In an earlier post, I wrote about the Enforcement of Chinese Judgments in the United States and cited a recent California decision enforcing a Chinese judgment in the United States. The case is unique because it is generally believed that United States courts will not enforce Chinese judgments given the lack of a treaty between the two countries on the issue and given that Chinese courts generally do not enforce United States judgments in China.
While the California decision came as welcome news to the plaintiffs, a recent Florida case may serve to temper the hopes of foreign litigants seeking to liquidate their judgments in U.S. courts. Earlier this week, as reported in the Wall Street Journal by Ashby Jones in the article Dole on A Roll: Court Declines to Enforce $97M Judgment, a federal judge in Miami refused to enforce a $97-million judgment ordered by a Nicaraguan court. Plaintiffs sought to enforce the judgment under Florida’s Uniform Out-of-Country Foreign Money-Judgments Recognition Act. The judgment handed down four years ago by 150 Nicaraguans who said they suffered injuries from pesticides used at Dole’s banana farms in the 1970s, can’t be enforced because it was based on a law that violates international legal standards, said Judge Paul Huck in Miami Tuesday. Judge Huck’s Order Denying Recognition of Judgment is worth a read.
In the opinion, Judge Huck found:
[T]hat the judgment in this case did not arise out of proceedings that comported with the international concept of due process. It arose out of proceedings that the Nicaraguan trial court did not have jurisdiction to conduct. During those proceedings, the court applied a law that unfairly discriminates against a handful of foreign defendants with extraordinary procedures and presumptions found nowhere else in Nicaraguan law. Both the substantive law under which this case was tried, Special Law 364, and the Judgment itself, purport to establish facts that do not, and cannot, exist in reality. As a result, the law under which this case was tried stripped Defendants of their basic right in any adversarial proceeding to produce evidence in their favor and rebut the plaintiffs’ claims. Finally, the judgment was rendered under a system in which political strongmen exert their control over a weak and corrupt judiciary, such that Nicaragua does not posses a “system of jurisprudence likely to secure an impartial administration of justice.”
Those are strong words coming from one of the country’s most experienced jurists on the subject of foreign judgments–due in part to the Court’s geographical proximity to South America.
Judge Huck concluded:
That Defendants have established multiple, independent grounds under the Florida Recognition Act that compel non-recognition of the $97 million Nicaraguan judgment. Because the judgment was “rendered under a system which does not provide impartial tribunal or procedures compatible with the requirements of due process of law,” and the rendering court did not have jurisdiction over Defendants, the judgment is not considered conclusive, and cannot be enforced under the Florida Recognition Act. FLA. STAT. § 55.605(1)(a)-(c). Additionally, the judgment will not be enforced because “the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of this state.” FLA. STAT. § 55.605(2)(c). The Court, therefore, orders that Plaintiffs’ judgment shall be neither recognized nor enforced.
The Court was persuaded in part by a United States State Department Country Report, which found that in every year from 1999 through 2008, Nicaragua lacked an effective civil law system. The Report is on point, as Nicaraguan courts have issued judgments in 32 such suits for a total of $2.05 billion against Dole and pesticide makers since 2002. As reported in the article Assailing Nicaraguan Judicial System, Miami Judge Refuses to Enforce $98 Million Judgment in Banana Pesticide Case, authored by Andrew Longstreth in the American Lawyer Litigation Daily, plaintiff’s own expert “’admitted on cross-examination that some judges are not impartial or independent and emphasized the need to improve Nicaragua’s judiciary.’"
Although this is a powerful ruling with potentially broad implications, it remains to be seen whether it will be a major deterrent to bringing other verdicts to the United States. This latest ruling is of particular interest to me given, my earlier posts here and here, on the Chevron litigation currently taking place in Ecuador.
Trend to Watch: Look for Other U.S. Courts to More Closely Examine Foreign Judgments That Reach Their Doorstep.