While many people think of the entry of judgment as the end of the legal process, enforcement of the judgment can be a complex and time-consuming process. That process is further complicated if the judgment must be enforced in a jurisdiction other than the one where it was entered.
What is a Foreign Judgment?
The term “foreign judgment” is used to refer both to judgments entered by a different U.S. state than the one in which enforcement is sought and judgments entered in foreign countries. Some states refer to judgments rendered in other states in different terms. Some states, including New York and California, call these judgments “sister state” judgments. For purposes of this page, both out-of-state and out-of-country judgements will be referred to as “foreign judgments.”
Reasons for Foreign Judgement Enforcement
The court with jurisdiction over a dispute will not necessarily be the court with personal jurisdiction over the defendant or with jurisdiction over the defendant’s property. For example, if a Maryland corporation with its headquarters in Virginia does business in New York, then a lawsuit arising out of that business in New York could be tried in the New York court. However, the New York court would not have the authority to garnish bank accounts or seize property in Virginia. So, the judgment holder would be reliant on the Virginia courts to enforce the judgment. A similar, though slightly more complex, scenario applies with regard to enforcing a U.S. judgment in a foreign country or a foreign nation’s judgment in a U.S. jurisdiction.
Enforcement of an Out-of-State Judgment
The “full faith and credit” clause of the United States Constitution makes enforcement of an out-of-state judgment more straightforward than enforcement of an international judgment. However, a judgment must be domesticated in the second state before enforcement actions may commence there. Under some circumstances, domestication is granted automatically upon showing of a valid judgment from a sister state.
In some cases, however , additional process is required. The exact requirements differ from state to state. One example is that in New York, a judgment entered after a hearing on the facts is recognized automatically. However, judgments entered as the result of a default or a confession of judgment are subject to stricter scrutiny and may require additional proceedings.
Thus, it is important to know the precise requirements of the state in which you seek to enforce a judgment. Those procedures may even play a role in selection of the state in which to pursue enforcement, if the defendant has assets in more than one jurisdiction. Working with a business debt collection attorney who is well-versed in the domestication of judgments can save you time, money and frustration as you seek to recover out-of-state assets to satisfy your judgment.
Enforcement of International Judgments
The procedures for enforcement of a judgment from outside the United States are somewhat less clear-cut, as there is no overarching treaty or agreement that sets forth the circumstances under which a foreign judgment will be enforced or what process is required. The U.S. is a party to reciprocal agreements or treaties with certain countries, but also enforces some foreign judgments without reciprocity.
While many foreign judgments are accepted at face value once they have been translated and authenticated, some are subject to greater scrutiny than others. Where a U.S. court must make a determination as to the enforceability of a foreign judgment, the key issues considered include:
- Whether the defendant had proper notice and opportunity to be heard
- Whether the foreign court had personal jurisdiction over the defendant
- Whether the judgment was obtained by fraud
- Whether enforcement of the judgment would be contrary to public policy
When you are seeking to enforce a U.S.-entered judgment in a foreign country, the procedures and availability of relief will vary depending on the country, and in some countries may also differ depending on the nature of the judgment.
Work With a Law Firm Experienced in Foreign Judgement Enforcement
Whether you are seeking to enforce a judgment entered in one U.S. state in a neighboring state or to enforce a judgment internationally, familiarity with local procedures and requirements in the target jurisdiction is critical. There is no reason to invest substantial time and energy untangling cross-jurisdictional rules or risk making an error that could derail your enforcement efforts. Our attorneys have the experience to guide you through the process efficiently and help you recover what you are owed.