McCord v. Jet Spray Intern. Corp.

• Decision Date: 28 December 1994
• Docket Number: Civ. A. No. 93-11375-JLT.
• Citation: 874 F. Supp. 436
• Parties: George C. McCORD, Plaintiff, v. JET SPRAY INTERNATIONAL CORP., Defendant.
• Court: U.S. District Court — District of Massachusetts

874 F. Supp. 436

George C. McCORD, Plaintiff, v. JET SPRAY INTERNATIONAL CORP., Defendant.

Civ. A. No. 93-11375-JLT.

United States District Court, D. Massachusetts.

December 28, 1994.

Jonathan W. Fitch, John J. Pentz, Sally & Fitch, Boston, MA, for plaintiff.

Morris M. Goldings, J. Todd Fernandez, David R. Kerrigan, Mahoney, Hawkes & Goldings, Boston, MA, for defendant.

MEMORANDUM

TAURO, Chief Judge.

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 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, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), 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. 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 (1992). The reciprocity requirement, first announced by the Supreme Court in Hilton v. Guyot, 159 U.S. 113, 16 S.Ct. 139, 40 L.Ed. 95 (1895), is no longer an element of the federal law of enforcement of foreign judgments. See Tahan v. Hodgson, 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, 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 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").¹

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, MILLER & COOPER, § 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 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 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 of "at-will" employment contracts, and would not have been enforceable in a Massachusetts court. Jet Spray also notes that the contract was designed 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), cert. denied, 405 U.S. 1017, 92 S.Ct. 1294, 31 L.Ed.2d 479 (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 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 (Be...