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HomeSéparateurFocusSéparateurAmericasSéparateurNAPPS USASéparateurRecognition and enforcement of Foreign country money-judgments in the USA
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Recognition and enforcement of Foreign country money-judgments in the USA


Presented by Stephen L. Bluestone, Managing Director of Bluestone Law International, at the International Union of Judicial Officers’ Congress, Washington, DC, April 27, 2006

As an attorney who has practiced law and resided in the District of Columbia for over 30 years, I am delighted to welcome members of the UIHJ to our nation's capital. We are located just a few miles from the Capitol where the Congress enacts federal legislation; where the United States Supreme Court decides cases which establish precedents applicable to laws and disputes throughout the entire country; where the executive branch of the United States government through the President and federal agencies create rules and regulations of national interest and applicability, and where the Department of State negotiates treaties and agreements with countries throughout the world.

 However, while I do not wish to disappoint you, the laws governing the recognition and enforcement of foreign judgments - awarded by courts in each of your countries has little do to with Washington, D.C. and the federal government, but is a matter of state law existing and enacted by each of the separate 50 states of the United States, in addition to the District of Columbia and territories such as the U.S. Virgin Islands. As a result, there is no bilateral treaty or multi-lateral international convention in force between the United States and any other country on recognition and enforcement of civil money judgments.

 However, the situation is not as confusing as it may appear. Over 40 years ago an organization by the name of the National Conference of Commissioners on Uniform State Laws drafted and recommended for enactment in all of the states, a model law known as the Uniform Foreign Money-Judgments Recognition Act. While a “Uniform” act is not a federal law, nor does it automatically have applicability to each and every state, many uniform acts ultimately become part of the statutory law of most states. As a result, this Act is on the books in over 30 United States jurisdictions. The states which have not adopted the model Act have similar statutes or procedures whereby a foreign judgment may receive recognition and be enforced in the same manner as a local state judgment would be.

 Before discussing specific provisions of the Act it is significant to note that the Act provides for recognition of a foreign judgment by applying the circumstances under which the judgment was granted against criteria contained in the Act. It does not provide the procedures by which a foreign judgment may be sought to be filed and ultimately enforced. The Model Act, as adopted by most states, provides that a foreign country judgment is recognized and enforced in the same manner as a sister state judgment.

There is, however, no need to worry as there is a relatively clear route to recognition and enforcement of your judgments. Let us discuss the nuts and bolts of the Act. First, it applies only to a “foreign state” which generally includes all members of the UIHJ and any recognized governmental unit. Next, and of initial significance, is that a foreign judgment must be a judgment for a sum of money other than for taxes, a fine or other penalty, or a judgment for support in a matrimonial or family matter. This definition is significantly limiting, as there are numerous awards and orders of courts throughout the world which deal with monetary issues, which must be treated through other means than the Uniform Act.

A number of years ago our firm was asked by a German law firm to record a “Grundschuld,” which apparently is an agreed upon charge on land, in the U.S. as a judgment for monies acknowledged to be due. As this was not a German court judgment, it did not qualify as a judgment under American laws. Additionally, there are child support orders issued by courts of many countries against a wayward father who is resident in the United States. This type of order is not within this Act and also must be handled through other procedures. Lastly, in reviewing the parameters of a judgment, it must be final, conclusive and enforceable in its home jurisdiction. If, as example, the judgment is an interim judgment, it will not be eligible for recognition.

 The backbone of the Act, and in fact, of any effort by a judgment creditor in any country to enforce a judgment or court order in any jurisdiction of the United States is the requirement of analyzing the nature of the tribunal which rendered the judgment and its related procedures. A threshold question in this analysis is whether the court which rendered the judgment is an impartial tribunal with procedures “compatible with the requirements of due process of law.”

As judicial officers from countries which hold the rule of law in the same high esteem as does the United States, I assume that you know what I am referring to. This means that the court rules provide procedures that require that a complaint be served on a defendant, and that proof of that service be filed with the court. While this may appear elementary, let me give you an example of a judgment which cannot be the subject of a recognition action. Under Civil Procedure Rules in the United Kingdom, claim form can be served on a defendant by ordinary mail. This means that the mere mailing of the claim form to a defendant at his last known address can ultimately be sufficient basis for a default judgment with no knowledge by the plaintiff or the court as to whether the defendant did, in fact, receive the lawsuit. Such a judgment would not be eligible for recognition and enforcement in any jurisdiction in the United States.

Due process also requires an examination of whether the case is brought in a seriously inconvenient forum thereby prejudicing the defendant in being unable to present witnesses and to otherwise defend the case. It also means the right of a defendant to be given a reasonable time to respond to a complaint; the right of a defendant to present witnesses on his behalf; the right to cross-examine the opponent's witnesses; the obligation that there be both subject matter and personal jurisdiction over the case; and the overriding issues that the judgment was not obtained by fraud, and that the cause of action which is the basis for the lawsuit is not repugnant to the public policy of the American jurisdiction in which the judgment is sought to be enforced.

Looking at this last criteria, we can all nod our heads and agree that we know what this means. We generally agree that business debts, contractual obligations, and the reasons behind most judgments are not in conflict with the public policies of your country and the states in the United States. Beware, however, there are exceptions. Consider a judgment obtained in your countries on a gambling debt.

Can you have the two American states where recognition and enforcement of such a judgment would be permitted? While we have not done definitive research on this issue, the gambling casinos in the United States are in Nevada, primarily Las Vegas, as well as in the State of New Jersey where the Atlantic City casinos hold forth. Efforts to enforce such a judgment in probably every other states would be met with the defense that enforcing a gaming debt is contrary to the public policy of that state.

 These are the hurdles which judgment creditors in your countries must overcome in order to register judgments through the recognition procedures of the Uniform Foreign Money-Judgments Recognition Act. Of course, the great benefit of this recognition procedure is that only the issues which I have just discussed and which are contained in the Act are the subject of review by an American court. The merits of the claim were previously decided in each of your countries before your home judges, under your local law, in your language and under your procedures. It is just the result of that litigation - the money judgment - which you seek to turn into an American judgment so that your judgment will have the same rights attached to it as any other judgment rendered in the United States.

While the merits of your claim may have been decided in your home court, what about a judgment obtained by default? This is where a defendant has been properly served with the lawsuit but has chosen not to file a defense or otherwise defend himself. As a result, upon the request of the plaintiff, a default judgment would be granted. While this default judgment may be fully enforceable in your home jurisdiction, there are certain states where such a default judgment is not subject to recognition and enforcement. The reason for this is that to some courts, default judgments are suspect as they have not been decided on the merits of the claim. As a result, the court will not give, what we call “full faith and credit” to a judgment of a sister state obtained by default. In fact, the statutory law of the State of Connecticut denies “full faith and credit” to judgments of sister states obtained by default or by confession of judgment. However, the solution to this problem in Connecticut, for example, is to bring a common law lawsuit on your judgment. Once this suit is filed, the defendant has the burden of proving that your judgment is void. This requires proof of the lack of a legally organized court, lack of jurisdiction over the subject matter, the parties or lack of court power to grant the relief contained in the judgment. Suing on your judgment is an alternative to using the expedited procedures set forth in the Uniform Act.

The third alternative in pursuing a claim in this country is to bring an original lawsuit in a local American court. While this has the advantage of seeking to obtain an original judgment in the defendant's home jurisdiction, it has the disadvantage of having to convince a foreign court of your local law and through witnesses from your own country. In addition, there is the risk that the case will be thrown out by the local American court on the grounds of forum non conveniens - meaning that the American court is an inconvenient forum for resolution of a foreign dispute.

However, for a defendant seeking to prevent your judgment from receiving recognition if he files a defense which requires taking proof through hearings and further proceedings, the defendant has the obligation to post a surety bond in the amount of the judgment or more to protect the interests of the plaintiff, should the defendant lose in his efforts to prevent your judgment from being recognized in the American court. Demanding that a surety bond be posted can be a powerful weapon particularly with shallow pocket defendants.

 Let me now touch on some practical matters in your consideration of turning your local judgment into an American judgment. Contrary to many countries which have an escalating scale of costs to be paid to the court clerk based upon the amount of the claim (or here, the judgment), all courts in the United States have a flat fee for the filing of a court action, irrespective of the amount of the claim or the judgment. While our court system has courts of limited jurisdiction such as a small claims court which may have jurisdiction of only up to $5,000, depending upon the amount of your judgment, it will be filed in the court which is appropriate for the judgment. All state courts, as well as federal courts throughout the United States have courts of an unlimited jurisdiction amount which provide for a flat filing fee of generally between $100 and $250 to file a case.

The legal fees for seeking to obtain recognition and ultimate enforcement of a foreign judgment can generally be any one of three different ways. First, many law firms, such as our firm, handle claims on a straight contingency fee basis. This means that the attorney who will be filing your judgment will be paid a percentage of the monies collected. Contingent fees are unethical in many countries, but they are ethical in most, but not all situations, in the U.S. In addition to the percentage, there may also be a retainer which may be a small amount of money to be credited against the percentage. Furthermore, attorneys will request money for court filing costs and other out-of-pocket expenses. A second way of being paid is through hourly fees irrespective of the success of the attorney in obtaining satisfaction of a judgment. Lastly, attorneys charge flat fees in an agreed upon amount for various portions of the legal work anticipated.

You might finally ask after all this discussion, how do I get money to satisfy my new American judgment. Once again, this is a matter of state law. However, generally there are rights provided by all state statutes and procedures to discover the assets of the judgment debtor through testimony and otherwise, as well as to attach assets either in the hands of the judgment debtor, or the hands of a third-party who is obligated to pay or transfer those assets to the judgment debtor. This applies to personal property, real property, bank accounts, contract rights, wages, automobiles, and virtually any and every kind of asset or property.

While the procedures which I have discussed may appear not to be simple and require a lawyer specializing and experienced in domesticating foreign judgments, please bear in mind that the hard work has already been done by you in obtaining your home country judgment. Ninety-five percent of the time is straight forward converting your judgment to an American judgment and is handled without serious and substantive defenses being raised.

I hope that you will take every opportunity to vigorously pursue recognition and enforcement of your judgments against judgment debtors, be they individuals or businesses, located in the United States.
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