Reply to Doug Cassel

Many thanks to Doug Cassel for his comments on some of the views I’ve expressed in the symposium. I’d like to respond to his three points in order.

Case-Specific Exceptions

I have argued that it doesn’t make much sense to have case-specific exceptions to the ordinary rules of recognition and enforcement of the foreign judgment. If the foreign judiciary is adequate, than it can detect and correct any case-specific fraud or corruption on its own. If the foreign judiciary is inadequate, than its judgment is not entitled to mandatory recognition and enforcement anyway.

Doug’s response is that “the world is not that neat,” that is, that there is a spectrum of judicial quality, ranging, as Doug puts it, from the United Kingdom to Zimbabwe. Most foreign judiciaries fall somewhere in between. Granted. “In such a world,” Doug writes:

we should not have to condemn an entire foreign judiciary merely because it might fail to correct serious problems in individual cases. Nor should we be bound to swallow individual judgments contrary to our fundamental principles, on the artificial assumption that since the system of which they are part is deemed adequate in general, therefore every individual judgment it produces must be deemed adequate as well.

I don’t find this persuasive. I think everyone is in agreement that when a defendant argues that a foreign judiciary is systematically inadequate, 1 the US court must put the foreign judiciary on one side of the line or the other, even though some will be closer to the line than others. Once the court draws the line, then it doesn’t seem sensible to me to say that while a judiciary may be systematically adequate, it is not adequate enough to leave error correction and fraud detection to it, but that the US courts must instead take that job on themselves. I think this is problematic as a matter of comity, because it sets up the US courts effectively as courts of appeals from decisions of judiciaries that we admit are deserving of respect and provide fair hearings. But I think it is also logically problematic, because US law does not require perfection in a foreign judiciary, and it seems to me that the notion of adequacy is meant to capture the notion that the judgments of a foreign court system, including its appellate processes, are entitled to recognition and enforcement. Now, I admit that this is really a policy argument rather than an argument about what the law is: the UFMJRA and the UFCMJRA both expressly provide for both systematic and case-specific defenses, and it seems to me that in the absence of the forum non conveniens issue we’ve been considering here, case-specific defenses are indeed allowed under US law, even though I don’t see the sense of them.

Case-Specific Exceptions and Forum Non Conveniens

I have argued that whatever the availability of case-specific defenses in general, a forum non conveniens dismissal can and in many cases should lead to an estoppel that prevents the US defendant from raising them. Doug, drawn like a moth to a flame (as I am!), discusses this point in the context of the Chevron/Ecuador case, and I will do likewise. First, I acknowledge that Doug makes two strong points that favor Chevron, though I note that these points are specific to the facts of the case and do not undercut the general argument I’m making. First, he says that the plaintiffs’ unclean hands prevent them from asserting an estoppel. I agree that unclean hands should be a factor in the equitable calculus, and maybe even a complete bar to an estoppel, though I haven’t worked that out doctrinally. Second, he points to Texaco’s stipulation, which expressly reserved the defenses available under New York law. I addressed this point at some length in a previous exchange with Doug, but I agree that the wording of the stipulation is a factor that favors Chevron.

Leaving these case-specific points aside, Doug says that the problem with my argument is the same as the problem with my argument about case-specific defenses generally: “The flaw in this suggestion is the same as the flaw in the first: it assumes an all-or-nothing view of the adequacy of a foreign judiciary.” My response is the same, but I add into the mix the idea that in the absence of a relevant change in foreign country conditions (more on this below), it is inequitable to allow the US defendant to blow hot and cold on the foreign judiciary as expediency requires, praising it when the defendant seeks an escape from the US courts, and damning it when it seeks to avoid its judgments in the United States.

Doug seems to agree with this to a point: he seems to say that estoppel is fine as long as the risk to the US defendant was foreseeable at the time of the FNC dismissal, but that there should be no rule of strict liability. So perhaps we don’t disagree too dramatically on this issue. I agree with Doug that strict liability is not the right rule: a US defendant who truly has no reason to suspect a radical change in an heretofore adequate foreign judiciary should not be estopped to challenge that judiciary’s judgments on grounds that arose after the FNC dismissal.

Foreseeability

In the Chevron/Ecuador case, the heart of the matter may, then, turn out to be a difficult mixed issue of fact and law: did something happen to Ecuador’s judiciary after the FNC dismissal that was so radical and unexpected that Chevron should be allowed to challenge the Ecuadoran judgment? Doug clearly has much more knowledge of the comparative merits of the various Latin American judiciaries than I do, but I find one passage in his post telling:

In 2000 Ecuador ranked respectably—with countries such as Mexico, Brazil and Peru—in the middle of the third quartile of nations worldwide. Ecuador then was well ahead of bottom-feeders like Honduras, Guatemala and Paraguay. By 2010, however, Ecuador had fallen to nearly the bottom of the fourth quartile, and was ranked ahead of only one other Latin American nation (Venezuela, where the “rule of law” has been reduced to the “rule of Chavez”).

I don’t know why that’s the right comparison. It is as though Doug is saying that yes, Chevron did choose to send the case to Latin America, a region not known for judicial independence, but there were plenty of countries in Latin America that are worse than Ecuador, which, after all, was in the middle of the third quartile! Isn’t the better comparison between the courts of the United States—Chevron’s home courts—and the courts of Ecuador? It strikes me that a US party that voluntarily forgoes the SDNY, one of the world’s great courts, for a court system in the middle of the third quartile of courts around the world can’t fairly complain when that court system slips from the middle of the third quartile—no great shakes—to the fourth quartile.

Thanks again to Doug for the engaging discussion.

Notes:

  1. We have been using the language of adequacy and inadequacy in the symposium, which is somewhat loose but convenient shorthand for the standard of, e.g., § 4(a)(1) of the UFMJRA, under which a judgment is non-conclusive if “the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law”.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2d ed. 2016), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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