Commercial Litigation and Arbitration

Only an Original Judgment That Is Registered Pursuant to 28 U.S.C. § 1963 May be Re-Registered in Other Jurisdictions — A Judgment Created by Registration Cannot — Caselaw Split

From De Leon v. Marcos, 2010 U.S. Dist. LEXIS 100644 (D. Colo. Sept. 23, 2010):

The operative facts for purposes of the instant motion are undisputed. The Plaintiff is the named representative of a class that holds a judgment2 of almost $2 billion against former Philippines President Ferdinand Marcos. The judgment was entered on February 3, 1995, by the United States District Court for the District of Hawaii. In this action, the Plaintiff seeks to collect against certain Colorado real property which, although nominally titled in the name of Defendant Denman, the Plaintiff contends is an asset of Mr. Marcos' estate. The primary relief sought by the Plaintiff is the quieting of title to that property in the estate's name and then the execution of the judgment against that property. Denman moves to dismiss this action on the grounds that the Plaintiff's judgment is no longer enforceable.

In January 1997, the Plaintiff registered the Hawaii judgment in Illinois, pursuant to 28 U.S.C. § 1963, but commenced no efforts to enforce it there. On or about February 3, 2005, the Hawaii judgment expired by operation of Hawaii law. Hi. Rev. Stat. § 657-5.

In April 2005, the Plaintiff registered the Hawaii judgment in Colorado and Texas and commenced suits similar to this one, seeking to execute the judgment against certain real property in those jurisdictions. In or about June 2006, when the defendant in the Texas action raised an argument that the Hawaii judgment had expired, the Plaintiff returned to the District of Hawaii, requesting that the judgment be extended. The District Court extended the judgment for another ten years under the Hawaii statute, but on appeal, the 9th Circuit reversed that ruling, finding that Hawaii law deemed the judgment "extinguished" on or about February 3, 2005 and that any request to extend it had to be brought prior to that date. ***As a result of that ruling, the Hawaii judgment itself was extinguished.

Having no enforceable Hawaii judgment, the Plaintiff then turned to the registered judgment in Illinois. By operation of Illinois law, a judgment registered becomes dormant seven years after registration and must be "revived" by the judgment creditor. 735 Il. Comp. Stat. 5/12-108(a). However, once revived, a judgment in Illinois remains effective for a period of 20 years from the date entry of that judgment. 735 Il. Comp. Stat. 2/1602(a). The Plaintiff petitioned the United States District Court for the Northern District of Illinois to revive that judgment, and on September 4, 2008, the court granted that request, directing the Clerk of the Court to "enter this revived judgment pursuant to FRCP 58."

The crux of the issue before this Court concerns the effect of the registration of the Hawaii judgment in Illinois and the revival of that judgment by the District Court. The Plaintiff contends that the registration of the Hawaii judgment in Illinois created a wholly new judgment that was enforceable and revivable under Illinois law. ***

This precise issue was considered in proceedings involving the Plaintiff before the United States District Court for the Northern District of Texas. In Del Prado v. B.N. Development Co., D. N.D. Tex. Case No. 4:05-cv-234-Y (N.D. Tex. Jan. 9, 2009) (slip op.), the court granted the defendant's motion to dismiss the Plaintiff's suit, rejecting the Plaintiff's argument that 28 U.S.C. § 1963 operates to create a new, independent judgment upon the registration of a foreign judgment. On appeal, the 5th Circuit disagreed, finding that registration of a judgment under § 1963 created a new judgment that "had all of the attributes of a judgment rendered by the [jurisdiction of registration]," that, in turn "may be re-registered" in other jurisdictions. Del Prado v. B.N. Development Co., 602 F.3d 660, 667 (5th Cir. 2010). ***

The only question requiring consideration in this case is the same one faced by the Northern District of Texas and the 5th Circuit: does registration of a judgment pursuant to 28 U.S.C. § 1963 create a wholly new judgment that can, in turn, be re-registered to create wholly new judgments in other jurisdictions?

This issue appears to be one of first impression in the 10th Circuit. Consequently, the Court has carefully considered the reasoning of Northern District of Texas, the 5th Circuit, and the various authorities cited by the parties. For the reasons that follow, this Court respectfully disagrees with the 5th Circuit's reasoning. This Court concludes that only an original judgment, issued by a court upon the substantive merits of an adversarial dispute, can be registered pursuant to 28 U.S.C. § 1963, and it cannot be registered once it is extinguished under the law of the jurisdiction where it was entered. A judgment created by registration (a "registered judgment") is enforceable in jurisdiction where it is registered in accordance with the law of that jurisdiction, but it cannot be subsequently "re-registered" in other jurisdictions. In this case, the rule that this Court finds proper would allow the Plaintiff to enforce his registered judgment in Illinois, but because the original Hawaii judgment has been extinguished before it was registered elsewhere, the Plaintiff cannot register or enforce any judgment outside of Illinois.

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