Saturday, November 3, 2007

Loewen, behold

This week marks the 12th anniversary of the initial jury verdict in the amount of $500 million handed down by a Mississippi state court against The Loewen Group, Inc. and Raymond L. Loewen.
Devotees of the television program Six Feet Under will recognize Loewen (pronounced LO-en) as a major Canadian funeral home operator, rivaled only by the former Texas giant SCI Corporation. Devotees of investor-State arbitration will recognize The Loewen Group Inc. & Raymond L. Loewen v. United States as the 1st case filed against the United States under the investment chapter of the North American Free Trade Agreement, known as NAFTA (logo at left), which took effect among Canada, Mexico, and the United States on January 1, 1994.
The Loewen case precipitated the formation of a new division within the Legal Adviser’s Office of the Department of State, which hired 5 attorneys to defend the United States against the claims in Loewen and the other cases that it seemed likely would follow. (Full disclosure: I was one of the 5, and I've written about the case here.) The United States won Loewen on what many argued were highly technical points that betrayed arbitrators more concerned about the political backlash should the United States lose a highly visible and contentious case rather than about awarding justice to a wronged Canadian company.
Notwithstanding these criticisms, the world of investor-State arbitration is thriving, with over 250 cases having been filed as of the end of 2006. The United States is indeed the defendant in several more cases, although its track record so far is perfect: it has prevailed in all cases that have so far gone to decision, and even won attorneys’ fees of several million dollars in the Methanex case.

No comments: