Case of the Day: L’Institute National De L’Audiovisuel v. Kultur International Films, Ltd.
Posted on February 14, 2012
The Paris court ruled in favor of INA and held that Kultur was required to indemnify Sound Ventures. It entered a judgment of € 97,650, which included € 7,650 in attorney’s fees, against Kultur. The Court of Appeals in Paris affirmed the judgment in 2009.
Kultur sought recognition and enforcement in New Jersey and moved for summary judgment. The main issue was whether the damages the French court awarded included “a fine or other penalty.” Under New Jersey’s enactment of the UFMJRA, a foreign judgment eligible for recognition and enforcement under the statute is
any judgment of a foreign state granting or denying recovery of a sum of money, other than a judgment for taxes, a fine or other penalty, or a judgment for support in matrimonial or family matters.
Compare this with the more recent and nuanced 2005 UFCMJRA, which does not define penal judgments out of the statute but instead provides:
This act does not apply to a foreign-country judgment, even if the judgment grants or denies recovery of a sum of money, to the extent that the judgment is:
* * *
(2) a fine or other penalty
(emphasis supplied). According to the judge, a judgment is a fine or penalty if its purpose is “penal in nature, punishing an offense against public justice,” rather than “remedial in nature, with its benefits accruing to private individuals.”
Kultur argued that INA was an agency of the French government. But as the judge observed, its claim was a claim for copyright infringement—the same kind of claim any private person could bring. Thus the judge found that INA’s official or quasi-official status did not make the French judgment penal. Kultur also complained that INA had not presented proof of its actual damages, suggesting that the award was therefore not compensatory but penal. But the judge rightly observed that US copyright law also permits an award of statutory damages in the absence of proof of actual damages, and such damages are compensatory rather than punitive under US law.
Kultur also argued that France was a “seriously inconvenient” forum for the litigation, which is also a discretionary basis for refusing recognition and enforcement in cases where the foreign court’s jurisdiction was “based only on personal service.” The gist of this statutory provision is that a judgment need not be recognized if the US court considers that the foreign court should have dismissed the case on forum non conveniens grounds. The judge held that this provision of the statute was not applicable because the defendants had voluntarily appeared and defended the French action. This view of the statute seems unnecessarily cramped, because it implies that only a party that defaults can raise forum non conveniens as a basis for refusing recognition. I think the statute is best read to mean that a party can raise forum non conveniens only when the only basis for asserting jurisdiction over the defendant was that the defendant had received “tag service” but would not otherwise have been subject to the foreign court’s jurisdiction. But I don’t see why a party, having been “tagged” with a summons while transiting through the foreign country, for example, needs to default in the foreign proceeding in order to retain the right to argue that the foreign forum was seriously inconvenient.
Kultur argued that the award of attorney’s fees was contrary to public policy. The judge quickly dispatched this argument, on the grounds that US law also provides for an award of fees in copyright infringement cases.
Last, Kultur sought to reargue the merits of the French court’s ruling on its obligation to indemnify Sound Ventures. According to Kultur, the judgment was contrary to the plain language of the contract between it and Sound Ventures on this point. The statute provides that a court need not recognize a foreign judgment if “the proceedings in the foreign country court were contrary to an agreement between the parties under which the dispute in question was to be settled, other than by proceedings in that court.” But that provision merely allows parties to enforce their forum selection or arbitration agreements, not to relitigate the substance of the dispute.
Photo credit: Mrlopez2681