The globalization of business and the interconnected nature of today's world often leads to legal disputes crossing international borders. Understanding when and how persons based outside of the U.S. can access U.S. courts is essential for anyone involved in cross-border transactions.
Below are some of the ways a person outside the U.S. can access U.S. courts:
International Business Disputes
Non-U.S. entities involved in business disputes with U.S. counterparts might be subject to U.S. jurisdiction if the dispute has significant ties to the United States. This can include, for example, contracts that were signed, executed or have a material connection to the U.S., or situations where the dispute's repercussions materialize within the U.S. To learn about how litigation funding works, you can read Brown Rudnick's article on that topic by clicking here.
Personal Jurisdiction
U.S. courts may claim jurisdiction over non-U.S. parties if they have sufficient contacts with the U.S. This concept, known as personal jurisdiction, requires that a party's activities in the U.S. be such that they could reasonably anticipate being brought into court in the U.S. These activities can range from conducting business, owning property, selling products or other business or personal engagements that establish a meaningful link to the U.S. Also, even if a non-U.S. party does not have a regular presence in the U.S through property or business, such a party may nonetheless be sued in the U.S. if it committed wrongful acts or caused harm in the U.S.
Treaties and Agreements
The U.S is party to several international treaties and agreements that impact cross-border legal actions, such as the United Nations Convention on Contracts for the International Sale of Goods, Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, Convention on the Taking of Evidence Abroad in Civil or Commercial Matters and the United Nations Convention against Corruption 11, which in some instances provide specific pathways for non-U.S. parties to bring their disputes to U.S. courts, especially in matters relating to trade, investment and intellectual property rights.
International Litigation
Disputes that span several countries can lead to complex jurisdictional questions, however, the presence of assets in the U.S. or agreements specifying the U.S. as the forum for disputes can anchor the litigation in U.S. courts. In cases of international litigation involving multiple jurisdictions, U.S. courts might be the preferred venue for resolving disputes due to: (a) the perceived fairness of the U.S. legal system; (b) the strategic advantages it may offer; (c) its broad discovery rules, which allow parties to obtain extensive information from opposing and third parties through depositions, interrogatories, and requests for documents to support their cases; (d) the ability to award significant damages based on applicable precedents; and (e) the highly developed legal system, with well-established and predictable laws and procedures.
U.S. Federal Law
U.S. federal law can grant non-U.S. parties access to U.S. courts through federal question jurisdiction, which allows cases involving federal statutes, treaties, the Constitution and federal common law, especially concerning international law and relations between the U.S. and foreign sovereigns, to be brought before U.S. federal courts. Federal question jurisdiction is anchored in the principle that issues requiring a uniform federal rule to protect distinctly federal interests, including those involving international relations, fall within the purview of federal common law. Cases that inherently involve international law or can affect the relationships between the U.S. and foreign nations may therefore find a judicial forum in U.S. federal courts, reinforcing the broad reach of the American legal system in addressing cross-border legal issues. To learn about the Advantages of Having a Compliance Manual that Conforms to U.S. Law, you can read Brown Rudnick's article on that topic by clicking here.
Monetary Thresholds
In certain jurisdictions, such as New York and California, non-U.S. parties may access the courts for disputes involving significant monetary amounts, even if the case does not have direct connections to the U.S., as long as the parties agree to litigate in such courts in their agreements. These provisions aim to position U.S. courts as a global center for dispute resolution, offering parties a reputable forum for resolving high-value international disputes.
Navigating jurisdictional complexities in cross-border litigation requires careful consideration on a proactive basis, when contracts are negotiated, and once a dispute arises. The decision to pursue legal action in the U.S. should be informed by the specific circumstances of each case, strategic advantages of litigating in the U.S., and potential challenges of establishing jurisdiction.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
