Domesticating Foreign Judgments
Once a litigant wins a lawsuit, a court grants her a judgment that she may need to enforce. But that judgment may only be used to collect assets within the jurisdiction of the court. This presents an issue for a litigant who wants to use the judgment to collect assets that the judgment debtor keeps somewhere else. What good is a New York judgment if the defendant owns very little in New York, but owns a house in California and keeps a bank account in Florida? Courts address this issue by letting litigants obtain local judgments based on judgments in other courts without needing to re-litigate the entire case.
Why should you read this post about domesticating foreign judgments?
You already read a post about getting a judgment in India and you don’t want to have to read a whole new post about getting a judgment.
You love following complicated procedural rules but are bored by the actual merits of a dispute.
You’re interested to learn about a context in which the word “foreign” can mean “New Jersey.”
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The Uniform Enforcement of Money Judgments Recognition Act
Nearly all states have adopted the Uniform Enforcement of Money Judgments Act. New York codified this law as Civil Practice Law and Rule Article 54. Pursuant to this law, a litigant can take her judgment from a federal court or a state and convert it into a judgment of another state court.
The judgment creditor does not need to start a new lawsuit. Instead, the creditor need only file the judgment with a county clerk, together with a sworn statement that “the judgment was not obtained by default in appearance or by confession of judgment, that it is unsatisfied in whole or in part, the amount remaining unpaid, and that its enforcement has not been stayed, and setting forth the name and last known address of the judgment debtor.”
After that, the judgment creditor needs to serve a copy of the filing on the judgment debtor. Then, thirty days later, the clerk can then issue a new judgment to the judgment creditor.
This procedure only applies to taking the judgment to state court for enforcement. A judgment creditor can take a federal court judgment and domesticate it another federal district by registering it with that district’s court pursuant to 28 U.S.C. 1963.
The Uniform Foreign Money Money Judgments Recognition Act
Most states have adopted the Uniform Foreign Money Judgments Recognition Act. This law sets forth a procedure for litigants with money judgments from foreign countries to initiate a new lawsuit in a U.S. state court and obtain a local state court judgment without re-litigating the underlying dispute. In New York, this law is set forth in Article 53 of the Civil Practice Law and Rules.
Unlike with a judgment from another state, this procedure requires the judgment creditor to initiate a new lawsuit. But instead of proving the underlying factual assertions in the new lawsuit, a plaintiff need only establish that her judgment is “final, conclusive and enforceable where rendered, even though an appeal therefrom is pending or it is subject to appeal.” The judgment debtor, in turn, may avoid domestication by arguing one of a list of exceptions. These include:
the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law;
the foreign court did not have personal jurisdiction over the defendant; or
the judgment was procured by fraud.
Court generally find that most countries have sufficient legal systems to award judgments that they will domesticate. One court hesitated to enforce a Chinese judgment. Another found Russian courts to be sufficiently impartial and still another affirmed Ecuadorian courts to be as well.
Litigants often try to use the “procured by fraud” exception to try to re-litigate the merits of a case. They claim that the initial court was deceived by false evidence or testimony and the new court should therefore not domesticate the judgment. But while these arguments may complicate the proceedings, they rarely succeed.
Domesticating a Non-Money Judgment
Not all judgments are for money. Some make a declaration about the legal status between two parties and others order a party to do or not to do something. The Uniform acts I discussed above do not apply to those kinds of judgments.
In many cases, a non-money judgment does not need to be domesticated. This is because violating that order will prompt the original court to punish the violating party. If that punishment is an adverse ruling in the original case, the court does not need the cooperation of another court to do that. if that punishment is a requirement that the violator pay money, the court can issue a money judgment that can be domesticated elsewhere. And, in the rare circumstance where the punishment is imprisonment, the court can issue a warrant for the violator’s arrest that police may see if the violator is arrested for another reason.
But in some cases, state courts will treat an out-of-state order as their own. For example, pursuant to the Violence Against Women Act, restraining orders in domestic violence cases are enforceable in jurisdictions beyond those of the court that issued them. And some statutes, like the Florida Enforcement of Judgments Act, set forth domestication procedures that apply to non-money judgments.