More Thoughts On The Second Circuit Decision In Chevron Corp. v. Naranjo
Posted on January 31, 2012
In my last post on Chevron v. Naranjo, I disagreed with the notion that some peculiarity of the Uniform Foreign Money Judgment Recognition Act implied that a party facing recognition and enforcement proceedings could not seek a declaration that the foreign judgment was not entitled to recognition. But a comment by Roger Alford at the Kluwer Arbitration Blog prompted some more thought. Roger writes:
It appears that the Ecuador plaintiffs will not seek to have the judgment enforced within the United States. Ecuador Plaintiffs’ lawyer James Tyrrell stated yesterday that “The Ecuadorean plaintiffs are not coming to New York to enforce this judgment.” Given the locus of Chevron’s assets, it is not obvious why the plaintiffs have adopted this strategy, unless they have reason to believe that there is a high probability that the judgment would not be enforced.
Why would the plaintiffs disclaim any intention to seek recognition and enforcement in the United States? Well, in the RICO case pending in New York, the Ecuadorans—who there are defendants rather than plaintiffs—have raised lack of personal jurisdiction as a defense. Suing for recognition and enforcement in New York would have waived the personal jurisdiction argument and allowed Chevron to bring its RICO claim as a counterclaim in the recognition and enforcement case.
Moreover, if the Ecuadorans intended to seek recognition and enforcement in New York, then surely they would already have done so by asserting a counterclaim in the RICO case. Under Rule 13(a)(1), maybe they would have had to assert their claim as a counterclaim, because the counterclaim “arises out of the transaction or occurrence that is the subject matter of the opposing party’s claim,” i.e., Chevron’s claim for a declaratory judgment.
So there are pretty strong reasons to take Tyrrell at his word and believe that the Ecuadorans really do not intend to seek recognition and enforcement in New York or elsewhere in the United States. If that’s right, then even if, in principle, a declaratory judgment action is available to a party in Chevron’s situation under the UFMJRA, Chevron wouldn’t be able to make the necessary showing of an actual case or controversy that is sufficiently concrete to permit the court to hear its claim for declaratory relief.