Winning a lawsuit fills a plaintiff with an unbelievable amount of joy. That moment when the long, hard-fought battle behind the bar culminates with a judgment in your favor is priceless. While the trial may have been agonizing, collecting a judgment can be even more frustrating. This feeling quadruples when the judicial payday you earned comes from a foreign judgment.
In order to recognize and enforce foreign judgments, the U.S. courts must consider both the foreign court’s handling of the case and the limitations on the U.S. court in overseeing the satisfaction of the foreign judgment. The court must analyze several areas of the judgment including;
- whether or not due process was present in coming to the judgment,
- whether the original court had proper jurisdiction to hand down a judgment,
- and, of course, public policy.
Recognition of the foreign judgment promotes efficiency and avoids duplication of previous proceedings. This typically occurs in U.S. courts in two types of cases.
- The most common is a case where the judgment holder seeks to enforce a foreign money judgment through access of the debtor’s local assets.
- The second most common case involves a party seeking to have a judge grant claims and/or issues preclusions in U.S. courts due to a foreign judgment as a way to prevent re-litigation.
Applicable Laws Governing Foreign Judgments
Unlike a judgment from within the United States, judgments from foreign courts do not fall under the Full Faith and Credit Clause. Most state and federal court decisions dealing with recognition of foreign judgments adhere to the U.S. Supreme Court’s analysis in Hilton v. Guyot. In this opinion, Justice Gray focused on both comity and due process of the foreign judgment.
Comity, as defined by the court, “is recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons was are under the protection of its laws.” The court goes on further to state that comity is satisfied and an action brought in this country upon the judgment should not be tried afresh where there has been:
- an opportunity for a full and fair trial abroad before a court of competent jurisdiction,
- due citation or voluntary appearance of the defendant,
- under a system of jurisprudence, an impartial administration of justice between the citizens of its own country and those of other countries, and
- nothing to show either prejudice or fraud in the court’s judgment, or in the system of laws under which it was sitting.
Substantive state law rules on recognition are generally uniform. Some states enact statutes for this type of issue, while other states strictly use common law. States following common law generally rely upon the Restatement (Third) of Foreign Relations Law. The 1962 Uniform Foreign Money Judgments Recognition Act and the 1964 Revised Uniform Enforcement of Foreign Judgments Act have been also adopted by many states to deal with this these type of judgments. The 1962 Recognition Act and the Enforcement Act, however, has resulted in conflicting decisions as to whether recognition and enforcement of a foreign judgment may be accomplished through a simple registration procedure or whether there must first be a separate action brought to officially recognize the foreign judgment. Ultimately, most courts require that a separate action be brought for the recognition of a foreign judgment.
Issues Effecting Enforcement and Recognition of Foreign Judgments
If a court finds that it cannot recognize or enforce a judgment from abroad, it generally is because of one of these three reasons:
- Lack of Due Process - In order to comply with this requirement, the foreign court’s due process does not need to be identical to the American courts. However, 2005 Recognition Act § 4(b)(1) states that the due process of the foreign court needs to be “compatible with the requirements of due process of law.”
- Lack of Jurisdiction - Lack of jurisdiction over the defendant or the property involved in the judgment is the most common ground for refusal to recognize or enforce a foreign judgment. Under the Restatement and both Recognition Acts, lack of personal jurisdiction and/or subject matter jurisdiction are mandatory grounds for non-recognition.
- Public Policy - Generally, U.S. courts are not required to recognize or enforce a foreign judgment if doing so violates public policy. However, unless the public policy involves a constitutional issue, courts will rarely deny recognition of foreign judgments due to public policy.
While winning that foreign judgment may have been a huge victory, the battle is far from over after that final gavel drops. Recognition and enforcement of a foreign judgment by U.S. courts will be where the war is often lost or won. Explore FindLaw to learn more about foreign judgments and other international law issues.