Foreign law in US courts

1. Foreign law in US courts • Obligations of attorney • Role of court in determining foreign law • Judicial notice statutes • Compare to common law • Role of parties, court • Procedures for introduction, proof, application of foreign law

2. Obligations of attorney • Must attorney investigate foreign law – when, what? • Must attorney consult with foreign counsel? • What are limits on making arguments and representations in court? Consider -- In re Disciplinary Action Curl (9th Cir. 1986)

3. Obligations of attorney Your client has been sued in US federal court by IH Credit on an equipment loan. He says he repaid the loan and has a Mexican court judgment to prove it. The judgment, from what you can tell, arose from a case in Mexico brought by IH Credit and says the Mexican court accepted his assertion that he had repaid the loan and dismissed case. Your client also shows you a decree by a Mexican appeals court, which seems to say the foreclosure action by IH Credit was precluded by its failure to repay your client his original down payment.

4. Should you – believe what your client has told you about these judgments? get the Mexican court papers translated? (who should do this?) consult with Mexican counsel about their meaning? (who will pay for this?) Licenciado Raul Encinas (Hermosillo) Obligations of attorney

5. Obligations of attorney Should you – • advocate your client’s position that he repaid the loan? • remember IH Credit knows payment history • IH Credit can present its story • argue the US proceeding is precluded by comity, res judicata and collateral estoppel? • remember IH Credit got the Mexican court papers, too • So did the court!

6. Obligations of attorney If you misrepresented (or failed to ascertain) the Mexican judgments, should there be a sanction? Consider Rule 11

7. Obligations of attorney Rule 11(b) Representations to Court. By presenting to the court … a pleading, written motion, or other paper, an attorney … is certifying that to the best of the person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances -- (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and

8. Obligations of attorney (c) Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation.

9. Role of parties in presenting law Role of court in weighing evidence First National City Bank v. Compañía de Aguaceros SA (5th 1968) Panama city skyline (89 banks) Court determination of foreign law

10. Court determination of foreign law Aguaceros has a bank deposit at Citibank’s branch in Panama. Its auditor Echevarria forges checks and cashes them. Six months later, when Aguaceros’s treasurer Silverthorne visits the bank, he notices a problem – for the first time. Although the bank has sent statements, they have gone to Echevarria, the company’s trusted auditor, who has squandered the money in Panama’s notorious casinos. Aguaceros sues Citibank in US federal court.

11. What are the issues? Does Panama law apply - why? Does Article 989 of the Commercial Code apply – why not? Is the bank’s negligence relevant – why not? Is this a matter for the court to investigate, analyze or resolve – or the experts? Court determination of foreign law

12. Court determination of foreign law Article 989 (Panama Commercial Code) [paraphrased] Banks must send statements to their customers at least 8 days after each quarter. And customers must present any corrections within 5 days. A customer who fails to correct within this period accepts the statement, which becomes definitive. Article 9 (Panama Civil Code) [paraphrased] When the meaning of the law is clear, its letter prevails over its spirit. When obscure, look its clear spirit or trustworthy history. Some expert guidance– please!

13. Court determination of foreign law

14. The trial court listened to Panamanian experts: Ricardo J. Alfaro (former member of World Court / banking lawyer): “Article 989 is peremptory, though depositor could defend if never got statement” Erasmo de la Guardia (member of Supreme Court and treatise author): “Article 989 places depositor on state of alert and, if does not act, must prove error, fraud or duress“ The trial court, confused by this testimony, did not apply Article 989. Instead, the court said Citibank was negligent for accepting the forged checks. Aguaceros gets its money back from the bank. Appeal? Court determination of foreign law

15. Court determination of foreign law On appeal, should the appeals court -- • accept the trial court’s findings? • look to the experts’ views, but come to its own conclusion? • disregard Article 989 since it is ambiguous – do the 5 days run after mailing or after receipt of statement? • come to its own conclusions about the meaning of Article 989 (based on Panama’s pro-bank tradition)? • disregard Article 989 since its sanction (the 5-day rule) is harsh?

16. Judicial notice statutes • Notice of foreign law issue • Who raises? • What notice required? • Proof • Sources - expert / evidence rules • Opportunity to respond • Decide • Judge: must decide or may decide? • role of jury? • Role of appellate court

17. Judicial notice statutes Rule 44.1: Determination of foreign law A party who intends to raise an issue concerning the law of a foreign country shall give notice in his pleadings or other reasonable written notice. The court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence. The court’s determination shall be treated as a ruling on a question of law.

18. Judicial notice statutes • Who raises issue of foreign law? • parties • judge sua sponte • appeals court

19. Judicial notice statutes • What notice is required? • pleading (common law requirement) • written notice (law / copy / translation) • notice before trial • notice by court

20. Judicial notice statutes • Can parties stipulate content of foreign law? • court bound by stipulation (common law) • court defers to parties • Public policy? • constitutional “case or controversy”?

21. Judicial notice statutes • What sources can be used? • rules of evidence (common law) • foreign experts, affidavits, treatises • outside sources discovered by judge (notice?)

22. Judicial notice statutes • Decide foreign law on summary judgment? • “genuine issue of material fact” (common law) • dispute in affidavits, expert testimony • resolved by court as matter of law

23. Judicial notice statutes • What is role of jury? • resolve questions of expert credibility (common law) • jury instructions must be challenged and corrected when given (or waived)

24. Judicial notice statutes • What is role of appellate court? • review “clearly erroneous” (common law) • judicial determination “matter of law” • supplemental research • take judicial notice on own (without lower court or parties?)

25. Judicial notice statutes • What is effect of judgment based on foreign law? • res judicata / collateral estoppel as between parties • binding precedent in other litigation