Snapshot: bringing a claim for enforcement of a foreign judgment in USA

Bringing a claim for enforcement

What is the limitation period for enforcement of a foreign judgment? When does it commence to run? In what circumstances would the enforcing court consider the statute of limitations of the foreign jurisdiction?

Limitation periods vary between states. States that follow the 2005 Uniform Foreign-Country Money Judgments Recognition Act (the 2005 Model Act) will generally apply its statute of limitations, which is the limitation period of the foreign country or 15 years, whichever is shorter. However, some states use a different limitation period. See, for example, section 26-6-209 of the Tennessee Code, which enacted the 2005 Model Act with a modified 10-year period.

No limitation period appears in the 1962 Uniform Foreign Money Judgments Recognition Act (the 1962 Model Act), and so state-specific law will apply in states that have only enacted this statute. For example, Florida, a state that follows the 1962 Model Act, applies a 20-year limitation period from the date of recognition. See Nadd v Le Credit Lyonnais, SA, 804 So 2d 1226 (Fla 2001).

Which remedies ordered by a foreign court are enforceable in your jurisdiction?

The 2005 Model Act and the 1962 Model Act provide that for a foreign judgment to be recognisable, it should concern a certain monetary amount, be final and conclusive, and be enforceable in the country where rendered. See sections 2 to 3 of the 1962 Model Act and section 3(a)(2) of the 2005 Model Act. Foreign judgments that satisfy these requirements are generally enforceable in US courts unless a statutory ground for non-recognition is established by the defendant. States that have not enacted one of the Model Acts will apply their own unique common-law requirements.

The enforcement of foreign judgments other than money judgments is not governed by statute. While a US court will generally recognise a foreign injunction under principles of comity, it is not bound to do so – see section 488 of the Restatement (Fourth) of Foreign Relations Law (2018). One example is foreign anti-suit injunctions, which are thoroughly examined by US courts and often denied recognition where the target lawsuit is properly before a US court. See, for example, Laker Airways Ltd v Sabena Belgian World Airlines, 559 F Supp 1124 (DDC 1983), aff’d, 731 F 2d 909 (DC Circuit, 1984).

Finally, foreign tax judgments, fines and penal judgments (ie, judgments that serve not to remedy an injury but instead seek to ‘punish an offence against the public justice of the State’) are generally not enforceable – see Huntington v Attrill, 146 US 657, 673-674 (1892). Both the 1962 Model Act and the 2005 Model Act prohibit the enforcement judgments for taxes, fines or penalties.

Must cases seeking enforcement of foreign judgments be brought in a particular court?

Generally, US courts must have subject-matter jurisdiction and personal jurisdiction over the defendant to hear a dispute. Both state and federal courts may have subject-matter jurisdiction over recognition and enforcement actions. However, federal courts require that the value of a claim be above a certain threshold and have specific requirements regarding the citizenship of the parties.

The exercise of personal jurisdiction over a foreign defendant generally requires that party to have sufficient dispute-related contacts with the state where the court is located (see Walden v Fiore, 571 US 277, 288 (2014)). In some circumstances, jurisdiction over a judgment debtor can also be established by the presence of property belonging to that debtor in the jurisdiction, but only to the extent of that property. In a limited number of states, a court does not need to have personal jurisdiction over a judgment debtor to enforce a foreign judgment against them. See, for example, Gesswein v Gesswein, 566 SW3d 34 (Tex App 2018).  

Once a foreign judgment has been recognised in a particular state, that judgment can generally be enforced in the same manner as a judgment rendered in that state (see section 486 of the Restatement (Fourth) of Foreign Relations Law (2018)).

While states usually give ‘full faith and credit’ to a judgment rendered in another US state, they are split as to whether this deference will be accorded to a judgment from another US state that recognises a foreign judgment. Compare Reading & Bates Const Co v Baker Energy Res Corp, 976 SW2d 702, 715 (Tex App 1998) (Texas court refusing to give credit to Louisiana judgment recognising a Canadian judgment), with Standard Chartered Bank v Ahmad Hamad Al Gosaibi & Bros Co, 99 A3d 936, 937 (PA Super 2014) (Pennsylvania court granting recognition to a New York judgment recognising a Bahraini judgment).

To what extent is the process for obtaining judicial recognition of a foreign judgment separate from the process for enforcement?

A foreign judgment must be recognised before it can be enforced, but both processes usually take place sequentially in the same proceedings. Recognition is typically governed by the forum state’s version of the 1962 Model Act, the 2005 Model Act or applicable common law. Once recognised, the procedure for enforcement of the recognised judgment is typically governed by the Uniform Enforcement of Foreign Judgments Act, which provides that enforcement shall proceed under the same state-law mechanisms that are used for local judgments – see section 3 of the 1962 Model Law and section 7 of the 2005 Model Act. See also, for example, Electrolines, Inc v Prudential Assurance Co, Ltd, 677 NW2d 874, 880-83 (Mich Ct App 2003).

Enforcement and pitfalls

Once a foreign judgment is recognised, what is the process for enforcing it in your jurisdiction?

The process for enforcement varies by state but has been increasingly aligned by model legislation. The 2005 Uniform Foreign-Country Money Judgments Recognition Act (the 2005 Model Act) states that once a foreign judgment is recognised, it is ‘enforceable in the same manner and to the same extent as a judgment rendered in this state’, but does not deal with the particulars of enforcement, which differ between states. All jurisdictions except California, Puerto Rico and Vermont have enacted the Uniform Enforcement of Foreign Judgments Act, which provides the procedure for enforcement of an out-of-state judgment. In general, judgment creditors can either seek enforcement via issuance of a writ of execution (ie, taking control of and monetising assets to satisfy a judgment) or by commencing supplemental proceedings. Common examples of supplemental proceedings include restraining notices, turnover orders or actions and asset discovery.

What are the most common pitfalls in seeking recognition or enforcement of a foreign judgment in your jurisdiction?

The recognition and enforcement of a foreign judgment in US courts is not a given, and statutory grounds for resisting enforcement vary greatly between states. The overall trend, as embodied by the growing number of states that have enacted the 2005 Model Act, which now includes Nebraska, New York and Utah, has been towards the expansion of grounds for resisting enforcement. Parties should seek advice from experienced counsel.