Academic journal article The George Washington Journal of International Law and Economics

Is the Uniform Foreign Money-Judgments Recognition Act Potentially Unconstitutional? If So, Should the Texas Cure Be Adopted Elsewhere?

Academic journal article The George Washington Journal of International Law and Economics

Is the Uniform Foreign Money-Judgments Recognition Act Potentially Unconstitutional? If So, Should the Texas Cure Be Adopted Elsewhere?

Article excerpt

Recent political events of historic and global proportion afford a wealth of challenge and opportunity for international legal practice. The breakup of the former Soviet Union, the reunification of Germany, and, in general, the collapse of command-style central planning as a viable approach to economic organization seem certain to expedite globalization of markets and increase the volume ofinternational business transactions. An increase in transactions means an increase in disputes. While arbitration is generally considered the preferred device for resolving transnational business disputes,(1) litigation is frequently unavoidable, either as a substitute for arbitration or as a consequence of it.(2) As international disputes are litigated and reduced to judgments in the national courts of various countries, the recognition and enforcement(3) of foreign judgments will present an expanded challenge to international legal practice. This Article addresses one aspect of that challenge: the recognition and enforcement of foreign country money judgments in the United States.

The United States is the nation most receptive to receptive to recognition of foreign country judgments.(4) This is the conclusion reached in 1987 by the American Law Institute's Restatement (Third) of Foreign Relations Law.(5) It attributes this receptivity to the influence of the principles and practices engendered by the Full Faith and Credit Clause of the Federal Constitution(6) in respect of sister state judgments.(7)

One manifestation of this receptivity is the Uniform Foreign Money-Judgments Recognition Act (Uniform International Act), promulgated by the National Conference of Commissioners on Uniform State Laws in 1962(8) and now said to be in effect in twenty-two states, including California, Illinois, Massachusetts ,Michigan, New York, Ohio, Pennsylvania, and Texas.(9) The Uniform International Act was designed to "codify" rules that had long been applied by a majority of state courts in the United States.(10) It provides for the enforcement of recognized foreign country money judgments "in the same manner as thejudgment of a sister state which is entitled to full faith and credit."(11)

The formula sounds simple, logical, and workable. For the most part it has been. But in the 1980s, two Texas intermediate appellate courts ruled it unconstitutional(12) and a third avoided that condemnation by reading into the Uniform International Act (Texas version) what was tantamount to a section on due process hearing procedures.(13) In mid-1989 the Texas state legislature obliged the Texas Bar by converting that judicially inferred section into a statutory amendment,(14) thereby attempting to cure the purported unconstitutionality of the Uniform International Act.(15) That purported unconstitutionality lay in the Uniform International Act's failure to specify the United States procedures by which a foreign country moneyjudgment is to be examined for compliance with due process standards: that is, the Act's failure to provide for due process here on the question of due process there unless a new common law action is brought on the foreign judgment.

A 1990 decision of the Texas Supreme Court upheld the constitutionality of the unamended Act but only on the basis that, under the facts of the particular case before it, the required due process hearing would be provided in the course of the separate common law action that had been brought to enforce the foreign judgment(16) Since a separate common law action on a sister stat or foreign country judgment has always been available,(17) the Texas Supreme Court's reasoning did not reach the perceived defects of the Uniform International Act,(18) which was designed to permit "short-cut" procedures as an alternative to enforcement lawsuits.(19)

Although the legislature in Texas took remedial action,(20) the problem has not been identified or addressed by the courts of any other state in which the Uniform International Act has been adopted. …

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