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GEORGE C. McCORD,
Plaintiff, v. JET SPRAY INTERNATIONAL CORP., Defendant. CA. No. 93-11375-JLT UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF MASSACHUSETTS 874 F. Supp. 436;
1994 U.S. Dist. LEXIS 19355 December 28, 1994,
Decided COUNSEL: [**1] For
GEORGE C. MCCORD, Plaintiff: Jonathan W. Fitch, John J. Pentz, Sally &
Fitch, Boston, MA. For JET SPRAY INTERNATIONAL CORPORATION, Defendant: Morris M.
Goldings, David R. Kerrigan, Mahoney, Hawkes & Goldings, Boston, MA. JUDGES: Joseph L. Tauro, United States District Judge OPINIONBY: Joseph L. Tauro OPINION: [*437] MEMORANDUM December 28, 1994 TAURO, Ch. J., I. BACKGROUND George McCord, a resident of Antwerp, Belgium, sued Jet Spray
International, a Massachusetts corporation, in the Labour Court of Turnhout,
Belgium. That suit, based on Jet Spray’s breach of an employment
contract, resulted in a judgment of 2,629,414 Belgian Francs. Unable to satisfy
the judgment in Belgium, McCord has now filed suit in this court, seeking to
enforce the Belgian judgment pursuant to M.G.L. ch. 235 § 23A,
Massachusetts’ version of the Uniform Foreign Money-Judgments
Recognition Act. The case is now before the court on the plaintiff’s
motion for summary judgment. II. THE RECOGNITION OF FOREIGN JUDGMENTS A. Choice of Law As an initial matter, this case requires a choice between federal
and state law in measuring the effect of a foreign judgment in a federal court
sitting in diversity. This issue was specifically [**2] left open by the First Circuit in John
Sanderson & Co. (Wool) Pty. Ltd. v. Ludlow Jute Co., 569 F.2d 696 (1st.
Cir. 1978). In Sanderson, the court held that the federal and state standards
for recognition of foreign judgments were sufficiently similar to obviate the
need for a choice of law analysis. In declining to address the issue, the court
noted: The district court
held that under Erie Railroad v. Tompkins, state law governs the effect to be
given foreign judgments . . . Because of the similarity in standards, we do not
rule on whether the Erie doctrine is to be applied when diversity jurisdiction
is invoked for determination of a dispute between an alien and a citizen. Sanderson v. Jute, 569 F.2d at 697, n.1. Unlike Sanderson, however, the present case highlights a
significant difference in the applicable state and federal law, requiring that
the court choose among the two standards. The difference between state and
federal law arises out of the “reciprocity requirement” that
is part of Massachusetts’ version of the Uniform Foreign
Money-Judgments Recognition Act. See M.G.L. ch. 235 § 23A. [**3] This requirement instructs
Massachusetts courts to enforce the judgments of foreign states only to the
extent the same foreign state would recognize a judgment rendered in
Massachusetts. See Ducharme v. Hunnewell, 411 Mass. 711, 585 N.E.2d 321 (Mass.
1992). The reciprocity requirement, first announced by the Supreme Court in
Hilton v. Guyot, is no longer an element of the federal law of enforcement of
foreign judgments. See Tahan v. Hodgson, 213 U.S. App. D.C. 306, 662 F.2d 862,
867 & n.21 (D.C. Cir. 1981). Some courts, noting that relations between the United States and
foreign sovereigns are committed to the federal government, have concluded that
state law should not be the “sole referent” in determining
the preclusive effect of a foreign judgment. Hunt v. BP Exploration Co.
(Libya), 492 F. Supp. 885 (N.D. Tex. 1980); Tahan v. Hodgson, 213 U.S. App.
D.C. 306, 662 F.2d 862, 868 (D.C. Cir. 1981) (noting that “the issue
seems to be national rather than state.”). These courts have refused
to resort to a mechanical [**4] application of state law in measuring
the effect of a judgment rendered abroad. Her Majesty the Queen in Right of
Province of British Columbia v. Gilbertson, 597 F.2d 1161 (9th Cir. 1979) (“the
question presented here carries foreign relations overtones which may create an
inference that this should not be decided merely by reference to Oregon law”).
n1 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n1 Commentators have also questioned the use of state law in
determining the preclusive effect of a foreign judgment. See WRIGHT, MILLER
& COOPER, FEDERAL PRACTICE AND PROCEDURE § 4473 (1981 & Supp.
1994) (“it is intriniscally awkward to confront foreign judgments with
the potentially divergent law of fifty states and federal courts”);
Robert C. Casad, Issue Preclusion and Foreign Country Judgments: Whose Law?, 70
IOWA L.J. 53, 77-80 (1984) (“Although the Republic can survive without
federalizing the law of foreign judgment recognition, the arguments in favor of
that position are strong and the principle argument against it amounts to
little more than inertia.”). - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**5] [*438] These considerations notwithstanding,
the majority of cases clearly hold that the issue in question is governed by
Erie and Klaxon, and that federal courts sitting in diversity should use state
law to measure the preclusive effect of a foreign country’s judgment.
See Success Motivation Inst. of Japan, Ltd. v. Success Motivation Institute,
Inc., 966 F.2d 1007, 1009-10 (5th Cir. 1992) (“Erie applies even
though some courts have found that these suits necessarily involve relations
between the U.S. and foreign governments, and even though some commentators
have argued that the enforceability of these judgments in the courts of the
United States should be governed by reference to a general rule of federal law.”)
WRIGHT ET AL., § 4473 at n.2 (1981 & Supp. 1994) (listing cases
applying state law). This court, therefore, will measure the effect of McCord’s
Belgian judgment by the law of Massachusetts, as codified in Massachusetts’
version of the Uniform Foreign Money-Judgments Recognition Act, M.G.L. ch. 235 §
23A. B. The Enforcement of Foreign Judgments Under M.G.L. ch. 235, §
23A. The Uniform Foreign Money-Judgments Recognition Act, as adopted [**6] in Massachusetts, provides in relevant
part: Any foreign judgment
that is final and conclusive and enforceable where rendered even though an
appeal therefrom is pending or it is subject to appeal shall be conclusive
between the parties to the extent that it grants or denies recovery of a sum of
money. The foreign judgment shall be enforceable in the same manner as the judgment
of a sister state which is entitled to full faith and credit. M.G.L. ch. 235, §
23A. Having established the general rule of enforceability, the Act
specifically enumerates the instances in which a foreign judgment should not be
recognized: A foreign judgment
shall not be recognized if (1) the defendant in the proceedings in the foreign
court did not receive notice of the proceedings in sufficient time to enable
him to defend; (2) the judgment was obtained by fraud; (3) the cause of action
on which the judgment is based is repugnant to the public policy of this state;
(4) the judgment conflicts with another final and conclusive judgment; (5) the
proceedings in the foreign court were contrary to an agreement between the
parties under which the dispute in question was to be settled otherwise than by
[**7]
proceedings in that court; (6) in the case of jurisdiction based only on
personal service, the foreign court was a seriously inconvenient forum for the
trial of the action; or (7) judgments of this state are not recognized in the
courts of the foreign state. M.G.L. ch. 235, §
23A. Defendant Jet Spray International raises two of these exceptions
in arguing that the Belgian judgment should not be enforced under the
Massachusetts statute. First, Jet Spray maintains that the Belgian judgment was
based on a cause of action “repugnant to the public policy of this
state.” M.G.L. ch. 235 § 23A. Second, Jet Spray maintains
that the judgment should not be enforced because Massachusetts’
judgments are not recognized in Belgium. The court examines these arguments in
turn. 1. The M.G.L. ch. 235, § 23A Public Policy Exception. Jet Spray argues that McCord’s Belgian judgment should
not be enforced in Massachusetts because it is based on a cause of action “repugnant
to the public policy of this state.” M.G.L. ch. 235, § 23A.
In support of its argument, Jet Spray notes that the employment contract which
lies at the center of the Belgian judgment is in conflict with Massachusetts’
policy [**8] of “at-will”
employment contracts, and would not have been enforceable in a Massachusetts
court. Jet Spray also notes that the contract was designed [*439] to defraud the Belgian government. In
pressing these arguments, however, Jet Spray appears to have misread the scope
of a court’s inquiry under the public policy exception. The public policy exception operates only in those unusual cases where
the foreign judgment is “repugnant to fundamental notions of what is
decent and just in the State where enforcement is sought.” Tahan, 662
F.2d at 864; Ackermann v. Levine, 788 F.2d 830, 841 (2d Cir. 1986); See also,
RESTATEMENT (SECOND) OF THE CONFLICT OF LAWS, § 117 (1971). Under the “classic
formulation” of the public policy exception, a judgment is contrary to
the public policy of the enforcing state where that judgment “‘tends
clearly’ to undermine the public interest, the public confidence in the
administration of the law, or security for individual rights of personal
liberty or of private property.” Ackermann, 788 F.2d at 841 (quoting
Somportex v. Philadelphia Chewing Gum, 453 F.2d 435, 443 (3d Cir. 1971), [**9] cert. denied, 405 U.S. 1017, 31 L. Ed.
2d 479, 92 S. Ct. 1294 (1972)). In light of this high standard, it is unnecessary to determine
whether the contract at the basis of this dispute would have been enforced in
the Commonwealth of Massachusetts. See Ackermann, 788 F.2d at 843 & n.13 (“it
is not enough merely that a foreign judgment fails to fulfill domestic practice
or policy”). Rather, it is sufficient to note that the employment
contract at issue in this case neither “offends our sense of justice
[nor] menaces the public welfare.” Id. at 842. The fact that
Massachusetts and Belgium law differ with respect to employment contracts does
not make Belgium’s law contrary to Massachusetts’ public
policy. 2. Reciprocity M.G.L. ch. 235 § 23A states that “a foreign
judgment shall not be recognized if . . . judgments of this state are not
recognized in the courts of the foreign state.” M.G.L. ch. 235 §
23A. The court must therefore determine whether Belgium “recognizes”
the judgments of Massachusetts within the meaning of section 23A. Having examined
the relevant [**10] portions of the Belgian Judicial Code,
the court finds that Belgian courts would recognize a Massachusetts judgment,
and accordingly finds that the reciprocity requirement is not a bar to
enforcement of McCord’s Belgian judgment. Article 635 of the Belgian Civil Judicial Code states that
Belgians and foreigners alike may be summoned before Belgian courts “for
the purpose of having foreign judgments declared enforceable in Belgium.”
CODE CIVIL, art. 635 (Bel.). Article 570 confers jurisdiction for these actions
on the civil court of first instance, and instructs the court on the degree of
scrutiny to be given to foreign judgments. n2 Courts are first instructed to “verify”
the merits of the action. In addition, article 570 directs Belgian courts to
inquire into several aspects of the foreign judgment and the court that
rendered it. n3 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n2 In some specific instances judgments from foreign states will
be enforced pursuant to treaty. There is no such treaty between the U.S. and
Belgium. n3 The statute requires that a Belgian court verify, among other
things, the authenticity of the foreign judgment, the basis of jurisdiction in
the rendering court, and the impact of the judgment on Belgian public policy. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**11] Jet Spray maintains that these procedures do not amount to “recognition”
of a foreign judgment. The court disagrees. It is evident that Belgium
specifically allows actions based upon foreign judgments. Persons seeking to
enforce American judgments need not re-try the cause of action upon which their
judgment is based. Affidavits submitted by the parties indicate that this
review of the merits is limited in nature, and that the defendant bears the
burden of proof in establishing that the judgment is not entitled to
enforcement. In sum, the evidence submitted by the parties suggests that the
Belgian procedures for enforcement of American judgments amount to “recognition”
of these judgments within any reasonable definition of the term. The fact that
the Belgian courts allow a limited inquiry into the substance of the action
does not erase the fact that Belgium
[*440] officially
recognizes a cause of action based upon an American judgment. n4 - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n4 The conclusion may be different if, for example, there were
evidence that Belgium merely allowed American judgments to be admitted as
evidence in a distinct cause of action. In that case, it would be more
difficult to find that the American judgment was “recognized”
for the purposes of the statute. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**12] Jet Spray also notes that Belgian courts are instructed to inquire
as to specific elements of the foreign judgment. Again, this alone does not
mean that American judgments are not enforced in Belgium. The court notes that
the areas of inquiry specified by article 570 are in many ways similar to the
defenses allowed under the Uniform Act. The mere existence of specific defenses
to the enforcement of a foreign judgment is not an indication of
non-recognition. See Ingersoll Milling Machine Co. v. Granger, 631 F. Supp.
314, 319 n.2 (N.D. Ill. 1986), aff’d, 833 F.2d 680 (7th Cir. 1987). In sum, the court concludes that American (and Massachusetts)
judgments are recognized in Belgium, and the enforcement of McCord’s
Belgian judgment does not violate the public policy of Massachusetts. No other
exceptions are applicable, and the court finds McCord entitled to have his
judgment enforced under the provisions of the Uniform Act. III. THE SCOPE OF THE FOREIGN JUDGMENTS Jet Spray argues that even if the Belgian judgment is deemed
enforceable under Massachusetts law, the judgment should be offset by payments
that were not considered [**13] by the Belgian court. Whether or not
the court may consider these set-of depends upon the scope of the Belgian
judgment at issue. The scope of a Belgian judgment is a matter of Belgian law. See
RESTATEMENT (SECOND) OF CONFLICT OF LAWS, § 98, comment f (1969). Because
there was no proof submitted on this aspect of Belgian law, the court assumes
that Belgian res judicata principles are similar to those found in the United
States. See Panama Processes, S.A. v. Cities Serv. Co., 796 P.2d 276, 291-292
& n. 70 (Okla. 1990) (applying domestic principles of res judicata where
foreign law was unavailable). The court accordingly assumes that Jet Spray had
the opportunity to assert these set-offs in the Belgian action, and that a
Belgian court would not reopen its judgment to consider the set-offs presented
here. n5 The Belgian judgment is final and conclusive with respect to the
employment contract at issue. - - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - -
- n5 A translated copy of the Belgian judgment, submitted by the
defendant, suggests that the Belgian court considered several defenses and
counterclaims raised by Jet Spray. Defendant’s Memorandum in
Opposition, Exhibit A. Jet Spray does not suggest that they were precluded from
asserting their set-offs in the Belgian action, and gives no indication of why
the Belgian court did not consider the set-offs in entering its judgment.
Moreover, the court notes that Jet Spray, after a full defense on the merits in
Belgian court, declined to exercise its right to appeal the Belgian judgment. - - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**14] IV. CONCLUSION The enforcement of foreign money-judgments in Massachusetts is
governed by the Uniform Foreign Money-Judgments Recognition Act. This act
specifically limits the defenses that may be raised in an action to enforce a
foreign judgment. Having examined the relevant defenses, the court finds that
the Belgian judgment at issue in this case is entitled to recognition as a
matter of law. The plaintiff’s motion for summary judgment is allowed. AN ORDER WILL ISSUE. Joseph L. Tauro United States District Judge |