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The author is a partner with Baker & McKenzie LLP, Chicago
Practitioners who find themselves before the courts and tribunals of other nations need to be aware of the potential effect that first-in-time foreign judgments may have on claims and defenses in U.S. proceedings. Many U.S. litigators, to the extent they know of this risk, reflexively evaluate it by reference to generalized principles of issue preclusion under U.S. federal or state law. But Judge Richard A. Posner’s opinion for the Seventh Circuit Court of Appeals in United States v. Kashamu, No. 10-2782 656 F.3d 679 (7th Cir. Sept. 1, 2011) surprisingly suggests that the law of the rendering court’s foreign jurisdiction may presumptively control the preclusive scope of foreign judgments in U.S. litigation.
In determining the preclusive effect, if any, of foreign judgments on U.S. proceedings, reviewing U.S. courts generally engage in a two-stage analysis. First, the court decides whether to recognize the judgment of the rendering foreign court. Second, if the court recognizes the foreign judgment, it then ascertains the scope of the judgment’s preclusive effect. Both stages may be fraught with choice of law issues. This column focuses on the second inquiry.