Supreme Court Rules That Federal Courts Are Not Bound to Give Conclusive Effect To Foreign Governments' Statements About Their Laws

The Supreme Court ruled today that, when a foreign government presents a formal submission to a federal court about the content of the government's own laws, the court should accord "respectful consideration" to the government's statements, but is not bound to grant them "conclusive effect." The decision in Animal Science Products, Inc. v. Hebei Welcome Pharmaceutical Co. (No. 16-1220) resolves a Circuit split about the weight to accord a foreign government's description of its own law and could lead to more in-depth litigation of the content and meaning of foreign law, with expert witnesses on both sides addressing the issues.

Background

Two years ago, we blogged about the Second Circuit's decision in In re Vivendi, S.A. Securities Litigation, which affirmed a ruling excluding certain foreign shareholders from a certified class in a securities class action against a non-U.S. issuer because of a concern that courts in some foreign countries might not give preclusive effect to a U.S. class-action judgment. The Second Circuit's decision confirmed that the "superiority" analysis conducted as part of the class-certification inquiry may properly consider whether foreign class members would or would not be bound by a U.S. class-action judgment if they were to sue in their home courts. Vivendi held that "[c]oncerns about foreign recognition of our judgments are reasonably related to superiority" because, if a foreign court would not grant preclusive effect to the judgment, the parties and the court would waste their time and resources litigating and adjudicating the claim.

The Vivendi case followed on the heels of the Second Circuit's ruling in In re Vitamin C Antitrust Litigation that, "when a foreign government, acting through counsel or otherwise, directly participates in U.S. court proceedings by providing a sworn evidentiary proffer regarding the construction and effect of its laws and regulations, which is reasonable under the circumstances presented, a U.S. court is bound to defer to those statements." In re Vitamin C's deference to foreign governments' interpretations of their laws seemed to create an incentive for parties litigating judgment-recognition issues to try to involve foreign governments in disputes about judgment recognition - as had been done in amicus briefs submitted by certain governments in other securities class actions.

The Supreme Court has now spoken and has changed the analysis in the Second Circuit.

In re Vitamin C -...