The Society of Lloyd's v. Ashenden et al

• Decision Date: 27 November 2000
• Docket Number: 99-4064,00-1066,00-1371,Nos. 99-3195,00-1430,s. 99-3195
• Parties: (7th Cir. 2000) The Society of Lloyd's, Plaintiff-Appellee, v. James Frederick Ashenden, et al., Defendants-Appellants. & 00-1702
• Court: U.S. Court of Appeals — Seventh Circuit

Page 473

233 F.3d 473 (7th Cir. 2000)

The Society of Lloyd's, Plaintiff-Appellee, v. James Frederick Ashenden, et al., Defendants-Appellants.

Nos. 99-3195, 99-4064, 00-1066, 00-1371, 00-1430 & 00-1702

In the United States Court of Appeals For the Seventh Circuit

Argued September 19, 2000

Decided November 27, 2000

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 98 C 5335, 99 C 2651--Harry D. Leinenweber, Judge. [Copyrighted Material Omitted]

Before Posner, Manion, and Kanne, Circuit Judges.

Posner, Circuit Judge.

These are diversity suits brought in the federal district court in Chicago by Lloyd's, a foreign corporation (see Haynsworth v. The Corporation, 121 F.3d 956, 958 (5th Cir. 1997)), against American members ("names") of insurance syndicates that Lloyd's manages. 28 U.S.C. sec. 1332(a)(2). Lloyd's wanted to use the Illinois Uniform Foreign Money-Judgments Recognition Act, 735 ILCS 5/12-618 to 626, to collect money judgments, each for several hundred thousand dollars, that it had obtained against the defendants in an English court after the names' repeated efforts in earlier litigation to knock out the forum-selection clause in their contracts with Lloyd's had failed. Bonny v. Society of Lloyd's, 3 F.3d 156 (7th Cir. 1993); Lipcon v. Underwriters at Lloyd's, 148 F.3d 1285 (11th Cir. 1998); Richards v. Lloyd's of London, 135 F.3d 1289 (9th Cir. 1998); Haynsworth v. The Corporation, supra; Allen v. Lloyd's of London, 94 F.3d 923 (4th Cir. 1996); Roby v. Corporation of Lloyd's, 996 F.2d 1353 (2d Cir. 1993). Pursuant to this strategy, Lloyd's filed the judgments in the district court and then issued "citations" pursuant to the Illinois procedure for executing a judgment. The filing of the judgments inaugurated this federal-court proceeding to collect them; and state law, in this case the Illinois citations statute, 735 ILCS 5/2-1402, supplies the procedure for executing a federal-court judgment. Fed. R. Civ. Pro. 69(a); Resolution Trust Corp. v. Ruggiero, 994 F.2d 1221, 1226 (7th Cir. 1993); 12 Charles A. Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure sec. 3012, p. 148 (1997). The statute allows the holder of a judgment to depose the judgment debtor respecting the existence, amount, and whereabouts of assets that can be seized to satisfy the judgment; to impose a lien on those assets; and to command the debtor to turn over to the judgment creditor as many of the seizable assets as may be necessary to satisfy the judgment. See Bank of Aspen v. Fox Cartage, Inc., 533 N.E.2d 1080, 1083 (Ill. 1989).

The defendants ignored the citations and instead asked the district court not to recognize the English judgments as being enforceable in Illinois. They argued that those judgments had denied them due process of law and therefore were not enforceable under the foreign money-judgments recognition act, which makes a judgment rendered by a court outside the United States unenforceable in Illinois if "the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law." 735 ILCS 5/12-621 (emphasis added); see also 5/12-620. The district court rejected the argument and granted summary judgment for Lloyd's, declaring the judgments enforceable and so the issuance of citations proper.

We have italicized the word that defeats the defendants' argument. The judgments about which they complain were rendered by the Queen's Bench Division of England's High Court, which corresponds to our federal district courts; they were affirmed by the Court of Appeal, which corresponds to the federal courts of appeals; and the Appellate Committee of the House of Lords, which corresponds to the U.S. Supreme Court, denied the defendants' petition for review. Any suggestion that this system of courts "does not provide impartial tribunals or procedures compatible with the requirements of due process of law" borders on the risible. "[T]he courts of England are fair and neutral forums." Riley v. Kingsley Underwriting Agencies, Ltd., 969 F.2d 953, 958 (10th Cir. 1992); to same effect see Haynsworth v. The Corporation, supra, 121 F.3d at 967; Roby v. Corporation of Lloyd's, supra, 996 F.2d at 1363. The origins of our concept of due process of law are English, Dent v. West Virginia, 129 U.S. 114, 123 (1889); Hurtado v. California, 110 U.S. 516, 528-32 (1884); Coniston Corp. v. Village of Hoffman Estates, 844 F.2d 461, 465 (7th Cir 1988); Keith Jurow, "Untimely Thoughts: A Reconsideration of the Origins of Due Process of Law," 19 Am. J. Legal Hist. 265 (1975), and the English courts, especially the Supreme Court of Judicature (composed of the High Court and the Court of Appeal) and the Appellate Committee of the House of Lords, the tribunals involved in the judgments challenged here, are highly regarded for impartiality, professionalism, and scrupulous regard for procedural rights. The English judicial "system . . . is the very fount from which our system developed; a system which has procedures and goals which closely parallel our own." In re Hashim, 213 F.3d 1169, 1172 (9th Cir. 2000), quoting Somportex Ltd. v. Philadelphia Chewing Gum Corp., 318 F. Supp. 161, 166 (E.D. Pa. 1970), aff'd, 453 F.2d 435 (3d Cir. 1971). "United States courts which have inherited major portions of their judicial traditions and procedure from the United Kingdom are hardly in a position to call the Queen's Bench a kangaroo court." British Midland Airways Ltd. v. International Travel, Inc., 497 F.2d 869, 871 (9th Cir. 1974).

Not that the English concept of fair procedure is identical to ours; but we cannot believe that the Illinois statute is intended to bar the enforcement of all judgments of any foreign legal system that does not conform its procedural doctrines to the latest twist and turn of our courts regarding, for example, the circumstances under which due process requires an opportunity for a hearing in advance of the deprivation of a substantive right rather than afterwards. See Hilton v. Guyot, 159 U.S. 113, 205 (1895); Ingersoll Milling Machine Co. v. Granger, 833 F.2d 680, 687-88 (7th Cir. 1987). It is a fair guess that no foreign nation has decided to incorporate our due process doctrines into its own procedural law; and so we interpret "due process" in the Illinois statute (which, remember, is a uniform act, not one intended to reflect the idiosyncratic jurisprudence of a particular state) to refer to a concept of fair procedure simple and basic enough to describe the judicial processes of civilized nations, our peers. The statute requires only that the foreign procedure be "compatible with the requirements of due process of law," and we have interpreted this to mean that the foreign procedures are "fundamentally fair" and do not offend against "basic fairness." Id. at 687-88; see also Hilton v Guyot, supra, 159 U.S. at 202-03; Wilson v. Marchington, 127 F.3d 805, 811 (9th Cir. 1997); Guinness PLC v. Ward, 955 F.2d 875, 900-01 (4th Cir. 1992); Banco Minero v. Ross, 172 S.W. 711, 714-15 (Tex. 1915).

We'll call this the "international concept of due process" to distinguish it from the complex concept that has emerged from American case law. We note that it is even less demanding than the test the courts use to determine whether to enforce a foreign arbitral award under the New York Convention, 9 U.S.C. sec. 201 et seq., whose due process defense (that a party lacked "proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case," Article V(1) (b), 9 U.S.C. sec. 201) has been interpreted to mean the enforcing jurisdiction's concept of due process, albeit a rather minimal such concept. Iran Aircraft Industries v. Avco Corp., 980 F.2d 141, 145-46 (2d Cir. 1992); see also Generica Ltd. v. Pharmaceutical Basics, Inc., 125 F.3d 1123, 1129- 31 (7th Cir. 1997).

It is true that no evidence was presented in the district court on whether England has a civilized legal system, but that is because the question is not open to doubt. We need not consider what kind of evidence would suffice to show that a foreign legal system "does not provide impartial tribunals or procedures compatible with the requirements of due process of law" if the challenged judgment had been rendered by Cuba, North Korea, Iran, Iraq, Congo, or some other nation whose adherence to the rule of law and commitment to the norm of due process are open to serious question, see, e.g., Bank Melli Iran v. Pahlavi, 58 F.3d 1406, 1411-12 (9th Cir. 1995); Choi v. Kim, 50 F.3d 244, 249-50 (3d Cir. 1995); Banco Minero v. Ross, supra, 172 S.W. at 715; Bridgeway Corp. v. Citibank, 45 F. Supp. 2d 276, 286-89 (S.D.N.Y. 1999), as England's are not. It is anyway not a question of fact. It is not, strictly speaking, a question of law either, but it is a question about the law of a foreign nation, and in answering such questions a federal court is not limited to the consideration of evidence that would be admissible under the Federal Rules of Evidence; any relevant material or source may be consulted. Fed. R. Civ. P. 44.1; Pittway Corp. v. United States, 88 F.3d 501, 504 (7th Cir. 1996); 9 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure sec. 2446 (1995).

Rather than trying to impugn the English legal system en gross, the defendants argue that the Illinois statute requires us to determine whether the particular judgments that they are challenging were issued in proceedings that conform to the requirements of due process of law as it has come to be understood in the case law of Illinois and other American jurisdictions. The statute, with its reference to "system," does not support such a retail approach, which would moreover be inconsistent with providing a streamlined, expeditious method for collecting money judgments rendered by courts in other...