USA Law and Practice Contributed by: Steven Molo, Robert Kry, Megan Cunniff Church and Walter Hawes, MoloLamken LLP
5. Enforcement 5.1 Methods of Enforcement
cute it. Recognition of foreign judgments is ordinarily a matter of state law. Each state has its own statutes or principles govern - ing the recognition of foreign judgments. Most states, however, have adopted some version of the Uniform Foreign-Country Money Judgments Recognition Act, a model law that provides uniform standards and pro - cedures for courts to follow. The Uniform Act gener - ally prohibits courts from re-examining the merits of a foreign judgment. Nonetheless, courts may decline to recognise a foreign judgment, for example, where: • the foreign court lacked jurisdiction; • the defendant did not have proper notice of the proceedings; or • enforcing the judgment would violate public policy. New York state courts are often a good forum for seeking recognition of foreign judgments. New York has narrow grounds for non-enforcement, and has expedited procedures for obtaining summary judg - ment in a recognition action. It takes a broad view of post-judgment asset discovery and execution, and many financial institutions and commercial coun - terparties with custody of a defendant’s assets are located there. Once a plaintiff obtains recognition of a foreign judgment in one US state, it is relatively easy to have that judgment recognised in other US states as well. 6. Privileges 6.1 Invoking the Privilege Against Self- Incrimination The Fifth Amendment to the US Constitution pro - vides individuals with a privilege against compelled self-incrimination. Individuals cannot be forced to give testimony, in the form of answering questions or providing information, that could implicate them in a crime. Invoking that right is often referred to as “tak - ing the Fifth”. Invoking the Fifth Amendment An individual may invoke the Fifth Amendment if the following three conditions are met:
Once the plaintiff obtains a judgment in a fraud action, the plaintiff may seek to execute the judgment against the defendant’s assets in several ways. Execution pro - cedures vary from state to state. Federal courts follow the state law procedures of the state where they are located. In New York, for example, a party with a judgment may serve restraining notices on the defendant or other parties with custody of the defendant’s assets. Those notices have the effect of freezing assets while the plaintiff pursues further execution procedures. Parties may serve those notices without any prior approval from the court. A plaintiff then executes against the assets by arrang - ing for the marshal or sheriff to serve a writ of execu - tion on the party with custody of the assets. The same process may be used to collect a debt that a third party owes to the judgment-debtor in satisfaction of the judgment. If the custodian refuses to turn over the property, the plaintiff may file a “turnover” action ask - ing the court to order the custodian to comply. In New York, a plaintiff may file a turnover action against a third-party custodian of property even if the property itself is located outside the United States. Because a turnover proceeding is an in personam proceeding against the custodian, New York requires only that the custodian itself be subject to the court’s jurisdiction. Other states are divided on whether they permit extraterritorial turnover actions. As noted in 2.1 Disclosure of Defendants’ Assets , after the plaintiff obtains a judgment, US law permits liberal discovery into the judgment-debtor’s assets, even those located overseas. Asset discovery is there - fore a major component of most post-judgment col - lection efforts. 5.2 Enforcement of Foreign Judgments Where a plaintiff holds a foreign judgment against a defendant, the plaintiff must obtain recognition of the judgment in the United States before seeking to exe -
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