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Last March 2015, members of the legal community wrote to congressional leaders and
administration officials to oppose the inclusion of Investor-State Dispute Settlement (ISDS)
provisions in the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment
Partnership (TTIP). We write now to express our extreme disappointment that the final text of
the TPP that was finally made public in November 2015 did not heed those warnings about this
controversial provisions negative consequences for our legal system. Those concerns expressed
in the 2015 letter were based on past agreements and leaked texts from the TPP negotiations.
Unfortunately the final TPP text simply replicates nearly word for word many of the problematic
provisions from past agreements, and indeed would vastly expand the U.S. governments
potential liability under the ISDS system.
We therefore urge you to protect the rule of law and our nations democratic institutions and
sovereignty by rejecting this TPP as long as ISDS is included. While there is still time, we urge
you to pressure the United States Trade Representative (USTR) to change course in the TTIP
negotiations and in negotiations of other prospective agreements, such as the Bilateral
Investment Treaty (BIT) between the United States and China, to ensure that ISDS is not
included in any of those pacts.
ISDS grants foreign corporations and investors a special legal privilege: the right to initiate
dispute settlement proceedings against a government for actions that allegedly violate loosely
defined investor rights to seek damages from taxpayers for the corporations lost profits.
Essentially, corporations and investors use ISDS to challenge government policies, actions, or
decisions that they allege reduce the value of their investments.
The problem with ISDS is not that it allows private corporations to sue the government for
conduct that harms the corporations economic interests. Indeed, U.S. domestic law already
recognizes the importance of granting private citizens and entities (including foreign
corporations) the power to take legal action against the government in order to help promote
effective implementation of the law and adherence to the Constitution. Over the past two
centuries, the United States through citizens, elected representatives, and courts has
established a framework of rules that govern such lawsuits against the government and
continually refines those rules through democratic processes. These include rules on court
procedures and evidence, which are designed to ensure the fairness, legitimacy and reliability of
proceedings; rules on who may bring lawsuits and under which circumstances, which are
designed to balance the right to sue with the need to ensure that government regulation in the
public interest is not made impossible due to unlimited litigation; rules on the power of courts,
which are designed to ensure that judges do not overly intrude on legitimate policy decisions
made by elected legislatures or executive officials, and to ensure that federal judges do not
unduly interfere with state law and policy; rules on appropriate remedies, which are crafted to
achieve diverse policy aims such as deterrence, punishment, and compensation; and rules on the
independence and accountability of judges who decide cases against the government.
Through ISDS, the federal government gives foreign investors and foreign investors alone
the ability to bypass that robust, nuanced, and democratically responsive legal framework.
Foreign investors are able to frame questions of domestic constitutional and administrative law
as treaty claims, and take those claims to a panel of private international arbitrators,
circumventing local, state or federal domestic administrative bodies and courts. Freed from
fundamental rules of domestic procedural and substantive law that would have otherwise
governed their lawsuits against the government, foreign corporations can succeed in lawsuits
before ISDS tribunals even when domestic law would have clearly led to the rejection of those
companies claims. Corporations are even able to re-litigate cases they have already lost in
domestic courts. It is ISDS arbitrators, not domestic courts, who are ultimately able to determine
the bounds of proper administrative, legislative, and judicial conduct.
This system undermines the important roles of our domestic and democratic institutions,
threatens domestic sovereignty, and weakens the rule of law.
In addition to these fundamental flaws that arise from a parallel and privileged set of legal rights
and recourse for foreign economic actors, there are various flaws in the way ISDS proceedings
are meant to be conducted in the TPP. In short, ISDS lacks many of the basic protections and
procedures of the justice system normally available in a court of law. There are no mechanisms
for domestic citizens or entities affected by ISDS cases to intervene in or meaningfully
participate in the disputes; there is no appeals process and therefore no way of addressing errors
of law or fact made in arbitral decisions; and there is no oversight or accountability of the private
lawyers who serve as arbitrators, many of whom rotate between being arbitrators and bringing
cases for corporations against governments. Codes of judicial conduct that bind the domestic
judiciary do not apply to arbitrators in ISDS cases.
If the TPP text were approved by Congress, we would not only be entrenching this inherently
flawed mechanism, but significantly expanding it. While the first investment treaty with ISDS
was concluded in the late 1960s, investment treaties with ISDS were not widely negotiated until
the 1990s, and ISDS claims only emerged in earnest in the late 1990s and early 2000s. Thus, we
really only have roughly 15 years of experience with this mechanism. Additionally, the United
States has only one investment treaty in force with a major capital exporting state, Canada,
meaning that only a relatively small share of foreign direct investment in the United States
roughly 10 percent is protected by a treaty with ISDS. The TPP would double the percentage of
covered investment in the United States, and if included in the TTIP as well, the amount of
covered investment in the United States would rise significantly to approximately 70 percent;
that would be a seven-fold increase in U.S. exposure to costly litigation and liability.
Before we further entrench and expand this relatively new area of law, the legal and policy
communities must reflect on this experiment.
In recent years, corporations have challenged a wide range of environmental, health, and safety
regulations, fiscal policies, bans on toxins, denials of permits including for toxic waste dumps,
moratoria on extraction of natural resources, measures taken in response to financial crises, court
decisions on issues ranging from the scope of intellectual property rights to the resolution of
bankruptcy claims, policy decisions on privatizations of prisons and healthcare, and efforts to
combat tax evasion, among others. Nearly 700 cases have been filed against approximately 100
governments over the past few years. There were 50 known ISDS cases launched in the regimes
first three decades combined. But the number of cases has soared in recent years. According to
the United Nations Conference on Trade and Development (UNCTAD), in 2015 alone, 70 ISDS
cases were launched more than in any previous year.
Fundamentally, the United States has typically only agreed to supranational adjudication in
exceptional and justified cases and after resolving a range of complex legal and policy concerns
about the scope and depth of supranational review and authority over domestic policies and
decisions, the role of public, private and affected stakeholders in the legal process, and the
available remedies to aggrieved parties. ISDS and its expansion through the TPP and TTIP
brushes aside these complex concerns and threatens to dilute constitutional protections, weaken
the judicial branch, and outsource our domestic legal system to a system of private arbitration
that is isolated from essential checks and balances.
For the above reasons, we urge you to reject this TPP as long as it includes ISDS and ensure any
future investment treaty, such as the TTIP and the BIT with China, excludes ISDS.
Sincerely,
1.
Laurence H. Tribe
2.
Joseph Stiglitz
3.
Jeffrey D. Sachs
4.
Cruz Reynoso
5.
Dani Rodrik
6.
Lisa E. Sachs
7.
Alan B. Morrison
8.
Amy Kapczynski
* Organizational affiliation for all signatories is included for identification purposes only; individuals represent
only themselves, not the institutions where they are teaching or other organizations in which they are active.
9.
10.
11.
Professor
Professor
Professor of Law
Jay and Ruth Caplan Distinguished
Professor of Law
12.
Stephen E. Gottlieb
13.
Gregory S. Munro
Professor, Retired
14.
15.
16.
17.
John Willoughby
Maria Floro
Robert A. Blecker
Robin Broad
18.
Ann Shalleck
19.
Brandon Butler
20.
Michael W. Carroll
21.
Peter Jaszi
22.
Sean Flynn
Professor of Law
24.
25.
26.
27.
28.
29.
30.
Jeanne Koopman
31.
Dr. Kevin P.
Gallagher
32.
Matas Vernengo
33.
Mayo C. Toruo
34.
35.
36.
37.
38.
39.
40.
Aydin Cecen
Andrew Friedman
Jeremy K. Kessler
Spencer J. Pack
Angela B. Cornell
Lourdes Beneria
K. Babe Howell
23.
Columbia University
Yale Law School
Albany Law School
Albany Law School
Alexander Blewett III School of
Law, University of Montana
American University
American University
American University
American University
American University Washington
College of Law
American University Washington
College of Law
American University Washington
College of Law
American University Washington
College of Law
American University Washington
College of Law
American University Washington
College of Law
Arizona State University, Tempe
Atlanta's John Marshall Law School
Babson College
Belmont Abbey College
Bentley University
Boston University
Boston University African Studies
Center
Boston University, Frederick S.
Pardee School of Global Studies
Bucknell University
California State University, San
Bernardino
Central Michigan University
Columbia Law School
Columbia Law School
Connecticut College
Cornell Law School
Cornell University
CUNY School of Law
41.
Pamela Edwards
42.
Jennifer Olmsted
43.
45.
Jedediah Purdy
Paul DeWitt
Carrington
William Moner
46.
David S. Levine
47.
Liza Vertinsky
Associate Professor
48.
Maritza Reyes
49.
Antonio Callari
50.
Sean Flaherty
51.
Susan K. Sell
52.
53.
Adam Levitin
David Luban
54.
Yaniv Heled
55.
56.
57.
Paul Hancock
Laurie Nisonoff
Christine Desan
58.
Duncan Kennedy
59.
60.
61.
62.
Gerald Frug
Lucie White
Martha Field
Martin Melkonian
63.
Richard W. Wright
64.
Lea Shaver
65.
66.
Shaianne Osterreich
Anton Korinek
Marie Christine
Duggan
Professor of Economics
44.
67.
68.
Steve Cohn
69.
James DeVault
70.
Thomas Masterson
Professor of Law
Professor of Economics and Director of
Middle East Studies
Robinson O. Everett Professor of Law
Harry R. Chadwick, Sr. Professor Emeritus
of Law
Assistant Professor
Knox College
Lafayette College
Levy Economics Institute of Bard
College
71.
72.
Mark A. Peterson
Lauren E. Willis
73.
Imre S. Szalai
74.
M Isabel Medina
75.
76.
77.
Cynthia Ho
Cecilia Ann Winters
Michael Waxman
78.
Paul M. Secunda
79.
Jonathan Hersh
Lecturer
80.
Sean A. Pager
Professor
81.
82.
83.
84.
85.
Christoph Henkel
Eva Paus
Shahrukh Rafi Khan
Carlin Meyer
Frank W. Munger
Professor of Law
Professor of Economics
Visiting Professor of Economics
Emeritus Professor of Law
Professor of Law
86.
Brook Baker
Professor
87.
Dan Danielsen
88.
Karl Klare
89.
Thomas Lambert
90.
91.
Douglas Donoho
Joel A. Mintz
92.
Joseph Harbaugh
93.
Jon M. Garon
94.
Timothy A. Canova
95.
Micah Berman
96.
Amy Cohen
Professor of Law
97.
98.
Mary C King
Anca Voicu
Avraham Izhat
Baranes
Benjamin Balak
Charles P. Rock
Rollins College
Rollins College
Rollins College
99.
100.
101.
102.
103.
104.
105.
Harry Kypraios
Kenna C. Taylor
Philip Kozel
Beth Stephens
106.
107.
109.
Paul Tractenberg
Yana van der Meulen
Rodgers
Nina Shapiro
110.
Tracey M. Roberts
Visiting Professor
111.
112.
113.
114.
115.
116.
117.
118.
Kathleen McAfee
Philip Jimenez
Charlotte Garden
Tayyab Mahmud
Jon Romberg
Tai Young-Taft
Jerome Joffe
Michael Asimow
119.
Mateo Taussig-Rubbo
Professor of Law
120.
Athena D. Mutua
121.
122.
123.
124.
Martha T. McCluskey
Ted P Schmidt
Howard Botwinick
Edith Kuiper
125.
Brishen Rogers
126.
David Kairys
Professor of Law
127.
Peter K. Yu
Professor of Law
128.
129.
130.
Barry Herman
Michael Cohen
Sakiko Fukuda-Parr
131.
Ellen E. Deason
Visiting Faculty
Professor of International Affairs
Professor
Joanne Wharton Murphy/Classes of 1965
and 1973 Professor in Law
132.
Margot E. Kaminski
133.
Thomas Michael
Power
134.
Cynthia Nance
University of Arkansas
108.
Rollins College
Rollins College
Rollins College
Rutgers Law School
Professor
Rutgers University
Professor of Economics
135.
Michael Reich
136.
Pamela Samuelson
137.
Pranab Bardhan
Professor
Richard M Sherman Distinguished
Professor of Law
Professor of Graduate School
138.
Charles L Knapp
Professor or Law
139.
Mark N. Aaronson
140.
Naomi Roht-Arriaza
141.
Catherine Fisk
142.
Erwin Chemerinsky
143.
Chiara Piovani
144.
Haider A. Khan
145.
Tracy Mott
146.
Karin Wedig
Assistant Professor
147.
Annecoos Wiersema
Professor of Law
148.
Paula R Rhodes
Associate Professor
149.
Stephen L. Pepper
Professor of Law
150.
151.
Maxine Burkett
Annemarie Bridy
Professor of Law
Professor of Law
152.
Ariana Levinson
153.
Frank Pasquale
Professor of Law
154.
Marley Weiss
Professor of Law
155.
Peter Spiegler
156.
Gerald Epstein
Professor of Economics
157.
J. Mohan Rao
Professor of Economics
158.
James K. Boyce
Professor of Economics
159.
Mwangi wa Gthnji
160.
Robert Pollin
161.
162.
163.
Arthur MacEwan
J K Kapler
Julie A. Nelson
164.
165.
166.
167.
168.
Philip I. Moss
David Abraham
Elizabeth Inglesias
Thomas E. Weisskopf
Ann Markusen
Professor of Economics
Professor of Law
Professor of Law
Professor of Economics (Emeritus)
Professor
Distinguished Research Professor of
Economics
Professor of Law and Butler, Snow,
O'Mara, Stevens, and Cannada
Distinguished Lecturer
169.
Cyrus Bina
170.
Mercer Bullard
171.
Professor Emeritus
172.
Kay Kindred
Professor of Law
173.
Marcus Hurn
Professor of Law
174.
Alfred Dennis
Mathewson
Deborah M.
Weissman
176.
177.
Marty Wolfson
178.
Barbara J. Fick
179.
Jaime Ros
180.
181.
182.
James M. O'Fallon
Dorene Isenberg
Nathaniel Cline
183.
Richard McIntyre
184.
185.
Ann C. Hodges
Bikku Kuruvila
186.
Tim Iglesias
Professor of Law
187.
Gregory Keating
188.
William E. Forbath
189.
190.
191.
Gunseli Berik
Hans G Ehrbar
Korkut Erturk
192.
Stephen C. Bannister
175.
193.
194.
Elaine McCrate
Stephanie Seguino
195.
Robert Aronson
196.
197.
Charles P. Dykman
Alexia Kulwiec
198.
Joel Rogers
199.
200.
Farida Khan
Marcelo Milan
Professor
Professor
Betts, Patterson & Mines Professor of Law
Emeritus
Adjunct Professor
Assistant Professor, Lawyer
Sewell-Bascom Professor of Law, Political
Science, Public Affairs, and Sociology
Professor of Economics
Assistant Professor of Economics
201.
Michael C. Duff
Professor of Law
202.
203.
204.
205.
206.
207.
Robert N. Covington
Jennifer Taub
Joan Vogel
John D. Echeverria
Liz Ryan Cole
Timothy Stoltzfus Jost
208.
John N. Drobak
209.
210.
William Burnham
Julie Matthaei
211.
212.
Karl Petrick
213.
Howard I Kalodner
214.
Leora Harpaz
Professor Emeritus
215.
216.
John Miller
Neil H. Cogan
217.
Peter L. Reich
218.
Professor of Economics
Professor of Law
Professor of Law and Director,
Environmental Law Concentration
Professor Emerita of Political Science
Barrick Distinguished Scholar & Cobeaga
Law Firm Professor of Law
Doris S. & Theodore B. Lee Professor of
Law
Emeritus Professor of Economics
Professor Emeritus
Joseph M. Field '55 Professor of Law
219.
220.
Jeffrey W. Stempel
221.
222.
223.
John Sheahan
Paulette Olson
Douglas Kysar
University of Vermont
University of Vermont
University of Washington School of
Law
University of Wisconsin Law School
University of WisconsinExtension
University of WisconsinMadison
University of WisconsinParkside
University of WisconsinParkside
University of Wyoming College of
Law
Vanderbilt University
Vermont Law School
Vermont Law School
Vermont Law School
Vermont Law School
Washington and Lee University
Washington University School of
Law
Wayne State University
Wellesley College
West Chester University of
Pennsylvania
Western New England University
Western New England University
School of Law
Western New England University
School of Law
Wheaton College, Norton, MA
Whittier College
Whittier Law School
William Paterson University
William S. Boyd School of Law,
University of Nevada, Las Vegas
William S. Boyd School of Law,
University of Nevada, Las Vegas
Williams College
Wright State University
Yale Law School