[Greg Shill is a Visiting Assistant Professor at the University of Denver Sturm College of Law.]
This post is part of the HILJ Online Symposium: Volumes 54(2) & 55(1). Other posts in this series can be found in the related posts below.
I thank Professor Christopher Whytock for engaging with the ideas in my article, Ending Judgment Arbitrage: Jurisdictional Competition and the Enforcement of Foreign Money Judgments in the United States, 54 Harv. Int’l L.J. 459 (2013), and the Harvard International Law Journal and Opinio Juris for hosting this symposium. Whytock has published widely on transnational litigation and judgment enforcement. Ultimately, I think his response misreads or overstates the article’s claims in some places (and in others we may simply have a difference of opinion), but the sister-state dimension of transnational judgment enforcement has thus far not attracted much scholarly attention and I am delighted to see his thoughtful and serious commentary in this forum.
I. Judgment Arbitrage & Whytock’s Criticisms
Briefly, the article focuses on the enforcement of foreign-country judgments in the United States. By its nature, this process creates the potential for clashes between domestic and foreign legal systems. In a typical case, a local court, often in the U.S., is asked to order a local defendant to satisfy a judgment rendered by a foreign court, under foreign law. Thus, unsurprisingly, scholars to date have tended to focus on the conflict between foreign sources of law and systems of justice on the one hand and their American counterparts on the other—the international-level conflict. One mission of the article is to explore domestic—i.e., sister-state—conflicts that result from the judgment-enforcement process.
To collect on a foreign judgment in the U.S., a plaintiff must first domesticate it. This entails a two-stage process: the judgment must first be recognized and then enforced. Federalism and the Erie doctrine are key to this process: (1) recognition is governed by state law, specifically forum law, (2) recognition standards differ widely from state to state, and (3) states have an obligation to enforce one another’s judgments. Thus, I argue, plaintiffs can exploit sister state differences in recognition law by first obtaining recognition in a state that is receptive to foreign judgments and then enforcing in a state that might not have recognized the foreign judgment in the first place. My article gives this phenomenon the name “judgment arbitrage,” and closes by proposing a federal statute to address it. The upshot of the statute is to allow states to resist judgment arbitrage by declining to enforce judgments they would not have recognized in the first place. (more…)