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Leading scholars, former judges sign letter opposing Investor-State Dispute Settlement

Alliance for Justice | 12 May 2015

Leading scholars, former judges sign letter opposing Investor-State Dispute Settlement

ISDS is a feature of trade deals, including the Trans-Pacific Partnership

WASHINGTON, D.C., May 12, 2015: A group of legal and economic luminaries have signed a letter to Congressional leaders urging them to oppose Investor-State Dispute Settlement (ISDS) provisions in proposed trade deals. Under ISDS, foreign corporations can challenge government actions they allege threaten their investments not in that nation’s courts, but before a panel of private arbitrators. The letter was coordinated by Alliance for Justice.

Prof. Laurence Tribe, the Carl M. Loeb University Professor of Constitutional Law at Harvard; Judith Resnik, Arthur Liman professor of law at Yale Law School; Cruz Reynoso, professor of law emeritus at the University of California, Davis School of Law and a former associate justice of the California Supreme Court; H. Lee Sarokin, former United States circuit judge of the United States Court of Appeals for the Third Circuit; and Joseph E. Stiglitz university professor, Columbia University signed the letter.

They join more than 100 other distinguished legal scholars and U.S. Senators such as Elizabeth Warren, D-Mass., and Jeff Merkley, D-Ore. in expressing outspoken opposition to ISDS.

“The concerns raised today by the President’s mentor and friend, Professor Laurence Tribe, and by Nobel prize-winning economist Joe Stiglitz echo the concerns of Hillary Clinton and many other top legal and economic minds in this country,” said Sen. Warren. “ISDS undermines the rule of law and is one more tool corporations can use to undermine public health and safety rules that hurt their bottom line. It has no place in American trade agreements.”

“It’s unacceptable to provide foreign corporations special legal rights to challenge our laws in international tribunals, outside of the U.S. legal system, run and staffed by corporate lawyers,” Sen. Merkley said. “These Investor-State Dispute Settlement provisions are a very real threat to U.S. sovereignty and to the laws that protect Americans’ health, pocketbooks, and environment, and any trade deal that includes them should be rejected.”

In the new letter, the authors write that “Our legal system rests on the conviction that every individual, regardless of wealth or power, has an equal right to bring a case to court.”

In addition, they note, ISDS decisions cannot be appealed in a court of law, and ISDS arbitrators don’t have to follow precedent. And in many cases, they write, “there is a revolving door between serving on ISDS arbitration panels and representing corporations bringing ISDS claims.”

The authors also note that “the threat and expense of ISDS proceedings have forced nations to abandon important public policies,” citing examples including a decision by Canada to lift a ban on a toxic gasoline additive – and pay a $13 million settlement to the corporation that wants to put it in gasoline – rather than go through the ISDS process.

They conclude that ISDS “represents investors taking advantage of a special legal right available only to them in an alternate legal system.”

 source: AFJ