Courts May Consider Foreign Law Declarations on Motions to Dismiss
By Matthew S. Mulqueen, Litigation News Contributing Editor – January 5, 2017

District courts may consider foreign legal materials outside the pleadings when deciding motions to dismiss, according to the U.S. Court of Appeals for the Ninth Circuit. The opinion emphasizes that Federal Rule of Civil Procedure 44.1 treats foreign law determinations as questions of law—not fact. The decision helps explain how federal judges should treat foreign law, particularly at the motion to dismiss stage.

Portrait of a Painter
The dispute originated from the transcontinental attempts of a French national, Yves Sicre de Fontbrune, to protect his copyright in photographs of Pablo Picasso's artworks. An American art publisher, Wofsy, reproduced the Picasso photographs and triggered the lawsuit.

Cahiers d'Art, a French artistic and literary journal, originally published almost 16,000 photographs of Picasso's art taken by the artist's friend, Christian Zervos. The photographic collection, known as the "Zervos Catalog," became a universally recognized reference work of Picasso's artistic corpus. De Fontbrune purchased Cahiers d'Art's publisher's stock in 1979, thereby acquiring intellectual property rights in the Zervos Catalog under French law.

Almost 20 years later, Wofsky included some of the images from the Zervos Catalog in two volumes on Picasso that Wofsy offered for sale at a Parisian book fair. De Fontbrune sued Wofsy in French court, alleging that the reproductions violated his copyright in the Zervos Catalog. A French appellate court found Wofsy guilty of copyright infringement. Applying a French doctrine called astreinte, the court prohibited Wofsy from further use of the Zervos photographs under penalty of 10,000 francs for each proven infraction.

Ten years later, de Fontbrune sought to enforce his astreinte award by seeking money damages from Wofsy in the High Court of Paris. That court found that Wofsy had violated the earlier judgment by reproducing copyrighted images from the Zervos Catalog and awarded de Fontbrune 2,000,000 euros.

Cat Catching a Bird
De Fontbrune sought to enforce the judgment against Wofsy in California state court under California's Uniform Foreign-Court Monetary Judgment Recognition Act. Wofsy removed the action to the U.S. District Court for the Northern District of California and filed a motion to dismiss under Rule 12(b)(6). The parties submitted competing declarations from experts on French law on whether the French doctrine of astreinte was more akin to a penalty or to damages. De Fontbrune moved to strike the declaration of Wofsy's expert on the grounds that it was evidence outside the pleadings and not permitted in support of a motion to dismiss.

The district court considered the experts' declarations and determined that the primary purpose of the astreinte was to compel Wofsy's compliance with the judgment, not to compensate de Fontbrune for his injuries. The district court concluded that the astreinte thus acted as a penalty and, accordingly, was unenforceable under the Uniform Recognition Act. De Fontbrune appealed.

The court of appeals affirmed the district court's decision to consider the experts' declarations but reversed the court's conclusion that the astreinte was an unenforceable penalty under the Uniform Recognition Act. The court began by analyzing the text of Rule 44.1, noting that the adoption of the rule in 1966 "marked a sea change in the treatment of foreign law by the federal courts." Previously, courts had treated foreign law as an issue of fact to be proved. Rule 44.1 now requires courts to treat the determination of foreign law as a legal issue and allows courts to "consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence."

Despite Rule 44.1's clear language, "federal courts have largely remained hesitant to engage with questions of foreign law as fully and independently as they do with questions of domestic law," the court noted. Lamenting the "semantic sloppiness" of other courts' references to the "burden of proving foreign law," the court emphasized that Rule 44.1 "unshackles courts and litigants from the evidentiary and procedural requirements that apply to factual determinations."

In light of the Rule 44.1's grant of judicial freedom to determine foreign law, the court held—as a matter of first impression among federal appellate courts—that Rule 44.1 authorizes district courts to consider foreign legal materials outside the pleadings in ruling on a motion to dismiss. To hold otherwise "would be antithetical to the language and purpose of Rule 44.1," the court concluded.

The Lesson
"The court reached the right decision," says Jorge A. Mestre, Miami, FL, cochair of the International Litigation Subcommittee of the ABA Section of Litigation's Commercial & Business Litigation Committee. The opinion "harmonizes the language of Rules 44.1 and 12(b)(6) and reflects the approach that international arbitrators often take in similar cases," notes Mestre.

Despite Rule 44.1's mandate that determinations of foreign law are issues of fact, Section of Litigation leaders have witnessed the same judicial timidity to address foreign law that the appellate court observed in its opinion. "Judges are absolutely hesitant to construe a law they did not learn in law school," observes Eric S. Rein, Chicago, IL, cochair of the International Litigation Subcommittee of the Section's Commercial & Business Litigation Committee

"The rule is precise in its language, but it is impossible to accomplish its purpose without the ability to determine what the law actually is. As a practical matter, you need an expert," says Mestre. And if the parties and the court need to determine the applicable law at some point in the proceedings, it makes sense to "get the law set" at the motion to dismiss stage and to use expert declarations to do so, he adds.

Keywords: motion to dismiss, material outside the pleadings, foreign law, expert affidavit, expert declaration

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