Who Bears the Burden: Assessing the Likelihood of Foreign Recognition of a U.S. Class Action Judgment

Joshua H. Plastrik*

Ever since the Second Circuit’s 1975 decision in Bersch v. Drexel Firestone, U.S. courts have grappled with whether to include foreign plaintiffs in U.S. opt-out class action lawsuits.  The notion of an opt-out class action runs contrary to many countries’ conceptions of public policy.  It is thus an open question whether these countries would recognize a U.S. court’s judgment in an opt-out class action.  U.S. courts and commentators are concerned by the potential for foreign plaintiffs in an opt-out class action to relitigate an adverse judgment abroad.  Various standards have been developed to guide courts in navigating this issue.  The Southern District of New York’s 2016 Petrobras decision is seminal.  In it, the court altered the prevailing Vivendi standard for assessing the likelihood of foreign recognition of the judgment in a U.S. opt-out class action lawsuit.  The Petrobras Court declined to follow the Vivendi standard and shifted the burden of showing the likelihood of nonrecognition from the party seeking class certification to the party resisting class certification.  This Note situates the Petrobras decision in relation to previously articulated standards and considers the evolution of these standards.  This Note argues for the applicability of Petrobras’ burden-shift beyond the securities context and suggests that it is time for courts to reconsider the relevance of the issue of foreign recognition to class certification.  It concludes by raising several uncertainties regarding the practical application of Petrobras’ burden-shift.

* Notes Editor, Columbia Journal of Transnational Law; J.D. Candidate, Columbia Law School, 2023. I am grateful to Professor Bermann for his assistance throughout this process. My thanks to Jake, Dana, Michael, David, Wisdom, and the Columbia Journal of Transnational Law staff for their invaluable feedback, suggestions, and support. A special thank you to my family and Chloe. We prove mysterious by this love.