can clarify a company's current and potential future liability before development occurs. But dispute resolution agreements may not be effective in addressing potential pollution, employment, and personal injury claims brought by or on behalf of local residents or project workers.
In recent years, residents of developing countries where multinationals have invested in projects have asserted claims seeking compensation for alleged torts injuring them or their land. Such foreign-based tort claims often are brought or enforced in U.S. courts and led by teams of U.S. lawyers. This chapter reviews some of the rules governing such foreign-based tort claims when such claims are asserted in or enforced through the U.S. legal system.
Such litigation has taken at least three forms:
(1) cases in U.S. courts alleging violations of international law under the Alien Tort Statute;
(2) cases in