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FULL FAITH AND CREDIT

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  • Posted on: Dec 9 2019

Judgments from sister states are enforceable in New York (and other sister states as well) by virtue of the “Full Faith and Credit” clause (article IV, section 1) of the Unites States Constitution (the “Clause”), which provides:

Full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state. And the Congress may by general laws prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof.

In Matter of Farmland Dairies v. Barber, 65 N.Y.2d 51 (1985), the New York Court of Appeals was called on to determine, inter alia, whether Farmland Dairies’ required license to sell milk in New York should be revoked because of a New Jersey price rigging conviction.  Normally, “[u]nder New York Law, the New Jersey judgment would be admissible in the New York proceedings, it would be conclusive proof of the underlying facts and it would, without more, warrant the denial of [Farmland’s] application.”  Farmland, 65 N.Y.2d at 52 (citation omitted).  New Jersey’s criminal procedure rules, however, permitted that a final criminal judgment of conviction include language indicating that a guilty plea “not be evidential in any civil proceeding.”  Rule 3:9-2 of the Rules Governing the Courts of the State of New Jersey.

At a hearing in New York on the renewal of Farmland’s license, the hearing officer received into evidence a certified copy of Farmland’s New Jersey conviction, but ultimately recommended that Farmland’s license not be revoked and that its extension application be granted.  The respondent Commissioner of the of the Department of Agriculture and Markets rejected the recommendation and denied Farmland’s application based on the New Jersey conviction admitted into evidence.  On Farmland’s appeal, the Court answered in the affirmative, the question of “whether the full faith and credit clause in the Federal Constitution mandates recognition of th[e] condition to bar use of the New Jersey judgment in the New York administrative proceeding.”  In explaining the purpose of the Clause, the Farmland Court stated:

Under our Federal structure, each State has its own judicial system capable of adjudicating the rights and responsibilities of the parties brought before it. Given this structure, there is always a risk that two or more States will exercise their power over the same case or controversy with the uncertainty, confusion, and delay that necessarily accompany relitigation of the same issue. The purpose of the full faith and credit clause was to avoid such conflicts and weld the independent States into a Nation.  Its provisions require that the public acts, records and judicial proceedings of each State shall be given full faith and credit in every other State (US Const, art IV, § 1). The doctrine does not make a foreign State judgment a judgment in the forum State. Before that occurs and a locus remedy may be obtained, an action must be brought and a judgment entered on the foreign judgment in the forum State. The doctrine establishes a rule of evidence, however, which requires recognition of the foreign judgment as proof of the prior-out-of-State litigation and gives it res judicata effect, thus avoiding relitigation of issues in one State which have already been decided in another.

Farmland, 65 N.Y.2d at 55 (some citations omitted).

The Farmland Court noted that generally criminal judgments are not entitled to full faith and credit because “no State is bound to enforce the penal laws of another State or to punish a person for a wrong committed against it.  Farmland, 65 N.Y.2d at 56 (citation omitted).  That general rule, the Farmland Court found, had no application in that case because “New York is not being asked by the State of New Jersey to enforce its penal laws” but, instead, “respondent wishes to recognize the New Jersey judgment as evidence of the misconduct underlying it.”  Farmland, 65 N.Y.2d at 57.  Under the plain language of the judgment as dictated by New Jersey law, however, such recognition is improper because the Court does “not perceive any overriding interest in the State of New York which would permit its agencies to rely on the New Jersey judgment to prove the misconduct but disregard the condition in it which induced the plea on which the judgment is based [and] This State is bound by the bargain just as New Jersey is and must give the judgment the same effect as New Jersey courts give it.”  Farmland, 65 N.Y.2d at 58 (citation omitted).

The law is also clear that review by the forum state of a judgment issued by the court of a sister state is limited to “whether the rendering court had jurisdiction, an inquiry which includes due process considerations.”  Fiore v. Oakwood Plaza Shopping Ctr., 78 N.Y.2d 572, 577 (1991) (citations omitted).  Accordingly, “inquiry into the merits of the underlying dispute is foreclosed….”  Fiore, 78 N.Y.2d at 577 (citation omitted).

The Second Department had occasion to discuss these issues in Balboa Capital Corp. v. Plaza Auto Care, Inc. (December 4, 2019).  The plaintiff in Balboa obtained a money judgment from a California court and subsequently commenced an action in New York to enforce same.  After supreme court denied its motion for summary judgment, plaintiff appealed.  The Second Department in Balboa, briefly reviewed the purpose of the Clause and noted that “[a]bsent a challenge to the jurisdiction of the issuing court, New York is required to give the same preclusive effect to a judgment from another state as it would have in the issuing state.”  The Court then found that reversal was appropriate because:

the defendants did not challenge the jurisdiction of the California court, but instead, sought to relitigate the merits underlying that court’s determination. The Supreme Court should not have considered the defendants’ attack on the merits of the California determination. Since the defendants failed to raise a triable issue of fact in opposition to the plaintiff’s prima facie showing, the court should have granted the plaintiff’s motion for summary judgment….

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