Pleading Foreign Law in NY Courts: Not As Easy As It May SeemMay 17, 2019 – Articles New York Law Journal
It is a common knowledge that New York is a center for international businesses and transactions and New York courts are often tasked with adjudicating disputes between litigants from various countries and in accordance with foreign laws. However, as the court practice suggests, there are certain procedural requirements one needs to follow for a New York court to apply the foreign law. Those requirements start with the initial pleadings and cannot be disregarded.
Applicable New York Rules
Rule 3016(e) of the New York Civil Practice Law and Rules (CPLR) requires that a pleading which includes “a cause of action or defense … based upon the law of a foreign country or its political subdivision” shall state “the substance of the foreign law relied upon.” The provision is similar to Rule 44.1 of the Federal Rules of Civil Procedure, which provides, in part, that “[a] party who intends to raise an issue about a foreign country’s law must give notice by a pleading or other writing.”
Although CPLR 4511(b) vests the trial courts in New York with discretion to take judicial notice of foreign law, it does not obviate the requirement of pleading foreign law when a cause of action is based on a violation of those laws. Moreover, even though the Court of Appeals in the past noted that the requirements of CPLR 3016(e) should not be applied with “any undue rigidity” (Edwards v. Erie Coach Lines Co., 17 N.Y.3d 306, 328 (2011)), the judicial practice from the courts below suggests otherwise. A litigant’s failure to sufficiently plead foreign law, whether in a complaint, answer or on motion to dismiss, may lead to dismissal of her claims or defenses. Although a court will typically apply New York law to adjudicate such claims or defenses, there is a potential argument that in certain cases a failure to properly plead foreign law should lead to dismissal of a pleading under CPLR 3013 for failure to state “material elements of each cause of action.”
When Foreign Law Is Not Sufficiently Pled
Earlier this year, the Supreme Court of New York, in a matrimonial proceeding, warned the litigants that the “trial courts have frequently refused to take judicial notice of foreign laws that are not appropriately presented.” N.B. v. F.W., 62 Misc.3d 1012 (Sup. Ct. NY Co. 2019). The decision also cited many examples in which the litigants failed to sufficiently plead foreign law. These examples include failure to cite to relevant provisions of law and provide analysis and substance of such law and failure to attach copies of relevant statutes and cases. Partial citations or references to “few cases” on the subject were also found insufficient.
For example, the First Department upheld dismissal of the breach of fiduciary duty allegations when plaintiffs failed to allege with particularity the applicable Saudi law and only generally discussed the relevant Saudi legal concepts without any legal citations. MBI Int’l Holdings v. Barclays Bank PLC, 151 A.D.3d 108, 116 (1st Dep’t 2017), leave to appeal denied, 29 N.Y.3d 919 (2017). The court then found that “[u]nder New York law, the law of the forum” the claims should be also dismissed. Id.
Similarly, the First Department in another matter upheld the trial court’s decision not to apply French law when plaintiff’s expert did not explain how he reached his conclusion that the action was time barred under “each of the possibly applicable French limitations periods” and only attached some of the relevant jurisprudence. Warin v. Wildenstein & Co., 297 A.D.2d 214, 215 (1st Dep’t 2002); see also N.B. v. F.W., 62 Misc.3d 1012 (Sup. Ct. NY Co. 2019) (finding that the French law was not sufficiently pled because a party “did not provide the court with relevant French law or analysis”).
A litigant who failed to properly plead the foreign law in her initial pleading, may be able to correct such omission on motion to dismiss. See Minovici v. Belkin BV, 109 A.D.3d 520, 525 (2d Dep’t 2013) (upholding dismissal of complaint and finding “the Supreme Court properly applied New York law when determining the defendants’ motion [to dismiss], as the plaintiffs failed to plead the substance of the foreign law to be applied, and their opposition papers failed to provide sufficient information concerning the foreign law at issue.”); see alsoMediaXposure Ltd. (Cayman) v. Omnireliant Holdings, 29 Misc.3d 1215(A) (Sup. Ct. N.Y. Co. 2010) (applying New York law because plaintiff in opposition to motion to dismiss failed to prove the substance of foreign law and, therefore, consented to application of New York law); see alsoPonnambalam v. Ponnambalam, 35 A.D.3d 571, 574 (2d Dep’t 2006) (holding that “the Supreme Court did not err in failing to apply Sri Lankan law … . [Plaintiffs] did not plead the substance of the foreign law to be applied (see CPLR 3016(e)), nor did their opposition papers provide the court with sufficient information to enable it to take judicial notice of the Sri Lankan law at issue (see CPLR 4511(b)).”).
How To Plead Foreign Law Properly
A review of New York cases suggests that in order to present the foreign law properly, a litigant should provide a detailed substantive analysis concerning the applicable foreign law with clear citations and copies of the relevant statutory authority (in particular for countries with the civil law system) and case law (for countries with the common law system). It is also useful to employ an expert on the subject who can submit a detailed affidavit discussing and analyzing the applicable foreign law. For example, in HSBC Guyerzeller Bank AG v. Chascona N.V., the First Department upheld trial court’s application of English substantive law where the parties “made substantial submissions interpreting a foreign law,” which included detailed experts’ affidavits and relevant foreign authority. 42 A.D.3d 381 (1st Dep’t 2007); see also CMIA Partners Equity Ltd. v. O’Neill, 29 Misc.3d 1228(A) (Sup. Ct. NY Co. 2010) (“The common law of a foreign jurisdiction may be proved by witnesses or by printed reports of cases.”).
New York rules also provide some guidance with respect to this matter. CPLR 4511(e) specifically states:
Evidence to be received on matter to be judicially noticed. In considering whether a matter of law should be judicially noticed and in determining the matter of law to be judicially noticed, the court may consider any testimony, document, information or argument on the subject, whether offered by a party or discovered through its own research. Whether or not judicial notice is taken, a printed copy of a statute or other written law or a proclamation, edict, decree or ordinance by an executive contained in a book or publication, purporting to have been published by a government or commonly admitted as evidence of the existing law in the judicial tribunals of the jurisdiction where it is in force, is prima facie evidence of such law and the unwritten or common law of a jurisdiction may be proved by witnesses or printed reports of cases of the courts of the jurisdiction.
Recent court practice in New York suggests that a litigant should not take lightly a matter of pleading foreign law. More often than not New York courts refuse to take judicial notice of a foreign law that was not properly presented and substantiated in litigant’s papers. Failure to properly present foreign law could result in the court’s application of New York substantive law to the dispute and in certain cases—dismissal of the claims or defenses.
Reprinted with permission from the May 17 issue of the New York Law Journal. (c) 2019 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.