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Unpublished Paper
Improving Parity in Personal Jurisdiction and Judgment Enforcement in International Cases: A Domestic Proposal to Help Revive the Hague Judgments Convention
ExpressO (2013)
  • Eric Porterfield
Abstract
Two aspects of American law inadvertently discriminate against American consumers and businesses to the benefit of foreign nationals. Restrictive personal jurisdiction rules often prevent American courts from exercising jurisdiction over foreign nationals on the grounds that they lack sufficient “contact” with the forum. Foreign product manufacturers can use this to their advantage, structuring their business dealings to take advantage of confusing constitutional constraints on personal jurisdiction, reducing, if not eliminating, the risk of potential tort liability in American courts, often leaving American consumers without a remedy and disadvantaging American businesses. American companies, in contrast, cannot avoid American tort law at home and when selling abroad can claim no such protection from foreign courts. As a result, foreign manufacturers have access to the lucrative U.S. market, competing alongside American companies who must not only bear the full burden of domestic tort liability, but are also subject to foreign law when they sell products abroad. American courts, in turn, tend to enforce money judgments secured abroad even though foreign courts are less likely to enforce money judgments obtained in the United States. These transnational problems are ripe for an international solution – namely, the proposed but abandoned Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (“Hague Judgments Convention” or “Convention”). The Hague Judgments Convention would have provided both a predictable basis for personal jurisdiction over foreign product manufacturers and rendered American judgments more enforceable abroad. While the Hague Judgments Convention seemed poised to cut the Gordian knot of personal jurisdiction and remedy international discrimination against American money judgments, our fellow Hague Conference nations had insufficient incentives to continue negotiations and hopefully consummate the treaty. Our negotiating partners had diminished incentives because they benefit from the asymmetric status quo inherent in personal jurisdiction and foreign judgment enforcement. First, the restrictive, fractured, and incoherent nature of personal jurisdiction fosters protracted battles over personal jurisdiction, often resulting in an American court refusing to exercise personal jurisdiction over foreign manufacturers. This reduces the risk that foreign manufacturers will bear American tort liability even though American companies are subject to such liability. Second, American courts already enforce foreign money judgments even though foreign courts are less receptive to American money judgments. Why would our Hague Conference negotiating partners consent to a treaty that would both increase the risk that their constituents would be subject to American tort liability and increase the likelihood that American judgments could be enforced against them in their home countries? With a few modifications, Congress should pass legislation that can change the asymmetric status quo and hopefully create the proper incentives to revive the moribund Hague Judgments Convention. Congress can create incentives designed to bring the parties back to the negotiating table by enacting domestic legislation to bring a measure of parity to both personal jurisdiction and judgment enforcement. First, Congress should pass the proposed Foreign Manufacturers Legal Accountability Act, revised to require foreign manufacturers to consent to jurisdiction in any court that is an otherwise proper venue. And second, Congress should pass the American Law Institute’s proposed Federal Judgment Recognition and Enforcement Act, which revives the basically discarded concept of reciprocity as a defense to the enforceability of a foreign judgment. Such legislation will, in the short term, help level the playing field for American businesses and protect our consumers, without a significant impact on trade and without violating international agreements. More importantly, it will allow the United States to bargain from a position of increased strength vis-à-vis our Hague Conference partners, in order to consummate a treaty that, in the end, can accomplish even more than the congressional legislation I propose.
Keywords
  • personal jurisdiction,
  • judgment enforcement,
  • Hague Judgments Convention
Publication Date
August 14, 2013
Citation Information
Eric Porterfield. "Improving Parity in Personal Jurisdiction and Judgment Enforcement in International Cases: A Domestic Proposal to Help Revive the Hague Judgments Convention" ExpressO (2013)
Available at: http://works.bepress.com/eric_porterfield/2/