Update (10/9/14): I think Greg Shill’s new post about this case may require a rethink on my part, so check back in!

The case of the day is Standard Chartered Bank v. Ahmad Hamad Al Gosaibi & Bros. (Pa. Super. Ct. 2014). Friend of Letters Blogatory Greg Shill brought it to my attention—thanks, Greg! I have written about the case three times before, once in connection with an action in New York for recognition and enforcement of a Bahraini judgment, and twice in connection with § 1782 proceedings. Today’s case was an action for recognition and enforcement of the New York judgment in Pennsylvania. So the case raises some of the issues Greg wrote about in his article on judgment arbitrage.

The basic holding of the case is that the Pennsylvania court was required by the Full Faith and Credit Clause to recognize the New York judgment, even though the New York judgment was an action to recognize a foreign judgment and not a litigation on the underlying merits. In one sense, this is an easy result, but then, it was an easy case: the law of Pennsylvania and the law of New York on recognition and enforcement of foreign judgments did not differ in any material respect, and there was no evidence of an improper purpose here in bringing the action first in New York and then seeking enforcement in Pennsylvania. So this wouldn’t be a good case for making the case that the risk of “judgment arbitrage,” i.e., the problem of a judgment creditor seeking recognition first in a lenient state and then enforcing that state’s judgment elsewhere in the United States, justifies a change in the rules of full faith and credit or the rules of nationwide enforcement of federal judgments. It may be that in a more difficult case a court would stretch to justify an exception to the ordinary rules.

My basic view, expressed in my post on Greg’s paper, is that it is probably unwise to make an exception to those existing rules. For one thing, it’s not clear there’s a real problem to be solved. This case is a good example: the judgment creditor sought recognition in two jurisdictions, but is there any reason to think it was trying to game the system in some way? For another thing, full faith and credit, and the nationwide enforceability of federal judgments by registration, express important values of American federalism that should not lightly be cast aside.