Foreign Judgments in American and English Courts: a Comparative Analysis

• Publication year: 2002

SEATTLE UNIVERSITY LAW REVIEWVolume 26, No. 3WINTER 2003

COMMENT

Foreign Judgments in American and English Courts: A Comparative Analysis

Brian Richard Paige(fn*)

I. INTRODUCTION

Judgment recognition and enforcement are typically not topics of much concern where the parties, the claim, the court, the laws, and the assets are located within the same country. In such cases, the laws of that country will govern the process by which judgments are obtained and executed.

These issues take on paramount importance, however, where the judgment creditor must execute a judgment against assets located in a foreign country. Where domestic judgments transcend the realm of the sovereign, their fate becomes uncertain. Notions of international comity have supplemented and stabilized foreign judgments to some degree.(fn1) Yet, for many years, countries such as England have sought to increase the currency of their domestic judgments by entering into and maintaining reciprocal foreign judgment recognition and enforcement treaties with other signatory countries.(fn2) Under these treaties, judgments may be registered within the courts of foreign signatory countries and given reciprocal effect if certain minimal statutory requirements are met.(fn3)

The United States is not a party to any such treaty.(fn4) Nor is there any federal law that recognizes and enforces foreign nation judgments by way of registration.(fn5) Surprisingly, individual states currently possess the exclusive authority to shape foreign judgment recognition and enforcement procedures within their respective borders. Consequently, to enforce a foreign judgment within American courts, a judgment creditor must file a fresh cause of action against the judgment debtor pursuant to the laws of the recognizing state.(fn6) The resulting patchwork of varying state approaches is confusing to the average foreign judgment creditor(fn7) and deficient when compared to the efficiency of the English scheme.

Recently, attempts to cure this deficiency via international convention have taken a back seat as the United States shifts its attention toward the enactment of federal legislation that would significantly reshape the American scheme of foreign judgment recognition and enforcement. If enacted, such legislation would dispense with the necessity of filing a fresh cause of action to enforce a foreign judgment and provide foreign judgment creditors with the option of enforcing their judgments by way of registration.

Part II of this Comment provides some background on the current American scheme of foreign judgment recognition and enforcement by comparing and contrasting its three major components- American common law, the Restatement (Third) of Foreign Relations Law, and the Uniform Foreign Money-Judgments Recognition Act. Part III tracks the English scheme of foreign judgment recognition and enforcement from its common law origin to its more sophisticated and streamlined foreign judgment registration system. Finally, Part IV suggests that the United States could benefit from the implementation of federal legislation that would bring foreign judgment registration procedures to American courts and provide for the recognition and enforcement of foreign judgments on a national level.

II. Foreign Judgments in the United States

While U.S. law clearly recognizes and enforces sister-state judgments, the law concerning most foreign judgments is less uniform. The United States Constitution provides that "Full Faith and Credit shall be given in each State to the . . . judicial Proceedings of every other State . . . ."(fn8) The protection this clause provides, however, is accorded only to sister-state judgments. There is no constitutional requirement that states extend similar recognition or enforcement to the decisions of foreign tribunals.(fn9) It may also surprise many to "learn that no federal law governs the enforcement of foreign-country judgments, and indeed that even in federal courts, state law rather than federal law applies to this subject."(fn10)

Despite the lack of a federal treaty or constitutional mandate addressing the issue, the United States is perceived as among the more liberal countries with regard to enforcing foreign nation judgments.(fn11) This status has been achieved largely though well founded notions of international comity and a national willingness to enforce foreign judgments "grounded on principles of justice similar to those recognized under United States laws."(fn12)

A. The Current American Scheme

While the current American scheme consists of an enigmatic patchwork of various common law and state statutory regimes,(fn13) the basic principles of recognition and enforcement are substantially the same throughout the United States.(fn14) The next section discusses these principles, beginning with their origin, in order to delineate and examine the current American approach to foreign judgment recognition.

1. American Common Law

Few, if any, state or federal cases addressing the issue of foreign judgment recognition fail to cite the 1895 United States Supreme Court decision in Hilton v. Guyot.(fn15) In Hilton, the Supreme Court established the basic United States common law principles pertaining to enforcement of foreign nation judgments.(fn16) The case involved a French judgment rendered against two United States citizens.(fn17) Writing for the majority, Justice Gray noted that in the absence of a "treaty or a statute of this country," the "duty still rests upon the judicial tribunals of ascertaining and declaring what the law is . . . ."(fn18)

Recognizing that concepts of sovereignty place limits on the extraterritorial effect of a nation's judgment, Justice Gray asserted: The extent to which the law of one nation, as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call "the comity of nations."(fn19)

According to Justice Gray, a fundamental prerequisite to the exercise of comity is the requirement that the judgment be "rendered by a court having jurisdiction of the cause, and upon regular proceedings and due notice."(fn20) Justice Gray went on to frame the general American rule of comity as follows:When an action is brought in a court of this country, by a citizen of a foreign country against one of our own citizens, to recover a sum of money adjudged by a court of that country to be due from the defendant to the plaintiff, and the foreign judgment appears to have been rendered by a competent court, having jurisdiction of the cause and of the parties, and upon due allegations and proof, and opportunity to defend against them, and its proceedings are according to the course of a civilized jurisprudence, and are stated in a clear and formal record, the judgment is prima facie evidence, at least, of the truth of the matter adjudged; and it should be held conclusive upon the merits tried in the foreign court, unless some special ground is shown for impeaching the judgment, as by showing that it was affected by fraud or prejudice, or that by the principles of international law, and by the comity of our own country, it should not be given full credit and effect.(fn21)

Ultimately, the Hilton Court refused to domesticate the French judgment on the ground that there was no showing that French courts would grant reciprocal treatment to judgments of the United States.(fn22) As such, "the comity of our nation" did not require the Court "to give conclusive effect to the judgments of the courts of France."(fn23)

Following a lengthy exploration of the rules of reciprocity as they pertain to the enforcement schemes of various nations, Justice Gray concluded that:The reasonable, if not the necessary, conclusion appears to us to be that judgments rendered in France, or in any other foreign country, by the laws of which our own judgments are reviewable upon the merits, are not entitled to full credit and conclusive effect when sued upon in this country, but are prima facie evidence only of the justice of the plaintiffs claim.(fn24)

Finding no statute or treaty to the contrary, Justice Gray asserted that it was "unwarrantable to assume that the comity of the United States requires anything more."(fn25)

In the many years following the Court's decision in Hilton, most courts, both state and federal, have adhered to and echoed the Court's basic holding.(fn26) However, despite the Court's unequivocal mandate that reciprocity be established as a precondition to the domestication of a foreign nation judgment by an American court, the vast majority of states have refused to recognize lack of reciprocity as a defense to recognition.(fn27) Nevertheless, as the next few sections illustrate, the Restatement (Third) of Foreign Relations Law, judicial decisions, and state statutes "have continued to be built upon the other requirements extracted from the comity analysis in Hilton."(fn28) While a state-by-state analysis is beyond the scope of this Comment, a basic overview is helpful in understanding the fundamental components of the American approach to foreign judgment recognition and enforcement.

2. Restatement (Third) of Foreign Relations Law

The Restatement (Third) of Foreign Relations Law and the...