Mamma Mia! The Treacherous Road that an American Plaintiff Must Travel to Enforce an American Money Judgment in Italy

01 Novembre 2006

I. INTRODUCTION

The level of international trade has increased dramatically over the past decades, as even small and medium-sized companies have expanded their business across the globe.[1] The increase in economic interaction among countries has been accompanied by a parallel increase in the number of civil and commercial suits brought in the United States involving foreign defendants.[2] In light of this, it is a wise move for American lawyers working in international law to acquire sufficient knowledge of how a judgment issued by a U.S. court would be enforced in another country.[3]

This paper aims to be a practical guide for an American plaintiff who wishes to enforce a money judgment[4] issued by a United States court in Italy.[5] The paper will introduce a litigation fact scenario – a class action – brought by American plaintiffs against an Italian defendant, and will then describe the iter that the successful plaintiffs must follow to have the judgment enforced in Italy.[6] The paper will first discuss the Italian law regulating the recognition and enforcement[7] of foreign judgments, examining today’s law, the result of a significant 1995 reform in Italian private international law, as well as the law prior to the reform.[8] Afterwards, the paper will apply this law to the fact scenario, showing what an American lawyer must do and consider when facing the hurdle of enforcing the judgment in Italy, concentrating on obstacles in Italian legal procedure and in its legal systems, as well as cultural obstacles in a class action context.[9]

II. LITIGATION FACT SCENARIO

As mentioned in the introduction, this paper will revolve around a litigation fact scenario to illustrate how a successful class action plaintiff attorney would try to enforce an American judgment in Italy. The scenario will adapt the facts of a real-life class action, the Baycol case. Baycol is a multi-district litigation involving more than 1,000 cases, alleging that a medication generically known as Baycol, commonly prescribed to aid in lowering cholesterol, caused rhabdomyolysis, a disease which causes damage to muscles, kidney failure or other injuries.[10] However, while the real-life Baycol case involves a German defendant, Bayer AG, the defendant for our circumstances will be an Italian pharmaceutical company, Pharco.[11] Moreover, for purposes of this paper, it will be assumed that the litigation has come to a successful end for the plaintiffs, and that they seek to enforce a judgment issued by an American court against Pharco in Italy, where the company’s assets are located.

III. ITALIAN LAW REGULATING FOREIGN JUDGMENTS

A. The Brussels Convention

All of Western Europe, including Italy, is covered by a network of bilateral and multilateral treaties that govern the recognition and enforcement of foreign judgments in civil and commercial matters.[12] The Brussels Convention on Jurisdiction and Enforcement of Foreign Judgments regulates the issue for all members of the European Union; Article 26 of the Convention provides that that a foreign judgment produces its effect automatically, without further ascertainments.[13] Thus, when both parties are members of the European Union, the recognition and enforcement of a foreign judgment poses no little or no problem for a litigant.[14] [Today the The Brussels Convention on Jurisdiction and Enforcement of Foreign Judgments of 1968 has been superseed by EU Regulation 44/2001].

B. The United States and Italy regarding Foreign Judgments

However, the United States is not a party to the Brussels Convention, or to any bilateral or multilateral treaty governing the enforcement of a United States judgment in any of the European countries, or in any country around the world.[15] Therefore, United States judgments are enforced according to the domestic law of the recognizing country.[16] This means that in Italy, a lawyer will have to look to the applicable articles in the Code of Civil Procedure that govern the recognition and enforcement of foreign judgments.[17]

C. C’era una volta: Articles 796-805 of the Civil Code of Procedure

The Italian law regarding the enforcement of foreign judgments was once regulated by Articles 796-805 of the Civil Code of Procedure. While no longer in effect, the articles demonstrate what was once a codified suspicion towards foreign judgments, and also indicate the lengthy and arduous procedure that characterized, and still characterize, the Italian legal system.[18] Further, they illustrate how a present-day court could still react to a foreign judgment.

Articles 796-805 of the Civil Code allowed for the recognition and enforcement of foreign judgments only on the condition that a decision recognizing the judgment was obtained in a competent Italian court.[19] To obtain this decision, a foreign plaintiff was required to undergo a series of rather complex undertakings.[20] He was first required to file a summons and complaint, which had to be filed on the parties who had appeared in the trial that took place in front of the foreign judge, as well as the Italian public prosecutor, who also had to be made a party to the action.[21] This procedure was considered indispensable for the judgment to be recognized of its effects and was necessary to ensure that fundamental elements of the Italian legal system, such as verification of jurisdiction and verification of the right to defense, had been respected.[22] To further complicate the matter, lengthen the proceedings and provide uncertainty as to whether the foreign judgment would be upheld, the Italian court had the authority to re-examine the foreign judgment on the merits upon request of the defendant and in cases of judgment by default.[23]

D. Law No. 218 of May 31, 1995: The Efficiency of Foreign Acts and Sentences

1. Provisions

On May 31, 1995, the Italian parliament passed Law No. 218, which radically reformed and updated the Italian system of private international law.[24] The reform was much needed on several different fronts. First, the old Code of Civil Procedure was based on a version originally promulgated in 1865.[25] Second, the Constitutional Court had issued several decisions that had declared certain articles of the old Code unconstitutional.[26] Third, Italy had entered into numerous international conventions and treaties about the enforcement of foreign judgments, such as the Brussels and Lugano Convention, that rendered the old Code inadequate, out-of-date and inapplicable.[27] And fourth, enormous social and political transformations had also made the old provisions inadequate, especially in the fields of international trade and banking.[28]

Law No. 218 is significant because it eliminates the need for any judicial proceeding for the recognition of a foreign judgment.[29] For a system that required a plaintiff to undertake a complete judicial proceeding, complete with summons and complaint, and with the possibility of the judgment being re-examined on the merits, to move to a system that allowed for recognition with no judicial proceeding, this is a significant step. However, the law makes different provisions for the plaintiff who wants the judgment recognized than those for the plaintiff who wants the judgment enforced. In essence, Law No. 218 simplifies the procedure for recognition only, as enforcement still requires the initiation of a court proceeding. Thus, the reform and opening of the Italian system towards foreign judgments is in appearances only, since many, if not most, plaintiffs will want a judgment enforced, and not just recognized.

2. Recognition

For recognition, article 64 of Law No. 218 provides that that an individual must simply present at the court of appeals in the region where the judgment is to be recognized an authenticated copy of the foreign judgment, as well as a sworn statement and an authorized translation into Italian, declaring that the following conditions were met:

(1) The judge who pronounced it could take cognizance of the case in accordance with Italian principles on jurisdictional competence;

(2) Document introducing proceedings was made known to defendant pursuant to provisions of law of place where proceedings were held and essential rights of defense were not infringed;

(3) Parties entered appearance in conformity with laws of place of proceedings or their failure to appear was declared in conformity with that law;

(4) Judgment became res judicata in accordance with law of place where it was pronounced;

(5) Judgment is not contrary to another judgment rendered by Italian judge and which became res judicata;

(6) No proceedings are pending before Italian judge for same matter and between same parties which were initiated prior to foreign proceedings;

(7) Its provisions do not produce effects contrary to Italian public policy.[30]

No court proceeding or involvement is necessary.[31]

3. Enforcement or challenged recognition

However, it is unlikely that a plaintiff will want the judgment only recognized and not enforced. Furthermore, it is equally unlikely that a defendant would not challenge a judgment. It would be to his advantage to do so, as there would always be a chance that an Italian court would find that one of the required conditions had not been met, and thus render the judgment worthless in the Italian legal system.

In these cases, article 67(1) of Law No. 218 lays out what steps a plaintiff must take to enforce the judgment in Italy, or if the defendant challenges its recognition. In these cases, a normal contentious judicial proceeding must be initiated.[32] The article provides that any interested person wishing to enforce a foreign judgment must petition the appropriate court of appeal for an order that find that the foreign judgment in question satisfies the conditions for its recognition.[33] The procuratore generale (clerk) of the court of appeals reviews the petition and writes a non-binding opinion as to whether recognition of the judgment would violate Italian public policy.[34] The file then goes to the judge on the court of appeals assigned to report the case to the panel, which decides by decree whether to grant the petition.[35] The clerk will then enter the panel’s decree and notify the petitioner’s attorney.[36] If the petition is granted, the petitioner’s attorney then serves a copy of the decree upon the defendant, who, in turn, has thirty days to file a complaint contesting the decree.[37] If the decree is not contested, the judgment becomes final and the petitioner may begin enforcement proceedings.[38]

IV. APPLICATION TO THE FACT SCENARIO AT HAND

Thus, with an overview of the Italian law presented, it is possible to move on to the application of the law to our litigation fact scenario. What will the class action plaintiffs have to consider, and what will they have to do, to get the American judgment enforced in Italy? Will they even be successful?

A. Potential Liability for Malpractice

It is clear that the road to enforcing an American judgment in Italy can be filled with twists and turns; the possibility that an Italian court will rule the judgment unenforceable looms on the horizon. In our fact scenario, it is possible that the lawyers could be liable for malpractice if they do not advise their clients of the difficulty in enforcing the judgment against Pharco in Italy and do not advise them that an Italian court might ultimately find the judgment unenforceable.

Rule 1.1 of the ABA Model Rules of Professional Conduct mandates that an attorney shall provide “competent representation to a client.”[39] Competent representation is defined as the legal knowledge and skill reasonably necessary for the representation; factors such as the relative complexity and specialized nature of the matter are considered in determining what is the requisite knowledge and skill.[40]

Thus, in an international context, the failure to consider foreign enforcement and the failure to communicate the possibility of non-enforcement in the foreign country could result in a finding of legal malpractice on behalf of a lawyer. A court could find that a lawyer has not provided adequate representation if the clients were not advised of the risk involved in international litigation. Moreover, a lawyer working in such a complex matter in an international context most likely would be expected to have knowledge of the enforcement of foreign judgments, and to communicate the information to the client to allow him or her to make an informed decision regarding the litigation, as mandated by Rule 1.4(b).[41] A decision of this nature would be whether to proceed or not, considering the uncertainty of ever recovering.[42]

B. General Considerations

In addition to potential liability for malpractice, there are other considerations that the attorney in our fact scenario should ponder even before beginning litigation. Indeed, in an international context, a wise attorney always begins at the end, thinking about where he will seek to enforce the American judgment, and if it will even be feasible. In Italy, our attorney could and should bear in mind the additional following points:

1. Italian court system

The Italian judicial system is notoriously slow. Currently, the average duration of a civil trial for going through all three levels of jurisdiction is around 10 years.[43] This is well beyond the standards recommended by the European Court of Human Rights: three years at first instance, two years for appeal or second instance, and eighteen months for proceedings before the supreme court of appeals.[44] One of the reasons for the slow proceedings is that an appeal is effectively a re-trial, as the case is re-examined on the merits, rather than just on a specific point of law.[45]

Therefore, in our situations, the lawyers in the Pharco case would need to be aware of this when advising their American clients about the Italian judicial system. First, it would be important because of the likelihood of dealing with the Italian courts for the enforcement of the judgment.[46] Furthermore, if the court found the judgment non-enforceable and if the plaintiffs decided to appeal this decision, the time to arrive at a final conclusion would be even lengthier. In addition to the cost of more years of litigation, the clients and lawyers would have to consider the logistics of bringing suit in Italy, and the feasibility of doing so, and the possibility of eventually prevailing. Especially for a class action claim, significant legal hurdles could exist, as will be subsequently explained.[47]

2. Local counsel

An additional consideration for an American lawyer facing the enforcement of a judgment in Italy would be the need for assistance by an Italian lawyer. As in the United States, a lawyer cannot appear in an Italian court unless he or she is authorized to do so.[48] Moreover, in Italy, almost all American lawyers would have a language barrier to overcome, as Italian are usually not skilled in speaking foreign languages, unlike people in northern European countries.

Several American law firms have expanded their offices to Italy and provide assistance to Americans facing the Italian legal system.[49] However, Italian law prohibits attorneys from entering into contingency fee agreements.[50] Thus, if the parties were facing a prolonged court proceeding, which is likely considering the Italian judicial system, money considerations could play an important role in deciding whether or not to further pursue the matter. In addition, Italian law has incorporated the “loser pays” rule.[51] In other words, the losing party is required to pay the attorney’s fees for the prevailing party, as well as court costs.[52] In any litigation situation, but particularly a class action, this is an important consideration to bear in mind, as the attorney’s fees could be quite large.

Finally, the American lawyers would want to consider whether there would be any significant bias towards an American plaintiff in the Italian court system. This potential bias would come not from antipathy towards Americans, as Italy and the United States enjoy a solid political relationship, and Italians are quite keen about American culture, from movies and music to television and fashion.[53] Rather, this bias would stem from a general mistrust and suspicion that Italians foster towards outsiders in general, the result of Italy’s history: for four hundred years, until Italian unification in 1871, the peninsula was ruled by foreign governments, such as the Austrian and French, not by the inhabitants themselves.[54] Moreover, this history has led to a deeply rooted skepticism towards government in general, not only towards outsiders.[55]

Thus, on two levels, this Italian characteristic could subconsciously influence an Italian judge when determining the enforceability of an American class action judgment. First, the judgment would be from abroad, from a country with different legal rules and systems and could be seen with an inherent suspicion. Second, because Italians are also suspicious of government as a whole, the concept of a class action such as Baycol, which addresses harms that have afflicted a great number of people across American society and looks to government and law to remedy these harms, could also seem alien to an Italian judge, and thus influence his decision to find the judgment unenforceable.[56]

C. Specific Consideration For Our Fact Scenarios

Thus, the above-mentioned considerations are general ones that an attorney facing the Italian court system should keep in mind, whether trying to enforce a foreign judgment or carry out other business. However, there are additional specific considerations that our attorney in the class action case against Pharco should bear in mind. These considerations are even more important and could potentially make the enforcement of the U.S. class action judgment even more arduous and uncertain.

1. Conceptual problems

The first significant hurdle facing an American plaintiff with a successful class action judgment is a legally based, yet conceptual one: the Italian legal system does not permit class actions.[57] Thus, an Italian judge, faced with a class action judgment, would be more likely to scrutinize procedural aspects when presented with a class action judgment because the procedure would be largely unfamiliar to him or her, as it would be to most legal practitioners around the world.[58] For example, the question of whether the petition has been presented on behalf of the class or on behalf of the identified individuals would likely present practical and conceptual problems for an Italian court.[59] A problem such as this, as well as other peculiarities of a class action, might make an Italian court look more closely at the procedure to determine whether it satisfies public policy concerns.[60]

2. Representation of class members under Italian law

Italian law does not allow for class representation, as does Rule 23 of the Federal Rules of Civil Procedure.[61] Instead, Italian law only allows representation of class members in criminal law, which permits entities, such as associations “representative” of interests harmed by crime in question, to participate in criminal proceedings and exercise the same procedural rights as the victim.[62] However, this type of representation is allowed only with the consent of the victim.[63] And because Italian law also requires the consent of those represented, a court could have concerns about a class action that allows no opt-out rights, as well as concerns that the named class representative are “fairly and adequately” protecting the interests of the class.[64] A court could see this type of action as fundamentally unfair to the absent and uninformed members of the class, since they will be bound by a judgment they took no part in and perhaps were not even aware of.[65]

3. Damages

An Italian court could also have difficulty or concerns enforcing an American judgment for the amount of damages that it awards. Italian law takes a very different approach to damages. First, Italian law does not allow for compensatory damages and strictly limits the amount a court may award for pain and suffering to what is required to restore a party to its pre-injury condition.[66] An award for damages issued by an Italian court will therefore be significantly lower than a similar award issued by an American court.[67] Thus, from a numerical viewpoint, an Italian court might not enforce an American judgment that awards a large amount of compensatory damages, potentially finding it in violation of public policy.[68]

In addition, Italian law requires proof of the amount of damages awarded by each plaintiff, unlike American law that allows damages to be determined collectively in class actions.[69] Thus, because many of the members of a class action will not have proven their damages as required by Italian law, a court could be unwilling to enforce the judgment, seeing it as fundamentally unfair to force a defendant to pay for damages that have not been ascertained to the level of proof required by Italian law.[70]

Furthermore, in most civil law legal systems, including Italy, punitive damages are not allowed.[71] They are considered to be a penal sanction that may be imposed only in criminal proceedings.[72] In fact, some of these countries may consider the prohibition on an award of punitive damages in civil actions to be a matter of fundamental public policy, and as a result, may refuse to recognize and enforce a foreign court judgment of punitive damages.[73]

4. Right to defend against all claims

An additional reason why an Italian court might not enforce a class action judgment is that it could be seen as unconstitutional, in violation of the defendant’s right to a full and complete defense and an adversarial process that is guaranteed under Article 24 of the Italian Constitution.[74] The Article mandates that there be no limitations or conditions that make the exercise of the right impossible or unreasonably difficult.[75]

However, in a class action, a defendant is not presented with the individual claims brought against it by each individual plaintiff.[76] Instead, the claims are aggregated together.[77] This means that the proof that the defendant’s behavior actually caused a particular plaintiff’s harms is dispensed with.[78] Therefore, a court could determine that a defendant is denied the opportunity to challenge the factual and legal issues relating to the individual claims advanced against it in a class action and is thus denied his constitutionally protected right.[79]

In addition, Article 1173 of the Italian Civil Code of Procedure strengthens this requirement when liability is treated as a common issue and demands that plaintiffs prove the facts underlying the claim so as to allow a defendant to challenge each one.[80] This would most certainly be the case in a class action such as the Baycol case, where the issue of Pharco’s liability links together all of the plaintiffs’ claims. For this reason, an Italian court could find an additional reason why the defendant did not have the opportunity to present a full defense against each alleged victim, in violation of both Article 24 of the Constitution and Article 1173 of the Civil Code.[81]

Furthermore, because all of the plaintiffs are not named and identified in a class action, a defendant is unable to ascertain all the necessary information to prepare its defense.[82] Finally, because information about each plaintiff is not gathered, and indeed would be nearly impossible to gather, a defendant’s right to a full defense could be seen a further weakened and violated.[83] With insufficient evidence, the defendant is also unable to offer evidence against the claims and cross-examine all members of the class and witnesses relating to the particular situations.[84]

D. What Should Our American Plaintiffs Do?

Certainly, the facts presented above do not bode well for our American plaintiffs, who have a victorious judgment against Pharco, but could very likely find it unenforceable in Italy. First, it is unlikely that Pharco would not contest the recognition, depriving the plaintiffs even of a res judicata effect. And second, even if this did not happen and if the plaintiffs tried to then enforce the judgment, the company would certainly challenge the enforcement, and an Italian court could very likely rule the judgment unenforceable on public policy grounds, such as depriving the defendant Pharco of its right to defense. Therefore, what alternatives exist for our American plaintiffs and indeed, for any American plaintiff seeking to enforce a judgment abroad, whether in Italy or another country?

Certainly one alternative would be a means of alternate dispute resolution, such as arbitration. Italy is a signatory to the New York Convention for the Enforcement of Arbitral Awards, which provides for automatic enforcement of any arbitral award in another signatory country.[85] With 122 signatory countries, it is a more certain solution to an international dispute than litigation.[86] Moreover, Italy has its own arbitration organization, the Italian Camera Arbitrale Nazionale e Internazionale di Milano.[87] The Chamber operates in Italian, French and English and provides services for both arbitration and mediation.[88] However, the European Union has demonstrated an unwillingness to use arbitration in consumer disputes, finding, for example, that binding pre-dispute arbitration clauses unenforceable.[89] Thus, even arbitration could have its hurdles to overcome in a class action context. Moreover, class actions are generally unknown in all civil law systems, not just Italy.[90] Thus, in international arbitrations with arbitrators trained in civil law, it could be difficult to persuade the tribunal to entertain class actions and formulate appropriate rules.[91]

IV. CONCLUSION

In international litigation, a foreign litigant must gamble. Pursue litigation in the United States and then risk enforcement abroad, or forgo litigation altogether? For this reason, some commentators have compared international litigation to a casino, where the lawyers move from game to game trying their luck.[92] As in gambling, the players don’t know what the outcome will be, but risk it all on that one big roll. To eliminate the chance in the game, the most logical solution would be for the United States to begin negotiations with its biggest trade partners, such as Italy and other European countries, and draft a treaty regarding the enforcement of foreign judgments. However, this seems unlikely as the significant differences between American substantive and procedural rules and their foreign counterparts are not likely to change, and have been the major reason why previous attempts to conclude such treaty negotiations have failed.[93] Thus, the best bet for a lawyer working in the field of international law is to understand what he is undertaking and the risks involved, communicate those risks to his client, and get ready for a game where the stakes can be high, but the winnings can be even higher.

[1] Volker Behr, Enforcement of Money Judgments in Germany, 13 J.l. & Com. 211, 211 (1994).

[2] Id.

[3] Id. A foreign proceeding is necessary when the defendant does not have assets, or has inadequate assets, in the United States, forcing the plaintiff to enforce the judgment abroad. Id.

[4] “Money judgment” refers to court judgment for a specific amount of money and excludes judgments for specific performance or injunctions, or divorce decrees or child support. Different law and treaties regulate the enforcement of non-money judgments and will not be discussed in this paper. ronald a. brand, enforcing foreign judgments in the united states and united states judgments abroad 1 (1992).

[5] Italy has been chosen because it is one of the United States’ most important trade partners. Various figures demonstrate the importance of the US-Italy relationship. For example, in 2003, the total trade between the United States and Italy exceeded $35 billion. The United States imported about $25 billion in Italian goods during the same year, while the United States exported about $10 billion in goods to Italy and invested approximately $28.5 in the country. Embassy of Italy in the United States, http://www.italyemb.org/Business2.htm.

[6] Infra Part II.

[7] There is a difference between recognition and enforcement, in both the proceedings to obtain one or the other, and also in the legal effect. brand, supra note 4, at 5. “Recognition” means that a foreign judgment is invoked merely to preclude relitigation of certain issues and is generally a prerequisite of enforcement. Id. “Enforcement” means that the beneficiary of a foreign judgment receives the direct benefit conferred by the judgment itself. Id.

[8] Infra Part III.

[9] Infra Part IV.

[10] See generally http://www.mnd.uscourts.gov/Baycol_Mdl/index.htm, the website maintained about the Baycol litigation, for further information about the case.

[11] Located in Lugano, the company recently announced that it would soon begin clinical trials of antiretroviral drugs involving 28 HIV-positive volunteers in Zambia. Kaiser Family Foundation, Daily Report (Nov. 4, 2004), at http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=26571.

[12] Behr, supra note 1, at 213.

[13] Vincenzo Vigoriti, Recent Developments in the Recognition and Execution of Foreign Judgments and Arbitral Awards in Italy, C.Q.J., 248, 255 (July 6, 1987). Article 26 provides that “A judgment given in a Contracting State shall be recognised in the other Contracting States without any special procedure being required.” European Convention on Jurisdiction and Enforcement of Foreign Judgments in Civil and Commercial Matters, Brussels, Sept. 27, 1968, E.E.C., art. 26 [hereinafter Brussels Convention].

[14] Vigoriti, supra note 13, at 255.

[15] Behr, supra note 1, at 213. The last failed attempt at entering into a bilateral treaty took place in the 1970s with Great Britain. CITE. The US delegation to the Hague Conference on Private International Law proposed negotiations for a convention dealing with recognition and enforcement of foreign judgments at the Meeting of the Special Commission on General Affairs and Policies in June 1992. However, it is unknown whether and when such a convention will be negotiated and adopted. Furthermore, the US seems to be hostile to the idea of entering into such a treaty. Id. It has been suggested that the reason for the failed attempts is the extensive differences between American substantive and procedural rules and their foreign counterparts, such as for example, those regarding class actions. Richard H. Dreyfuss, Class Action Judgment Enforcement in Italy: Procedural “Due Process” Requirements, 10 Tul. J. Int’l & Comp. L. 5, 14 (2002) [hereinafter Class Action Enforcement Judgment in Italy].

[16] Behr, supra note 1, at 214.

[17] Id.

[18] Because these articles provide complex and difficult mechanisms for the enforcement of a foreign judgment in Italy, it is widely held that the articles reflect a view, prevalent in certain periods of Italian legislation, of the exclusivity and completeness of Italian law and thus the irrelevance of any foreign law. See Pierluigi D’Urso, Il Valore delle Sentenze Straniere nell’Ordinamento Italiano, at 10 (“Il nostro sistema, infatti, ha oscillato tra posizioni internazionalistiche, di apertura ai valori giuridici stranieri espressi da atti giurisdizionali, e posizioni che affermavano, con vigore, la esclusività, la completezza dell’ordinamento italiano e quindi l’irrilevanza degli atti giurisdizionali stranieri.”).

[19] Vigoriti, supra note 13, at 248.

[20] Id.

[21] Id. at 252.

[22] Id. at 248.

[23] Id. at 252-253.

[24] John R. Schmertz, Jr., Italy has enacted Law No. 218 that comprehensively updates Italian system of private international law as to jurisdiction, choice of law, obtaining evidence and serving documents, International Law Update Vol. 2, No. 8 (August, 1996).

[25] Dossier Provvedimento: Riforma del Sistema Italiano di Diritto Internazionale Privato: Lavori Preparatori della Legge 31 Maggio 1995 No. 218, n. 118/1 at 472.

[26] Id.; see also Pierluigi D’Orso, supra note 18 at 61 (discussing a landmark 1974 Court of Cassation decision that declared that a foreign judgment should be recognizable and enforceable in Italy without any domestic judicial proceeding, anticipating the 1995 civil law reform by more than 20 years).

[27] Id.

[28] Id.

[29] Paragraph 1 of Article 64 provides in relevant part: “La sentenza straniera è riconosciuta in Italia senza che sia necessario il ricorso ad alcun procedimento . . . “ codice di procedura civile, Law No. 218, art. 64, para. 1 (May 31, 1995).

[30] Martindale-Hubbel Italy Law Digest, Judgments, (2004).

[31] Telephone conversation with Andrea de Pieri, Associate Attorney, McDermott Will & Emery / Carnelutti, Milano (Nov. 2, 2004).

[32] Giuseppe Calá, La Questione del “Passaggio in Giudicato” nell’Ordinamento Inglese, Pubblicazione Lex et Jus (March, 2000).

[33] See supra Part III.D.2.

[34] Dreyfuss, supra note 15, at 15.

[35] Id. Past decisions of Italian courts have refused recognition and enforcement to foreign judgments on public policy grounds, finding that the judgment violated the inalienable rights of a defendant and his right to a full defense. See e.g., S.p.A. Emilianauto v. Bicketts Solicitors, Cass. Civ. Sez. 1, 18 maggio 1995, n.5451 (holding public policy refers not only to the content of the foreign judgment but also to the its procedure, which must comply with those inalienable principles that safeguard the rights of defense, which was denied because damages had been calculated collectively). But c.f., Cass Civ. Sez. 1, 23 gen. 1980, n.543, Giur. It. 1981, I, 1, 590, 596 (holding by Italian court of appeals that a judgment from Iowa was not repugnant to Italian public policy and the principle of adversary proves regarding requests for admissions because the requested party is given a reasonable period of time to submit its defense by providing written details) (cited in Dreyfuss, supra note 15, at n.146). In another case, the court refused enforcement to an English child support order, erroneously finding that an “order” in English law was not final because it could be appealed and thus did not meet the requirements of Law No. 218. This requirement also contributes to the great delays in the Italian judicial system because as a rule, judgments are not enforceable pending the time allowed for appeal (il passaggio di giudicato) or the appeal itself. Moreover, an appeal is a de novo adjudication of the case (rather than a mere revisio prioris instantiae) not limited to questions of law, and allows the introduction of new defenses and new evidence. Vincenzo Varano, Civil Procedure Reform in Italy, 45 Am. J. Comp. L. 657, 659 (1997). Although this case did not involve a money judgment, the type issued in civil litigation, it still provides an understanding as to why an Italian court might find a foreign judgment unenforceable.

[36] Id.

[37] Id. at 15-16.

[38] Id.

[39] Model Rules of Prof’l Conduct r. 1.1 (2003).

[40] Id. comment [1].

[41] Model rules of prof’l conduct R. 1.4(b) (2003).

[42] Rule 1.3(b) provides that “[a] lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.” Model Rules of Prof’l Conduct 1.3(b) (2003). Interestingly enough, in 1991, a German court of appeals held a German lawyer liable for malpractice and the damages suffered by his client based on the lawyer’s lack of knowledge of the Brussels Convention. Behr, supra note 1, at 214. In the case, the court did not state that a lawyer must possess the knowledge of a special convention or foreign law, rather that in some instances, it may be professional malpractice for a lawyer not to consider suing and collecting abroad and the conditions under which it might be necessary to bring the judgment to foreign jurisdictions. Id.

[43] Vigoriti, supra note 13, at 55. Indeed, Italy has been repeatedly sanctioned by the European Court of Human Rights for the length of its judicial proceedings. See e.g., Case of A.P. v. Italy (35265/97, July 28, 1999) (noting that since 1987, the European Court of Human Rights has delivered 65 judgments in which it has found violations of Article 6 § 1 in proceedings exceeding a “reasonable time” in the civil courts of the various regions of Italy, indicating a situation that has not yet been remedied and in respect of which litigants have no domestic remedy).

[44] Vigoriti, supra note 13, at 55.

[45] Id.

[46] See supra Part III.D.3.

[47] See infra Part IV.C.

[48] Law no. 31 of 1982 mandates that a foreign attorney who temporarily renders legal services in Italy must have the assistance of Italian counsel. Cass. Sez. Un. Civ. n. 146 (May 18, 1999). See also, minn. stat. § 481.02 subd. 1 (2003) (regulating the unauthorized practice of law and stating that it is unlawful for any person “except members of the bar of Minnesota admitted and licensed to practice as attorneys at law, to appear as attorney or counselor at law in any action or proceeding in any court in this state.”). Id. The unauthorized practice of law is punishable as a misdemeanor, and the attorney general may begin injunctive proceeding against the person or association to enjoin such action. Id. subd. 8(a)(b).

[49] For example, McDermott Will & Emery recently purchased Carnelutti Studio Legale Associato, one of the oldest and most prestigious law firms in Italy, and expanded its international practice to include Italy, with offices in Milan and Rome. See generally www.mwe.com for more information about the firm’s offices. Baker & McKenzie, founded in Chicago, also has offices in Rome and Milan. See generally www.bakerinfo.com for further information about Baker & McKenzie’s offices throughout the world.

[50] See generally Stefano Agostini, Advertising And Solicitation: A Comparative Analysis Of Why Italian And American Lawyers Approach Their Profession Differently, 10 Temp. Int’l & Comp. L.J. 329, 357 (1996) (stating that “ two Italian statutes enacted in 1942 expressly prohibiting contingency fees agreements and legal fees below the minimum that the tariffa forense provides. The dignity and decorum of the Italian legal profession is regarded as an esteemed public interest which overrides the considerations of a free market.”). Id.

[51] Richard H. Dreyfuss, The Italian Law on Strict Products Liability, 17 n.y.l. sch. j. int’l & comp. l. 37, 40 (1997).

[52] Id.

[53] Paul Ginsborg, Italy and Its Discontents: Family, Civil Society, State: 1980-2001 235 (2003).

[54] John Haycraft, Italian Labyrinth: Italy in the 1980s 5 (1985).

[55] Id.

[56] See also Anita Bernstein and Paul Fanning, Heirs of Leonardo: Cultural Obstacles to Strict Product Liability in Italy, 27 Vand. J. transnat’l 1, 17-18 (1994) (discussing the skepticism of Italians toward the idea that government and law can be the source of progress and improvement).

[57] Emily Backus and Fred Kapner, Parmalat Lawsuits Expand: Italian Investors Join U.S.-Based Class-Action Suits, Financial Times (March 11, 2004). This article also exemplifies the extreme length of Italian judicial proceedings, as it quotes an Italian lawyer who initiated a case on behalf of 146 individuals in 1993: “After 10 years and 9 judges, they finally reached a verdict,” the lawyer, Mr. Adami was quoted as saying. He continued by stating that “now, [the defendant] has begun an appeal.” Id.

[58] Dreyfuss, supra note 15, at 14.

[59] Id.

[60] Id. at 8.

[61] Rule 23(a) states the requirements of one type of class actions and declares that a class action may be certified if “one or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of al members is impracticable; (2) there are questions of law or facts common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class.” Two additional types of class actions are also permitted. See fed. r. civ. p. 23(b)(c).

[62] Dreyfuss, supra note 15, at 10.

[63] Id.

[64] See fed. r. civ. p. 23(b)(c).

[65] However, it is worth noting that it is not only outside the United States where class actions are criticized as lacking in fundamental fairness for the parties, as well as those absent members. See Dreyfuss, supra note 15 at n.59 (citing various United States court decisions and law review articles that have questioned the respect of due process rights, as well as other aspects of fundamental fairness that are often thought to be compromised in class actions).

[66] John Gotanda, Punitive Damages: A Comparative Analysis, 42 Colum. J. Transnat’l L. 391, 396 (2004).

[67] Id.

[68] Id.

[69] Dreyfuss, supra note 15, at 27-28.

[70] Id.

[71] Gotanda, supra note 64, at 396.

[72] Id.

[73] Id. See generally, Hartwin Bungert, Enforcing U.S. Excessive and Punitive Damages Awards in Germany, 127 int’l law. 1075 (1993) (discussing five important German court decisions that put into evidence the debate among German courts about the recognition and enforcement of American judgments with substantial damages, both compensatory and punitive).

[74] Article 24 provides the right to be heard in all stages of a court proceeding: “La difesa è diritto inviolabile in ogni stato e grado del procedimento. Sono assicurati ai non abbienti, con appositi istituti, i mezzi per agire e difendersi davanti ad ogni giurisdizione.” costituzione italiana art. 24.

[75] Dreyfuss, supra note 15, at 18.

[76] Id. at 27.

[77] Id.

[78] Dreyfuss, supra note 15, at 27.

[79] Id.

[80] Id. at 32.

[81] Id. at 32.

[82] Id. at 28.

[83] Id.

[84] Id.

[85] The New York Convention on the Enforcement of Arbitral Awards, more commonly known as the New York Convention, requires courts in contracting states to recognize arbitration agreements in writing and to refuse to allow a dispute to be litigated before them when it is subject to an arbitration agreement. See generally New York Convention On The Recognition And Enforcement Of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38. It also requires courts to recognize and enforce foreign arbitral awards. International Chamber of Commerce, International Court of Arbitration, International Dispute Resolution Services, at http://www.iccwbo.org/court/english/news_archives/2000/malta.asp.

[86]International Chamber of Commerce, International Court of Arbitration, International Dispute Resolution Services, at http://www.iccwbo.org/court/english/news_archives/2000/malta.asp.

[87] See generally http://camera-arbitrale.it/ for further information about the Chamber.

[88] Id.

[89] Donna M. Bates, A Consumer’s Dream Or Pandora’s Box: Is Arbitration A Viable Option For Cross-Border Consumer Disputes?, 27 Fordham Int’l L.J. 823, 842 (2004). The article concludes that traditional arbitration systems are not appropriate for cross-border consumer transactions, such as our fact scenario, and proposes that the most prudent solution is to leave arbitration to commercial parties involved in business-to-business transactions. Id. at 825.

[90] Hans Smit, Class Actions in Arbitration, 14 Am. Rev. Int’l Arb. 175, 176 (2003).

[91] Id.

[92] See e.g., Michael Gordon, Civil Justice Reform in the Americas: Lessons from Brazil, Mexico,

and Guatemala, 16 Fla. J. Int’l L. 11, 16-17 (2004).

[93] Dreyfuss, supra note 15, at n.4.