Foreign Judgment Enforcement

In recent years, plantiffs have filed 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 Daimler AG v. Bauman (2014), Kiobel v. Royal Dutch Petroleum (2013) and Morrison v. National Australia Bank (2010) will likely mean a new strategy for plaintiffs and their lawyers: bringing 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 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 who can 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 of New York 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.

Suggested Resources

Research
  • As <em>Kiobel</em> Turns Two: How the Supreme Court is Leaving the Details to Lower Courts

    As Kiobel Turns Two: How the Supreme Court is Leaving the Details to Lower Courts

    August 11, 2015

    This paper explores the effect of the U.S. Supreme Court's Kiobel decision on Alien Tort Statute (ATS) litigation in lower courts, and how lower courts have struggled to determine whether Kiobel permits U.S. corporations to be sued under the ATS for alleged torts in foreign countries. Read More

  • ILR Research Review - Fall 2017

    ILR Research Review - Fall 2017

    November 30, 2017

    This special double-issue of the ILR Research Review features a wealth of insight and analysis on the world's rapidly changing litigation environment. The research contained in this issue targets exploitative litigation at home and abroad, examining numerous developments ranging from hyper-aggressive trial lawyer advertising in the U.S. to the imminent expansion of class actions in Europe. Read More

Additional Resources

All Results for Foreign Judgment Enforcement

  1. Chevron Case Shows Why We Must Police Lawsuit Fraud

    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

  2. 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

  3. A Legal Fraud Laid Bare

    March 05, 2014 | News and Blog

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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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

  9. Taming Tort Tourism

    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

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

    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