This post is on the recognition of foreign judgments in United States Courts. More particularly, it is on the law U.S. courts look to when deciding whether to enforce a foreign court judgment, the foreign judgments they will enforce, and the procedures they use to determine whether to enforce.
Successful litigation depends not just on winning a judgment, but also on enforcing it. Enforcing a foreign court judgment usually requires assistance from a court, and sometimes law enforcement within the court’s jurisdiction, to ensure compliance with the court’s decision. Before a US court will enforce a judgment issued by a foreign court, the US court must first recognize the judgment. To “recognize” a foreign judgment means to make it equal to any other judgment issued by a US court. A foreign judgment recognized by a US court—a domesticated judgment—has the same authority as a judgment first issued in the United States. Foreign judgments cannot be enforced in the US before they are recognized.
Although the process can be complicated, it is almost always faster and cheaper to domesticate a foreign judgment in a United States court than to obtain a new US judgment by filing a complaint and litigating the merits de novo in a US court.
Many people are surprised to hear that there are no international treaties governing U.S. court recognition and enforcement of non-US court judgments. The US is a party to multilateral conventions that apply to enforcement of foreign arbitration awards, but it is not party to any multilateral treaties on the enforcement of foreign court judgments. Rather, recognition and enforcement of foreign judgments in United States courts is governed by individual state laws. Even if a case is brought in federal court, that court will apply the relevant state law in reaching its decision.
Enforcement of foreign judgments in the U.S. varies state-by-state but there are major similarities among states. Most U.S. states have adopted the Uniform Foreign Money Judgments Recognition Act (UFMJRA), drafted by the National Conference on Uniform State Laws. The UFMJRA provides a standard framework for courts to recognize and enforce non-US money judgments. States that have not adopted the UFMJRA (either in its original or amended form), generally recognize foreign judgments under common law and principles of comity. Likewise, non-money judgments ordering or prohibiting a specific act may also be recognized under state laws, with similar results.
In states that have adopted the UFMJRA, a foreign judgment granting or denying recovery of money will be recognized only if the judgment is (1) final; (2) conclusive; and (3) enforceable where rendered. If any of these three criteria are missing, the US court will not recognize the judgment. A pending appeal of a foreign court judgment does not necessarily mean that judgment is unenforceable where rendered. A US court may, however, stay US enforcement proceedings pending the foreign court appeal.
In addition, under the UFMJRA, the United States court cannot recognize the foreign judgment if the foreign court (1) was not impartial; (2) did not offer due process of law; or (3) did not have personal jurisdiction over the defendant. The judgment holder must prove that each of these requirements are met. Number two has become the go-to argument of late for opposing China court judgments.
In addition to these mandatory requirements, courts in most states have discretion to deny recognition for many other reasons. For example, the law in most states gives courts discretion to deny recognition of a foreign judgment if the judgment was obtained by fraud; if there was insufficient notice of the foreign proceedings; if the judgment goes against the state’s public policy; or if the foreign judgment runs contrary to US constitutional principles.
A few US states have also adopted a reciprocity requirement. This means that if the foreign jurisdiction that first issued the judgment would not recognize a judgment from the US state, that US state’s courts will not recognize a judgment from the foreign jurisdiction. Accordingly, attorneys must consult individual states’ laws as well as the laws of the foreign court that issued the judgment. Seeing as how China is so bad at enforcing U.S. court judgments, this is another basis for opposing the enforcement of Chinese court judgments in U.S. courts. See China Enforces United States Judgment: This Changes Pretty Much Nothing.
Each state has its own procedural rules for enforcing a foreign court judgment. In most states, the procedure for recognizing a non-US judgment requires starting a new action in a US court to obtain jurisdiction over the US defendant or his property. Often, a summary proceeding — such as a summary judgment motion — may commence the action, rather than a complaint.
To support the claim, the foreign court judgment holder must prove that its foreign judgment is valid and authentic. To make that determination, the US court typically requires a certified copy of the judgment from the foreign court that issued it, along with an English translation. The translation must be certified by an approved translator or consular agent.
Notice of the recognition and enforcement proceeding must be properly served on the adverse party, and the adverse party must be given an opportunity to be heard. The adverse party may contest the proceeding and generally has a set time — such as 30 days — to do so.
Once the procedural rules for starting the action are satisfied, the foreign court judgment holder must prove that the final judgment rendered against the US defendant meets the state standards for recognition, as set forth above. If the foreign judgment meets the requirements to be recognized in a US court, a US court will convert the foreign judgment into a US judgment, which then becomes a domesticated U.S. judgment enforceable in the United States.
For more on United States Litigation, check out our United States Litigation Guide.
Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog.
Nadja focuses on assisting American and European companies in their foreign direct investments into Spain and Germany and on assisting European companies with their foreign direct investment into the United States.
