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

Another Plaintiff Fraud Exposed

March 10, 2014 | News and Blog

A California appeals court upheld a decision that vacated a $3.3 million verdict against Dole, upholding a lower court's finding of "deliberate and egregious misconduct" by the plaintiffs. Read More »

A Legal Fraud Laid Bare

March 05, 2014 | News and Blog

"The Legal Fraud of the Century!" Read More »

In the News Today - October 21, 2013

October 21, 2013 | News and Blog

JP Morgan has tentatively agreed to pay $13 billion to settle investigations by the Department of Justice into their mortgage-backed securities business, but the deal reportedly would not settle a criminal probe. Read More »

In the News

September 25, 2013 | News and Blog

A week after six lawyers left a Plaintiffs Steering Committee, a lawyer has voluntarily dropped a bellweather transvaginal mesh case against CR Bard Inc. Read More »

Should State Law Rule the World?

September 24, 2013 | News and Blog

Earlier this year, the U.S. Supreme Court in Kiobel v Royal Dutch Petroleum, issued a landmark ruling that curbed a pernicious abuse of the Alien Tort Statute. Read More »

In the News

September 23, 2013 | News and Blog

After an Oregon state court granted jurisdiction over a U.S. company and its foreign parent, Danish company Novo Nordisk is asking the Supreme Court to clarify whether a foreign company can be held liable for products handled by the American subsidiary. Read More »

International Tribunal Rules for Chevron

September 19, 2013 | News and Blog

On Tuesday, an international tribunal ruled that Chevron is not liable for environmental damage claims in Ecuador. Read More »

Taming Tort Tourism

Author: Page C. Faulk | September 19, 2013 | News and Blog

In 1895, the U.S. Supreme Court ruled that judgments rendered by foreign courts could be recognized and enforced in the U.S., if the foreign court had abided by certain American standards of jurisprudence. However, this clear and effective precedent was short-lived. Read More »

Taming Tort Tourism: The Case for a Federal Solution to Foreign Judgment Recognition

Author: John B. Bellinger, III and R. Reeves Anderson of Arnold & Porter LLP | September 18, 2013 | Research

When is a multi-million dollar foreign-country judgment not worth the paper it's printed on? Surprisingly, the answer depends in large part on where the judgment is enforced in the United States. Read More »

Should State Law Rule the World? A Call for Caution in Applying State Law in Transnational Tort Cases

Author: Donald Earl Childress III, Pepperdine University School of Law | September 18, 2013 | Research

Corporations need to turn their attention to the application of U.S. state law in transnational tort cases following the Kiobel case. Encouraging caution on the part of federal and state courts interpreting state law and potential Congressional action is but a first step in resolving these important transnational human rights and business issues. Read More »

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