## Facts

- The Province of British Columbia assessed provincial income taxes against Oregon residents based on income earned from logging work performed in British Columbia.
- Under Canadian procedure, British Columbia filed certificates of tax assessment in a Canadian court; the certificates had the effect of judgments for the taxes owed.
- British Columbia then sued the Oregon residents in Oregon state court to enforce the Canadian judgment-equivalent and collect the tax amounts.
- The Oregon trial court dismissed the action under the common-law revenue rule, which generally bars courts from enforcing foreign tax laws.
- British Columbia appealed; the case proceeded in federal court on diversity jurisdiction applying Oregon law informed by conflicts principles.

## Issues

1. Whether the revenue rule bars an Oregon court from enforcing a Canadian tax claim when the taxing authority has reduced the assessment to a judgment-equivalent certificate in its own courts.
2. Whether a foreign sovereign may avoid the revenue rule by suing in the United States on a foreign “judgment” that is founded on unpaid taxes rather than on a private-law obligation.
3. Whether any treaty or statute required recognition or enforcement of the Canadian tax judgment-equivalent in Oregon.

## Decision

- The Ninth Circuit affirmed dismissal of the action.
- The court held the suit was substantively an attempt to collect foreign taxes, which is barred by the revenue rule even if framed as enforcement of a foreign judgment.
- The court declined to treat the Canadian certificate as an ordinary foreign money judgment because the underlying obligation remained a public revenue claim.
- The court found no treaty or statutory authorization requiring U.S. courts to enforce Canadian provincial tax claims or judgments based on them.

## Legal Principles

- Under the common-law revenue rule, U.S. courts do not enforce foreign revenue laws, either directly through suits for taxes or indirectly through suits on judgments founded on such taxes.
- Courts may look behind the form of a foreign judgment to determine whether enforcement would, in substance, enforce a foreign tax liability.
- Recognition of ordinary foreign civil judgments based on private rights does not extend to judgments that merely restate foreign tax obligations.
- Absent clear treaty or legislative authorization, courts should not extend judicial assistance to foreign sovereign tax collection given sovereignty and foreign-relations concerns.

## Conclusion

The Ninth Circuit held that British Columbia could not collect provincial income taxes from Oregon residents in Oregon courts by suing on a Canadian assessment certificate treated as a judgment, because enforcing it would amount to enforcing a foreign revenue law barred by the revenue rule.


Her Majesty the Queen in Right of the Province of British Columbia v. Gilbertson, 597 F.2d 1161 (9th Cir. 1979)