Enforcing Foreign Judgments in California

Transcription

1 Enforcing Foreign Judgments in California Consulegis International Litigation and Arbitration Specialist Group Edinburgh May 2, 2014 Jeffery J. Daar Daar & Newman, A Professional Law Corporation

2 No international treaty requires California to recognize a foreign country s judgment. Nothing in the U.S. Constitution requires recognition of a foreign country s judgment (the full faith and credit clause only requires one state to honor the judgment of another U.S. state or territory). No federal statutes require California or the United States to recognize a foreign country s judgment. 2

3 State law determines whether a foreign country s judgment will be enforceable in California. In 1967, California adopted the Uniform Foreign Money Judgment Recognition Act. (Former Code Civ. Proc , et seq., repealed.) In 2007, California adopted the Uniform Foreign Country Money Judgment Recognition Act (Code Civ. Proc. 1713, et seq.), which replaced the former Uniform Foreign Money Judgment Recognition Act. 3

4 Policy Behind Recognizing Foreign Judgments Creates greater recognition of California judgments in foreign nations by informing the foreign nations of particular situations in which their judgments would be recognized and thus encourage them to recognize California judgments. (Guimaraes v. Northrop Grumman Corp. (2007) 156 Cal.App.4th 644, , footnote 3, quoting from Bank of Montreal v. Kough (N.D. Cal. 1977) 430 F.Supp. 1243, 1249.) Enforcement in a number of foreign nations depends upon reciprocity. 4

5 The Uniform Foreign Country Money Judgment Recognition Act Basically, the statutory scheme seeks to ensure that the foreign judgment debtor receives basic due process. If the judgment should be recognized, it will be converted into a domestic California judgment enforceable by all the means available for collecting on a California judgment. 5

6 The new law requires the filing of an action for recognition to enforce a foreign country judgment. If recognition of the foreign country judgment is sought for a purpose other than enforcement, such as res judicata or collateral estoppel, recognition can be asserted by a counterclaim, cross-claim or affirmative defense. (Code Civ. Proc. 1718(b).) 6

7 Requirements for Recognition The foreign country judgment must grant or deny recovery of a sum of money. (Code Civ. Proc. 1715(a)(1).) A judgment for a sum of money subject to change by an accounting can be recognized. A judgment for taxes or a fine or other penalty are not recognized. Judgments that grant or deny a divorce, child custody, title to or possession of property, an injunction or other non-monetary relief are not eligible for recognition. However, such non-monetary judgments remain recognizable and enforceable as a matter of comity. (Manco Contracting Co. v. Bezdikian (2008) 45 Cal.4th 192, 198; Renoir v. Red Star Corp. (2004) 123 Cal.App.4th 1145, 1150.) 7

8 The foreign judgment must be final, conclusive and enforceable under the laws of the foreign country in which it was rendered. (Code Civ. Proc. 1715(a)(2).) If the foreign country rendering the judgment does not consider the judgment be final while on appeal, then the foreign judgment cannot be recognized in California and the statute of limitations does not start running. 8

9 Under the Uniform Act, an action to recognize a foreign country judgment must be commenced not more than 10 years from when the judgment becomes effective in the foreign country. (Code Civ. Proc ) Note that California differs from the Uniform Act, which otherwise provides for 15 years rather than 10 years. This was done to make California s statute of limitations for foreign judgments the same as for domestic and sister-state limitations. 9

10 California action to recognize a foreign judgment can be stayed. If an appeal from a foreign judgment is pending, or will be taken in the foreign country, the California court may stay any proceedings with regard to the foreign judgment until the appeal is concluded, the time for appeal expires, or the appellant has had sufficient time to prosecute the appeal and has failed to do so. (Code Civ. Proc ) The current Uniform Act is to be construed and applied to promote uniformity of the law with respect to the other states that enact either Uniform Act. 10

11 Grounds for Not Recognizing a Foreign Country Judgment California will not recognize a foreign country judgment if certain grounds exist. The grounds are defenses for the judgment debtor. After the judgment creditor establishes that the foreign country money judgment is final, conclusive and enforceable where rendered, then the burden of proof shifts to the judgment debtor to establish that a ground exists for non-recognition. 11

12 Ground No. 1 The foreign judgment was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with due process. (Code Civ. Proc. 1716(b)(1).) Procedures compatible with due process include affording defendants a full and fair trial before an impartial tribunal. Tribunal conducts regular proceedings after proper service or voluntary appearance of defendants. No showing of prejudice in the court system or the system of governing laws. 12

13 Lack of due process may exist if the judiciary is dominated by political branches of the government for the opposing party, or if a party is unable to obtain counsel, secure documents or the attendance of witnesses or have access to review of the judgment. (See Wilson v. Marchington (9th Cir. 1997) 127 F.3d 805, 811.) Forum non conveniens cases provide guidance as to the low standard deemed acceptable for the presence of due process. This is a mandatory ground for not recognizing the foreign judgment. 13

14 Ground No. 2 Foreign country judgment will not be recognized if the foreign court did not have jurisdiction over the defendant. (Code Civ. Proc. 1716(b)(2).) This is a mandatory ground for not recognizing the foreign judgment. 14

15 A foreign judgment shall not be refused recognition for lack of personal jurisdiction if: The defendant was personally served in the foreign country; The defendant voluntarily appeared other than to avoid seizure of property or to confess jurisdiction; The defendant agreed to submit to the foreign jurisdiction; The defendant was domiciled in the foreign jurisdiction when the proceedings began; 15

16 The defendant was a corporation or business principally located in, organized under the laws of, the foreign jurisdiction; The proceedings involved contact by the defendant s business office in the foreign country; or The proceedings involved an accident arising out of the defendant s operation of a vehicle or aircraft in the foreign country. (Code Civ. Proc. 1717(a).) The new Uniform Act permits finding of personal jurisdiction on other bases. (Code Civ. Proc. 1717(b). 16

17 Ground No. 3 If a foreign court did not have jurisdiction over the subject matter. (Code Civ. Proc. 1716(b)(3).) This is a mandatory ground for not recognizing the foreign judgment. 17

18 Ground No. 4 The defendant in the foreign court did not receive notice of the proceedings in sufficient time to enable the defendant to defend the action. (Code Civ. Proc. 1716(c)(1).) This is a discretionary ground. 18

19 Ground No. 5 The foreign judgment was obtained by fraud that deprived the losing party of an adequate opportunity to present its case. (Code Civ. Proc. 1716(c)(2).) This is a discretionary ground. 19

20 Ground No. 6 The judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of California or the United States. (Code Civ. Proc. 1716(c)(3).) Note: Under the prior law, the level of conflict must be high and not a mere difference in laws or remedies. Under the new Uniform Act, if the cause of action is not repugnant, but the judgment is, recognition may be denied. Extreme interest as part of a judgment may be deemed repugnant. This is a discretionary ground. 20

21 Ground No. 7 The foreign judgment conflicts with another final and conclusive judgment. (Code Civ. Proc. 1716(c)(4).) This is a discretionary ground. 21

22 Ground No. 8 The foreign court proceedings was contrary to an agreement between the parties under which the dispute in question was to be determined other than by the proceedings in the foreign court. (Code Civ. Proc. 1716(c)(5).) This is a discretionary ground. 22

23 Ground No. 9 In cases of jurisdiction based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action. (Code Civ. Proc. 1716(c)(6).) This is a discretionary ground. 23

24 Ground No. 10 The foreign judgment was rendered in circumstances that raise substantial doubt about the integrity of the rendering court with respect to the judgment. (Code Civ. Proc. 1716(c)(7).) This is a discretionary ground. This is a new ground in the new Uniform Act. 24

25 Ground No. 11 The specific proceedings in the foreign court leading to the foreign judgment was not compatible with the requirements of due process of law. (Code Civ. Proc. 1716(c)(8).) This is a discretionary ground. This is a new ground in the current Uniform Act. 25

26 Ground No. 12 The foreign judgment includes recovery for a claim of defamation unless the California court determines that the defamation law applied by the foreign court provided at least as much protection for freedom of speech and the press as provided by the United States and California Constitutions. (Code Civ. Proc. 1716(c)(9).) This is a discretionary ground. This is a new ground in the current Uniform Act. 26

27 Issues for Consideration Does the California court require in personam jurisdiction over the judgment debtor to recognize the foreign judgment. No California case law on this issue. Other State have determined that no personal jurisdiction is required (e.g., Iowa, New York). 27

28 Jeffery J. Daar Positions include: Principal of Daar & Newman, P.C., Los Angeles Immediate Past Chair, International Law Section of the State Bar of California Past Chair, International Law Section of the Los Angeles County Bar Co-Chair, Consulegis International Litigation and Arbitration Specialist Group Chairperson, City of Los Angeles Rent Adjustment Commission International Litigation and Arbitration track record for more than 20 years Contact: Daar & Newman, A Professional Law Corporation Woodland Hills, California 818/