Cure Without a Disease: The Emerging Doctrine of Successor Liability in International Trade Regulation
Aaron Xavier Fellmeth
Arizona State University (ASU) - Sandra Day O'Connor College of Law
Yale Journal of International Law, Vol. 31, 2006
The application of successor liability theories is relatively new to international trade law and has exploded since the turn of the century. Successor liability is an equitable state law doctrine that allows a company's creditors to seek damages from a different company that either acquired the assets of or merged with the debtor company. Federal agencies, charged with promulgating regulations for and enforcing the international trade statutes, have sought to justify their occasionally successful attempts to impose successor liability on diverse grounds, but none can point to a clear statutory authorization, and none has advanced a particularly cogent policy rationale for these aggressive enforcement practices.
If the adoption of successor liability in international trade regulation was intended to enhance deterrence, it raises the question of whether such measures are effectively directed at the individuals and companies that risk violating the law. The legality and constitutionality of the practice also merit closer scrutiny than they have received. This Article offers both an analysis of a specific issue of increasing importance and a case study of how federal regulatory agencies are using their discretion to achieve what Laura Nader called little injustices that aggregate to form major systemic injustice. The specific focus of the present study is on the ways in which international trade regulatory agencies have recently begun incorporating the equitable principles of successor liability into trade regulatory regimes to justify punishing innocent purchasers of corporate assets for international trade law violations committed by entirely different parties, the asset sellers.
Number of Pages in PDF File: 62
Keywords: international trade law, successor liability, trade regulation
Date posted: May 17, 2009
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