City of Oakland v. Desert Outdoor Advertising, Inc.

• Decision Date: 04 August 2011
• Docket Number: No. 53973.,53973.
• Citation: 267 P.3d 48,127 Nev. Adv. Op. 46
• Parties: CITY OF OAKLAND, Appellant, v. DESERT OUTDOOR ADVERTISING, INC., Respondent.
• Court: Nevada Supreme Court

127 Nev. Adv. Op. 46
267 P.3d 48

CITY OF OAKLAND, Appellant,
v.
DESERT OUTDOOR ADVERTISING, INC., Respondent.

No. 53973.

Supreme Court of Nevada.

Aug. 4, 2011.

[267 P.3d 48]

Porter Simon, PC, and Brian C. Hanley and Peter H. Cuttitta, Reno, for Appellant.

Robison Belaustegui Sharp & Low and Frank C. Gilmore, Reno, for Respondent.

Before the Court En Banc.

[267 P.3d 49]

OPINION By the Court, CHERRY, J.:

This appeal involves an attempt by appellant City of Oakland to enforce, in Nevada, a California civil judgment against respondent Desert Outdoor Advertising, Inc. We consider whether the California judgment is entitled to full faith and credit in Nevada. Recognizing that Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), provides an exemption to the Full Faith and Credit Clause of the United States Constitution, such that other states' penal judgments are unenforceable in the State of Nevada, we conclude that the California judgment in this case was penal in nature and, as such, is not enforceable in Nevada. Accordingly, we affirm the district court's decision in this matter.

FACTUAL AND PROCEDURAL HISTORY

In 2003, Desert Outdoor erected an outdoor billboard for advertising purposes within Oakland, California, city limits. Upon learning of the advertisement, Oakland sent a notice to abate to Desert Outdoor, advising it that the billboard was in violation of Oakland's municipal code. Specifically, the sign in question contained advertisements for businesses that were not located on the property on which the sign was erected, in violation of Oakland Municipal Code section 14.04.270.¹ After two months had passed and Desert Outdoor had taken no action, Oakland sent Desert Outdoor another notice to abate, advising Desert Outdoor that it was in violation of Oakland Municipal Code sections 14.04.270, 17.10.850,² and 17.70.050(B).³ The second notice to abate also instructed Desert Outdoor to remove the billboard and its supporting pole within the next month.

After Desert Outdoor failed to remove the sign, Oakland filed suit against it in California for, among other things, unlawful business practices, with the consent of the Alameda County District Attorney. See Cal. Bus. & Prof.Code § 5466(b) (providing for civil actions brought by government entities). The California district court ultimately found that Desert Outdoor engaged in unlawful business practices through its violation of the aforementioned Oakland Municipal Code sections. Thus, the California district court imposed civil statutory penalties upon Desert Outdoor. On November 2, 2007, the California district court entered a civil judgment in favor of Oakland pursuant to California Business and Professions Code Section 5485.⁴

[267 P.3d 50]

The judgment was for (1) $124,000 in statutory civil penalties, which were calculated by adding the statutory penalty of $10,000, plus $75 per day for 1,520 days of violation; (2) $263,000 in disgorged profits; and (3) costs and attorney fees in the amount of $92,353.75. Desert Outdoor appealed the judgment, and the California Court of Appeal affirmed.

On February 28, 2008, Oakland filed its California judgment in Nevada's Second Judicial District Court, seeking enforcement of the judgment under the Uniform Enforcement of Foreign Judgments Act (UEFJA). NRS 17.330–.400. Thereafter, Oakland attached Desert Outdoor's bank accounts and income from Desert Outdoors Nevada properties. Approximately 13 months after the judgment was filed in Nevada, Desert Outdoor filed a motion to set aside the foreign judgment and quash execution of the judgment. The district court granted Desert Outdoor's motion, concluding that because California's judgment was penal, it was not entitled to full faith and credit. This appeal followed.

DISCUSSION

On appeal, Oakland argues that the district court: (1) improperly relied on the United States Supreme Court's decision in Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), to conclude that the penal judgment of a sister state need not be given full faith and credit by Nevada courts; and (2) erred in concluding that the California civil monetary judgment was penal in nature. We disagree with Oakland's contentions, and we affirm the district court's decision.

The California judgment falls within the penal exception to the Full Faith and Credit Clause set forth in Huntington v. Attrill

On appeal, Oakland argues that the district court erred when it relied upon Huntington v. Attrill, 146 U.S. 657, 13 S.Ct. 224, 36 L.Ed. 1123 (1892), to set aside the California judgment. Oakland contends that Huntington is a “relic” of “questionable authority,” and that its enforcement is contrary to the purpose of the UEFJA, codified in Nevada at NRS 17.330 through 17.400, which is to “provide a speedy and economical method to enforce foreign judgments and to make uniform the laws of the states that enact it.” As a result, Oakland argues, citing Rosenstein v. Steele, 103 Nev. 571, 573, 747 P.2d 230, 232 (1987), that the district court erred in setting aside the judgment because the only defenses available to Desert Outdoor under the UEFJA are those that a “judgment debtor may constitutionally raise under the Full Faith and Credit Clause and which are directed to the validity of the foreign judgment.” For the reasons set forth below, we reject Oakland's contentions and conclude that the penal exception set forth in Huntington warrants against enforcement of the California judgment in Nevada.

The Full Faith and Credit Clause and the UEFJA

Under the Full Faith and Credit Clause of the United States Constitution, a final judgment entered in a sister state must be respected by the courts of this state. See U.S. Const. art. IV, § 1; Rosenstein, 103 Nev. at 573, 747 P.2d at 231; Donlan v. State, 127 Nev. ––––, –––– & n. 1, 249 P.3d 1231, 1233 & n. 1 (2011). “For the States of the Union, the constitutional limitation imposed by the full faith and credit clause abolished, in large measure, the general principle of international law by which local policy is permitted to dominate rules of comity.” Broderick v. Rosner, 294 U.S. 629, 643, 55 S.Ct. 589, 79 L.Ed. 1100 (1935).

To further the principle of comity, Nevada adopted the UEFJA in NRS 17.330 through 17.400. Under this act, a properly filed foreign judgment has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a Nevada district court judgment, and may be enforced or satisfied in like manner. NRS 17.350. Nevada's UEFJA

[267 P.3d 51]

applies to all foreign judgments filed in Nevada district court for the purpose of enforcing the judgment in Nevada. NRS 17.340; NRS 17.350. The act defines a foreign judgment “as any judgment of a court of the United States or of any other court which is entitled to full faith and credit in this state.” NRS 17.340 (emphasis added).

However, not all judgments are entitled to full faith and credit in Nevada. Notably, “defenses such as lack of personal or subject-matter jurisdiction of the rendering court, fraud in the procurement of the judgment, lack of due process, satisfaction, or other grounds that make the judgment invalid or unenforceable may be raised by a party seeking to reopen or vacate a foreign judgment.” 30 Am.Jur.2d Executions and Enforcement of Judgments § 787 (2005); see also Rosenstein, 103 Nev. at 573, 747 P.2d at 232; Marworth, Inc. v. McGuire, 810 P.2d 653, 656 (Colo.1991); Wooster v. Wooster, 399 N.W.2d 330, 333 (S.D.1987) (quoting Baldwin v. Heinold Commodities Inc., 363 N.W.2d 191, 194 (S.D.1985)). In addition, the United States Supreme Court has determined that the Full Faith and Credit Clause does not apply to penal judgments. Huntington v. Attrill, 146 U.S. 657, 666, 672–73, 13 S.Ct. 224, 36 L.Ed. 1123 (1892); Nelson v. George, 399 U.S. 224, 229, 90 S.Ct. 1963, 26 L.Ed.2d 578 (1970) (reiterating that “the full faith and credit clause does not require that sister states enforce a foreign penal judgment”). This exception for penal judgments, most notably analyzed in Huntington, is the law at issue here.

Huntington v. Attrill

In Huntington, Huntington obtained a judgment against Attrill in New York based on a statutory provision imposing joint and several liability on the officers of a corporation for the debts of the corporation itself if the officer made any materially false representation in a certificate, report, or public notice. Id. at 660–62, 13 S.Ct. 224. Huntington then brought a bill in Maryland state court seeking to have the New York judgment enforced in Maryland. Id. at 660–61, 13 S.Ct. 224. Attrill demurred to the bill on the grounds that Huntington's claim “was for recovery of a penalty against Attrill arising under a statute of the state of New York, and because it did not state a case which entitled the plaintiff to any relief in a court of equity in the State of Maryland.” Id. at 663, 13 S.Ct. 224. The circuit court of Baltimore overruled the demurrer, and the Maryland Court of Appeals reversed the decision of the circuit court and dismissed the bill on the grounds that “liability imposed by section 21 of the statute of New York ... was intended as a punishment for doing any of the forbidden acts, and was, therefore, ... a penalty which could not be enforced in the state of Maryland.” Id.

Huntington then sought a writ of error in the United States Supreme Court, arguing that the Maryland court unconstitutionally denied full faith and credit to the New York judgment. Id. at 665, 13 S.Ct. 224. After determining that the question of whether full faith and credit was denied to the New York judgment in Maryland was a federal question, the Huntington Court stated that “in order to determine this question, it will be necessary, in the first place, to consider the true scope and meaning of the fundamental maxim of international law stated by Chief Justice Marshall in the fewest possible words: ‘The courts of...