Recent trends in U.S. legal decisions concerning jurisdiction and corporate responsibility could make the U.S. less attractive as a site for foreign investment, said Masatami Otsuka, an attorney with the Tokyo office of the law firm of Jones, Day, Reavis & Pogue, at a breakfast briefing on Feb. 13.
He told attendees that foreign companies should be aware that recent rulings in U.S. courts could subject them to U.S. law in certain circumstances, and force them to go through the discovery process and sharing of information.
As an example, Mr. Otsuka told about a recent ruling against Japan’s NCI Corp., which entered the U.S. to negotiate a settlement of a patent disagreement with Minnesota-based 3M. Although NCI had no office or license to do business in the state, the 8th circuit court allowed 3M to file a breach of contract suit against the Japanese company because of the negotiations between the two that took place in Minnesota.
The case serves as a warning that foreign companies entering the U.S., even for the purpose of negotiating with a U.S. company, will be subjecting themselves to the jurisdiction of U.S. courts in the event of disputes, said Mr. Otsuka.
Two other 1996 cases pending in the U.S., involving several oil companies involved in Burma and Nigeria, assert that foreign companies could be held responsible for human rights violations by the governments of countries in which they have operations, he added.
Rulings against the companies involved in these cases could expose companies with operations in the U.S. as well as other countries to a wave of litigation, he said.
The breakfast at the World Trade Center-Atlanta was presented by the Japan-America Society of Georgia and sponsored by Jones Day.