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NAFTA Can Overturn Supreme Court

  • An international panel claims it can overrule the Supreme Court -- and the United States, under NAFTA, is obligated to comply.
Exclusive to The SPOTLIGHT
By James P. Tucker Jr.

It may soon be demonstrated, for all to see, that a NAFTA panel is superior to U.S. federal courts.

The outcome of The Loewen Group Inc. v. U.S.A. is less important than the fact that it will be decided by the International Center for Settlement of Investment Disputes -- a NAFTA panel.

NAFTA, the panel ruled, has jurisdiction over complaints from foreign countries about court decisions in the United States. It also claims jurisdiction over complaints about state and federal administrative agency actions.

While the landmark case involves a state court ruling, the panel claims power to overturn U.S. Supreme Court decisions as well.

The panel scheduled a hearing Oct. 15 on whether the United States is liable for "damages" caused by a Mississippi jury's verdict against a Canadian company. The Canadians claimed that a hefty appeal bond was an "expropriation."

The panel's decision will be final and un appealable except on very limited grounds. Under NAFTA, U.S. courts are com pelled to enforce the panel's decisions.


It "is a very shocking and broad-based decision," Mary Bottari of Public Citizen, a Ralph Nader group based in Washington, told The National Law Journal. "We now have a level of review for the U.S. court system that is above that of the U.S. Supreme Court ... and it is three international arbitrators who operate in secret and whose decisions cannot be appealed."

NAFTA allows foreign investors to escape liability for all sorts of negligent acts, such as deadly manufacturing de fects in automobiles or medical supplies, by transferring a jury's damage awards from the corporation to the U.S. taxpayers, she said.

A three-member panel of the International Center, interpreting Article 1105 of NAFTA, made the ruling on Jan. 5. The panelists are Sir Anthony Mason, L. Yves Fortier and Abner Mikva, a former U.S. circuit judge.

The case involves a Canadian corporation's claim that it was victimized by racial and national prejudice on the part of a Mississippi judge, jury and plaintiff's counsel -- all of whom are black.

The Loewen Group argued that Missis sippi law made it impossible to appeal a $500 million verdict on grounds of discrimination. The requirement for posting 125 percent of a damage award as bond amounts to "illegal expropriation" of a foreign investor's property, the company argued.

Loewen argued that it is entitled to protection even though a domestic corporation would have faced the same bond requirement. It is seeking $725 million in damages from the American taxpayers.

This establishment of an international court superior to the Supreme Court of the United States or the highest courts in Canada and Mexico is the first of a series of dramatic steps that are designed to establish an American Union similar to the European Union -- long on the common agenda of Bilderberg and its brother group, the Trilateral Commission.

As NAFTA expands as the Free Trade Area of the Americas to include the entire Western Hemisphere, its 90-man commission is to expand accordingly, evolving into the American Union Parliament. "Dollari zation" is to produce a common currency like the European Union's euro.