September 8, 2010

Law Review Article Focuses on a French Court's Refusal to Enforce a California Punitive Damages Award

Here's a new law review article reminding us that foreign courts don't care much for American-style punitive damages. The article, posted to SSRN by French law professor Francois-Xavier Licari, describes a case in which a French appellate court refused to recognize a California judgment because it included an award of punitive damages. The French court concluded that punitive damages are contrary to that nation's public policy because they represent a windfall to the plaintiff. Other foreign courts have taken a similar approach.

Apparently, the author of this article disagrees with that approach and thinks the judgment should have been enforced, but I can't say for sure because I can't read the article. It's written in French. Perhaps an enterprising (and French-speaking) reader will offer a translation.

UPDATE (9/13/10): Professor Licari has been kind enough to provide this English-language version of the abstract of his article:

Recently, a French Court of Appeal (cour d’appel) refused to recognize a California judgment (to grant an “exequatur”) that awarded punitive damages to American citizens in a breach of contract case involving the sale of a ship from French sellers. The French Court gave several reasons in refusing to grant the exequatur, particularly: French law only allows for compensatory damages and considers the principle of full compensation as fundamental; punitive damages create an unjust enrichment (a windfall) for the plaintiff. In effect, the punitive damages given by the California court were disproportionate to the actual damages. In sum, punitive damages hurt French public policy (l’ordre public international français). The author contends that none of these arguments stand up to an objective examination. For example, a close look at French case law shows the principle of full compensation has never been considered as belonging to the ordre public in the international sense of the notion. Furthermore, French private law knows “private penalties” (pienes privées), and some of them resemble American punitive damages. Last but not least, two recent law reform proposals militate in favor of the introduction of punitive damages to the French Civil Code. This essay advocates for a better understanding of the notion of punitive damages and their role in American law, and urges French courts to give effect to reasonable punitive damage awards.

Professor Licari has also pointed out that a snippet of an English translation of the French appellate opinion appears in a footnote in this U.S. Supreme Court amicus brief. See this citation in footnote 17: Court of Appeal of Poitiers, No. 0702404 (Feb. 26, 2009) (“a foreign decision which . . . awards punitive damages far in excess from the price of the vessel, object of the contract . . . infringes upon the principle of proportionality between the damages and the breach guaranteed by Article 8 of the French Declaration of the Rights of Man and the Citizen.”)