Thursday, March 03, 2022

In re Rejuvi Labs (9th Cir. - March 3, 2022)

I don't think I'm confused easily.  Not about legal doctrine, anyway.  But I'm honestly confused about one aspect of this opinion by the Ninth Circuit earlier today.

It's about whether a federal bankruptcy court should recognize a (particularly large) default judgment entered by an Australian tribunal against a U.S. corporation.  The district court refused to recognize the judgment because the Australian court didn't have personal jurisdiction over the defendant, but the Ninth Circuit reverses.

Let's take this in steps.  It's a federal court (bankruptcy) suit, so federal law applies, but federal law says we determine the validity of foreign judgments under the the law of the forum state (here, California).  So California law applies.  Check.

California law says that it doesn't recognize foreign judgments if there's no personal jurisdiction.  Check.

California law then defines what it means by a lack of personal jurisdiction, which is defined as either (1) no jurisdiction under California law (e.g., the Due Process Clause), or (2) no jurisdiction under the law of the forum rendering the judgment; here, Australia.  Got it.  Check.

Today's Ninth Circuit opinion discusses (1) at length, and says that there was jurisdiction here because defendant voluntarily appeared in Australia to try to vacate the default.  That waives jurisdiction, it says, because under California law, you waive jurisdiction if you appear on the merits, instead of just arguing jurisdiction.  And since, here, the defendant didn't just argue jurisdiction, there's waiver, thus jurisdiction.

That's certainly true under California procedure.  But two things.

(1) Is it true under Australian law?  The California statute is binary:  it says no jurisdiction (hence no enforcement) if there's either no jurisdiction in (here) California or (here) Australia.  Presumably we've got to see whether Australia -- or, more particularly, the particular Australian state there -- follows California's distinction between general and special appearances, no?  Yet nowhere in the opinion does it discuss the law of Australia on these points.  Maybe Australia's the same way; they do, it seems, have a procedure for "conditional" appearances.  Maybe defendant didn't make this argument, but I would think we'd at least have to mention it.

(2) Is that really what the California statute means when it says no jurisdiction under California law?  I'm pretty certain that what California mostly (if not entirely) means when it says no jurisdiction under the law of California it means minimum contacts; e.g., International Shoe and the like.  The district court thought that test wasn't satisfied here, and the Ninth Circuit doesn't dispute that fact.

But the Ninth Circuit says that under California procedure, if you don't specially appear, you waive personal jurisdiction.  True.  But does the statute's reference to California law really incorporate the California personal jurisdiction procedural rules?  And, yes, this is an Erie-type of question; sorry to take you back to that troubling first year civil procedure stuff.  With an international twist, no less.

There are lots of procedural things I'm quite confident that the statute doesn't intend to incorporate. For example, in California state court, it's not okay to challenge jurisdiction through a non-California-admitted lawyer, but surely we wouldn't say "Aha!  In Australia, your lawyer wasn't admitted to the California bar when she showed up to challenge jurisdiction, so you thereby consent to jurisdiction under the statute."  It seems at least plausible to me that the California statute says:  "Look, if there's no jurisdiction under minimum contacts in Australia, then we don't recognize the judgment, and we're not incorporating California procedural rules on this issue, just the whole minimum contacts point."  If so, the district court might well be right.  At least we'd have to grapple with that argument.

So, in the end, I'm just looking for a little bit more here.  Before I basically give away this entire U.S. corporation to a particular Australian citizen who was allegedly injured and got a default judgment entered against it, anyway.