## Facts

- Reading & Bates and Baker Energy, both U.S. companies, competed for a Quebec pipeline contract to install a natural gas line under the St. Lawrence River; Baker Energy won and performed the work.
- Reading & Bates sued Baker Energy and others in the Federal Court of Canada, alleging infringement of Reading & Bates’s Canadian patents used in the project.
- In 1986, the Canadian court found one patent valid and infringed.
- In 1992, the Canadian court entered a money judgment ordering Baker Energy to pay profits earned on the project (CA$ 2,934,205) plus interest; the judgment became final in 1995 after Canada’s highest court denied leave to appeal.
- Reading & Bates obtained a Louisiana state-court judgment recognizing and enforcing the Canadian judgment.
- Reading & Bates then sought recognition of the Canadian judgment in Texas under Texas’s Uniform Foreign Country Money-Judgment Recognition Act (UFCMJRA) and, separately, enforcement of the Louisiana judgment in Texas under Texas’s Uniform Enforcement of Foreign Judgments Act (UEFJA).
- Baker Energy opposed recognition in Texas, arguing (i) the Canadian award of full project profits conflicted with Texas public policy, and (ii) Texas should refuse recognition because Canada allegedly would not enforce a comparable Texas judgment (reciprocity).
- The Texas trial court denied recognition/enforcement, accepting public-policy and reciprocity objections; Reading & Bates appealed.

## Issues

1. Whether Texas courts could deny recognition of a final Canadian money judgment under the UFCMJRA on public-policy grounds because the foreign damages remedy differed from remedies available under U.S./Texas law.
2. Whether Texas courts could deny recognition under the UFCMJRA based on a reciprocity requirement not expressly listed in the statute.
3. Whether Texas was required to give full faith and credit, via the UEFJA, to a Louisiana judgment that had already recognized and enforced the Canadian judgment.

## Decision

- The court of appeals reversed the trial court’s denial of recognition and enforcement.
- The Canadian judgment was recognizable under the UFCMJRA; the profits-based damages remedy did not meet the narrow standard for non-recognition based on Texas public policy.
- The trial court erred by treating reciprocity as a basis to deny recognition; lack of reciprocity is not a ground for non-recognition under the Texas UFCMJRA.
- Texas was required to give full faith and credit to the Louisiana judgment recognizing the Canadian judgment, absent a jurisdictional or due-process defect in the Louisiana proceeding.
- The case was remanded with instructions consistent with recognizing and enforcing the judgments.

## Legal Principles

- Under the UFCMJRA, a foreign-country money judgment that is final, conclusive, and enforceable where rendered is generally conclusive between the parties, subject only to enumerated grounds for non-recognition.
- The UFCMJRA public-policy exception is narrow; a judgment is not denied recognition merely because foreign substantive law or remedies differ from Texas law, including differences in the measure of damages.
- Courts applying the UFCMJRA may not re-litigate the merits of the foreign dispute (including liability and damages) when the foreign tribunal afforded impartial proceedings and due process.
- Reciprocity is not an implied prerequisite to recognition under Texas’s UFCMJRA when it is not included among the statute’s listed grounds for non-recognition.
- Under the Full Faith and Credit Clause and the UEFJA, Texas must enforce a sister-state judgment recognizing a foreign-country judgment unless the sister-state court lacked jurisdiction or failed to provide due process.

## Conclusion

The court of appeals held that Texas must recognize and enforce the Canadian money judgment because differences in available damages remedies did not make the judgment repugnant to Texas public policy, the UFCMJRA does not permit denial based on reciprocity, and Texas must also enforce the Louisiana recognition judgment under full faith and credit principles.


Reading & Bates Constr. Co. v. Baker Energy Res. Corp., 976 S.W.2d 702 (Tex. App.—Houston [1st Dist.] 1998)