[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







                    RECOGNITION AND ENFORCEMENT OF 
                           FOREIGN JUDGMENTS

=======================================================================

                                HEARING

                               BEFORE THE

                   SUBCOMMITTEE ON COURTS, COMMERCIAL
                         AND ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 15, 2011

                               __________

                           Serial No. 112-109

                               __________

         Printed for the use of the Committee on the Judiciary









      Available via the World Wide Web: http://judiciary.house.gov

                                _____

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                       COMMITTEE ON THE JUDICIARY

                      LAMAR SMITH, Texas, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        HOWARD L. BERMAN, California
HOWARD COBLE, North Carolina         JERROLD NADLER, New York
ELTON GALLEGLY, California           ROBERT C. ``BOBBY'' SCOTT, 
BOB GOODLATTE, Virginia                  Virginia
DANIEL E. LUNGREN, California        MELVIN L. WATT, North Carolina
STEVE CHABOT, Ohio                   ZOE LOFGREN, California
DARRELL E. ISSA, California          SHEILA JACKSON LEE, Texas
MIKE PENCE, Indiana                  MAXINE WATERS, California
J. RANDY FORBES, Virginia            STEVE COHEN, Tennessee
STEVE KING, Iowa                     HENRY C. ``HANK'' JOHNSON, Jr.,
TRENT FRANKS, Arizona                  Georgia
LOUIE GOHMERT, Texas                 PEDRO R. PIERLUISI, Puerto Rico
JIM JORDAN, Ohio                     MIKE QUIGLEY, Illinois
TED POE, Texas                       JUDY CHU, California
JASON CHAFFETZ, Utah                 TED DEUTCH, Florida
TIM GRIFFIN, Arkansas                LINDA T. SANCHEZ, California
TOM MARINO, Pennsylvania             [Vacant]
TREY GOWDY, South Carolina
DENNIS ROSS, Florida
SANDY ADAMS, Florida
BEN QUAYLE, Arizona
MARK AMODEI, Nevada

      Sean McLaughlin, Majority Chief of Staff and General Counsel
       Perry Apelbaum, Minority Staff Director and Chief Counsel
                                 ------                                

       Subcommittee on Courts, Commercial and Administrative Law

                 HOWARD COBLE, North Carolina, Chairman

               TREY GOWDY, South Carolina, Vice-Chairman

ELTON GALLEGLY, California           STEVE COHEN, Tennessee
TRENT FRANKS, Arizona                HENRY C. ``HANK'' JOHNSON, Jr.,
DENNIS ROSS, Florida                   Georgia
BEN QUAYLE, Arizona                  MELVIN L. WATT, North Carolina
                                     [Vacant]

                      Daniel Flores, Chief Counsel

                      James Park, Minority Counsel















                            C O N T E N T S

                              ----------                              

                           NOVEMBER 15, 2011

                                                                   Page

                           OPENING STATEMENT

The Honorable Howard Coble, a Representative in Congress from the 
  State of North Carolina, and Chairman, Subcommittee on Courts, 
  Commercial and Administrative Law..............................     1

                               WITNESSES

Linda J. Silberman, Martin Lipton Professor of Law, New York 
  University School of Law
  Oral Testimony.................................................     3
  Prepared Statement.............................................     6
H. Kathy Patchel, Uniform Law Commissioner, Indianapolis, IN
  Oral Testimony.................................................    46
  Prepared Statement.............................................    48
John B. Bellinger, III, Partner, Arnold & Porter, LLP, on behalf 
  of the U.S. Chamber of Commerce and the U.S. Chamber Institute 
  for Legal Reform
  Oral Testimony.................................................    55
  Prepared Statement.............................................    58

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Steve Cohen, a Representative 
  in Congress from the State of Tennessee, and Ranking Member, 
  Subcommittee on Courts, Commercial and Administrative Law......    73
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress from the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    74
Response to Post-Hearing Questions from Linda J. Silberman, 
  Martin Lipton Professor of Law, New York University School of 
  Law............................................................    75
Response to Post-Hearing Questions from H. Kathy Patchel, Uniform 
  Law Commissioner, Indianapolis, IN.............................    83
Response to Post-Hearing Questions from John B. Bellinger, III, 
  Partner, Arnold & Porter, LLP, on behalf of the U.S. Chamber of 
  Commerce and the U.S. Chamber Institute for Legal Reform.......    87
Letter from Louis B. Kimmelman, Chair, the New York City Bar.....   110
Letter from Forum Nobis PLLC.....................................   113
Letter from John B. Bellinger, III, Arnold & Arnold LLP..........   175
Letter from William E. Thomson, Gibson Dunn......................   178

 
            RECOGNITION AND ENFORCEMENT OF FOREIGN JUDGMENTS

                              ----------                              


                       TUESDAY, NOVEMBER 15, 2011

              House of Representatives,    
                    Subcommittee on Courts,
                 Commercial and Administrative Law,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 1:30 p.m., in 
room 2141, Rayburn House Office Building, the Honorable Howard 
Coble (Chairman of the Subcommittee) presiding.
    Present: Representatives Coble, Gowdy, Cohen, and Watt.
    Staff Present: (Majority) Daniel Flores, Subcommittee Chief 
Counsel; Blaine Merritt, Counsel; Johnny Mautz, Counsel; Ashley 
Lewis, Clerk; and (Minority) James Park, Subcommittee Chief 
Counsel.
    Mr. Coble. The Subcommittee will come to order.
    I don't believe in penalizing people who get here in a 
timely way, and you all are here in a timely way, so we will 
proceed.
    I think there is a scheduled vote on or about 2:30, so we 
will try to move along and not keep you all here excessively. 
It is good to have you with us, each of the three witnesses.
    This hearing is an outgrowth of the libel tourism project 
that resulted in passage of the SPEECH Act in the 111th 
Congress. The SPEECH Act addresses the issue of so-called libel 
tourism lawsuits and how they may be enforced against American 
citizens. The Ranking Member, Mr. Cohen, will be here shortly; 
and he was actively involved in that legislation as well.
    The recognition and enforcement of libel tourism judgment 
is a subset of a larger concern, namely how are most judgments 
rendered by foreign courts recognized and enforced in the 
United States. The purpose of the hearing is to provide general 
background on the subject matter so Members can determine 
whether Congress should create a Federal statute to address how 
foreign judgments are treated in our country. This will 
dovetail into an analysis on the American Law Institute's 2006 
report on the subject, which included a proposed Federal 
statute.
    The recognition and enforcement of foreign judgments in the 
United States is governed by State law and there is no Federal 
statute on the subject. The United States is not a party to any 
international agreement that addresses the topic, though it has 
participated in multilateral negotiations in the 1900's and 
early 2000's that led to the development of a choice of courts 
treaty that has been signed but not ratified.
    Aside from uniform model acts, many States have adopted in 
whole or in part State law regarding the recognition and 
enforcement of foreign judgments is a function of comity, the 
principle that courts of one State or jurisdiction will give 
effect to laws and judicial decisions of another State or 
jurisdiction, not as a matter of obligation but out of 
deference and mutual respect.
    In addition, States frequently revoked the restatements of 
lawful authority when deciding foreign treatment cases. The two 
most cited texts are the restatement third of foreign relations 
law and the restatement second conflict of laws.
    The Subcommittee wants to explore the extent to which State 
law is doing a good job of recognizing and enforcing foreign 
judgment in a way that is equitable to litigants. How do the 
individual States vary in their treatment on this 
jurisprudence? Does this variation result in forum shopping?
    Should the Federal Government preempt the States and create 
an exclusive and uniform way of recognizing and enforcing 
foreign judgments? These are some of the issues we want to 
explore this afternoon.
    I will conclude with this final point. The hearing is not 
about sticking a square peg in a round hole. We don't want to 
write and process a bill if this would create havoc. The 
hearing is an opportunity for the Members to learn more about 
the subject matter so that we can learn and make more informed 
decisions about proceeding or not proceeding at a later time.
    Again, I thank the witnesses for your being here today, and 
I recognize the--well, the only Member we have is Mr. Gowdy 
from the land of the palmetto. Do you have an opening statement 
to make?
    Mr. Gowdy. No, sir, Mr. Chairman.
    The gentleman from North Carolina has since joined us as 
well, Mr. Chairman.
    Mr. Coble. I recognize Mr. Watt, the distinguished 
gentleman from North Carolina. Do you have a statement to make?
    Mr. Watt. No.
    Mr. Coble. No statement, so we will proceed.
    We have a very distinguished panel of witnesses today. Each 
of the witness's written statements will be entered into the 
record in its entirety.
    I ask that each witness summarize his or her testimony in 5 
minutes or less, if possible. You will have--the red light will 
illuminate that your 5 minutes are expired. Now you won't be 
keel hauled if you violate it, but we would like to comply with 
the 5-minute rule as do we here and particularly since there is 
a scheduled vote that is probably imminent. When the red light 
becomes amber, that's a 1 minute warning that the ice on which 
you are skating is getting thin. When the light switches from 
green to yellow, that will be your note.
    Without objection, all Members have 5 legislative days 
within which to submit materials for the record.
    Our first witness is Professor Linda Silberman, the Martin 
Lipton Professor of Law at the New York University School of 
Law. She is the first tenured woman full professor at the 
school where she teaches conflict of laws, civil procedure, 
comparative civil procedure, transitional litigation, and 
international commercial arbitration.
    Prior to joining the NYU faculty, Professor Silberman 
practiced law in Chicago, worked at a professor in residence at 
the Department of Justice, and served as a member of numerous 
State Department delegations to The Hague Conference on Private 
International Law. She is the author of case books and numerous 
law review articles of great relevance to our hearing. She was 
a co-reporter of the 2006 American Law Institute Project on the 
Recognition and Enforcement of Foreign Judgments. Professor 
Silberman received her undergraduate and law degrees from the 
University of Michigan, and she was a Fulbright scholar as well 
in London.
    Our second witness is Mr. John Bellinger, partner at the 
law firm of Arnold & Porter in Washington, D.C.
    Earlier in his career, Mr. Bellinger served in a number of 
senior positions of the Federal Government, including as legal 
advisor to the Department of State, the legal advisor to the 
National Security Council and the Council for National Security 
Matters in the Criminal Division at the Department of Justice. 
He was also an Adjunct Senior Fellow in International and 
Security Law at the Council of Foreign Relations. Mr. Bellinger 
earned his undergraduate degree from Princeton, his M.A. in 
Foreign Affairs from the University of Virginia, and his J.D. 
From the Harvard School of Law, where he was the editor of the 
Harvard International Law Journal.
    Our final witness is Ms. Kathy Patchel, an Indiana 
Commissioner of the National Conference of Commissioners of 
Uniform State Law, also known as Uniform Law Commission. She 
will be testifying on behalf of that organization.
    Ms. Patchel is also an emeritus professor at the Indiana 
School of Law in Indianapolis. Through the years, she has 
taught legislation, constitutional law, commercial paper, 
remedies, and other subjects. In addition, Professor Patchel 
has taught at Northern Illinois University and the University 
of Mississippi, clerked for the Honorable Frank M. Johnson, 
Jr., of the 11th Circuit and practiced law in Atlanta.
    She earned her B.A. Degree in English from Huntington 
College, a J.D. From my alma mater, University of North 
Carolina--and Mrs. Watts spent some time at Chapel Hill as 
well, if my memory serves correctly. As I said, from Huntington 
College and then the J.D. From the University of North Carolina 
Chapel Hill, her L.L.M. From Yale. Professor Patchel has 
published widely and served on a number of Uniform Law 
Commission committees.
    Welcome to each of you. The witnesses will be allowed, as I 
said, 5 minutes; and we will recognize Ms. Silberman to begin 
with.

  TESTIMONY OF LINDA J. SILBERMAN, MARTIN LIPTON PROFESSOR OF 
             LAW, NEW YORK UNIVERSITY SCHOOL OF LAW

    Ms. Silberman. Thank you, Chairman Coble. I am delighted to 
have this invitation and delighted to find the Subcommittee 
interested in considering Federal legislation in this area.
    I testified before this Subcommittee when it was 
considering Federal legislation to deal with concerns over the 
recognition and enforcement of foreign defamation judgments 
which eventually resulted in the SPEECH Act, and I suggested 
then that perhaps more comprehensive legislation might be in 
order at a later time. So to summarize points made more 
extensively in my written testimony, I think the need for 
Federal legislation is more important now than ever before.
    A comprehensive Federal statute will have an impact in two 
areas. First, it will provide a Federal uniform standard for 
recognition and enforcement in foreign judgments in the United 
States; and, second, it has the potential to enhance 
recognition and enforcement of U.S. judgments in other 
countries.
    Let me first address the point about recognition practice 
in the United States. As you know and as you have said, 
recognition and enforcement is presently a matter of State law, 
although there is a curious history about that which I detail 
in my written testimony. Notwithstanding the existence of two 
uniform State laws, there is still no uniformity of practice. 
And that is because, first, not all States have adopted the 
Uniform Acts, which differ in various ways themselves; second, 
the adoptions, when they occurred, are not necessarily uniform; 
and, three, interpretations by State courts of those Acts are 
not necessarily uniform.
    Just to give one significant example, some States and even 
some that have the Uniform Act have added a requirement of 
reciprocity. Reciprocity is the requirement that if a foreign 
country judgment is to be recognized and enforced in the United 
States, the foreign country must also respect a United States 
judgment in similar circumstance. Most States do not have a 
reciprocity requirement. Some do.
    So, in short, the Uniform Act is not uniform; and only a 
Federal statute can ultimately achieve the maximum level of 
uniformity.
    Now you might wonder whether uniformity is actually 
important in this area, and my answer is yes for several 
reasons. A judgment can be enforceable in New York or Illinois 
but not in Texas or Georgia. In the absence of uniformity, both 
the judgment creditor in an enforcement proceeding or the 
judgment debtor in a declaratory judgment proceeding for 
nonenforcement can forum shop for a State law favorable to its 
position.
    Moreover, at the earlier stage of deciding whether to 
commence litigation abroad--because you are trying to decide 
whether a judgment abroad will be enforced--a prediction is 
difficult because a potential litigant may not know in which 
State in the United States eventual enforcement action will 
take place. And, perhaps even more significantly, uniformity is 
tied to the need for Federal legislation because this issue of 
recognition and enforcement involves relations between the 
United States and foreign governments.
    The Supreme Court itself has commented on aspects of the 
reciprocity requirement in other contexts as saying States are 
improperly intruding into the field of foreign affairs. But 
whether reciprocity is or is not to be required as a 
precondition of foreign judgment lies with the Congress.
    Another example of the impact on foreign relations relates 
to one of the traditional defenses that can be raised and that 
is the failure to have a system of impartial tribunals or to 
have procedures that are compatible with due process of law. 
And although it is accurate to say that all States would 
probably recognize such a defense, each State is entitled to 
make that assessment according to its own interpretation. 
Questions about the quality and fairness of a foreign judicial 
system would seem to easily fall within foreign relations 
concerns of the United States, and so there should be uniform 
Federal criteria.
    Potential corruption in a judicial system is another issue 
that has arisen. Again, that is a decision that should be 
decided by Congress; and the criteria about making that 
assessment should also be determined by Congress. State and 
Federal courts can interpret those provisions, but the ultimate 
guidance should be that of the Supreme Court. In this way, a 
uniform level of the proper protection of American interests 
can be established within a framework of recognition practice 
that encourages and sustains international global commerce. I 
recognize that there is also an important role for State 
policy, and where the issues pertain to State rather than 
Federal policy, State policy can apply in the context of a 
Federal statute.
    There are other aspects of Federal judgment recognition 
where the patchwork of State laws I think also leads to 
uncertainty and predictability. The constitutional issue I 
think is quite clear. The concern about the recognition of 
foreign judgments abroad is also enhanced by a uniform statute.
    Recognition and enforcement of foreign judgments as well as 
nonrecognition and nonenforcement is and ought to be a matter 
of national concern. We are in an age of globalization and 
international commerce, and the relevant standards and criteria 
should be in the hands of the Federal Government.
    I thank you for this opportunity.
    [The prepared statement of Ms. Silberman follows:]
    
    
    
    
                               __________
    Mr. Coble. Thank you, Professor Silberman.
    Professor Patchel, you are recognized.

   TESTIMONY OF H. KATHY PATCHEL, UNIFORM LAW COMMISSIONER, 
                        INDIANAPOLIS, IN

    Ms. Patchel. Thank you, Chairman Coble and the Committee, 
for inviting me to testify on behalf of the National Conference 
of Commissioners on Uniform State Laws.
    My testimony focuses on two issues that I believe the 
Committee needs to consider. They are raised by Professor 
Silberman in her testimony.
    The first is whether there are specific problems in the 
legal system as it exists under State law which would justify 
federalizing this area and disrupting the 70 years of State 
governance of recognition and enforcement.
    The law in this area in my experience is well settled, it 
is familiar to courts and to practitioners, and it has been 
effective. The United States is recognized as one of the most 
cooperative nations in the recognition and enforcement of 
judgments and yet the legal regime gives courts the ability, 
when they need to, to deny recognition to a judgment that 
should not be recognized.
    My experience in this area is based in large part in 
serving as a reporter for the 2005 revision of the Conference's 
Recognition Act. In preparing to be a reporter for that Act, I 
did some research. I looked at a large number of cases. I also 
looked at all of the nonuniform amendments under the 1962 Act, 
which is the primary source of law in this area.
    I found, somewhat to my own surprise, that there is an 
amazing degree of uniformity here. I believe there is as much 
uniformity of interpretation in the courts as there would be if 
there were only one statute being interpreted by courts, rather 
than a number of State uniform laws. This doesn't mean that 
there is complete uniformity of interpretation. You cannot have 
that with any statute. But there is a high degree.
    Professor Silberman mentions reciprocity. That is, I think, 
the most significant area in which I found that there was 
variance. It was actually statutory in my research. There were 
eight of the 32 States that had adopted the 1962 Act which had 
amended it to require reciprocity. North Carolina was actually 
one of those. But we have found that the 2005 Act is being 
adopted in those States to update their law that the States are 
dropping that reciprocity requirement. In fact, North Carolina 
recently adopted our law; and they adopted it without that 
reciprocity requirement. So I believe that that particular 
nonuniformity is going away as States are adopting the 2005 
Act.
    I think that the Subcommittee needs to identify specific 
problems if it is going to overturn this law in favor of 
federalization in this area in favor of a new Federal law which 
then will require new interpretation. And necessarily whenever 
you have a subject that has shifted from the State to the 
Federal domain, you are going to have a period when you are 
having to reinterpret any law. And I think that there need to 
be problems with the current law, problems that implicate an 
important Federal interest in order to justify that sort of 
disruption.
    Mr. Coble. You may continue.
    Ms. Patchel. I believe that simply the fact that a judgment 
is issued by a foreign court which gives this private right 
isn't a sufficient Federal interest here. I think the Federal 
courts have implicitly recognized that when they have said that 
it is not enough of a Federal interest to give rise to Federal 
question jurisdiction. There needs to be some more specific 
interest identified, as the Subcommittee identified when it 
passed the SPEECH Act. There, even though the uniform law was 
following what the SPEECH Act did, it was striking down these 
libel decisions under the public policy exception. This 
Committee and Congress felt that a stronger statement, a 
Federal statement needed to be made; and I think that there 
would need to be an identification of particular other issues 
that are problematic that would cause that.
    Secondly, I think that the Committee needs to consider the 
costs and weigh those. Federal courts are available in their 
diversity jurisdiction under State law, but if this area is 
federalized then they will become the primary adjudicators in 
this area, and they will have Federal question jurisdiction. 
That means that necessarily their case load will increase vis--
vis the States; and it also means that their enforcement 
officials, the U.S. Marshals, will be burdened with these 
additional enforcement actions.
    Finally, with regard to those enforcement actions, I would 
like to point out, which I don't think is often noted, the 
relationship between recognition and enforcement. Recognition 
is a precondition to enforcement, to being able to get your 
monies. And the procedures for getting your money are State 
procedures. They differ from State to State, and they are very 
local in nature. And so if the area of recognition is 
federalized it takes away the State's ability to control the 
prerequisite to invoking these local State procedures.
    [The prepared statement of Ms. Patchel follows:]
    
    
    
                               __________

    Mr. Coble. Thank you, professor.
    We have a vote. I am going to recognize the distinguished 
gentleman from North Carolina for his questioning. We will then 
go vote and return after the vote.
    Mr. Watt. Mr. Bellinger.
    Mr. Coble. Oh, I stand corrected. Mr. Bellinger, let me get 
to you now, and then we will go vote. I apologize, sir.

TESTIMONY OF JOHN B. BELLINGER, III, PARTNER, ARNOLD & PORTER, 
  LLP, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE AND THE U.S. 
               CHAMBER INSTITUTE FOR LEGAL REFORM

    Mr. Bellinger. Thanks, Mr. Chairman; and thank you and Mr. 
Gowdy and Mr. Watt for having me here today. I am testifying 
today on behalf of the U.S. Chamber of Commerce and the U.S. 
Chamber Institute for Legal Reform.
    As you correctly noted, I was the legal advisor for the 
Department of State during the Bush administration under 
Secretary of State Condoleezza Rice. In fact, I spent my very 
last day in office, almost my last minutes in office, dealing 
with these very issues when I signed The Hague Choice of Court 
Treaty in The Hague on January 19th, 2009. I will come back to 
that in a moment.
    I want to make six very brief points today, and I will stay 
under 5 minutes because I don't want to be keelhauled by the 
Chairman.
    First, and most important, the business community supports 
recognition and enforcement in U.S. courts of appropriate 
foreign judgments. Recognition and respect for foreign 
judgments serves our interests. When U.S. Courts recognize and 
enforce foreign judgments in our country, foreign courts are 
more likely to recognize and enforce U.S. judgments out of 
reciprocity.
    But, second, the business community is concerned, however, 
about the potential abuse of the U.S. system for recognition of 
foreign judgments rendered by politicized or corrupt foreign 
judicial systems; and in recent years there have been some 
controversial judgments coming out of courts in Latin America 
against U.S. companies that plaintiffs have sought to enforce 
in U.S. courts.
    In one case, plaintiffs sought to enforce a $96 million 
judgment in Nicaragua rendered against the Dole Food Company 
and Dow Chemical under a special law that had been specifically 
designed to discriminate against U.S. companies.
    And then earlier this year Ecuadorian plaintiffs obtained 
an $18 billion judgment against Chevron for alleged 
environmental harm in Ecuador based on another special law 
designed specifically to limit Chevron's ability to defend the 
suits.
    Now, so far, U.S. courts have refused to recognize both the 
Nicaraguan and the Ecuadorian judgments, but these cases are 
being very closely watched by the U.S. business community as 
the possible tip of a dangerous iceberg.
    Now, last month, the U.S. Chamber Institute for Legal 
Reform published a report which I would commend to the 
Committee's attention on recognition of abusive foreign 
judgments like this. And the report describes the recent rise 
in global forum shopping and explains how U.S. courts must 
ensure that foreign judgments comport with U.S. legal 
requirements and the basic norms of due process before they are 
enforced in the United States.
    Third, and touching on the points that my colleagues have 
mentioned, the business community is concerned about the 
patchwork of State laws that currently govern recognition and 
enforcement of foreign judgments----
    Mr. Coble. Mr. Bellinger, I am going to ask you to suspend.
    Mr. Bellinger. Certainly.
    Mr. Coble. Because the second vote has already been called. 
We will probably be gone from between 35 to 40 minutes. So you 
all rest easy, and I apologize for this problem, but the 
problem appears to be universal and consistent. We will stand 
in recess.
    [Recess.]
    Mr. Coble. I apologize to you, folks.
    Mr. Bellinger, I particularly owe you an apology. Not only 
did I fail to recognize you in order, I may have muzzled you in 
the middle of your testimony. So if you will resume, we will 
proceed.
    Mr. Bellinger. Mr. Chairman, it is better to be muzzled 
than keelhauled.
    Mr. Coble. You are right about that.
    Mr. Bellinger. Thank you very much.
    I was just making several points on the recognition and 
enforcement of foreign judgments, and I had made the point that 
the business community generally supports recognition and 
enforcement of appropriate foreign judgments but has a concern 
about some recent cases that may be the beginning of a trend of 
efforts to enforce inappropriate foreign judgments. And just 
resuming my quick points, we are also concerned about the 
current system of State laws, which, as my colleagues have 
said, currently govern enforcement and recognition of foreign 
judgments in the United States.
    As you know, 17 States are currently governed by the 1962 
Uniform Foreign Money Judgments Act; another 17 have adopted 
the 2005 revised Recognition Act, which has slightly different 
standards from the 1962 Act; and then the remaining States have 
no statutory provisions at all and instead rely on common law 
doctrines. So this is a patchwork of State laws, which creates 
a problem for the U.S. business community.
    This lack of uniformity amongst the State laws jeopardizes 
the procedural rights of judgment debtors; it encourages forum 
shopping, both here in the United States and abroad; and it 
enables plaintiffs to circumvent rules that would prevent 
recovery under U.S. law. So that is my third point.
    And then, fourth, turning to my colleague, Professor 
Silberman and the American Law Institute's proposal, they have 
proposed a very useful Federal statute that would address some 
of the problems in this patchwork of State laws.
    A Federal statute would establish a uniform standard for 
recognition and enforcement of foreign money judgments. In my 
view, however, the ALI statute could be significantly improved 
in some ways. And we need to bear in mind that it was put 
together 5 or 6 years ago, and there have been some significant 
changes in international litigation since that time that I 
think the ALI might take into account.
    So, for example, the proposal could clarify the public 
policy exception for nonrecognition. The U.S. business 
community is concerned that plaintiffs may try to circumvent 
U.S. laws by obtaining judgments in politicized forums abroad 
and then seek enforcement of those judgments here. Courts need 
to have clearer authority to reject judgments that are based on 
foreign suits that would not prevail if brought originally in 
the United States.
    Fifth, the 2005 Hague Convention on Choice of Courts 
Agreements, which as I mentioned I signed in The Hague on my 
last day in office, is an important treaty that is likely to be 
transmitted by the Obama administration to the Senate for 
advice and consent in the near future. The convention provides 
that a judgment by a court that has been chosen by the parties 
in a commercial agreement must be recognized and enforced in 
the courts of countries that are parties to the convention. In 
order for the Senate to approve the convention, legislation by 
both Houses of Congress will be needed to ensure that the 
United States is in a position to enforce judgments reached 
under the terms of the convention. So if this treaty is 
transmitted to the Senate, both the House and the Senate will 
have an opportunity to consider Federal legislation in any 
case.
    And then sixth and my last point, although greater 
uniformity in the recognition and enforcement of foreign 
judgments would be desirable in my view, the Committee should 
consider whether the law should be fully federalized or whether 
some discretion should be left to the States. My personal view 
is that a purely Federal statute would have certain advantages.
    So, with that, I will conclude my remarks and am happy to 
take your questions. Thank you, Mr. Chairman.
    [The prepared statement of Mr. Bellinger follows:]
    
    
    
                               __________

    Mr. Coble. Thank you, Mr. Bellinger.
    Thanks to all of you.
    I believe it was Professor Patchel, I believe, mentioned 
the uniformity, did you not, Professor?
    Ms. Patchel. Yes.
    Mr. Coble. And I want to go down that path, Mr. Bellinger, 
with you. In your opinion, how much uniformity exists among the 
several States when it comes to enforcing and recognizing 
foreign judgments, A? And, B, is there a great deal, in your 
opinion, of forum shopping that occurs in this area of 
jurisprudence?
    Mr. Bellinger. Thank you, Mr. Chairman.
    There really is not uniformity at all amongst the State 
laws. There are some States that have adopted the 1962 
Recognition Act, some that have adopted the 2005 Recognition 
Act, and then some States that don't have a statutory framework 
at all.
    As Professor Patchel said, there has tended to be greater 
uniformity in the way the courts have interpreted these 
statutes, but still the statutes and the common law framework 
are significantly different, and it does create a tremendous 
incentive for a judgment creditor to pick the State where it is 
going to be the easiest to enforce a judgment. And so it does 
encourage forum shopping. The business community I think would 
like to see greater uniformity in the recognition and 
enforcement of foreign judgments, and that would have 
sufficient protections for judgment debtors.
    Mr. Coble. Thank you, Mr. Bellinger.
    Professor Patchel, what is the best argument you can submit 
in defense of the status quo to a foreign national trying to 
enforce a judgment in the United States?
    Ms. Patchel. Well, the best argument for the status quo is 
that it has been around for 70 years. And so the people who are 
going to be enforcing those judgments on behalf of foreign 
nationals are familiar with it, and they know what they need to 
do under it.
    If we federalize the area, you are going to have a brand 
new Federal statute which will have to be interpreted by the 
court in its own light. If it is interpreted consistently with 
the current State law, then I suppose it will be familiar. But 
if it isn't changing the current State law, then I don't see 
the argument there for federalizing.
    Mr. Coble. I thank you for that.
    Professor Silberman, if we in the Congress decide to in 
fact write a Federal statute, your belief is what? Should we 
adopt the ALI model in its entirety, or does the model contain 
provisions that may be difficult to include in a final draft?
    Ms. Silberman. Yes, thank you.
    As I said in my testimony, I was not making a special plea 
for the ALI statute. Much more importantly was the principle 
that Mr. Bellinger also identified, which was to have a uniform 
Federal statute.
    There are areas, I think, of the ALI provision that may 
well be useful, including issues about accepted bases of 
jurisdiction, which for the moment I think are unclear. There 
are also developments since we have done the ALI statute which 
may indicate a rethinking of certain provisions. For example, 
the issue of whether or not you look to the specific 
proceeding, for example, is one that was rejected at the time 
of the ALI; and I think one might want at least to revisit 
that.
    So the ALI statute also dealt with some broad issues that I 
think may not have to be done by the Congress, and so I think 
the ALI proposal ought to be looked at as just that.
    And I think it can actually be improved upon. Like all of 
us, when you have done something and it sits for a while and 
you take a second look, I think you are never completely 
satisfied with the product you have, and there is always room 
for improvement, and I suspect that it can be improved upon.
    Mr. Coble. Thank you, Professor.
    I stated to the panelists, unlike you all, it is an area of 
the law in which I am not proficient. So I am learning as we go 
along.
    And I thank you all again for your attendance today, 
reiterate my apology. But I think, as you know, you assume that 
risk when you come to Capitol Hill.
    But without objection, all Members will have 5 legislative 
days to submit--I want to be sure no one else is up here--to 
submit to the Chair additional written questions for the 
witnesses, which we will in turn forward to the witnesses. Mr. 
Cohen may be on his way. Do you all want to submit anything 
additionally while we are waiting? Feel free to do so.
    Mr. Bellinger. Nothing here, but happy to wait for Mr. 
Cohen to hear his questions as well.
    Mr. Coble. Let me go ahead and complete what I was about to 
do until Mr. Cohen arrives.
    All Members will have 5 legislative days to submit to the 
Chair additional written questions for the witnesses, which we 
will in turn forward to the witnesses; and I ask that you 
respond as promptly as possible so that your answers may be 
made a part of the record. Without objection, all Members will 
have 5 legislative days to submit any additional materials for 
inclusion in the record, and then I will thank you again once 
Mr. Cohen arrives.
    Ms. Patchel. Chairman Coble? 
    Mr. Coble. Yes.
    Ms. Patchel. I would perhaps make one more statement, if we 
have time for that.
    Mr. Coble. Sure.
    Ms. Patchel. Because both of my colleagues had expressed 
their concern about the patchwork nature of the State law, 
although, as Mr. Bellinger noted, the patchwork, the lack of 
uniformity is in the form that the law takes and not so much in 
the rule. And the results from jurisdiction to jurisdiction 
come out the same, for the most part, as I said, as much as I 
think you would find under the interpretation of one statute.
    And the reason for that, I think, is that when you look at 
the development of this area of the law, it started as common 
law, but common law that was interpreting international comity. 
And so it was looking at uniform rules. The 1962 Act simply 
codified those rules, and the 2005 Act was a clarification. And 
so although you have the law in different forms in the States, 
the rules are basically the same and have been continuous over 
time.
    Mr. Coble. I thank you for that.
    The distinguished gentleman from Tennessee has just 
arrived, and we will be glad to hear from him. Unlike me, he is 
proficient in this area of the law.
    Steve, I just admitted that I am not that proficient in 
this area of the law, but you are. But it is good to recognize 
the gentleman from Tennessee--Memphis, specifically.
    Mr. Cohen. Thank you, sir. I appreciate that.
    It shows that you and Rick Perry have something in common. 
You all are honest. Because he was honest when Ron Paul gave 
him the third branch of government; and instead of going for 
it, yeah, that is the ticket, I am for getting rid of the EPA, 
he said, no, and oops.
    Mr. Coble. Would the gentleman yield?
    Mr. Cohen. Yes, I yield.
    Mr. Coble. I don't know Governor Perry, but I empathized 
with him that night. Because it has happened to me, and it has 
happened to a lot of people, and I think he probably handled it 
about as well as he could have.
    I yield back.
    Mr. Cohen. Thank you, sir.
    This is an important subject, and I appreciate the hearing. 
I apologize for being late.
    I was pleased to sponsor the SPEECH Act, which started out 
as a different name, but we went through the Senate and worked 
with Senator Leahy, and I really appreciated his help. We had 
some problems getting it passed at first with a couple of 
Congresses. We passed it here before the Senate did, in I think 
it was the 110th or 109th, and then we got it passed the next 
Congress, the 110th.
    The libel tourism was important, and I think it is maybe 
the forerunner of this particular hearing. We have got certain 
standards that we should have for First Amendment issues before 
we let folks get judgments and come here and try to collect on 
them on things that are really antithetical to the American 
perspective of First Amendment rights. And we check that. If 
they don't have it, we don't enforce the judgment. So that is 
important.
    I appreciate the assistance I had from Chairman Smith and 
Subcommittee Chairman Coble on that bill, Chairman Conyers, and 
everybody else that worked on it, particularly Senator Leahy, 
who was a gentleman, as he always is.
    We heard testimony from Professor Silberman in favor of a 
Federal statute to cover the recognition and enforcement of 
foreign judgments generally, rather than ones simply limited to 
defamation suits. That was when we had our hearing on the 
SPEECH Act in the Congress. My priority at that time was free 
speech, and we had some particular issues concerning a New York 
author and a book in England and some Saudi or Middle Eastern 
objections and problems.
    What you said made sense to me, that we need to have 
something uniform on the Federal level. So I appreciate your 
bringing that issue to the fore.
    There is a Federal interest, I think, in having foreign 
judgments recognized by our government. I don't see where there 
is a problem. The States might object, but it is not exactly 
like making them have folks carry pistols that they didn't 
authorize. It is not like that, which is something we will, 
without my vote, pass tomorrow.
    But that is different States' rights. This is a different 
situation, where there truly is a Federal interest, and there 
should be uniformity among the States and among the 
jurisdictions.
    I am not sure what the other nations have done with having 
foreign judgment statutes similar to this. I presume they have 
something, and I will ask that question when I get a chance.
    But I think it would help us in having that clarity and 
predictability for foreign judgments, when it is to be enforced 
and when it is not. They should be uniform throughout the 
country, and I think it would be a bipartisan effort. Since the 
1920's, it has largely been a State law issue. And that is not 
anything that was intended. It just happened because there were 
State court decisions and there was no Federal common law. 
Congress never had Ms. Silberman then. You were born too late 
to have us have a law at the right time. But you came around, 
and we are adjusting well to it. So we are catching up with 
history.
    If we go far with our Federal legislation, which I hope we 
do, we would seek the State Department's input and might 
consider an initial step of enacting legislation implementing 
The Hague Choice of Court Convention that John Bellinger, a 
former State Department legal adviser and witness we have here, 
alluded to in his written statement.
    With the enactment of the SPEECH Act and the United States 
signing The Hague Choice of Court Convention, we have already 
been down--begun the road of federalizing law governing 
recognition and enforcement of foreign judgments. This broader 
Federal foreign judgment statute seems like the next logical 
step.
    I am sorry I missed the discussion. I am happy that we have 
had this hearing. I compliment the distinguished Chair of the 
Subcommittee from the 51st State of East Carolina for 
scheduling this and having this important hearing.
    I could ask one question of Ms. Silberman. Are you related 
to Judge Silberman?
    Ms. Silberman. I am not.
    Mr. Cohen. He is also a brilliant legal mind.
    Ms. Silberman. Thank you. I would be delighted to be in his 
company, which I have been on some occasions. But he once asked 
me if my family was in steel. And I said, no, unless you 
spelled it s-t-e-a-l.
    Mr. Cohen. My great grandfather immigrated from Lithuania, 
and my grandfather had newsstands. And my father at one time 
had a meeting with somebody that was like one of these 
publisher types, whatever. He said, my family was in papers; 
and my father said, mine was, too.
    The other man was publishing newspapers. My grandfather 
sold them on the curb stand. But we were in papers as well.
    Mr. Coble. Steve, the witnesses have already submitted 
testimony. If you want to examine them, you may do so.
    Mr. Cohen. Just one question I would ask. What is the law 
in other nations concerning uniform statutes?
    Ms. Silberman. Well, in unitary systems, of course, the 
U.K. Has a statute or common law standards. Australia has a 
statute. Germany has a statute. But those, of course, are 
unitary systems.
    Canada, of course, is different; and Canada does deal with 
these issues province by province. But that is also an 
interesting development, because Canada, in terms of its treaty 
powers, deals with international treaties province by province, 
unlike the United States, where these foreign relation issues 
are those of the national government and of the Congress.
    Mr. Cohen. Let me ask you--this may go back to Government 
101, and I may pull a Rick Perry--but you said Germany has this 
unitary--I thought they had Landers, and I thought the Landers 
had some--like they were similar to States in their authority 
to pass laws.
    Ms. Silberman. Well, I mean, they have--I don't purport to 
be an expert on German law, but I have done a kind of survey of 
judgment recognition in other countries. And Germany does have 
a statute that deals with recognition of foreign judgments as 
to third States such as the United States. Of course, within 
Europe, there is the European Regulation or the Brussels 
Regulation, which deals both with jurisdiction and recognition 
of judgments among European states.
    At the moment, there is a review of the European Regulation 
ongoing, which would look to, if you will, federalize the rules 
at least with respect to jurisdiction as among third States. So 
they would then--all the rules of jurisdiction in Europe would 
be the European rules, and you would no longer look to 
jurisdiction or rules in England or in France or in Germany. 
There would now be European rules, and they would apply to 
defendants from the United States. So the move toward treating 
these issues as Federal subject I think is, I would say, 
pervasive.
    Mr. Cohen. Has the bar or any other body of legal authority 
in the United States taken any position on this? The ABA?
    Ms. Silberman. Well, the ALI has recommended a proposed 
uniform statute on recognition. I mean, that was the proposal. 
Because we looked at this--the ALI looked at this and decided 
that the concept of a single uniform Federal law was very 
important in this growing age of commerce and particularly 
international commerce and transnational litigation.
    It is also, I think, important, as I said in my written 
remarks and my comments earlier, that when other countries are 
thinking about recognizing judgments in the United States, that 
is, taking U.S. judgments and enforcing them abroad, they often 
have a reciprocity requirement. And it will be much easier, 
much more transparent, much less costly if those countries can 
look to the United States and say here is the position of the 
United States in terms of what we do about foreign country 
judgments.
    Mr. Cohen. Thank you, Mr. Chairman. I yield back the 
balance of my time and celebrate Memphis' first basketball 
victory on their way to New Orleans.
    Mr. Coble. Thank you. And I want to ask you a football 
question after we adjourn.
    I have already submitted my concluding remarks. Again, 
thank you all for your attendance, as well as those in the 
audience. Come back, stay tuned.
    This hearing stands adjourned.
    [Whereupon, at 3:13 p.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

 Prepared Statement of the Honorable Steve Cohen, a Representative in 
Congress from the State of Tennessee, and Ranking Member, Subcommittee 
              on Courts, Commercial and Administrative Law
    Last Congress, I introduced and successfully pushed to enactment 
the ``Securing the Protection of our Enduring and Established 
Constitutional Heritage Act'' or ``SPEECH Act.'' That law addresses the 
so-called ``libel tourism'' phenomenon, whereby defamation plaintiffs 
seek to do an end-run around our free speech protections by seeking a 
more favorable, less speech-protective foreign forum.
    Among other things, the SPEECH Act prohibits a court in the United 
States from recognizing or enforcing a foreign defamation judgment 
unless such judgment provides as much protection for speech as our 
First Amendment and comports with our due process standards. As far as 
I know, it is the first time that Congress has enacted a national 
standard regarding recognition and enforcement of a type of foreign 
judgment.
    I am proud of having shepherded the SPEECH Act to enactment. I am 
grateful for the support and assistance that Subcommittee Chairman 
Howard Coble, full Chairman Lamar Smith, then-full-Committee-Chairman 
John Conyers, and our Senate colleagues provided in achieving that end.
    At our hearing on libel tourism that preceded introduction of the 
SPEECH Act last Congress, we heard testimony from Professor Linda 
Silberman arguing in favor of a federal statute to govern the 
recognition and enforcement of foreign judgments generally, rather than 
one limited just to defamation judgments.
    While my priority at the time was to protect our Nation's free 
speech guarantees, Professor Silberman's idea made a lot of sense to 
me. I am glad that she can be with us again to focus on the argument in 
favor of a broader federal foreign judgments statute.
    There is an overriding federal interest in matters affecting the 
foreign relations of the United States.
    This is particularly so with respect to ensuring a smoothly 
functioning global commercial system, one which is vital to America's 
economic well-being, and in ensuring comity with other countries.
    A federal foreign judgments statute would serve this interest by 
ensuring nationwide uniformity and consistency in this area of the law, 
providing clarity and predictability for both U.S. and foreign parties 
in determining when a foreign judgment will be enforced and when it 
will not.
    This discussion should not be framed in an ideological or partisan 
way. American parties, be they plaintiffs or defendants, have the same 
interest in clear, uniform, and predictable rules regarding the 
recognition and enforcement of foreign judgments in U.S. courts.
    That the recognition and enforcement of foreign judgments has, 
since the 1920's, largely been a state law matter is a bit of an 
historical accident, largely based on state court decisions, the 
absence of federal common law, and Congressional acquiescence rather 
than a specific constitutional prohibition or policy decision by 
Congress.
    These historical circumstances, by themselves, do not seem like 
good reasons for Congress not to act.
    Should we go forward with federal legislation, we should seek the 
State Department's input and might also consider taking the initial 
step of enacting legislation implementing the Hague Choice of Court 
Convention that John Bellinger, former State Department legal adviser 
and one of our witnesses, alluded to in his written statement.
    With enactment of the SPEECH Act and the U.S.'s signing of the 
Hague Choice of Court Convention, we have already begun down the road 
of federalizing the law governing the recognition and enforcement of 
foreign judgments. A broader federal foreign judgments statute seems to 
be the next logical step.
    I look forward to an interesting and fruitful discussion.

                                

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress from the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary
    Today we consider whether Congress should enact a federal statute 
to govern the recognition and enforcement of foreign judgments.
    I approach this topic with an open mind, and I hope that during the 
course of our discussion, the witnesses can help address a few 
questions.
    First, what are the concerns with the status quo when it comes to 
the recognition and enforcement of foreign judgments?
    The recognition and enforcement of foreign judgments traditionally 
has been a matter of state law.
    Among possible concerns with continuing under such a state-based 
system is that the existence of a patchwork of state laws governing 
foreign judgment recognition and enforcement undermines necessary 
uniformity in this area of the law.
    Additionally, Congress ought to have the final say when it comes to 
matters that affect the foreign relations of the United States. The 
framework under which U.S. courts will recognize and enforce foreign 
judgments may fall within that federal interest.
    Still, any time Congress treads on an area of law traditionally 
left to the states, we must be sensitive to federalism concerns. Even 
where the Constitution allows us to intrude on areas traditionally left 
to states, we must consider whether doing so would be good policy.
    We should also examine the extent to which the recognition and 
enforcement of foreign judgments in fact impacts the Nation's foreign 
relations, and what effect a federal statute may have on our relations 
with other countries.
    I am particularly interested to know how the exceptions to 
enforcement of foreign judgments that are part of current law--and that 
would presumably be made part of any federal statute--impact the 
willingness of other countries to recognize or enforce the judgments of 
U.S. courts.
    For example, if a U.S. court refused to recognize a foreign 
judgment on public policy grounds, would that simply open the door to 
other countries refusing to recognize or enforce U.S. judgments?
    Perhaps a reciprocity requirement such as the one contained in the 
American Law Institute's model federal foreign judgments statute could 
help assuage that concern.
    Finally, I would also like the witnesses to address whether, 
assuming it chooses to go ahead with a federal foreign judgments 
statute, Congress should adopt the ALI's model federal statute.
    The ALI's proposal appears to be comprehensive and thoughtful.
    If, however, there should be additions or changes made to the ALI 
proposal, or even a different approach altogether, I would like to hear 
the witnesses' thoughts on what those additions or changes should be, 
as well as the reasons for them.





                                 
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