Harvard International Law Journal/Opinio Juris Symposium on “Judgment Arbitrage”

Yesterday, the Harvard International Law Journal and the blog Opinio Juris hosted a symposium on my article, “Ending Judgment Arbitrage: Jurisdictional Competition and the Enforcement of Foreign Money Judgments in the United States,” which was published in the Harvard International Law Journal last fall. The article is about the domestication of foreign judgments in the United States and focuses on an example of extreme forum shopping that I call “judgment arbitrage,” in which plaintiffs can exploit differences in state law to make it easier for them to enforce foreign judgments in states that otherwise would have rejected them.

Professor Christopher Whytock, an expert on international litigation at UC Irvine, wrote a very thoughtful response to the article. I replied.

I want to thank Chris for contributing, and also to make a quick note here about the value of these types of exchanges.

This is exactly the kind of direct, public dialogue that I think can help advance the state of knowledge on an issue, in this case the procedure for domesticating a foreign judgment in American courts. In the past, legal scholars would often retreat to their offices to write lengthy law review articles, submit them for publication, and then would have little choice but to hope they would be cited by a few other scholars (in similarly massive tomes) and courts once they were published a year later. They might call on subject-matter experts down the hall or at another school for feedback, sure, but often other scholars did not get the benefit of those conversations, which in my experience can be the most valuable. To put it another way, I gather that the scholarship model essentially assured that scholars would talk past one another to some extent. There was no SSRN. There was no email, let alone blogging or Twitter. Unless they worked in a highly specialized space, people did not necessarily know about one another’s projects until they saw them in print – if then. Before Westlaw and Lexis, it was hard to conduct comprehensive searches. In the best of cases, the amount of time between Prof. X’s project (perhaps conceived in Year 1, submitted in Year 2, published in Year 3) and Prof. Y’s (which might take a similar amount of time) was a meaningful impediment to scholarly conversation.

Today, blogging, online symposia, sharing via SSRN and Twitter (and even Facebook), and other forms of near-instantaneous interaction are becoming increasingly common. I’ve not heard anyone claim they should replace traditional scholarship – there’s only so much you can do in a blog post – but public exchanges among people who’ve spent a lot of time kicking around an idea can be very useful. Personally, I have found that they do not seriously detract from core scholarship; on the contrary, I find they help alleviate the frustration of endlessly researching something and not seeing the fruits in print for a year or two. In scholarship as in life, notching incremental progress and receiving feedback makes it easier to complete major undertakings (and makes them better). Of course, the temptation of instant feedback could in principle lead one to focus on blogging instead of core work, so one should be mindful of that risk. But for most I don’t think that’s a major concern.

At the risk of dating myself, I’ll also note that these public, interactive deep dives are just one more way that the internet has enriched the state of knowledge and reduced barriers to accessing it – now, not only can other scholars see shorter, more targeted exchanges, but the bar and the public at large can benefit from them as well. This is hardly an original observation, but law has been slower to embrace online exchanges than some other disciplines. I think most would agree that is changing.

Links are below, followed by an abstract of the article below the fold. I welcome your comments.

Prof. Whytock’s response to “Ending Judgment Arbitrage”

My response to Prof. Whytock on “Ending Judgment Arbitrage”

Ending Judgment Arbitrage: Jurisdictional Competition and the Enforcement of Foreign Money Judgments in the United States
by Greg Shill, 54 Harvard International Law Journal 459 (2013)

Recent multi-billion-dollar damage awards issued by foreign courts against large American companies have focused attention on the once-obscure, patchwork system of enforcing foreign-country judgments in the United States. That system’s structural problems are even more serious than its critics have charged. However, the leading proposals for reform overlook the positive potential embedded in its design.

In the United States, no treaty or federal law controls the domestication of foreign judgments; the process is instead governed by state law. Although they are often conflated in practice, the procedure consists of two formally and conceptually distinct stages: foreign judgments must first be recognized and then enforced. Standards on recognition differ widely from state to state, but under current law once plaintiffs have secured a recognition judgment all American courts must enforce it irrespective of their own recognition laws. This rigid system, which exceeds the constitutional requirement of full faith and credit, enables plaintiffs to effectively launder a foreign judgment by getting it recognized in one state and then enforcing it in another state that would have rejected it in the first place.

This brand of forum shopping, which I call “judgment arbitrage,” creates a fundamental structural problem that has thus far escaped scholarly attention: it undermines the power of individual American states to determine whether foreign-country judgments are enforced in their territory and against their citizens. It also creates a powerful, if implied, conflict of recognition laws among sister U.S. states that precedes and often determines the outcome of what scholars currently consider the primary conflict, between American and foreign law. Finally, this system impedes the development of state law and weakens practical constraints on the application of foreign nations’ laws in the United States.

This Article contends that statutorily liberating states from the current conception of full faith and credit in domestication would sharpen jurisdictional competition, encouraging the development of better law (however defined) and, eventually, greater uniformity in an area where scholars agree uniformity is desirable. It begins by constructing a novel framework for conceptualizing these problems, and addresses them by proposing a federal statute that would allow states to capture the benefits — and require them to internalize the costs — of their own recognition laws. Rather than scrap the current state-law system in favor of a single federal rule, as the American Law Institute and some leading scholars call for, or institute a national regime of centrally-designed uniform state laws, as the National Conference of Commissioners on Uniform State Laws and other commentators urge, the statute proposed in this Article would provide incentives for competition among states for recognition law. The proposal may also suggest ways to manage other sister-state conflicts of law in an age when horizontal conflicts are proliferating.

One thought on “Harvard International Law Journal/Opinio Juris Symposium on “Judgment Arbitrage”

  1. Pingback: Thoughts on Greg Shill's Judgment Arbitrage | Letters Blogatory

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