## Facts

- A dual U.S.–German citizen was convicted of sex-crime charges in California and sentenced to prison, but he avoided serving the sentence by leaving the United States and moving to Germany.
- The victim filed a civil tort action against him in California superior court.
- Before the defendant left for Germany, the victim personally served him in California with the summons and complaint in the civil case.
- The defendant did not appear in the California civil proceedings, and the California court entered a default judgment against him.
- The California judgment awarded the victim about USD 150,000 for past and future medical costs, USD 200,000 for pain and suffering, and USD 400,000 in punitive damages.
- The victim sought recognition and a declaration of enforceability in Germany so she could execute against the defendant’s assets there, relying on German rules governing enforcement of foreign judgments (including §§ 722 and 328 ZPO).
- The lower German courts granted enforcement only in part, and both sides sought further review in the Bundesgerichtshof (BGH).

## Issues

1. Whether a German action to declare a foreign judgment enforceable under § 722 ZPO is treated as a civil action to which § 265(2) ZPO (effects of a transfer of the claim while litigation is pending) applies.
2. Whether enforceability in Germany is barred merely because, under the law of the rendering state, the foreign judgment might be subject to exceptional post-judgment relief (even though it has not been set aside).
3. Whether the fact that the U.S. proceedings used pre-trial discovery prevents recognition and enforcement in Germany.
4. Whether a German court may declare a foreign money judgment enforceable only in part when another separable part cannot be enforced.
5. Whether the compensatory elements of the U.S. judgment—especially future medical costs not dependent on a present decision to undergo treatment and an unusually high pain-and-suffering award—violate German public policy (ordre public) under § 328(1) ZPO.
6. Whether a U.S. judgment component that effectively includes a 40% contingency fee for the plaintiff’s attorney prevents recognition or enforcement in Germany.
7. Whether a substantial punitive-damages award imposed in addition to compensation is unenforceable in Germany as contrary to German substantive public policy.
8. Whether enforcement depends on the foreign court having applied the same choice-of-law rules Germany would have applied (EGBGB).

## Decision

- The BGH held that an action for a declaration of enforceability of a foreign judgment under § 722 ZPO is a civil proceeding to which ordinary procedural rules apply, including § 265(2) ZPO.
- The BGH held that the mere possibility that a foreign judgment could be vacated through exceptional remedies in the rendering state does not bar enforcement in Germany as long as the judgment still stands there.
- The BGH held that the use of U.S.-style pre-trial discovery, by itself, does not prevent recognition or enforcement in Germany.
- The BGH held that partial enforcement is allowed: if one separable part of the judgment cannot be enforced, the remaining parts may still be declared enforceable.
- The BGH held that, in applying the public-policy exception in § 328(1) ZPO, courts must take account of the degree of connection to Germany (Inlandsbeziehung) when evaluating whether recognition would be unacceptable.
- The BGH upheld enforcement of the compensatory awards, including medical-cost damages and a very high pain-and-suffering amount, finding no automatic public-policy bar solely because the amounts exceeded typical German awards.
- The BGH held that a contingency-fee component (here, 40%) awarded or reflected in the foreign proceedings did not by itself block recognition or enforcement.
- The BGH refused to declare enforceable the punitive-damages portion of the California judgment because punitive damages of a significant amount, awarded in addition to compensation, regularly conflict with German substantive public policy.
- The BGH confirmed that enforceability does not depend on whether the foreign court’s choice of law matched German conflict-of-law rules.

## Legal Principles

- Proceedings for a declaration of enforceability of a foreign judgment (§ 722 ZPO) are treated procedurally as civil actions; standard civil-procedure rules, including § 265(2) ZPO, can apply.
- A foreign judgment is not denied enforcement in Germany solely because it is theoretically vulnerable to exceptional post-judgment relief in the state of origin; what matters is whether it has actually been set aside there.
- The existence of pre-trial discovery in U.S. civil litigation does not alone violate German procedural public policy for recognition purposes.
- German courts may sever a foreign judgment and deny enforcement only as to the portion that conflicts with public policy while enforcing the rest when the award is separable.
- Public-policy review under § 328(1) ZPO considers the case’s connection to Germany (Inlandsbeziehung) when assessing whether recognition would be unacceptable.
- High compensatory damages, including unusually large sums for pain and suffering, are not automatically barred from enforcement on public-policy grounds.
- A foreign award of medical expenses that is not conditioned on a present intent to undertake treatment is not, without more, contrary to German public policy.
- A contingency-fee arrangement reflected in a foreign judgment (including a 40% fee) does not, by itself, prevent enforcement in Germany.
- Punitive damages of more than trivial size, awarded as an additional lump sum beyond full compensation, are generally incompatible with German substantive public policy and are not enforceable to that extent.
- Recognition and enforceability in Germany do not depend on whether the foreign court applied German choice-of-law rules.

## Conclusion

The BGH allowed enforcement in Germany of the compensatory portions of the California default judgment, including substantial medical-cost and pain-and-suffering awards, but denied enforcement of the punitive-damages component as contrary to German public policy, confirming that German courts can enforce separable parts of a foreign judgment while rejecting only the offending portion.


Re the Enforcement of a U.S. Judgment, Case IX ZR 149/91, reprinted in [1994] I. L. Pr. 602 (1992)