If you have a judgment that was issued by a court of either 1) another state in the United States, or 2) a country other than the United States, your judgment is called a “foreign judgment.”
What Is Domestication of a Foreign Judgment and When Is Domestication Necessary?
Before you can enforce that judgment in your own state or any jurisdiction other than the jurisdiction that originated the judgment, you must initiate a “domestication” action. Domestication is a legal proceeding in an appropriate court in the jurisdiction where you want to enforce the judgment. In a domestication action, you will ask that court to give effect to your foreign judgment.
The specific domestication process you need to follow depends on the rules of the jurisdiction where you want to enforce the judgment. The rules will set out the requirements you must meet for giving notice to other interested parties, response deadlines, and so forth.
Domestication of Foreign Judgments Issued by a Court of a State in the United States
Most states in the United States, the District of Columbia, the Northern Mariana Islands, and the Virgin Islands have adopted the Uniform Enforcement of Foreign Judgments Act, which requires them to give effect to the judgments of other states and territories.
The process requires registering a certified copy of the foreign judgment with the clerk of the court in the jurisdiction where you want to enforce the judgment. You will also need to file an affidavit attesting to certain facts, as specified in the court’s procedural rules. The Act does not require a hearing or additional formal procedures.
A few states have rules that deviate a bit from the Act. For example, the streamlined process is not available in some states such as New York and Connecticut if the foreign judgment was obtained by default, that is, the opposing party never appeared before the court to present a defense. These states also require the foreign judgment holder to bring a full-blown domestication action if the foreign judgment was obtained by confession by the opposing party.
Three states (California, Massachusetts, and Vermont) have not adopted the Act. To enforce foreign judgment in those states, you would have to file a traditional “domestication” action. In most cases, this domestication action is usually a formality. The United States Constitution requires states to honor the judgments of other states, and any defendant that tries to object to it has a heavy burden of proof.
Domestication of Foreign Judgments Issued by a Court in another Country
Domesticating a judgment from a foreign country can be more complex. You will need to bring a domestication action as described above.
In most cases, a foreign country judgment will be accepted by a United States court if the judgment is final, conclusive, and enforceable in the jurisdiction where it was rendered. Also, the country must have provided the parties with due process of law (adequate notice and an opportunity for hearing, legal representation, and similar rights) and had personal jurisdiction over the defendant(s). Whether the United States court will recognize the foreign judgment depends on the specifics of the underlying case.
If your foreign judgment awards you monetary damages in a foreign currency, the United States court domesticating it will usually convert the foreign currency to United States dollars using the exchange rate in effect at the time of entry of the foreign judgment.
Domesticating Foreign Judgments Issued by a United States Court in a Foreign Country
Domesticating a United States court judgment in a foreign country is more complicated than the domestication of a United States state court judgment. Whether the foreign country court will recognize and enforce the judgment first depends on whether a treaty exists between the United States and the country where recognition is sought, or whether a convention provides for the routine of registration and enforcement between the two countries.
Second, the courts of most countries will accept jurisdiction to hear cases for the recognition and enforcement of a United States court judgment if the defendant or relevant assets are physically located within the countries’ territorial boundaries, the domestic law of the court where recognition is sought permits it, and general principles of comity.
The factors that go into the decision-making usually include:
- Whether the United States court properly accepted personal jurisdiction over the defendant;
- Whether the defendant was properly served with notice of the proceedings and given a reasonable opportunity to be heard, raising general principles of natural justice and international standards;
- Whether the proceedings were tainted with fraud; and
- Whether the judgment offends the public policy of the local jurisdiction.
The laws and policies of the United States are not consistent with those of many foreign countries. Here are two areas where a foreign court will be reluctant to recognize and enforce a United States court judgment:
1. Punitive damages, multiple remedies, or excessive monetary awards. Foreign courts are reluctant to enforce foreign judgments which involve multiple forms of remedies or punitive damages. The United States is not a signatory to any treaty or convention on damages. Many countries are uncomfortable with the amount of money damages awarded by U.S. courts which consistently exceed the compensation available in those countries.
2. Exercise of extraterritorial jurisdiction. The laws of the United States allow courts to exercise broad jurisdiction over parties and property. In some cases, the court’s long reach to exercise its authority offends other countries’ notions of their sovereignty. Consequently, some courts are not inclined to enforce some United States court judgments.
In short, whether a foreign court will recognize and enforce a United States court judgment is a question that cannot be readily answered.
Consult with the Litigation Attorneys at KPPB LAW
Domesticating your foreign judgment requires the assistance of legal counsel with expertise in enforcing foreign judgments. Don’t make the costly mistake of trying to handle it yourself. Speak to the litigation and dispute resolution attorneys at KPPB LAW for more information about your case.