Foreign Judgment Enforcement

In recent years, there have been many lawsuits against businesses and individuals in U.S. courts for alleged conduct occurring outside the United States. The Supreme Court’s recent rulings limiting such cases – including Kiobel v. Royal Dutch Petroleum (2013) and Morrison v. National Australia Bank (2010) – will likely mean a new strategy for plaintiffs and their lawyers: lawsuits in foreign courts, followed by attempts to enforce any judgment in U.S. courts and seizing a company’s U.S. assets. This raises the troubling prospect of abusive and improper foreign judgments being enforced in the United States – in violation of the spirit and principles of the U.S. Constitution and our justice system. read more...

In an effort to standardize the state laws governing foreign judgment enforcement, the Uniform Law Commission (ULC) developed model statutes in 1962 and 2005. While some states have adopted laws based on these models, others have gone their own way. And even those states adopting a model law have differing judicial interpretations. These differing standards open the door to forum shopping by plaintiffs that seek enforcement under the most lax state standard.

The inadequacy of some state standards was highlighted by recent legal proceedings involving a $9 billion judgment against Chevron issued by an Ecuadorean court. Multiple U.S. courts have found that the Ecuadorian proceedings were tainted by fraud. But when Chevron sought an injunction against enforcement in U.S. courts, the Second Circuit Court of Appeals rejected the company’s request, holding that New York’s enforcement law did not allow a company to preemptively challenge the legitimacy of a foreign judgment. (Ultimately, the U.S. District Court for the Southern District ruled that the Ecuadorian judgement was the product of fraud and racketeering, and declared the judgment unenforceable under civil racketeering statutes.) Since then, the plaintiffs have sought to enforce the Ecuadorian judgment against Chevron in Canada. Those proceedings are ongoing.

To prevent abusive forum shopping, Congress should adopt uniform federal standards to govern the recognition and enforcement of foreign judgments. In addition, states that have not yet adopted the 2005 model act should consider doing so. Congress and the states should include a provision to allow judgement debtors like Chevron to bring a preemptive declaratory judgment action for non-recognition of abusive foreign judgements.

Research

The ILR Research Review - Winter 2014

December 18, 2014 | This edition of the ILR Research Review offers valuable insights from the latest of ILR's research on perpetual prosecution, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), social media, and transnational litigation.

Federal Cases from Foreign Places: How the Supreme Court Has Limited Foreign Disputes From Flooding U.S. Courts

October 21, 2014 | This collection of essays examines the shifting legal landscape of federal claims by foreign plaintiffs in the federal courts and focuses on the most common statutes invoked by foreign plaintiffs, as well as the threshold issues of personal jurisdiction and pleading standards that govern such suits.

Additional Resources

All Results for Foreign Judgment Enforcement

In the News Today - September 12, 2016

September 12, 2016 | News and Blog

Fortune's Roger Parloff writes that Ecuadorian plaintiffs face an "uphill battle" this week in trying to get a Canadian court to enforce a controversial $9.5 billion judgment against Chevron. Read More »

"Hired Activist" Sharon Stone Provides Latest Embarrassment for Backers of Anti-Chevron Litigation

March 03, 2015 | News and Blog

It's been an embarrassing year for those behind Ecuador's decades-long legal and PR battle against Chevron. Read More »

The ILR Research Review - Winter 2014

Author: Institute for Legal Reform | December 18, 2014 | Research

This edition of the ILR Research Review offers valuable insights from the latest of ILR's research on perpetual prosecution, the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), social media, and transnational litigation. Read More »

D&O Diary Highlights ILR's 'Federal Cases from Foreign Places' Paper

November 04, 2014 | News and Blog

Noting the "ever-present anxiety" that exists for global, non-U.S. companies over the possibility they might face litigation in U.S. courts, D&O Diary's Kevin Lacroix highlights the paper ILR released at the 15th Annual Legal Reform Summit, "Federal Cases from Foreign Places: How the Supreme Court Has Limited Foreign Disputes from Flooding U.S. Courts". Read More »

Federal Cases from Foreign Places: How the Supreme Court Has Limited Foreign Disputes From Flooding U.S. Courts

Author: George T. Conway III, Wachtell, Lipton, Rosen & Katz, John Bellinger, III and R. Reeves Anderson, Arnold & Porter LLP, James L. Stengel, Orrick, Herrington & Sutcliffe LLP | October 21, 2014 | Research

This collection of essays examines the shifting legal landscape of federal claims by foreign plaintiffs in the federal courts and focuses on the most common statutes invoked by foreign plaintiffs, as well as the threshold issues of personal jurisdiction and pleading standards that govern such suits. Read More »

As Kiobel Turns One, Its Effect Remains Unclear

May 02, 2014 | Research

Authored by John Bellinger, III and Reeves Anderson of Arnold Porter LLP, this paper takes a look back at the impact of the U.S. Supreme Court's April 27, 2013 Kiobel v. Royal Dutch Petroleum decision. Read More »

Chevron Gets Green Light to Sue Law Firm

April 01, 2014 | News and Blog

A federal judge will let Chevron's suit against the Patton Boggs law firm go forward after finding the firm's defense lacked merit. Read More »

The Real and Ugly Facts of Litigation Funding

March 26, 2014 | News and Blog

The notion that litigation financing is a mechanism for promoting justice is, at best, naive, and at worst, disingenuous. Read More »

Chevron Looks Beyond Lawyer for Corrupt Suit

March 25, 2014 | News and Blog

After a judge ruled that a $9.5 billion verdict against Chevron in Ecuador was secured through "corrupt means," the company is going after the lead lawyer in the case, a law firm that tried to enforce the judgment, and, now, a funder that backed the litigation. Read More »

Chevron Case Shows Why We Must Police Lawsuit Fraud

Author: Lisa A. Rickard | March 12, 2014 | News and Blog

Terms like "racketeering," "extortion," "money laundering" and "wire fraud" are typically more associated with the Mafia than plaintiffs' lawyers. But in a landmark ruling last week, a New York federal judge used these terms to describe conduct by a lawyer. Read More »

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