February 11th, 2015

Lim Ruger Prevails in Appeal Construing Several Issues of First Impression Regarding the Recognition of Foreign Country Money Judgments

Foreign-country money judgments can be enforced in California under the Uniform Foreign Country Money Judgments Recognition Act (the Act). Code Civ. Proc. §§ 1713-1724. In a lawsuit brought by Lim Ruger that went up on appeal three separate times, the California Court of Appeal ended decades of uncertainty by deciding several issues of first impression under the Act.

In the most recent appeal, Lim Ruger prevailed on a motion for summary judgment and obtained a California judgment for its client in the amount of $8,818,628. The Court of Appeal decided an issue of first impression in the United States in favor of Lim Ruger’s client: does the Act apply to a foreign country money judgment that provides compensation to an employer for having to pay a criminal penalty to a foreign government due to the criminal wrongdoings of an employee? Judgments for fines or other penalties are outside the scope of the Act. Code Civ. Proc. § 1715. Nonetheless, the Court of Appeal found that although the judgment compensated Lim Ruger’s client for having to pay a fine, the judgment was not itself a fine or penalty within the meaning of the Act.

Additionally, the judgment in this case awarded post-judgment interest at the rate of 20% per annum, pursuant to the law of the foreign country. This presented another issue of first impression: does a California court recognizing a foreign country money judgment apply the post-judgment interest of the foreign country, or does it apply the ten percent per annum interest provided by California law? Again, the Court of Appeal found in favor of Lim Ruger’s client and affirmed the grant of 20% per annum interest. This was a significant win because the accrued interest was in the amount of $3,787,397. Once the foreign judgment is entered in California, however, the court found that California’s post-judgment interest of 10% per annum applies.

In a prior appeal in this lawsuit, the Court of Appeal decided another issue of first impression: actions for recognition under the Act are subject to the same procedural requirements as all other civil actions, including summary judgment procedures and trial, as needed to establish that the judgment is eligible for recognition in California. Hyundai Securities Co., Ltd. v. Lee (2013) 215 Cal. App. 4th 682.

While many uncertainties have been resolved in these appeals, it nonetheless takes counsel with expertise in litigating under the Act to navigate the nuances and pitfalls of the Act’s deceptively simple elements and defenses.

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