Applying Chinese Law in US Courts: No Really, Despite it All

Way back in 2008 I wrote a post immediately after one of my firm’s lawyers returned from a federal court hearing where the judge essentially said — near as I could tell without any basis in law — that service of an English language only complaint on our client was valid even though she did not speak a word of English and even though the Hague Convention rules on service of process for that particular country explicitly stated that the complaint needed to be translated into her native language. In that post, which follows, I raged (well for me it was raging) against a US legal system that fails to sufficiently account for foreign law.

This post is on private, not public international law. That means it has little to nothing to do with such hot button issues as the United Nations, the Kyoto Protocol, or the International Criminal Court. This post is on how American courts deal with business cases involving foreign parties and foreign or international law as that law applies to such cases. No more, no less.

Many years ago, I was representing a Canadian-Australian manufacturer in a big case down in Texas along with two truly excellent Dallas litigators. At some point in the case, I had the “brilliant” idea of arguing that US Federal law had preempted Texas state law, mandating dismissal of plaintiff’s claims against my client. We settled the case before the court could hear our preemption argument, but I still remember the half-joking advice I received from Texas local counsel. It was something along the lines of, “forget about federal law, this is Texas; we don’t recognize federal law down here.”

I am beginning to wonder about the willingness of US courts to apply foreign or international law, even in those instances where US law calls for such application.

In a few months, I will be in Las Vegas (I count myself among the people who love Vegas!) speaking on the Hague Convention rules on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, as they apply to Chinese companies. Based on my firm’s experience with getting US courts to recognize international law, I am sorely tempted to just say something like, “forget about international law. This is the United States. We don’t recognize international law here.” Go ahead, just stick your summons and complaint in a bottle, throw it in the ocean, that ought to be enough for you to get a default judgment anyway. And since China never enforces US judgments anyway, why does it matter?

I am sure my speech will be a bit more nuanced by the time I get there, but you get the point.

For at least the third time (two times is coincidence, three times is a trend), a US court has allowed a case to go forward against a defendant despite the plaintiff having clearly failed to abide by the Hague Convention Rules on international service of process. The most recent instance is in a still pending case so I cannot go into the specifics on that one.

Virtually every time we have sought to get the US courts to enforce the Hague Convention or even, in one instance, when we sought to get a US court to pretty much ignore the Hague Convention, the US court has seemed perfectly willing to rule as though the United States has no obligation to abide by a treaty it signed. I have a strong sense US Courts (both state courts and federal courts) will not enforce the Hague Convention’s technical service requirements (including that the summons and complaint must usually be translated into the language of the country in which it is being served). Oh, and getting a US court to throw out or stay (delay) a case so that an already pending case in another country can be decided first — forget it. My conclusion is that US courts are happy to ignore foreign/international law in favor of handling things under US law, whether US law should apply or not.

Since writing the above, our firm has had a Federal Court ignore Australian law in a case without even deigning to explain why and a state court refuse even to consider delaying the US action based on an already pending case in Spain, and get mad at our lawyers for even making the request!

US court judgments are rarely enforced outside the United States and one of the reasons given for this is the failure of American courts to recognize foreign law. Our foreign clients — international businesspeople from countries like Australia, England, Spain, and Germany that are not generally anti-American — are complaining more and more to our lawyers about US courts “think they can ignore the rest of the world.” Add in a President whose response to countries beyond our borders is a big FU and low-life neo-nazis marching in our streets with torches, and you can understand why so many of my non-American friends have been asking if I am concerned about the United States’ standing in the world and the impact all of this will have on our legal system.

My answer is yes.

Strangely enough, I recently thought through much of the above when analyzing an intellectual property matter on which I worked. The matter was for a European company looking to sue an American company under Chinese law in a United States court. (Please nobody ask me to explain either how the parties got into this situation nor why this contortion was even being considered.) What struck me was how despite all of the things about which I wrote above, my opinion to the European lawyers was that if they were to pursue litigation in a US court they could excpect the court to abide by the law, and since the law was clear (and did not really involve court power as did the cases above), we could expect it to apply Chinese law.

I guess I am standing on history (at least that of the U.S. legal system) for now.

Your thoughts?

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.