Loewen Group v. United States of America

Award in ICSID Case No. ARB(AF)/98/3 (NAFTA) of 26 June 2003 (2003)

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Loewen Group v. United States of America

International Centre for Settlement of Investment Disputes
Award in ICSID Case No. ARB(AF)/98/3 (NAFTA) of 26 June 2003 (2003)

Facts

Jeremiah O’Keefe, Jerry O’Keefe, and the businesses owned by the O’Keefe (collectively, O’Keefe) family sued Loewen Group, Inc. (Loewen) (plaintiff), a Canadian corporation, in Mississippi state court. O’Keefe initiated the suit after a dispute involving three contracts between O’Keefe and Loewen and a dispute involving an exchange of two O’Keefe funeral homes for a Loewen insurance company. Throughout the trial, O’Keefe’s lawyer portrayed his client as a proud Mississippian and small businessman victimized by a “ruthless foreign (Canadian) corporate predator.” Over the objections of Loewen’s attorneys, the trial judge refused to give an instruction stating that nationality-based, racial, or class-based discrimination was impermissible in the jury deliberations. The jury awarded O’Keefe $500 million in damages. Loewen then brought a claim to the International Centre for Settlement of Investment Disputes against the United States of America (defendant), claiming the conduct of the Mississippi trial court constituted a violation of the North American Free Trade Agreement (NAFTA). Loewen argued that the trial judge impermissibly allowed O’Keefe’s attorneys to make race-based and class-based distinctions between O’Keefe and Loewen, resulting in a grossly excessive verdict. Loewen also argued the trial judge repeatedly allowed the lawyers for O’Keefe to make irrelevant and prejudicial references to Loewen’s status as a Canadian company over the objections of Loewen’s attorneys. The United States responded, arguing that the International Centre for Settlement of Investment Disputes lacked the jurisdiction to adjudicate the matter. The United States further argued that the trial judge’s behavior did not constitute a violation under NAFTA as Loewen was treated no differently than any American defendant.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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