Article | RemediesAn Empirical Study of the Enforcement of Liquidated Damages Clauses in California and New Yorkby Luca […]
For half a century at least, the several states of the United States have taken a liberal attitude toward the recognition and enforcement of foreign country money judgments. The U.S. Supreme Court invoked the “grace” of sovereign nations to justify a restrictive approach to the recognition of judgments in the famous case of Hilton v. Guyot. The New York Court of Appeals laid out a more generous approach based in the vindication of private rights. Simply put, private rights won. In 1962, the Uniform Law Commission promulgated the Uniform Foreign Money-Judgments Recognition Act, which codified a liberal approach to the cross-border circulation of money judgments. The many U.S. states that adopted the uniform act were trying to lead by example. The hope was that, if they accepted incoming judgments, judgments exported to the rest of the world would be accepted, recognized, and enforced. For decades, this effort was regarded as a failure. The European Union continued to draw a sharp distinction between E.U. judgments and U.S. judgments—though acceptance of U.S. judgments by E.U. member states crept up over time. Some of the world’s largest economies—most notably, China—outright rejected recognition of U.S. money judgments.
Change has been recent and dramatic. In 2017, a Chinese court recognized and enforced a U.S. money judgement for the first time. Chinese law requires reciprocity between nations in order to recognize a foreign money judgment. The United States has no reciprocal judgment recognition treaty with any country. A U.S. district court recognized and enforced a Chinese judgment in 2009. This “reciprocity in fact” was sufficient for a Chinese court. A few months later, China announced that it would sign The Hague Convention on Choice of Court Agreements (“COCA”), obligating Chinese courts to recognize and enforce judgments rendered under a choice of court clause selecting the courts of any contracting state. The COCA has already entered into force between the European Union, Mexico, and Singapore. The United States has signed, but not ratified, the agreement. Meanwhile, The Hague Judgments Project gathers steam to require the free circulation of judgments arising in all but a few contexts. The drivers of this apparent convergence are obscure and likely diverse. This Article will analyze the causes of this recent, dramatic shift and will attempt to assess the likelihood of further convergence.
When fifteen-year-old Elisa Cazares was not nominated for membership to her high school’s chapter of the National Honor Society, she and her teachers were surprised. As the “brightest student” her math teacher had “seen come through” Tohono O’Odham High School, Cazares was one of four members of the student government, had been on the honor roll for every report period, and was active in a number of student activities. Arguing that the selection committee declined to nominate her because she was pregnant, unwed, and not living with the father of her future child, Cazares claimed that her equal protection rights had been violated and brought suit in federal district court. In holding that Cazares’s exclusion constituted a violation of her equal protection rights, the district court mandated that “no student . . . [could] be inducted into the National Honor Society unless and until Elisa Cazares [was] among them.” To achieve compliance with the district court’s instructions, Tohono O’Odham canceled the induction ceremony, remedying the violation by denying both Cazares and the students the selection committee had already nominated access to the Society.
In 1924, proponents of the Federal Arbitration Act (“FAA”) believed arbitration was an amicable way to resolve disputes between business professionals: Arbitration “preserves business friendships. . . . It raises business standards. It maintains business honor.” This indeed may be true, but judicial opinions interpreting the FAA have transcended the realm of legal reasoning, becoming hostile and antagonistic not toward a party’s improper action, but toward judges.