## Facts

- Royal Bank of Canada obtained an Alberta (Canada) default money judgment for $250,000 plus interest against Trentham Corporation based on a guaranty of Trentham Canada’s liabilities up to $250,000.
- Royal Bank sued in federal court in the Southern District of Texas to recognize and enforce the Alberta judgment under diversity jurisdiction.
- Trentham argued Texas should refuse recognition under a reciprocity doctrine, asserting Alberta would not recognize a comparable U.S. default judgment under similar circumstances.
- At the time, Texas authority on reciprocity as a condition for recognizing foreign-country money judgments was unsettled, and the district court predicted Texas would not require reciprocity.
- The district court granted summary judgment recognizing and enforcing the Alberta judgment.
- After appellate argument, Texas enacted the Uniform Foreign Country Money-Judgment Recognition Act, which includes reciprocity as a discretionary ground for non-recognition.

## Issues

1. Whether an intervening change in Texas law during the appeal required the federal courts to reconsider recognition of the Alberta judgment under the newly enacted Uniform Foreign Country Money-Judgment Recognition Act.
2. Whether, under the Act, the Texas court could refuse recognition based on lack of reciprocity and what additional legal and factual findings were necessary (including the Act’s applicability and Alberta’s treatment of comparable Texas judgments).

## Decision

- The Fifth Circuit vacated the district court’s summary judgment and remanded for further proceedings.
- The court held that the case had to be reconsidered in light of the intervening Texas statute governing recognition of foreign-country money judgments.
- The court declined to decide in the first instance whether the Act applied retroactively or whether reciprocity warranted non-recognition, leaving those matters to the district court on remand.

## Legal Principles

- In diversity cases, federal courts apply the forum state’s law governing recognition and enforcement of foreign-country judgments.
- When controlling state law changes while an appeal is pending, the appellate court should ensure the judgment conforms to the current state law and may vacate and remand for reconsideration.
- Under the Uniform Foreign Country Money-Judgment Recognition Act, reciprocity may operate as a discretionary ground for non-recognition where the foreign country does not recognize comparable forum-state judgments under similar circumstances.
- Determining recognition under the Act may require (i) analysis of the statute’s temporal scope and (ii) factual development regarding the foreign jurisdiction’s recognition practices.

## Conclusion

The Fifth Circuit did not decide whether Texas ultimately must recognize the Alberta default judgment; instead, it vacated the enforcement judgment and remanded so the district court could apply Texas’s newly enacted Uniform Foreign Country Money-Judgment Recognition Act, including its reciprocity-related non-recognition provision and any related applicability questions.


Royal Bank of Can. v. Trentham Corp., 665 F.2d 515 (5th Cir. 1981)