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Ahmad Hamad Al Gosaibi & Brothers Co. v. Standard Chartered Bank

Court of Appeals of Columbia District

September 4, 2014

AHMAD HAMAD AL GOSAIBI & BROTHERS COMPANY, et al., APPELLANTS,
v.
STANDARD CHARTERED BANK, APPELLEE

Argued April 10, 2014

Page 999

Appeals from the Superior Court of the District of Columbia. (CAF-1602-13). (Hon. Anthony C. Epstein, Trial Judge).

Mark J. Leimkuhler, with whom Eric L. Lewis and A. Katherine Toomey were on the brief, for appellants.

Christopher T. Handman, with whom Edward C. Dolan, Khang V. Tran, and Marc J. Gottridge were on the brief, for appellee.

Before FISHER and EASTERLY, Associate Judges, and REID, Senior Judge.

OPINION

Page 1000

Fisher, Associate Judge

The Constitution of the United States and 28 U.S.C. § 1738 (2012) require states of the Union to give full faith and credit to judgments rendered by other states. By contrast, judgments rendered in foreign countries are not entitled to full faith and credit, but they may be recognized by individual states as a matter of comity. The question presented in this case, an issue of first impression for us, is whether a New York judgment that simply recognized a judgment issued in Bahrain is entitled to full faith and credit in the District of Columbia. We hold that it is not.

I. Background

A. The Legal Context

Recognition of domestic judgments is governed by Article IV, Section 1, of the United States Constitution, which provides: " Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof." Exercising its power pursuant to this clause, Congress enacted 28 U.S.C. § 1738, which states that the acts, records, and judicial proceedings " of any State, Territory, or Possession of the United States . . . shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts . . . from which they are taken." [1]

Applying these provisions, the Supreme Court long ago recognized that, as a general matter, " the judgments of each State [have] the same conclusive effect . . . in all the States, as they ha[ve] at home." Thompson v. Whitman, 85 U.S. 457, 462, 21 L.Ed. 897 (1873). Put differently, " [a] final judgment in one State, if rendered by a court with adjudicatory authority over the subject matter and persons governed by the judgment, qualifies for recognition throughout the land." Baker ex rel. Thomas v. Gen. Motors Corp., 522 U.S. 222, 233, 118 S.Ct. 657, 139 L.Ed.2d 580 (1998). " This rule, if not compelled by the Full Faith and Credit Clause itself, . . . is surely required by 28 U.S.C. § 1738 . . . ." Thomas v. Washington Gas Light Co., 448 U.S. 261, 270, 100 S.Ct. 2647, 65 L.Ed.2d 757 (1980) (plurality opinion).[2]

Page 1001

Importantly, however, " recognition of judicial decrees of foreign countries is based upon [principles of] comity and not . . . upon full faith and credit under the Federal Constitution." Butler v. Butler, 239 A.2d 616, 618 (D.C. 1968); see Hilton v. Guyot, 159 U.S. 113, 227, 16 S.Ct. 139, 40 L.Ed. 95 (1895) (concluding " that judgments rendered in France, or in any other foreign country, . . . are not entitled to full credit and conclusive effect when sued upon in this country" ). " Comity, in the legal sense, is [not] a matter of absolute obligation . . . . [I]t is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation . . . ." Hilton, 159 U.S. at 163-64. " [I]n the absence of a federal statute or treaty . . ., recognition and enforcement of foreign country judgments is a matter of State law." Restatement (Third) of Foreign Relations Law § 481 cmt. a (1987) (citing Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938)).

As a matter of " state" law, the District of Columbia has adopted two separate statutory schemes to govern the recognition of domestic judgments and foreign country judgments. The Uniform Enforcement of Foreign Judgments Act (" UEFJA" ) provides for the streamlined registration of " any judgment . . . that is entitled to full faith and credit." D.C. Code § § 15-351 to -357 (2012 Repl.). The Act makes the District's recognition of such judgments essentially automatic, as they may be registered " in the Office of the Clerk of the Superior Court" without the involvement of a judge and without prior notice to other interested parties. D.C. Code § § 15-352 to -353 (2012 Repl.). Once filed with the Clerk, that judgment " shall have the same effect and be subject to the same procedures, defenses, or proceedings for reopening, vacating, or staying as a judgment of the Superior Court and may be enforced or satisfied in the same manner." D.C. Code § 15-352 (2012 Repl.).

The UEFJA does not apply to judgments rendered in a foreign country, which " are not entitled to full credit and conclusive effect when sued upon in this country." Hilton, 159 U.S. at 227. See, e.g., Van Kooten Holding B.V. v. Dumarco Corp., 670 F.Supp. 227, 228 (N.D.Ill. 1987) (holding " that the judgments of foreign countries can not be registered for enforcement under" the UEFJA); Multibanco Comermex, S. A. v. Gonzalez H., 129 Ariz. 321, 630 P.2d 1053, 1053 (Ariz. Ct. App. 1981) (same).

In contrast to the UEFJA, the Uniform Foreign-Country Money Judgments Recognition Act (" UFCMJRA" ) requires a litigant seeking recognition of a foreign country judgment to raise the issue in a new or pending action before the Superior Court. See D.C. Code § § 15-361 to -371 (2012 Repl.). A judge then substantively reviews the foreign country judgment. See D.C. Code § 15-364 (2012 Repl.). Under the UFCMJRA, " [a] court of the District of Columbia may not recognize a foreign-country judgment if" it was rendered under

Page 1002

any one of three enumerated circumstances. D.C. Code ยง 15-364 (b) (2012 Repl.). Additionally, the statute enumerates eight conditions under which " the District of Columbia need not recognize a foreign-country ...


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