Whose Law of Personal Jurisdiction? The Choice of Law Problem in the Recognition of Foreign Judgements

It is black-letter law that in order to recognize and enforce a foreign judgment, the rendering court must have had personal jurisdiction over the defendant. While the principle is clear, it is an open question as to whose law governs the question of personal jurisdiction: that of the rendering court or that of the recognizing court. In other words, is the foreign court\u27s jurisdiction over the defendant governed by foreign law (the law of F1), domestic law (the law of F2), or some combination thereof? While courts have taken a number of different approaches, it seems that many courts regard foreign law as relevant to the question of whether the foreign court possessed personal jurisdiction over the defendant. In this Article, I argue that U.S. courts should not be looking to foreign law (in whole or in part) to determine whether a foreign court had jurisdiction over the defendant in the original action. I present five arguments in support of this contention: (1) there is no statutory authority pointing to the application of foreign law; (2) U.S. courts are not well-positioned to apply foreign jurisdictional law; (3) re-examining assertions of jurisdiction under foreign law violates international comity, (4) an examination of foreign law is usually unnecessary because jurisdiction is also assessed according to U.S. standards; and (5) U.S. courts do not do a good job applying foreign jurisdictional law. Instead, I argue that courts should apply American law to assess whether a foreign court was jurisdictionally competent. This, in turn, raises the question: What is American law? I maintain that courts should apply broad federal standards of jurisdiction, and not state-based ones, to determine whether the rendering court had personal jurisdiction over the defendant. This Article also looks closely at two particular areas of jurisdiction law that are particularly complicated as they relate to the choice of law issue: submission and notice. With respect to submission, U.S. courts seem to be unclear as to whose law applies in assessing whether a defendant in a foreign action submitted to the jurisdiction of the foreign court. In particular, many U.S. courts defer to the foreign court\u27s interpretations as to whether the acts of the defendant constituted submission. With respect to notice, there is a lack of clarity as to how notice relates to personal jurisdiction in the context of the recognition and enforcement of foreign judgments. Here too, there is confusion as to whose law of notice applies in assessing whether a defendant received adequate notice of the proceeding. Consistent with the argument above, this Article takes the position that U.S. standards, and not foreign ones, should ultimately guide the submission and notice inquiries in the recognition context. Finally, because much of the law in this area is codified in either the 1962 Uniform Foreign Money-Judgments Recognition Act or the 2005 Uniform Foreign-Country Money Judgments Recognition Act, I propose concrete changes to the language of the uniform acts that would address the choice of law problem in the recognition of foreign judgments and would clarify the intersection between notice and personal jurisdiction in the uniform acts

(Still) A Real and Substantial Mess: The Law of Jurisdiction in Canada

In Morguard Investments Ltd. v. De Savoye, the Supreme Court of Canada established that a court could assert jurisdiction over an out-of-province defendant in cases where there was a real and substantial connection between the forum and the action. Years later, the Ontario Court of Appeal in Muscutt v. Courcelles attempted to provide guidance on the content of the real and substantial connection test by enumerating eight factors for a court to consider in deciding whether to assume jurisdiction over an ex juris defendant. Most provincial courts have enthusiastically and uncritically embraced the Muscutt approach to jurisdiction. The author argues that the Muscutt factors have obscured what the Supreme Court intended to be the core of the jurisdictional analysis: the need for a real and substantial connection, in the sense of a link or nexus, between the action and the forum. The Court envisaged that it was through such a connection that jurisdictional determinations would achieve the policy goals of order and fairness. By superimposing considerations extraneous to the existence of a connection between the action and theforum onto the jurisdictional analysis, Muscutt has effectively transformed the question of whether a court can hear a case (jurisdiction simpliciter) into the question of whether a court should hear a case (forum non conveniens). This invites inconsistency of results and creates uncertainty for parties involved in international litigation. Even leaving aside these major structural limitations of the Muscutt framework, the author suggests that many of the individual factors themselves are problematic on both a practicaland a theoretical level. She further maintains that Muscutt has unnecessarily increased the procedural complexity of jurisdictional determinations and opened the door to litigation on a new front: that of jurisdiction simpliciter. Given the inherent limitations of the Muscutt jurisdictional analysis, the author suggests that courts should return to a pre-Muscutt approach to determining jurisdictions impliciter. A possible model for reform can be found in the Uniform Court Jurisdiction and Proceedings Transfer Act, recently enacted in British Columbia

Forum Selection Clauses and Consumer Contracts in Canada

Every day, billions of people use the online social media platform, Facebook. Facebook requires, as a condition of use, that users “accept” its terms and conditions—which include a forum selection clause nominating California as the exclusive forum for dispute resolution. In Douez v. Facebook, the Supreme Court of Canada considered whether this forum selection clause was enforceable, or whether the plaintiff could proceed with her suit in British Columbia. The Supreme Court of Canada ultimately decided that the forum selection clause was not enforceable. It held that the plaintiff had established “strong cause” for departing from the forum selection clause. The Court premised its decision on two primary considerations: the contract involved a consumer and was one of adhesion, and the claim involved the vindication of privacy rights. The Court’s analysis suffers from several major weaknesses that will undoubtedly cause confusion in this area of law. This Article will examine those weaknesses, and argue that the Supreme Court of Canada actually abandoned the strong cause test that it claimed to be applying. The consequence of the Douez decision is that many forum selection clauses—at least in the consumer context—will be rendered unenforceable. While this may be a salutary development from the perspective of consumer protection, it will undoubtedly have an effect on companies choosing to do business in Canada

When Forum Selection Clauses Meet Choice of Law Clauses

Many contracts that contain a forum selection clause also contain a choice of law clause. This raises the issue of whether to apply the parties’ chosen law to questions of forum selection clause interpretation, such as whether the clause is mandatory or permissive and how far the scope of the clause extends. The recent trend has been for courts to apply the law selected by the parties in their choice of law clause to govern these interpretation issues. This Article argues that the law has gone in the wrong direction and that courts should apply forum law to questions of forum selection clause interpretation. This Article challenges each of the stated rationales in favor of applying the parties’ chosen law to interpret a forum selection clause: the party autonomy argument; the intention of the parties argument; the certainty and predictability argument; the substance versus procedure argument; the “part of the contract” argument; and the forum shopping argument. None of the purported arguments in favor of applying the parties’ chosen law stand up to closer scrutiny. Additionally, this Article examines the myriad complications presented by interpreting a forum selection clause in conjunction with a choice of law clause. Foremost among these is the sheer complexity of the exercise. Particularly when it comes to applying foreign country law, there is uncertainty over exactly what the “chosen law” is. If the parties have selected the law of a European Union country, for instance, there are a variety of possible laws that could apply: internal domestic law, the Brussels Regulation, the Hague Choice of Court Convention, or some combination thereof. Additional complications are presented by structural dynamics of the choice of law endeavor: the principle of party prosecution and the differential treatment of forum selection clauses in a contract without a choice of law clause. Finally, when one examines what courts are doing in practice, it is clear that they are not particularly adept at ascertaining and applying the parties’ chosen law to interpret a forum selection clause. The net result is a hodge-podge interpretation of mixed U.S. and foreign law. The choice of law exercise is complicated enough. This Article suggests that we need not make it any more complicated by using the parties’ chosen law to interpret a preliminary issue. Ultimately, the responsibility is on the parties to draft forum selection clauses clearly and without ambiguity. If they do so, then none of this is an issue

Foreign Judgments at Common Law: Rethinking the Enforcement Rules

England and Canada have adopted divergent approaches to the enforcement of foreign civil and commercial judgments. An English court will only enforce a foreign judgment where the defendant submitted to the junsdiction of the foreign court, or was present in the foreign jurisdiction when served with process. This position. while protecting domestic defendants, is outdated and does little to further the objectives underpinning judgment enforcement- Canadian courts, by contrast, have been far more liberal than their English counterparts, enforcing foreign judgments in cases where there is a real and substantial connection between the dispute and the judgment forum. While this approach fully advances the objectives of judgment enforcement, it leaves Canadian defendants exposed to the perils and uncertainties of international litigation. An alternative to either of these positions would be to adopt a variant of the real and substantial connection test to govern the issue of foreign judgment recognition at common law. Under this framework, questions of how fair it is to require a domestic defendant to litigate in a foreign forum would be encapsulated within the jurisdictional inquiry itself. The judgment court would only be perceived as junsdictionally competent (and its judgment therefore enforceable) when, considenng the totality of the circumstances and the additional burdens imposed by international litigation, it is fair and reasonable to expect the defendant to litigate the claim in the foreign jurisdiction. This test underscores the fact that enforceability concerns are not the same domestically as they are internationally, and that a test which is to promote the freer movement of judgments must also encompass minimum fairness safeguards

Transnational Class Actions and the Illusory Search for Res Judicata

The transnational class action-a class action in which a portion of the class consists of non-US claimants-is here to stay Defendants typically resist the certification of transnational class actions on the basis that such actions provide no assurance of finality for a defendant, as it will always be possible for a non-U.S. class member to initiate subsequent proceedings in a foreign court. In response to this concern, many U.S. courts will analyze whether the home courts of the foreign class members would accord res judicata effect to an eventual U.S. judgment prior to certifying a U.S. class action containing foreign class members. The more likely the foreign court is to recognize a US. class judgment, the more likely an American court will include those foreigners in the U.S. class action. Current scholarship accepts propriety of the res judicata analysis but questions the manner in which the analysis is carried out. This Article breaks from the existing literature by arguing that the dynamics of class litigation render the res judicata effect of an eventual U.S. class judgment inherently unknowable to a U.S. court ex ante. In particular, I argue that certain litigation dynamics -specifically the process of proving foreign law via experts, the principle of party prosecution, and the litigation posture of the action-complicate the transnational class action landscape and prevent a court from accurately analyzing the res judicata issues at play. This is exacerbated by the structural dynamics of class litigation: the complexity of foreign law on the recognition and enforcement of judgments, the newness of class action law in most foreign countries, and the distinction between general and fact-specific grounds for nonenforcement of a U.S. class judgment. Accordingly, I argue that U.S. courts should abandon their illusory search for res judicata. Instead courts should avoid the res judicata problem altogether by employing an opt-in mechanism for foreign class plaintiffs, whereby such plaintiffs are not bound unless they affirmatively undertake to be bound by U.S. class judgment. An opt-in mechanism for foreign plaintiffs also provides several advantages over the current opt-out mechanism: it allows all foreign claimants to participate in U.S. litigation if they so choose; it provides additional due process protections for absent foreign claimants; it respects international comity; and it sufficiently deters defendant misconduct