Foreign Country Judgments and the Res Judicata Puzzle

Whose Preclusion Law Should U.S. Courts Apply?

Abstract

With the rise in global transactions, U.S. courts are often asked to decide what effect to give foreign judgments that involve related claims or issues. In the absence of a uniform rule, U.S. courts reach a variety of results, sometimes applying federal rules of res judicata (including claim preclusion and issue preclusion), sometimes applying state rules or state choice-of-law, and occasionally applying foreign rules of preclusion. The decision is complicated by doctrines peculiar to American law, including constitutional and statutory requirements of full faith and credit and “Erie” deference owed by federal courts to state court law. Neither comity nor statutes enacting a version of the Uniform Foreign Money-Judgments Recognition Act answer the question whose res judicata law to apply. Scholars have proposed a variety of approaches, including extension of full faith and credit to foreign judgments, abolition of Erie in the context of cases involving foreign parties or jurisdictions, and blanket application of federal law. As practitioners who deal with private international law cases, we recommend that U.S. courts apply U.S. law: federal law to cases involving federal questions, and state law in cases involving state law claims and diversity of citizenship. Our approach would simplify the process, avoid conflicts that arise when courts try to apply multiple doctrines, stave off expense and uncertainty that result when U.S. courts are asked to apply foreign laws of res judicata, and allow practitioners to anticipate results to a much greater degree than is now possible.