SOSA v. ALVAREZ-MACHAIN et al.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

No. 03339. Argued Murch 30, 2004Declded June 29, 2004

The Drug Enforcement Administration (DEA) approved using petitioner Sosa and other Mexican nationals to abduct respondent
Alvarez-Machain (Alvarez), also a Mexican national, from Mexico to stand trial in the United States for a DEA agents torture
and murder. As relevant here, after his acquittal, Alvarez sued the United States for false arrest under the Federal Tort Claims
Act (FTCA), which waives sovereign immunity in suits for personal injury caused by the negligent or wrongful act or
omission of any [Government] employee while acting within the scope of his office or employment, 28 U.S.C. 1346(b)(1);
and sued Sosa for violating the law of nations under the Alien Tort statute (ATS), a 1789 law giving district courts original
jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations , 1350. The District
Court dismissed the FTCA claim, but awarded Alvarez summary judgment and damages on the ATS claim. The Ninth Circuit
affirmed the ATS judgment, but reversed the FTCA claims dismissal.
Held:
1. The FTCAs exception to waiver of sovereign immunity for claims arising in a foreign country, 28 U.S.C. 2680(k),
bars claims based on any injury suffered in a foreign country, regardless of where the tortious act or omission occurred. Pp. 4
17.
(a) The exception on its face seems plainly applicable to the facts of this case. Alvarezs arrest was said to be false, and
thus tortious, only because, and only to the extent that, it took place and endured in Mexico. Nonetheless, the Ninth Circuit
allowed the action to proceed under what is known as the headquarters doctrine, concluding that, because Alvarezs abduction
was the direct result of wrongful planning and direction by DEA agents in California, his claim did not aris[e] in a foreign
country. Because it will virtually always be possible to assert negligent activity occurring in the United States, such analysis
must be viewed with skepticism. Two considerations confirm this Courts skepticism and lead it to reject the headquarters
doctrine. Pp. 47.
(b) The first consideration applies to cases like this one, where harm was arguably caused both by action in the foreign
country and planning in the United States. Proximate cause is necessary to connect the domestic breach of duty with the action
in the foreign country, for the headquarters behavior must be sufficiently close to the ultimate injury, and sufficiently important
in producing it, to make it reasonable to follow liability back to that behavior. A proximate cause connection is not itself
sufficient to bar the foreign country exceptions application, since a given proximate cause may not be the harms exclusive
proximate cause. Here, for example, assuming the DEA officials direction was a proximate cause of the abduction, so were the
actions of Sosa and others in Mexico. Thus, at most, recognition of additional domestic causation leaves an open question
whether the exception applies to Alvarezs claim. Pp. 89.
(c) The second consideration is rooted in the fact that the harm occurred on foreign soil. There is good reason to think that
Congress understood a claim arising in a foreign country to be a claim for injury or harm occurring in that country. This was
the common usage of arising under in contemporary state borrowing statutes used to determine which States limitations
statute applied in cases with transjurisdictional facts. And such language was interpreted in tort cases in just the same way that
the Court reads the FTCA today. Moreover, there is specific reason to believe that using arising in to refer to place of harm
was central to the foreign country exceptions object. When the FTCA was passed, courts generally applied the law of the place
where the injury occurred in tort cases, which would have been foreign law for a plaintiff injured in a foreign country. However,
application of foreign substantive law was what Congress intended to avoid by the foreign country exception. Applying the
headquarters doctrine would thus have thwarted the exceptions object by recasting foreign injury claims as claims not arising
in a foreign country because of some domestic planning or negligence. Nor has the headquarters doctrine outgrown its tension
with the exception. The traditional approach to choice of substantive tort law has lost favor, but many States still use that
analysis. And, in at least some cases the Ninth Circuits approach would treat as arising at headquarters, even the later
methodologies of choice point to the application of foreign law. There is also no merit to an argument that the headquarters
doctrine should be permitted when a States choice of law approach would not apply the foreign law of the place of injury.
Congress did not write the exception to apply when foreign law would be applied. Rather, the exception was written at a time
when arising in meant where the harm occurred; and the odds are that Congress meant simply that when it used the phrase.
Pp. 917.
2. Alvarez is not entitled to recover damages from Sosa under the ATS. Pp. 1745.
(a) The limited, implicit sanction to entertain the handful of international law cum common law claims understood in 1789
is not authority to recognize the ATS right of action Alvarez asserts here. Contrary to Alvarezs claim, the ATS is a
jurisdictional statute creating no new causes of action. This does not mean, as Sosa contends, that the ATS was stillborn because
any claim for relief required a further statute expressly authorizing adoption of causes of action. Rather, the reasonable
inference from history and practice is that the ATS was intended to have practical effect the moment it became law, on the
understanding that the common law would provide a cause of action for the modest number of international law violations
thought to carry personal liability at the time: offenses against ambassadors, violation of safe conducts, and piracy. Sosas
objections to this view are unpersuasive. Pp. 1730.
(b) While it is correct to assume that the First Congress understood that district courts would recognize private causes of
action for certain torts in violation of the law of nations and that no development of law in the last two centuries has
categorically precluded federal courts from recognizing a claim under the law of nations as an element of common law, there
are good reasons for a restrained conception of the discretion a federal court should exercise in considering such a new cause of
action. In deriving a standard for assessing Alvarezs particular claim, it suffices to look to the historical antecedents, which
persuade this Court that federal courts should not recognize claims under federal common law for violations of any international
law norm with less definite content and acceptance among civilized nations than the 18th-century paradigms familiar when
1350 was enacted. Pp. 3045.
&nb sp; (i) Several reasons argue for great caution in adapting the law of nations to private rights. First, the prevailing
conception of the common law has changed since 1790. When 1350 was enacted, the accepted conception was that the
common law was found or discovered, but now it is understood, in most cases where a court is asked to state or formulate a
common law principle in a new context, as made or created. Hence, a judge deciding in reliance on an international norm will
find a substantial element of discretionary judgment in the decision. Second, along with, and in part driven by, this conceptual
development has come an equally significant rethinking of the federal courts role in making common law. In Erie R.
Co. v. Tompkins, 304 U.S. 64, 78, this Court denied the existence of any federal general common law, which largely
withdrew to havens of specialty, with the general practice being to look for legislative guidance before exercising innovative
authority over substantive law. Third, a decision to create a private right of action is better left to legislative judgment in most
cases. E.g., Correctional Services Corp. v. Malesko, 534 U.S. 61, 68. Fourth, the potential implications for the foreign relations
of the United States of recognizing private causes of action for violating international law should make courts particularly wary
of impinging on the discretion of the Legislative and Executive Branches in managing foreign affairs. Fifth, this Court has no
congressional mandate to seek out and define new and debatable violations of the law of nations, and modern indications of
congressional understanding of the judicial role in the field have not affirmatively encouraged greater judicial creativity. Pp.
3037.
&nb sp; (ii) The limit on judicial recognition adopted here is fatal to Alvarezs claim. Alvarez contends that prohibition of
arbitrary arrest has attained the status of binding customary international law and that his arrest was arbitrary because no
applicable law authorized it. He thus invokes a general prohibition of arbitrary detention defined as officially sanctioned action
exceeding positive authorization to detain under the domestic law of some government. However, he cites little authority that a
rule so broad has the status of a binding customary norm today. He certainly cites nothing to justify the federal courts in taking
his rule as the predicate for a federal lawsuit, for its implications would be breathtaking. It would create a cause of action for
any seizure of an alien in violation of the Fourth Amendment, supplanting the actions under 42 U.S.C. 1983 and Bivens v. Six
Unknown Fed. Narcotics Agents,403 U.S. 388, that now provide damages for such violations. And it would create a federal
action for arrests by state officers who simply exceed their authority under state law. Alvarezs failure to marshal support for his
rule is underscored by the Restatement (Third) of Foreign Relations Law of the United States, which refers to prolonged
arbitrary detention, not relatively brief detention in excess of positive authority. Whatever may be said for his broad principle, it
expresses an aspiration exceeding any binding customary rule with the specificity this Court requires. Pp. 3845.
331 F.3d 604, reversed.
Souter, J., delivered the opinion of the Court, Parts I and III of which were unanimous, Part II of which was joined by
Rehnquist, C. J., and Stevens, OConnor, Scalia, Kennedy, and Thomas, JJ., and Part IV of which was joined by Stevens,
OConnor, Kennedy, Ginsburg, and Breyer, JJ. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in
which Rehnquist, C. J., and Thomas, J., joined. Ginsburg, J., filed an opinion concurring in part and concurring in the judgment,
in which Breyer, J., joined. Breyer, J., filed an opinion concurring in part and concurring in the judgment.

NOTES
*. Together with No. 03485, United States v. Alvarez-Machain et al., also on certiorari to the same court.










U.S. Supreme Court
Fauntleroy v. Lum, 210 U.S. 230 (1908)
Fauntleroy v. Lum
No. 215
Argued April 27, 28, 1908
Decided May 18, 1908
210 U.S. 230
ERROR TO THE SUPREME COURT
OF THE STATE OF MISSISSIPPI
Syllabus
A judgment is conclusive as to all the media concludendi, and it cannot be impeached either in or out
of the state by showing that it was based on a mistake of law.
A judgment of a court of a state in which the cause of action did not arise, but based on an award of
arbitration had in the state in which the cause did arise, is conclusive, and, under the full faith and
credit clause of the federal Constitution, must be given effect in the latter state, notwithstanding the
award was for a claim which could not, under the laws of that state, have been enforced in any of its
courts.
80 Miss. 757 reversed.
The facts are stated in the opinion.
Page 210 U. S. 233
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is an action upon a Missouri judgment, brought in a court of Mississippi. The declaration set forth
the record of the judgment. The defendant pleaded that the original cause of action arose in
Mississippi out of a gambling transaction in cotton futures; that he declined to pay the loss; that the
controversy was submitted to arbitration, the question as to the illegality
Page 210 U. S. 234
of the transaction, however, not being included in the submission; that an award was rendered
against the defendant; that thereafter, finding the defendant temporarily in Missouri, the plaintiff
brought suit there upon the award; that the trial court refused to allow the defendant to show the
nature of the transaction, and that, by the laws of Mississippi, the same was illegal and void, but
directed a verdict if the jury should find that the submission and award were made, and remained
unpaid, and that a verdict was rendered and the judgment in suit entered upon the same. (The
plaintiff in error is an assignee of the judgment, but nothing turns upon that.) The plea was
demurred to on constitutional grounds, and the demurrer was overruled, subject to exception.
Thereupon replications were filed, again setting up the Constitution of the United States (Art. IV,
1), and were demurred to. The Supreme Court of Mississippi held the plea good and the replications
bad, and judgment was entered for the defendant. Thereupon the case was brought here.
The main argument urged by the defendant to sustain the judgment below is addressed to the
jurisdiction of the Mississippi courts.
The laws of Mississippi make dealing in futures a misdemeanor, and provide that contracts of that
sort, made without intent to deliver the commodity or to pay the price, "shall not be enforced by any
court." Annotated Code of 1892, 1120, 1121, 2117. The defendant contends that this language
deprives the Mississippi courts of jurisdiction, and that the case is like Anglo-American Provision Co.
v. Davis Provision Co., 191 U. S. 373. There, the New York statutes refused to provide a court into
which a foreign corporation could come, except upon causes of action arising within the state, etc.,
and it was held that the State of New York was under no constitutional obligation to give jurisdiction
to its supreme court against its will. One question is whether that decision is in point.
No doubt it sometimes may be difficult to decide whether certain words in a statute are directed to
jurisdiction or to
Page 210 U. S. 235
merits, but the distinction between the two is plain. One goes to the power, the other only to the
duty, of the court. Under the common law, it is the duty of a court of general jurisdiction not to enter
a judgment upon a parol promise made without consideration; but it has power to do it, and, if it
does, the judgment is unimpeachable unless reversed. Yet a statute could be framed that would
make the power -- that is, the jurisdiction -- of the court dependent upon whether there was a
consideration or not. Whether a given statute is intended simply to establish a rule of substantive
law, and thus to define the duty of the court, or is meant to limit its power is a question of
construction and common sense. When it affects a court of general jurisdiction and deals with a
matter upon which that court must pass, we naturally are slow to read ambiguous words as meaning
to leave the judgment open to dispute or as intended to do more than to fix the rule by which the
court should decide.
The case quoted concerned a statute plainly dealing with the authority and jurisdiction of the New
York court. The statute now before us seems to us only to lay down a rule of decision. The Mississippi
court in which this action was brought is a court of general jurisdiction, and would have to decide
upon the validity of the bar if the suit upon the award or upon the original cause of action had been
brought there. The words "shall not be enforced by any court" are simply another, possibly less
emphatic, way of saying that an action shall not be brought to enforce such contracts. As suggested
by the counsel for the plaintiff in error, no one would say that the words of the Mississippi statute of
frauds, "[a]n action shall not be brought whereby to charge a defendant," Code 1892, 4225, go to
the jurisdiction of the court. Of course, it could be argued that logically they had that scope, but
common sense would revolt. See 191 U.S. 191 U. S. 375. A stronger case than the present
is General Oil Co. v. Crain, 209 U. S. 211,209 U. S. 216. We regard this question as open under the
decisions below, and we have expressed our opinion upon it independent of the effect of the
judgment, although it might be that, even if jurisdiction of the original cause of action
Page 210 U. S. 236
was withdrawn, it remained with regard to a suit upon a judgment based upon an award, whether
the judgment or award was conclusive or not. But it might be held that the law as to jurisdiction in
one case followed the law in the other, and therefore we proceed at once to the further question
whether the illegality of the original cause of action in Mississippi can be relied upon there as a
ground for denying a recovery upon a judgment of another state.
The doctrine laid down by Chief Justice Marshall was
"that the judgment of a state court should have the same credit, validity, and effect in every other
court in the United States which it had in the state where it was pronounced, and that whatever pleas
would be good to a suit thereon in such state, and none others, could be pleaded in any other court
in the United States."
Hampton v. M'Connel, 3 Wheat. 234. There is no doubt that this quotation was supposed to be an
accurate statement of the law as late as Christmas v. Russell, 5 Wall. 290, where an attempt of
Mississippi, by statute, to go behind judgments recovered in other states was declared void and it
was held that such judgments could not be impeached even for fraud.
But the law is supposed to have been changed by the decision in Wisconsin v. Pelican Ins. Co., 127
U. S. 265. That was a suit brought in this Court by the State of Wisconsin upon a Wisconsin
judgment against a foreign corporation. The judgment was for a fine or penalty imposed by the
Wisconsin statutes upon such corporations doing business in the state and failing to make certain
returns, and the ground of decision was that the jurisdiction given to this Court by Art. III, 2, as
rightly interpreted by the Judiciary Act, now Rev.Stat. 687, was confined to "controversies of a civil
nature," which the judgment in suit was not. The case was not within the words of Art. I, 1, and, if
it had been, still it would not have, and could not have, decided anything relevant to the question
before us. It is true that language was used which has been treated as meaning that the original
claim upon which a judgment is based
Page 210 U. S. 237
may be looked into further than Chief Justice Marshall supposed. But evidently it meant only to
justify the conclusion reached upon the specific point decided, for the proviso was inserted that a
court "cannot go behind the judgment for the purpose of examining into the validity of the claim ."
127 U.S. 127 U. S. 293. However, the whole passage was only a dictum, and it is not worth while to
spend much time upon it.
We assume that the statement of Chief Justice Marshall is correct. It is confirmed by the Act of May
26, 1790, c. 11, 1 Stat. 122, providing that the said records and judicial proceedings
"shall have such faith and credit given to them in every court within the United States as they have
by law or usage in the courts of the state from whence the said records are or shall be taken."
See further Tilt v. Kelsey, 207 U. S. 43, 207 U. S. 57. Whether the award would or would not have
been conclusive, and whether the ruling of the Missouri court upon that matter was right or wrong,
there can be no question that the judgment was conclusive in Missouri on the validity of the cause of
action. Pitts v. Fugate, 41 Mo. 405; State ex Rel. Hudson v. Trammel, 106 Mo. 510; In re
Copenhaver, 118 Mo. 377. A judgment is conclusive as to all the media concludendi, United States v.
California & Oregon Land Co., 192 U. S. 355, and it needs no authority to show that it cannot be
impeached either in or out of the state by showing that it was based upon a mistake of law. Of
course, a want of jurisdiction over either the person or the subject matter might be shown. Andrews
v. Andrews, 188 U. S. 14; Clarke v. Clarke, 178 U. S. 186. But, as the jurisdiction of the Missouri
court is not open to dispute, the judgment cannot be impeached in Mississippi even if it went upon a
misapprehension of the Mississippi law.See Godard v. Gray, L.R. 6 Q.B. 139; MacDonald v. Grand
Trunk Ry. Co., 71 N.H. 448;Peet v. Hatcher, 112 Ala. 514.
We feel no apprehensions that painful or humiliating consequences will follow upon our decision. No
court would give judgment for a plaintiff unless it believed that the facts were a cause of action by
the law determining their effect. Mistakes
Page 210 U. S. 238
will be rare. In this case, the Missouri court no doubt supposed that the award was binding by the
law of Mississippi. If it was mistaken, it made a natural mistake. The validity of its judgment, even in
Mississippi, is, as we believe, the result of the Constitution as it always has been understood, and is
not a matter to arouse the susceptibilities of the states, all of which are equally concerned in the
question and equally on both sides.
Judgment reversed.
MR. JUSTICE WHITE, with whom concurs MR. JUSTICE HARLAN, MR. JUSTICE McKENNA, and MR.
JUSTICE DAY, dissenting:
Admonished that the considerations which control me are presumptively faulty, as the Court holds
them to be without merit, yet so strong is my belief that the decision now made unduly expends the
due faith and credit clause of the Constitution, I state the reasons for my dissent.
By law, the State of Mississippi prohibited certain forms of gambling in futures, and inhibited its
courts from giving effect to any contract or dealing made in violation of the prohibitive statute. In
addition, it was made criminal to do any of the forbidden acts. With the statutes in force, two citizens
and residents of Mississippi made contracts in that state which were performed therein, and which
were in violation of both the civil and criminal statutes referred to. One of the parties asserting that
the other was indebted to him because of the contracts, both parties, in the State of Mississippi,
submitted their differences to arbitration, and, on an award being made in that state, the one in
whose favor it was made sued in a state court in Mississippi to recover thereon. In that suit, on the
attention of the court being called to the prohibited and criminal nature of the transactions, the
plaintiff dismissed the case. Subsequently, in a court of the State of Missouri, the citizen of
Mississippi, in whose favor the award had been made, brought an action on the award and succeeded
in getting personal
Page 210 U. S. 239
service upon the other citizen of Mississippi, the latter being temporarily in the State of Missouri. The
action was put at issue. Rejecting evidence offered by the defendant to show the nature of the
transactions, and that, under the laws of Mississippi, the same were illegal and criminal, the Missouri
court submitted the cause to a jury with an instruction to find for the plaintiff if they believed that the
award had been made as alleged. A verdict and judgment went in favor of the plaintiff. Thereupon
the judgment so obtained was assigned by the plaintiff to his attorney, who sued upon the same in a
court of Mississippi, where the facts upon which the transaction depended were set up and the
prohibitory statutes of the state were pleaded as a defense. Ultimately the case went to the Supreme
Court of the State of Mississippi, where it was decided that the Missouri judgment was not required,
under the due faith and credit clause, to be enforced in Mississippi, as it concerned transactions
which had taken place exclusively in Mississippi between residents of that state, which were in
violation of laws embodying the public policy of that state, and to give effect to which would be
enforcing transactions which the courts of Mississippi had no authority to enforce. The court now
reverses on the ground that the due faith and credit clause obliged the courts of Mississippi, in
consequence of the action of the Mississippi court, to give efficacy to transactions in Mississippi which
were criminal, and which were against the public policy of that state. Although not wishing in the
slightest degree to weaken the operation of the due faith and credit clause as interpreted and applied
from the beginning, it to me seems that this ruling so enlarges that clause as to cause it to obliterate
all state lines, since the effect will be to endow each state with authority to overthrow the public
policy and criminal statutes of the others, thereby depriving all of their lawful authority. Moreover,
the ruling now made, in my opinion, is contrary to the conceptions which caused the due faith and
credit clause to be placed in the Constitution, and substantially overrules the previous decisions of
this Court
Page 210 U. S. 240
interpreting that clause. My purpose is to briefly state the reasons which lead me to these
conclusions.
The foundation upon which our system of government rests is the possession by the states of the
right, except as restricted by the Constitution, to exert their police powers as they may deem best for
the happiness and welfare of those subject to their authority. The whole theory upon which the
Constitution was framed, and by which alone, it seems to me, it can continue, is the recognition of
the fact that different conditions may exist in the different states, rendering necessary the enactment
of regulations of a particular subject in one state when such subject may not in another be deemed
to require regulation; in other words, that in Massachusetts, owing to conditions which may there
prevail, the legislature may deem it necessary to make police regulations on a particular subject,
although like regulations may not obtain in other states. And, of course, such also may be the case in
Louisiana or any other state. If it be that the ruling now made deprives the states of powers
admittedly theirs, it follows that the ruling must be wrong. The inquiry whether the ruling does so
becomes therefore directly pertinent not merely from considerations of inconvenience, but as a
matter of substantial demonstration. The due faith and credit clause, it is now decided, means that
residents of a state may, within such state, do acts which are violative of public policy, and yet that a
judgment may be rendered in another state giving effect to such transactions, which judgment it
becomes the duty of the state whose laws have been set at defiance to enforce. It must follow, if one
state, by the mere form of a judgment, has this power, that no state has in effect the authority to
make police regulations -- or, what is tantamount to the same thing, is without power to enforce
them. If this be true, the doctrine now upheld comes to this -- that no state, generally speaking,
possesses police power concerning acts done within its borders if any of the results of such acts may
be the subject of civil actions, since the enforcement by the state of its police
Page 210 U. S. 241
regulations as to such acts may be nullified by an exertion of the judicial power of another state.
Indeed, the principle, as understood by me, goes further than this, since it not only gives to each of
the states in the cases suggested the power to render possible an evasion of the police laws of all the
other states, but it gives to each state the authority to compel the other states, through their courts,
to give effect to illegal transactions done within their borders. It may not be denied that a state
which has lawfully prohibited the enforcement of a particular character of transaction, and made the
same criminal, has an interest in seeing that its laws are enforced and will be subjected to the
gravest humiliation if it be compelled to give effect to acts done within its borders which are in
violation of its valid police or criminal laws. And the consciousness of the enforced debasement to
which it would be subjected if compelled to enter a decree giving effect to acts of residents of
Mississippi, done within that state, which were violative of the public policy of the state and which
were criminal, was clearly shown in the opinion of the supreme court of the state in this case.
When the Constitution was adopted, the principles of comity by which the decrees of the courts of
one state were entitled to be enforced in another were generally known, but the enforcement of
those principles by the several states had no absolute sanction, since they rested but in comity. Now
it cannot be denied that, under the rules of comity recognized at the time of the adoption of the
Constitution and which at this time universally prevail, no sovereignty was or is under the slightest
moral obligation to give effect to a judgment of a of another sovereignty when to do so would compel
the state in which the judgment was sought to be executed to enforce an illegal and prohibited
contract when both the contract and all the acts done in connection with its performance had taken
place in the latter state. This seems to me conclusive of this case, since, both in treatises of
authoritative writers (Story, Conflict of Law 609) and by repeated adjudications of
Page 210 U. S. 242
this Court, it has been settled that the purpose of the due faith and credit clause was not to confer
any new power, but simply to make obligatory that duty which, when the Constitution was adopted,
rested, as has been said, in comity alone. Without citing the numerous decisions which so hold,
reference is made to a few of the leading cases in which the prior rulings of this Court were reviewed,
the foregoing principle was stated, and the scope of the due faith and credit clause was fully
expounded: Thompson v. Whitman, 18 Wall. 457; Wisconsin v. Pelican Ins. Co., 127 U. S. 265; Cole
v. Cunningham, 133 U. S. 107; Andrews v. Andrews, 188 U. S. 14. A more particular review of those
cases will demonstrate why my conviction is that the decision in this case overrules the cases cited.
In Thompson v. Whitman, it was directly held that, when a judgment of one state is presented for
enforcement in another, the due faith and credit clause does not deprive the courts of the state in
which it is sought to make the judgment effectual from inquiring into the jurisdiction of the court in
which the judgment was rendered.
In Wisconsin v. Pelican Ins. Co., a judgment was rendered in Wisconsin against an insurance
company for a large amount of money. An original suit was brought in this Court upon the judgment.
Elaborately considering the authorities, it was held that the due faith and credit clause did not
deprive of the right to go behind the face of the money judgment and ascertain the cause of action
upon which it had been rendered. In other words, it was expressly decided that there was power to
ascertain whether the cause of action was such as to give the Wisconsin court jurisdiction to render a
judgment entitled to enforcement in other states. This having been determined, as the proof
established that the judgment for money rendered in Wisconsin was for a penalty imposed by the
statutes of that state, it was held that the judgment was not entitled to be enforced, because, when
the Constitution was framed, no state ever enforced the penal laws of another state. Speaking of the
grant of jurisdiction over
Page 210 U. S. 243
"controversies between a state and citizens of another state," it was said (p. 127 U. S. 289):
"The grant is of 'judicial power,' and was not intended to confer upon the courts of the United States
jurisdiction of a suit or prosecution by the one state of such a nature that it could not, on the settled
principles of public and international law, be entertained by the judiciary of the other state at all."
Certainly if such was the purpose of the framers in regard to the clause referred to, a like purpose
must have been intended with reference to the due faith and credit clause. If a judgment for a
penalty in money rendered in one state may not be enforced in another, by the same principles, a
judgment rendered in one state giving to the party the results of prohibited and criminal acts done in
another state is not entitled to be enforced in the state whose laws have been violated.
Nor do I think that the ruling in the Pelican case is at all qualified by a sentence quoted in the opinion
of the Court now announced, taken from page 127 U. S. 293 of the report of the Pelican case. On the
contrary, when that sentence is read in connection with its context, in my opinion, it has a directly
contrary effect to that for which it is now cited. The passage in full is as follows, the sentence
referred to in the opinion in this case being the part embraced in brackets, as found in the original:
"The essential nature and real foundation of a cause of action are not changed by recovering
judgment upon it, and the technical rules which regard the original claim as merged in the judgment,
and the judgment as implying a promise by the defendant to pay it, do not preclude a court to which
a judgment is presented for affirmative action [while it cannot go behind the judgment for the
purpose of examining into the validity of the claim] from ascertaining whether the claim is really one
of such a nature that the court is authorized to enforce it."
It seems to me that the words "validity of the claim," used in the sentence in brackets, but pointed
out the absence of power, when a judgment is one which is entitled to be enforced,
Page 210 U. S. 244
to relitigate the mere question of liability, and that the language which follows the bracketed
sentence, declaring that the court is empowered "to ascertain whether the claim is really one of such
a nature that the court is entitled to enforce it," leaves no room for the implication that the bracketed
sentence was intended to destroy the very doctrine upon which the decision in the Pelican case was
necessarily based, and without which the decision must have been otherwise.
The decision in the Pelican case has never been overruled or qualified; on the contrary, that decision
has been affirmed and reaffirmed and approvingly cited in many cases. It was expressly approved in
the review which was made of the doctrine in Cole v. Cunningham -- an instructive case on the
power of a state to restrain its citizens from prosecuting actions in other jurisdictions when
prosecuting such actions was a violation of the laws of the State of the domicil. So also,
the Pelican case was approvingly cited and commented upon in Andrews v. Andrews, supra, where
the doctrine now under consideration was involved. And the authoritative nature of the decision in
the Pelicancase was recognized in Anglo-Am. Prov. Co. v. Davis Prov. Co., 191 U. S. 373.
None of the cases to which I have referred conflicts with the opinion of Mr. Chief Justice Marshall
in Hampton v. M'Connel, 3 Wheat. 234, since that case but determined the degree of effect which
was to be given to a judgment which was entitled to be enforced, and therefore did not possibly
concern the question here presented. It is by me conceded that, if the judgment whose enforcement
is here in question is one which the courts of Mississippi were bound to enforce under the due faith
and credit clause, the courts of that state are obliged to give to the judgment, as declared by Chief
Justice Marshall in Hampton v. M'Connel, the same effect and credit which it was entitled to receive
in the state where rendered. But, in my opinion, the concession just stated does not in any way
influence the question here involved, which solely is whether the judgment was such an one as to be
entitled to any credit at all. In other
Page 210 U. S. 245
words, I do not see how the question whether a judgment is without the due faith and credit clause
may be controlled by a decision pointing out the extent of the credit to be given to a judgment if it be
within that clause.
In addition to the considerations just stated, in my opinion, this case is controlled byAnglo-American
Prov. Co. v. Davis Prov. Co., No. 1, supra, cited in the opinion of the Court. In that case, it was held
that a judgment rendered in the State of Illinois in favor of one corporation against another
corporation, both foreign to New York, was not entitled to be enforced in the courts of New York
under the due faith and credit clause, because the statutes of New York enumerating the cases in
which jurisdiction might be exercised over actions between foreign corporations did not give
jurisdiction of such action as was before the court. Now, in this case, in considering the very
language found in the statute here in question as contained in a prior statute of the same nature, the
supreme court of the state held (Lemonius v. Mayer, 71 Miss. 514),
"that, by the second section of the act of 1882, the complainants were denied access to the courts of
this state to enforce their demand . . . for the money advanced for the purchase of the 'futures' in
cotton."
The want of power in the courts of Mississippi under the local statute is therefore foreclosed in this
Court by the construction given to the statute by the state court of last resort. At all events, that
construction should not be departed from in order to compel the courts of Mississippi to enforce
obligations which took origin in that state as the result of the intentional violation of a prohibitory law
manifesting the public policy of the state.
No special reference has been made by me to the arbitration, because that is assumed by me to be
negligible. If the cause of action was open for inquiry for the purpose of deciding whether the
Missouri court had jurisdiction to render a judgment entitled to be enforced in another state, the
arbitration is of no consequence. The violation of law in Mississippi could not be cured by seeking to
arbitrate in that state in order to fix
Page 210 U. S. 246
the sum of the fruits of the illegal acts. The ancient maxims that something cannot be made out of
nothing, and that which is void for reasons of public policy cannot be made valid by confirmation or
acquiescence, seem to my mind decisive.
I therefore dissent.


U.S. Supreme Court
Milwaukee County v. M. E. White Co., 296 U.S. 268 (1935)
Milwaukee County v. M. E. White Co.
No. 32
Argued November 12, 13, 1935
Decided December 9, 1935
296 U.S. 268
CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
Syllabus
1. A suit by or on behalf of a State upon a judgment for taxes is a suit of a civil nature within the
meaning of 24, Jud.Code, defining the jurisdiction of the District Courts. P.296 U. S. 270.
2. The obligation to pay taxes is not penal; it is a statutory liability, quasi-contractual in nature,
enforceable, if there be no exclusive statutory remedy, in the civil courts by the common law action
of debt or indebitatus assumpsit. This was the rule established in the English courts before the
Declaration of Independence. P. 296 U. S. 271.
3. The objection that the courts in one State will not entertain a suit to recover taxes due to another
or upon a judgment for such taxes goes not to the jurisdiction, but to the merits, and raises a
question which District Courts are competent to decide. P. 296 U. S. 272.
4. Even if full faith and credit are not commanded, there is nothing in the Constitution and laws of
the United States which requires a court of a State to deny relief upon a judgment recovered in
another State because it is for taxes. P. 296 U. S. 272.
Page 296 U. S. 269
5. Where suits to enforce the laws of one State are entertained in the courts of another on the
principle of comity, the federal District Courts sitting in that State may and should entertain them if
to do so will not infringe federal law or policy. P. 296 U. S. 272.
6. Assuming that the courts of one State, and federal court therein, are not required by the
Constitution, Art. IV, 1, and the Act of Congress passed thereunder, to entertain suits to recover
taxes levied under the statutes of another State, they cannot deny full faith and credit to judgments
recovered in the other State for such taxes. P. 296 U. S. 275.
7. The opinion in Wisconsin v. Pelican Insurance Co., 127 U. S. 265, is disapproved insofar as it can
be taken to suggest that full faith and credit are not required with respect to a judgment unless the
original cause of action would have been entitled to like credit. P. 296 U. S. 278.
In answer to a question certified by the court below, on an appeal from a judgment of the District
Court dismissing an action in Illinois based on a judgment for taxes recovered by the plaintiff County
in Wisconsin.
MR. JUSTICE STONE delivered the opinion of the Court.
This case comes here under 239 of the Judicial Code, 28 U.S.C. 346, on certificate of the Court of
Appeals for the Seventh Circuit, which presents a question of law concerning which the instructions of
this Court are desired for the proper decision of the case.
The relevant facts, as stated by the certificate, are that the appellant, Milwaukee county, a county
and citizen of Wisconsin, brought suit in the District Court for Northern Illinois against M. E. White
Company, appellee,
Page 296 U. S. 270
a corporation and citizen of Illinois, to recover on a judgment for $52,165.84 which appellant had
duly recovered and entered against the appellee in the circuit court of Milwaukee county, Wisconsin,
a court of general jurisdiction. The judgment is said to be for taxes duly assessed against appellee,
under Wisconsin statutes, upon income received from its business transacted within the State under
state license. The District Court dismissed the cause on the ground that, as the suit was in substance
brought to enforce the revenue laws of Wisconsin, it could not be maintained in the District Court in
Illinois.
The question certified is as follows:
"Should a United States District Court in and for the Illinois, having jurisdiction of the parties,
entertain jurisdiction of an action therein brought based upon a valid judgment for over $3,000
rendered by a court of competent jurisdiction in the Wisconsin against the same defendant, which
judgment was predicated upon an income tax due from the defendant to the State of Wisconsin?"
Appellee insists that the question should be answered in the negative (1) because such a suit is not
within the judicial power conferred upon District Courts by the Constitution and laws of the United
States, and (2) because a judgment for taxes constitutes an exception to the requirement of the
Constitution and statutes of the United States that full faith and credit be given in each state to the
public acts and judicial proceedings of every state.
1. By 24(1) of the Judicial Code, 28 U.S.C. 41(1), District Courts are given original jurisdiction "of
all suits of a civil nature at common law or in equity" where there is the requisite diversity of
citizenship and the amount in controversy exceeds $3,000. In this grant of jurisdiction of causes
arising under state as well as federal law, the phrase "suits of a civil nature" is used in
contradistinction to "crimes and offenses," as to which the jurisdiction
Page 296 U. S. 271
of the District Courts is restricted by 24(2) to offenses against the United States. Thus, suits of a
civil nature within the meaning of the section are those which do not involve criminal prosecution or
punishment, and which are of a character traditionally cognizable by courts of common law or of
equity. Such are suits upon a judgment, foreign or domestic, for a civil liability, of a court having
jurisdiction of the cause and of the parties, which were maintainable at common law upon writ of
debt, or of indebitatus assumpsit. [Footnote 1]
Even if the judgment is deemed to be colored by the nature of the obligation whose validity it
establishes, and we are free to reexamine it, and, if we find it to be based on an obligation penal in
character, to refuse to enforce it outside the State where rendered, see Wisconsin v. Pelican
Insurance Co., 127 U. S. 265, 127 U. S. 292 et seq., compare Fauntleroy v. Lum, 210 U. S. 230, still
the obligation to pay taxes is not penal. It is a statutory liability, quasi-contractual in nature,
enforceable, if there is no exclusive statutory remedy, in the civil courts by the common law action of
debt orindebitatus assumpsit. United States v. Chamberlin, 219 U. S. 250; Price v. United
States, 269 U. S. 492; Dollar Savings Bank v. United States, 19 Wall. 227, and see 80 U. S. United
States, 13 Wall. 531, 80 U. S. 542; Meredith v. United States, 13 Pet. 486,38 U. S. 493. This was the
rule established in the English courts before the Declaration of Independence. Attorney General v.
Weeks, Bunbury's Exch. Rep. 223; Attorney General v. Jewers and Batty, id., 225; Attorney General
v. Hatton,
Page 296 U. S. 272
id., 262; Attorney General v. ____, 2 Ans.Rep. 558; see Comyn's Digest (Title "Dett," A, 9); 1 Chitty
on Pleading, 123; cf. Attorney General v. Sewell, 4 M. & W. 77.
The objection that the courts in one state will not entertain a suit to recover taxes due to another or
upon a judgment for such taxes is not rightly addressed to any want of judicial power in courts which
are authorized to entertain civil suits at law. It goes not to the jurisdiction, but to the merits, and
raises a question which District Courts are competent to decide. See Illinois Central R. Co. v.
Adams, 180 U. S. 28; General Investment Co. v. New York Central R. Co., 271 U. S. 228, 271 U. S.
230; Becker Steel Co. v. Cummings, ante, p. 296 U. S. 74.
That defense is without merit if full faith and credit must be given the judgment. But even if full faith
and credit is not commanded, there is nothing in the Constitution and laws of the United States which
requires a court of a state to deny relief upon a judgment because it is for taxes. A state court, in
conformity to state policy, may, by comity, give a remedy which the full faith and credit clause does
not compel. Young v. Masci, 289 U. S. 253; Bond v. Hume, 243 U. S. 15; cf. Tennessee Coal, Iron &
R. Co. v. George, 233 U. S. 354, 233 U. S. 355; Clark Plastering Co. v. Seaboard Surety Co.,259 N.Y.
424, 182 N.E. 71; Herrick v. Minneapolis & St. Louis Ry. Co., 31 Minn. 11, 16 N.W. 413; Healy v.
Root, 11 Pick. 389; Schuler v. Schuler, 209 Ill. 522, 71 N.E. 16. A suit to recover taxes due under the
statutes of another state has been allowed without regard to the compulsion of the full faith and
credit clause. Holshouser Co. v. Gold Hill Copper Co., 138 N.C. 248, 50 S.E. 650. The privilege may
be extended by statute. SeeLaws N.Y.1932, c. 333. Where suits to enforce the laws of one state are
entertained in the courts of another on the principle of comity, the federal District Courts sitting in
that state may entertain them and should if they do not infringe federal law
Page 296 U. S. 273
or policy. Union Trust Co. v. Grosman, 245 U. S. 412, 245 U. S. 418; Bond v. Hume, supra; Northern
Pacific R. Co. v. Babcock, 154 U. S. 190, 154 U. S. 197-198; Dennick v. Railroad Co., 103 U. S.
11; see Bradford Electric Light Co. v. Clapper, 286 U. S. 145, 286 U. S. 161.
2. The faith and credit required to be given to judgments does not depend on the Constitution alone.
Article IV, 1, not only commands that "full Faith and Credit shall be given in each State to the
public Acts, Records, and judicial Proceedings of every other State," but it adds "Congress may be
general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and
the Effect thereof." And Congress has exercised this power, by Act of May 26, 1790, c. 11, 28 U.S.C.
687, which provides the manner of proof of judgments of one state in the courts of another, and
specifically directs that judgments
"shall have such faith and credit given to them in every court within the United States as they have
by law or usage in the courts of the State from which they are taken."
Such exception as there may be to this all-inclusive command is one which is implied from the nature
of our dual system of government, and recognizes that, consistently with the full faith and credit
clause, there may be limits to the extent to which the policy of one state, in many respects
sovereign, may be subordinated to the policy of another. That there are exceptions has often been
pointed out, Broderick v. Rosner, 294 U. S. 629, 294 U. S. 642; Alaska Packers Assn. v. Industrial
Accident Comm'n, 294 U. S. 532, 294 U. S. 546; Bradford Electric Light Co. v. Clapper, supra, 286 U.
S. 160;Huntington v. Attrill, 146 U. S. 657, 146 U. S. 663; Wisconsin v. Pelican Insurance Co., 127
U. S. 265, 127 U. S. 293, and in some instances decided. See Haddock v. Haddock, 201 U. S.
562; Maynard v. Hill, 125 U. S. 190; Hood v. McGehee, 237 U. S. 611; Olmsted v. Olmsted, 216 U.
S. 386; Fall v. Eastin, 215 U. S. 1. Without attempting to
Page 296 U. S. 274
say what their limits may be, we assume for present purposes that the command of the Constitution
and of the statute is not all-embracing, and direct our inquiry to the question whether a state to
which a judgment for taxes is taken may have a policy against its enforcement meriting recognition
as a permissible limitation upon the full faith and credit clause. Of that question, this Court is the
final arbiter. See Alaska Packers Association v. Industrial Accident Commission, supra, 294 U. S.
547; Bradford Electric Light Co. v. Clapper, supra, 286 U. S. 157-162.
It is said that, in answering it, the Court should examine the record which supports the judgment and
refuse to give credit to the judgment if the cause of action upon which it is founded is one which it
would not enforce, and appellee urges that a suit for taxes imposed by state statute will not be
entertained outside the taxing state. It has often been said, [Footnote 2] and in a few cases held,
[Footnote 3] that statutes imposing taxes are not entitled to full faith and credit. Other obligations to
pay money arising under the statutes of one state must be given recognition in courts of
another.Converse v. Hamilton, 224 U. S. 243; Broderick v. Rosner, supra; Bradford Electric Light Co.
v. Clapper, supra. But it is insisted that to this rule taxing statutes constitute an exception, analogous
to that relating
Page 296 U. S. 275
to penal laws, because the courts of one state should not be called upon to scrutinize the relations of
a foreign state with its own citizens, such as are involved in its revenue laws, and thus commit the
State of the forum to positions which might be seriously embarrassing to itself or its neighbors. See
Moore v. Mitchell, 30 F.2d 600, 602, 604; Beale, Conflict of Laws, 610.1.
Whether one state must enforce the revenue laws of another remains an open question in this
Court. See Moore v. Mitchell, 281 U. S. 18, 281 U. S. 24. But we do not stop to inquire whether the
considerations which have been thought to preclude the enforcement of the penal laws of one state
in the courts of another are applicable to taxing statutes, or whether the mere possibility of
embarrassment in their enforcement should stay the hand of the court of another state in cases
where in fact such embarrassment will not occur. For present purposes, we will assume that the
courts of one state are not required to entertain a suit to recover taxes levied under the statutes of
another, and confine our inquiry to the single question whether they must nevertheless give full faith
and credit to judgments for such taxes.
A cause of action on a judgment is different from that upon which the judgment was entered. In a
suit upon a money judgment for a civil cause of action, the validity of the claim upon which it was
founded is not open to inquiry, whatever its genesis. Regardless of the nature of the right which gave
rise to it, the judgment is an obligation to pay money in the nature of a debt upon the specialty.
Recovery upon it can be resisted only on the grounds that the court which rendered it was without
jurisdiction,Pennoyer v. Neff, 95 U. S. 714; D'Arcy v. Ketchum, 11 How. 165; Tilt v. Kelsey, 207 U.
S. 43, or that it has ceased to be obligatory because of payment or other discharge,Anderson v.
Clark, 70 Ga. 362; Haggerty v. Amory, 7 Allen 458; First Nat. Bank v.
Page 296 U. S. 276
Hahn, 197 Mo.App. 593, 198 S.W. 489; Revere Copper Co. v. Dimock, 90 N.Y. 33, or that it is a
cause of action for which the State of the forum has not provided a court,Anglo-American Provision
Co. v. Davis Provision Co., 191 U. S. 373; compare Kenney v. Supreme Lodge, 252 U. S. 411, unless
it is compelled to do so by the privileges and immunities clause; compare Douglas v. New York, N.H.
& H. R. Co., 279 U. S. 377,McKnett v. St. Louis & S.F. Ry. Co., 292 U. S. 230, and Broderick v.
Rosner, supra; or possibly because procured by fraud, compare 72 U. S. Russell, 5 Wall.
290; Maxwell v. Stewart, 21 Wall. 71, 89 U. S. 22 Wall. 77; Hanley v. Donoghue, 116 U. S.
1; Simmons v. Saul, 138 U. S. 439, with 52 U. S. Reid, 11 How. 437; NcNitt v. Turner, 16 Wall.
352,83 U. S. 366; Cole v. Cunningham, 133 U. S. 107, 133 U. S. 12.
Trial of these issues, even though the judgment be for taxes incurred under the laws of another
state, requires no scrutiny of its revenue laws or of relations established by those laws with its
citizens, and calls for no pronouncement upon the policy of a sister state. It involves no more
embarrassment than the interstate rendition of fugitives from justice, the constitutional command for
which is no more specific than that requiring full faith and credit. Foreign judgments are not liens,
and are not entitled to execution in the State to which they are brought. See M'Elmoyle v. Cohen, 13
Pet. 312; Cole v. Cunningham, supra, 133 U. S. 112; cf. Gasquet v. Fenner, 247 U. S. 16; Sistare v.
Sistare, 218 U. S. 1, 218 U. S. 26. They can no more demand priority over domestic claims for taxes
than a judgment upon a simple contract debt, which is equally a binding obligation of the judgment
debtor where rendered, and to which full faith and credit must be accorded.
We can perceive no greater possibility of embarrassment in litigating the validity of a judgment for
taxes and enforcing it than any other for the payment of money. The very purpose of the full faith
and credit
Page 296 U. S. 277
clause was to alter the status of the several states as independent foreign sovereignties, each free to
ignore obligations created under the laws or by the judicial proceedings of the others, and to make
them integral parts of a single nation throughout which a remedy upon a just obligation might be
demanded as of right, irrespective of the State of its origin. That purpose ought not lightly to be set
aside out of deference to a local policy which, if it exists, would seem to be too trivial to merit serious
consideration when weighed against the policy of the constitutional provision and the interest of the
State whose judgment is challenged. In the circumstances here disclosed, no state can be said to
have a legitimate policy against payment of its neighbor's taxes, the obligation of which has been
judicially established by courts to whose judgments in practically every other instance it must give
full faith and credit.Compare Fauntleroy v. Lum, supra.
In numerous cases, this Court has held that credit must be given to the judgment of another state,
although the forum would not be required to entertain the suit on which the judgment was founded;
that considerations of policy of the forum which would defeat a suit upon the original cause of action
are not involved in a suit upon the judgment and are insufficient to defeat it. Full faith and credit is
required to be given to the judgment of another state although the original suit on which it was
based arose in the State of the forum and was barred there by the Statute of Limitations when the
judgment was rendered. Christmas v. Russell, 5 Wall. 290; Roche v. McDonald, 275 U. S. 449, and
where the original suit was upon a gambling contract invalid by the law of the forum where it was
made, Fauntleroy v. Lum, supra. It was required where the judgment was for wrongful death,
although it was thought that the statute giving the recovery was not entitled to full faith and
credit. Kenney
Page 296 U. S. 278
v. Supreme Lodge, supra; compare Converse v. Hamilton, supra; Broderick v. Rosner, supra; see
also American Express Co. v. Mullins, 212 U. S. 311.
Appellee especially relies upon the Statement in the opinion of this Court in Wisconsin v. Pelican
Insurance Co., supra, at ( 127 U. S. 293):
"The essential nature and real foundation of a cause of action are not changed by recovering
judgment upon it, and the technical rules which regard the original claim as merged in the judgment,
and the judgment as implying a promise by the defendant to pay it, do not preclude a court to which
a judgment is presented for affirmative action (while it cannot go behind the judgment for the
purpose of examining into the validity of the claim) from ascertaining whether the claim is really one
of such a nature that the court is authorized to enforce it."
In that case, it was held that this Court was without original jurisdiction of a suit brought by
Wisconsin to recover upon a judgment obtained in its own courts for a penalty imposed by its
statutes for the failure of an insurance company to file an annual report. So far as the opinion can be
taken to suggest that full faith and credit is not required with respect to a judgment unless the
original cause of action would have been entitled to like credit, it is inconsistent with decisions of this
Court already noted, and was discredited in Fauntleroy v. Lum, supra, 210 U. S. 236-237,
and Kenney v. Supreme Lodge, supra, 252 U. S. 414.
The precise question now presented appears to have been decided in only a single case,New York v.
Coe Manufacturing Co., 112 N.J.Law, 536, 172 A.198. In holding in that case that a New York
judgment for taxes was entitled to full faith and credit, the New Jersey Court of Errors and Appeals
pointed out that questions of the construction and application of the New York tax laws were not the
subject of litigation in New Jersey, since
Page 296 U. S. 279
they had been conclusively determined by the New York judgment, which established liability for the
tax. [Footnote 4]
We conclude that a judgment is not to be denied full faith and credit in state and federal courts
merely because it is for taxes.
We intimate no opinion whether a suit upon a judgment for an obligation created by a penal law, in
the international sense, see Huntington v. Attrill, supra, 146 U. S. 677, is within the jurisdiction of
the federal District Courts, or whether full faith and credit must be given to such a judgment even
though a suit for the penalty before reduced to judgment could not be maintained outside of the
State where imposed. See Wisconsin v. Pelican Insurance Co., supra.
The findings of the Wisconsin court, upon which the judgment in the present case was predicated,
are appended as an exhibit to the certificate. They indicate that the judgment included interest and a
"penalty" of
Page 296 U. S. 280
2 percent for delinquency in payment, but the record does not disclose that the nominal penalty
arose under a penal law, or is of such a nature as to preclude suit to recover it outside the State of
Wisconsin. See Huntington v. Attrill, 146 U. S. 657, 146 U. S. 667et seq. The certificate and question
are framed on the assumption that it is not. The judgment is stated to be for taxes.
The question is answered "yes."
MR. JUSTICE McREYNOLDS and MR. JUSTICE BUTLER think that the question should be answered
"no."
[Footnote 1]
Horsy v. Daniel, 2 Lev. 161; 1 Marsh. 284; Prince v. Nicholson, 5 Taunt. 665; Hall v. Obder, 11 East,
118; Lyman v. Brown, 2 Curtis 559, 561; Taylor v. Bryden, 8 Johns. 173; Russell v. Smyth, 9 M. &
W. 810; Andrews v. Montgomery, 19 Johns. 162;Boston India Rubber Factory v. Hoit, 14 Vt.
92; Carter v. Crews, 2 Port. 81; Belford v. Woodward, 158 Ill. 122, 41 N.E. 1097; Cole v. Driskell, 1
Blackf. 16; see 1 Chitty on Pleading, 115; 2 Freeman on Judgments, 1515.
[Footnote 2]
Henry v. Sargeant, 13 N.H. 321; Gulledge Bros. Lumber Co. v. Wenatchee Land Co.,122 Minn. 266,
142 N.W. 305; Colorado v. Harbeck, 232 N.Y. 71, 133 N.E. 357; James & Co. v. Second Russian
Insurance Co., 239 N.Y. 248, 257, 146 N.E. 369; In re Martin's Will, 255 N.Y. 359, 362, 174 N.E.
753; Beadall v. Moore, 199 App.Div. 531, 533, 191 N.Y.S. 826; cf. Municipal Council of Sydney v.
Bull [1909] 1 K.B. 7; Queen of Holland v. Drukker [1928] Ch. 877; Attorney General of Canada v.
Schulze & Co., 9 Sc.L.T.Rep. 4.
[Footnote 3]
Moore v. Mitchell, 30 F.2d 600, 601, aff'd on another ground, 281 U. S. 281 U.S. 18;In re Anita Bliss'
Estate, 121 Misc. 773, 202 N.Y.S. 185; In re Martin's Estate, 136 Misc. 51, 240 N.Y.S. 393; Maryland
v. Turner, 75 Misc. 9, 132 N.Y.S. 173. Contra, Holshouser Co. v. Gold Hill Copper Co., 138 N.C. 248,
50 S.E. 650.
[Footnote 4]
The Restatement of Conflict of Laws of the American Law Institute, 1934, declares:
" 610. No action can be maintained on a right created by the law of a foreign state as a method of
furthering its own governmental interests."
This is stated by Comment (c) to refer to claims for taxes. It also declares:
" 443. A valid foreign judgment for the payment of money which has been obtained in favor of a
state, a state agency, or a private person, on a cause of action created by the law of the foreign
state as a method of furthering its own governmental interests will not be enforced."
Comment (b) states that the enforcement of such a judgment is not required by the full faith and
credit clause. But illustration 4 states that a state judgment against a foreign corporation for a
stipulated fee for the privilege of doing business within the State is entitled to full faith and credit.
These conclusions should be compared with New York v. Coe Manufacturing Co., supra.See Beale,
Conflict of Laws, 443.1, 610.2.






















U.S. Supreme Court
D. H. Overmyer Co., Inc. v. Frick, 405 U.S. 174 (1972)
D. H. Overmyer Co., Inc., of Ohio v. Frick
No. 69-5
Argued November 9, 1971
Decided February 24, 1972
405 U.S. 174
CERTIORARI TO THE COURT OF APPEALS
OF OHIO, LUCAS COUNTY
Syllabus
After a corporation (Overmyer) had defaulted in its payments for equipment manufactured and being
installed by respondent company (Frick), and Overmyer, under a post-contract arrangement, had
made a partial cash payment and issued an installment note for the balance, Frick completed the
work, which Overmyer accepted as satisfactory. Thereafter Overmyer again asked for relief and, with
counsel for both corporations participating in the negotiations, the first note was replaced with a
second, which contained a "cognovit" provision in conformity with Ohio law at that time whereby
Overmyer consented in advance, should it default in interest or principal payments, to Frick's
obtaining a judgment without notice or hearing, and issued certain second mortgages in Frick's favor,
Frick agreeing to release three mechanic's liens, to reduce the monthly payment amounts and
interest rate, and to extend the time for final payment. When Overmyer, claiming a contract breach,
stopped making payments on the new note, Frick, under the cognovit provision, through an attorney
unknown to, but on behalf of, Overmyer, and without personal service on or prior notice to
Overmyer, caused judgment to be entered on the note. Overmyer's motion to vacate the judgment
was overruled after a post-judgment hearing, and the judgment court's decision was affirmed on
appeal against Overmyer's contention that the cognovit procedure violated due process
requirements.
Held: Overmyer, for consideration and with full awareness of the legal consequences, waived its
rights to prejudgment notice and hearing, and, on the facts of this case, which involved contractual
arrangements between two corporations acting with advice of counsel, the procedure under the
cognovit clause (which is not unconstitutional per se) did not violate Overmyer's Fourteenth
Amendment rights. Pp. 405 U. S. 182-188.
Affirmed.
BLACKMUN, J., delivered the opinion of the Court, in which all Members joined except POWELL and
REHNQUIST, JJ., who took no part in the consideration or decision of the case. DOUGLAS, J.,
Page 405 U. S. 175
filed a concurring opinion, in which MARSHALL, J., joined, post, p. 405 U. S. 188.
MR. JUSTICE BLACKMUN delivered the opinion of the Court.
This case presents the issue of the constitutionality, under the Due Process Clause of the Fourteenth
Amendment, of the cognovit note authorized by Ohio Rev.Code 2323.13. [Footnote 1]
Page 405 U. S. 176
The cognovit is the ancient legal device by which the debtor consents in advance to the holder's
obtaining a judgment without notice or hearing, and possibly even with the appearance, on the
debtor's behalf, of an attorney designated by the holder. [Footnote 2] It was known at least as far
back as Blackstone's time. 3 W. Blackstone, Commentaries *397. [Footnote 3] In a case applying
Ohio law, it was
Page 405 U. S. 177
said that the purpose of the cognovit is "to permit the note holder to obtain judgment without a trial
of possible defenses which the signers of the notes might assert."Hadden v. Rumsey Products,
Inc., 196 F.2d 92, 96 (CA2 1952). And, long ago, the cognovit method was described by the Chief
Justice of New Jersey as "the loosest way of binding a man's property that ever was devised in any
civilized country." Alderman v. Diament, 7 N.J.L. 197, 198 (1824). Mr. Dickens noted it with obvious
disfavor. Pickwick Papers, c. 47. The cognovit has been the subject of comment, much of it critical.
[Footnote 4]
Statutory treatment varies widely. Some States specifically authorize the cognovit. [Footnote 5]
Others disallow it. [Footnote 6]
Page 405 U. S. 178
Some go so far as to make its employment a misdemeanor. [Footnote 7] The majority, however,
regulate its use, and many prohibit the device in small loans and consumer sales. [Footnote 8]
In Ohio, the cognovit has long been recognized by both statute and court decision. 1 Chase's
Statutes, c. 243, 34 (1810); Osborn v. Hawley, 19 Ohio 130 (1850);Marsden v. Soper, 11 Ohio St.
503 (1860); Watson v. Paine, 25 Ohio St. 340 (1874);Clements v. Hull, 35 Ohio St. 141 (1878). The
State's courts, however, give the instrument a strict and limited construction. See Peoples Banking
Co. v. Brumfield Hay & Grain Co., 172 Ohio St. 545, 548, 179 N.E.2d 53, 55 (1961).
This Court apparently has decided only two cases concerning cognovit notes, and both have come
here in a full faith and credit context. National Exchange Bank v. Wiley, 195 U. S.
257 (1904); Grover & Baker Sewing Machine Co. v. Radcliffe, 137 U. S. 287(1890). See American
Surety Co. v. Baldwin, 287 U. S. 156 (1932).
I
The argument that a provision of this kind is offensive to current notions of Fourteenth Amendment
due process is, at first glance, an appealing one. However, here, as in nearly every case, facts are
important. We state them chronologically:
1. Petitioners D. H. Overmyer Co., Inc., of Ohio, and D. H. Overmyer Co., Inc., of Kentucky, are
segments of a warehousing enterprise that counsel at one point in
Page 405 U. S. 179
the litigation described as having built "in three years . . . 180 warehouses in thirty states." The
corporate structure is complex. Because the identity and individuality of the respective corporate
entities are not relevant here, we refer to the enterprise in the aggregate as "Overmyer."
2. In 1966, a corporation, which then was or at a later date became an Overmyer affiliate, executed
a contract with the respondent Frick Co. for the manufacture and installation by Frick, at a cost of
$223,000, of an automatic refrigeration system in a warehouse under construction in Toledo, Ohio.
3. Overmyer fell behind in the progress payments due from it under the contract. By the end of
September, 1966, approximately $120,000 was overdue. Because of this delinquency, Frick stopped
its work on October 10. Frick indicated to Overmyer, however, by letter on that date, its willingness
to accept an offer from Overmyer to pay $35,000 in cash "provided the balance can be evidenced by
interest-bearing judgment notes."
4. On November 3, Frick filed three mechanic's liens against the Toledo property for a total of
$194,031, the amount of the contract price allegedly unpaid at that time.
5. The parties continued to negotiate. In January, 1967, Frick, in accommodation, agreed to
complete the work upon an immediate cash payment of 10% ($19,403.10) and payment of the
balance of $174,627.90 in 12 equal monthly installments with 6 1/2% interest per annum. On
February 17, Overmyer made the 10% payment and executed an installment note calling for 12
monthly payments of $15,498.23 each beginning March 1, 1967. This note contained no confession
of judgment provision. It recited that it did not operate as a waiver of the mechanic's liens, but it
also stated that Frick would forgo enforcement of those lien rights so long as there was no default
under the note.
Page 405 U. S. 180
6. Frick resumed its work, completed it, and sent Overmyer a notice of completion. On March 17,
Overmyer's vice-president acknowledged in writing that the system had been "completed in a
satisfactory manner," and that it was "accepted as per the contract conditions."
7. Subsequently, Overmyer requested additional time to make the installment payments. It also
asked that Frick release the mechanic's liens against the Toledo property. Negotiations between the
parties at that time finally resulted in an agreement in June, 1967, that (a) Overmyer would execute
a new note for the then-outstanding balance of $130,997 and calling for payment of that amount in
21 equal monthly installments of $6,891.85 each, beginning June 1, 1967, and ending in February,
1969, two years after Frick's completion of the work, as contrasted with the $15,498.23 monthly
installments ending February, 1968, specified by the first note; (b) the interest rate would be 6%,
rather than 6 1/2%; (c) Frick would release the three mechanic's liens; (d) Overmyer would execute
second mortgages, with Frick as mortgagee, on property in Tampa and Louisville; and (e)
Overmyer's new note would contain a confession of judgment clause. The new note, signed in Ohio
by the two petitioners here, was delivered to Frick some months later by letter dated October 2,
1967, accompanied by five checks for the June through October payments. This letter was from
Overmyer's general counsel to Frick's counsel. The second mortgages were executed and recorded,
and the mechanic's liens were released. The note contained the following judgment clause:
"The undersigned hereby authorize any attorney designated by the Holder hereof to appear in any
court of record in the State of Ohio, and waive this issuance and service of process, and confess a
judgment
Page 405 U. S. 181
against the undersigned in favor of the Holder of this Note, for the principal of this Note plus interest
if the undersigned defaults in any payment of principal and interest and if said default shall continue
for the period of fifteen(15) days."
8. On June 1, 1968, Overmyer ceased making the monthly payments under the new note and,
asserting a breach by Frick of the original contract, proceeded to institute a diversity action against
Frick in the United States District Court for the Southern District of New York. Overmyer sought
damages in excess of $170,000 and a stay of all proceedings by Frick under the note. On July 5,
Judge Frankel vacated an ex parte stay he had theretofore granted. On August 7, Judge Mansfield
denied Overmyer's motion for reinstatement of the stay. He concluded,
"Plaintiff has failed to show any likelihood that it will prevail upon the merits. On the contrary,
extensive documentary evidence furnished by defendant indicates that the plaintiff's action lacks
merit."
9. On July 12, without prior notice to Overmyer, Frick caused judgment to be entered against
Overmyer (specifically against the two petitioners here) in the Common Pleas Court of Lucas County.
Ohio. The judgment amount was the balance then remaining on the note, namely, $62,370, plus
interest from May 1, 1968, and costs. This judgment was effected through the appearance of an Ohio
attorney on behalf of the defendants (petitioners here) in that Ohio action. His appearance was "by
virtue of the warrant of attorney" in the second note. The lawyer waived the issuance and service of
process and confessed the judgment. This attorney was not known to Overmyer, had not been
retained by Overmyer, and had not communicated with the petitioners prior to the entry of the
judgment.
Page 405 U. S. 182
10. As required by Ohio Rev.Code 2323.13(C), the clerk of the state court, on July 16, mailed
notices of the entry of the judgment on the cognovit note to Overmyer at addresses in New York,
Ohio, and Kentucky.
11. On July 22, Overmyer, by counsel, filed in the Ohio court motions to stay execution and for a new
trial. The latter motion referred to "[i]rregularity in the proceedings of the prevailing party and of the
court. . . ." On August 6, Overmyer filed a motion to vacate judgment and tendered an answer and
counterclaim alleging breach of contract by Frick, and damages. A hearing was held. Both sides
submitted affidavits. Those submitted by Overmyer asserted lack of notice before judgment and
alleged a breach of contract by Frick. A copy of Judge Mansfield's findings, conclusions, and opinion
was placed in the record. On November 16, the court overruled each motion.
12. Overmyer appealed to the Court of Appeals for Lucas County, Ohio, specifically asserting
deprivation of due process violative of the Ohio and Federal Constitutions. That court affirmed with a
brief journal entry.
13. The Supreme Court of Ohio "sua sponte dismisse[d] the appeal for the reason that no substantial
constitutional question exists herein."
We granted certiorari. 401 U.S. 992 (1971).
II
This chronology clearly reveals that Overmyer's situation, of which it now complains, is one brought
about largely by its own misfortune and failure or inability to pay. The initial agreement between
Overmyer and Frick was a routine construction subcontract. Frick agreed to do the work and
Overmyer agreed to pay a designated amount for that work by progress payments at specified times.
This contract was not accompanied by any promissory note.
Page 405 U. S. 183
Overmyer then became delinquent in its payments. Frick naturally refrained from further work. This
impasse was resolved by the February, 1967, post-contract arrangement, pursuant to which
Overmyer made an immediate partial payment in cash and issued its installment note for the
balance. Although Frick had suggested a confession of judgment clause, the note, as executed and
delivered, contained no provision of that kind.
Frick completed its work, and Overmyer accepted the work as satisfactory. Thereafter, Overmyer
again asked for relief. At this time, counsel for each side participated in the negotiations. The first
note was replaced by the second. The latter contained the confession of judgment provision
Overmyer now finds so offensive. However, in exchange for that provision and for its execution of the
second mortgages, Overmyer received benefit and consideration in the form of (a) Frick's release of
the three mechanic's liens, (b) reduction in the amount of the monthly payment, (c) further time in
which the total amount was to be paid, and (d) reduction of a half point in the interest rate.
Were we concerned here only with the validity of the June, 1967, agreement under principles of
contract law, that issue would be readily resolved. Obviously and undeniably, Overmyer's execution
and delivery of the second note were for an adequate consideration and were the product of
negotiations carried on by corporate parties with the advice of competent counsel.
More than mere contract law, however, is involved here.
III
Petitioner Overmyer first asserts that the Ohio judgment is invalid because there was no personal
service upon it, no voluntary appearance by it in Ohio, and no genuine appearance by an attorney on
its behalf. Thus,
Page 405 U. S. 184
it is said, there was no personal jurisdiction over Overmyer in the Ohio proceeding. The petitioner
invokes Pennoyer v. Neff, 95 U. S. 714, 95 U. S. 732 (1878), and other cases decided here and by
the Ohio courts enunciating accepted and long-established principles for in
personam jurisdiction. McDonald v. Mabee, 243 U. S. 90, 243 U. S. 91(1917); Vanderbilt v.
Vanderbilt, 354 U. S. 416, 354 U. S. 418 (1957); Sears v. Weimer, 143 Ohio St. 312, 55 N.E.2d 413
(1944); Railroad Co. v. Goodman, 57 Ohio St. 641, 50 N.E. 1132 (1897); Cleveland Leader Printing
Co. v. Green, 52 Ohio St. 487, 491, 40 N.E. 201, 203 (1895).
It is further said that whether a defendant's appearance is voluntary is to be determined at the time
of the court proceeding, not at a much earlier date when an agreement was signed; that an
unauthorized appearance by an attorney on a defendant's behalf cannot confer jurisdiction; and that
the lawyer who appeared in Ohio was not Overmyer's attorney in any sense of the word, but was
only an agent of Frick.
The argument then proceeds to constitutional grounds. It is said that due process requires
reasonable notice and an opportunity to be heard, citing Boddie v. Connecticut, 401 U. S. 371, 401
U. S. 378 (1971). It is acknowledged, however, that the question here is in a context of "contract
waiver, before suit has been filed, before any dispute has arisen," and
"whereby a party gives up in advance his constitutional right to defend any suit by the other, to
notice and an opportunity to be heard, no matter what defenses he may have, and to be represented
by counsel of his own choice. [Footnote 9]"
In other words, Overmyer's position here specifically is that it is "unconstitutional to waive in
advance the right to present a defense in an action on the note." [Footnote 10] It is conceded that, in
Ohio, a court has the
Page 405 U. S. 185
power to open the judgment upon a proper showing. Bellows v. Bowlus, 83 Ohio App. 90, 93, 82
N.E.2d 429, 432 (1948). But it is claimed that such a move is discretionary, and ordinarily will not be
disturbed on appeal, and that it may not prevent execution before the debtor has notice, Griffin v.
Griffin, 327 U. S. 220, 327 U. S. 231-232 (1946). Goldberg v. Kelly, 397 U. S. 254 (1970),
and Sniadach v. Family Finance Corp., 395 U. S. 337 (1969), are cited.
The due process rights to notice and hearing prior to a civil judgment are subject to waiver.
In National Equipment Rental, Ltd. . v. Szukhent, 375 U. S. 311 (1964), the Court observed:
"[I]t is settled . . . that parties to a contract may agree in advance to submit to the jurisdiction of a
given court, to permit notice to be served by the opposing party, or even to waive notice altogether."
Id. at 375 U. S. 315-316. And in Boddie v. Connecticut, supra, the Court acknowledged that "the
hearing required by due process is subject to waiver." 401 U.S. at 401 U. S. 378-379.
This, of course, parallels the recognition of waiver in the criminal context where personal liberty,
rather than a property right, is involved. Illinois v. Allen, 397 U. S. 337, 397 U. S. 342-343 (1970)
(right to be present at trial); Miranda v. Arizona, 384 U. S. 436, 384 U. S. 444 (1966) (rights to
counsel and against compulsory self-incrimination); Fay v. Noia, .372 U.S. 391, 372 U. S. 439 (1963)
(habeas corpus); Rogers v. United States,340 U. S. 367, 340 U. S. 371 (1951) (right against
compulsory self-incrimination).
Even if, for present purposes, we assume that the standard for waiver in a corporate property right
case of this kind is the same standard applicable to waiver in a criminal proceeding, that is, that it be
voluntary, knowing, and intelligently made, Brady v. United States, 397
Page 405 U. S. 186
U.S. 742, 397 U. S. 748 (1970); Miranda v. Arizona, 384 U.S. at 384 U. S. 444, or "an intentional
relinquishment or abandonment of a known right or privilege," Johnson v. Zerbst, 304 U. S. 458, 304
U. S. 464 (1938); Fay v. Noia, 372 U.S. at 372 U. S. 439, and even if, as the Court has said in the
civil area, "[w]e do not presume acquiescence in the loss of fundamental rights," Ohio Bell Tel. Co. v.
Public Utilities Comm'n, 301 U. S. 292, 301 U. S. 307 (1937), that standard was fully satisfied here.
Overmyer is a corporation. Its corporate structure is complicated. Its activities are widespread. As its
counsel in the Ohio post-judgment proceeding stated, it has built many warehouses in many States,
and has been party to "tens of thousands of contracts with many contractors." This is not a case of
unequal bargaining power or overreaching. The Overmyer-Frick agreement, from the start, was not a
contract of adhesion. There was no refusal on Frick's part to deal with Overmyer unless Overmyer
agreed to a cognovit. The initial contract between the two corporations contained no confession of
judgment clause. When, later, the first installment note from Overmyer came into being, it, too,
contained no provision of that kind. It was only after Frick's work was completed and accepted by
Overmyer, and when Overmyer again became delinquent in its payments on the matured claim and
asked for further relief, that the second note containing the clause was executed.
Overmyer does not contend here that it or its counsel was not aware of the significance of the note
and of the cognovit provision. Indeed, it could not do so in the light of the facts. Frick had suggested
the provision in October, 1966, but the first note, readjusting the progress payments, was executed
without it. It appeared in the second note delivered by Overmyer's own counsel in return for
substantial benefits and consideration to Overmyer. Particularly important, it would seem, was the
Page 405 U. S. 187
release of Frick's mechanic's liens, but there were, in addition, the monetary relief as to amount,
time, and interest rate.
Overmyer may not have been able to predict with accuracy just how or when Frick would proceed
under the confession clause if further default by Overmyer occurred, as it did, but this inability does
not, in itself, militate against effective waiver. See Brady v. United States, 397 U.S. at 397 U. S.
757; McMann v. Richardson, 397 U. S. 759, 397 U. S. 772-773 (1970).
We therefore hold that Overmyer, in its execution and delivery to Frick of the second installment note
containing the cognovit provision, voluntarily, intelligently, and knowingly waived the rights it
otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the
legal consequences.
Insurance Co. v. Morse, 20 Wall. 445 (1874), affords no comfort to the petitioners. That case
concerned the constitutional validity of a state statute that required a foreign insurance company,
desiring to qualify in the State, to agree not to remove any suit against it to a federal court. The
Court quite naturally struck down the statute, for it thwarted the authority vested by Congress in the
federal courts and violated the Privileges and Immunities Clause.
Myers v. Jenkins, 63 Ohio St. 101, 120, 57 N.E. 1089, 1093 (1900), involving an insurance contract
that called for adjustment of claims through the company alone and without resort to the courts, is
similarly unhelpful.
IV
Some concluding comments are in order:
1. Our holding necessarily means that a cognovit clause is not, per se, violative of Fourteenth
Amendment due process. Overmyer could prevail here only if the clause were constitutionally invalid.
The facts of this case, as
Page 405 U. S. 188
we observed above, are important, and those facts amply demonstrate that a cognovit provision may
well serve a proper and useful purpose in the commercial world, and at the same time not be
vulnerable to constitutional attack.
2. Our holding, of course, is not controlling precedent for other facts of other cases. For example,
where the contract is one of adhesion, where there is great disparity in bargaining power, and where
the debtor receives nothing for the cognovit provision, other legal consequences may ensue.
3. Overmyer, merely because of its execution of the cognovit note, is not rendered defenseless. It
concedes that, in Ohio, the judgment court may vacate its judgment upon a showing of a valid
defense, and, indeed, Overmyer had a post-judgment hearing in the Ohio court. If there were
defenses such as prior payment or mistaken identity, those defenses could be asserted. And there is
nothing we see that prevented Overmyer from pursuing its breach of contract claim against Frick in a
proper forum. Here, again, that is precisely what Overmyer has attempted to do, thus far
unsuccessfully, in the Southern District of New York.
The judgment is
Affirmed.
MR. JUSTICE POWELL and MR. JUSTICE REHNQUIST took no part in the consideration or decision of
this case.
[Footnote 1]
When the judgment challenged here was entered in 1968, the statute read:
"Sec. 2323.13. (A) An attorney who confesses judgment in a case, at the time of making such
confession, must produce the warrant of attorney for making it to the court before which he makes
the confession, which shall be in the county where the maker or any one of several makers resides or
in the county where the maker or any one of several makers signed the warrant of attorney
authorizing confession of judgment, any agreement to the contrary notwithstanding; and the original
or a copy of the warrant shall be filed with the clerk."
"(B) The attorney who represents the judgment creditor shall include in the petition a statement
setting forth to the best of his knowledge the last known address of the defendant."
"(C) Immediately upon entering any such judgment the court shall notify the defendant of the entry
of the judgment by personal service or by registered or certified mail mailed to him at the address
set forth in the petition."
Senate Bill No. 85, 133 Ohio Laws 196-198 (1969-1970), effective Sept. 16, 1970, amended
paragraphs (A) and (C), in ways not pertinent here, and added paragraph (D):
"(D) A warrant of attorney to confess judgment contained in any promissory note, bond, security
agreement, lease, contract, or other evidence of indebtedness executed on or after January l, 1971,
is invalid and the courts are without authority to render a judgment based upon such a warrant
unless there appears on the instrument evidencing the indebtedness, directly above or below the
signature of each maker, or other person authorizing the confession, in such type size or distinctive
marking that it appears more clearly and conspicuously than anything else on the document: "
" Warning -- By signing this paper you give up your right to notice and court trial. If you do not pay
on time a court judgment may be taken against you without your prior knowledge and the powers of
a court can be used to collect from you or your employer regardless of any claims you may have
against the creditor whether for returned goods, faulty goods, failure on his part to comply with the
agreement, or any other cause."
[Footnote 2]
The Iowa Supreme Court succinctly has defined a cognovit as "the written authority of the debtor and
his direction . . . to enter judgment against him as stated therein." Blott v. Blott, 227 Iowa 1108,
1111-1112, 290 N.W. 74, 76 (1940).
In Jones v. John Hancock Mutual Life Insurance Co., 289 F.Supp. 930, 935 (WD
Mich.1968), aff'd, 416 F.2d 829 (CA6 1969), Judge Fox, in applying Ohio law, pertinently observed:
"A cognovit note is not an ordinary note. It is, indeed, an extraordinary note which authorizes an
attorney to confess judgment against the person or persons signing it. It is written authority of a
debtor and a direction by him for the entry of a judgment against him if the obligation set forth in the
note is not paid when due. Such a judgment may be taken by any person or any company holding
the note, and it cuts off every defense which the maker of the note may otherwise have. It likewise
cuts off all rights of appeal from any judgment taken on it."
[Footnote 3]
Historical references appear in General Contract Purchase Corp. v. Max Keil Real Estate Co., 35 Del.
531, 532-533, 170 A. 797, 798 (1933), and First Nat. Bk. v. White, 220 Mo. 717, 728-732, 120 S.W.
36, 39-40 (1909).
[Footnote 4]
Recent Cases, Confession of Judgments -- Refusal of New York State to Enforce Pennsylvania
Cognovit Judgments, 74 Dick.L.Rev. 750 (1970); Note, Enforcement of Sister State's Cognovit
Judgments, 16 Wayne L.Rev. 1181 (1970); H. Goodrich, Conflict of Laws 73, p. 122 (4th ed.1964);
Hopson, Cognovit Judgments: An Ignored Problem of Due Process and Full Faith and Credit, 29
U.Chi.L.Rev. 111 (1961); Hunter, The Warrant of Attorney to Confess Judgment, 8 Ohio St.L.J. 1
(1941); Note, A Clash in Ohio?: Cognovit Notes and the Business Ethic of the UCC, 35 U.Cin.L.Rev.
470 (1966); Comment, The Effect of Full Faith and Credit on Cognovit Judgments; 42 U.Colo.L.Rev.
173 (1970); Comment, Confessions of Judgment: The Due Process Defects, 43 Temp.L.Q. 279
(1970); Comment, Cognovit Judgments and the Full Faith and Credit Clause, 50 B.U.L.Rev. 330
(1970); Comment, Cognovit Judgments: Some Constitutional Considerations, 70 Col.L.Rev. 1118
(1970); Note, Confessions of Judgment, 102 U.Pa.L.Rev. 524 (1954); Note, Foreign Courts May Deny
Full Faith and Credit to Cognovit Judgments and Must Do So When Entered Pursuant to an Unlimited
Warrant of Attorney, 56 Va.L.Rev. 554 (1970); Note, Should a Cognovit Judgment Validly Entered in
One State be Recognized by a Sister State?, 30 Md.L.Rev. 350 (1970).
[Footnote 5]
Ill.L.Rev.Stat., c. 110, 50; Mo.Rev.Stat. 511.100; Ohio Rev.Code 2323.13; Pa.Stat.Ann., Tit.
12, 738 and 739 and Pa.Rules of Civil Procedure 2950-2976; S.D.Comp.Laws 21-26-1.
[Footnote 6]
See, for example, Ala.Code, Tit. 20, 16, and Tit. 62, 248; Ariz.Rev.Stat.Ann. 6-629 and 44-
143; Mass.Gen.Laws Ann., c. 231, 13A.
[Footnote 7]
Ind.Ann.Stat. 2-2904 and 2-2906; N.M.Stat.Ann. 219-16 and 21-9-18; R.I.Gen.Laws Ann.
19-25-24 and 19-25-36.
[Footnote 8]
See, for example, Conn.Gen.Stat.Rev. 42-88 and 36-236; Mich.Comp.Laws 600.2906 and
493.12, Mich.Stat.Ann. 27A.2906 and 23.667(12); Minn.Stat. 548.22, 168.71, and 56.12;
N.J.Stat.Ann. 2A: 16-9.
[Footnote 9]
Brief for Petitioners 16.
[Footnote 10]
Tr. of Oral Arg. 17.
MR. JUSTICE DOUGLAS, whom MR. JUSTICE MARSHALL joins, concurring.
I agree that the heavy burden against the waiver of constitutional rights, which applies even in civil
matters, Ohio Bell Tel. Co. v. Public Utilities Comm'n, 301 U. S. 292, 301 U. S. 307 (1937); Aetna
Ins. Co. v. Kennedy, 301 U.S.
Page 405 U. S. 189
389, 301 U. S. 393 (1937), has been effectively rebutted by the evidence presented in this record.
Whatever procedural hardship the Ohio confession of judgment scheme worked upon the petitioners
was voluntarily and understandingly self-inflicted through the arm's-length bargaining of these
corporate parties.
I add a word concerning the contention that opening of confessed judgments in Ohio is merely
discretionary, and requires a higher burden of persuasion than is ordinarily imposed upon
defendants. As I read the Ohio law of cognovit notes, trial judges have traditionally enjoyed wide
discretion in vacating confessed judgments. 32 Ohio Jur.2d Judgments 558 (1958). In Livingstone
v. Rebman, 169 Ohio St. 109, 158 N.E.2d 366 (1959), however, the Ohio Supreme Court imposed
certain safeguards on the exercise of a judge's discretion in opening confessed judgments. That case
also involved a petition to open a confessed judgment where, as here, the debtor alleged the
affirmative defense of failure of consideration. Using the "preponderance of the evidence" test, the
trial court had found insufficient support for the debtor's claim, and had dismissed the motion to
open. On appeal, however, the Ohio Supreme Court reversed on the degree of proof needed to
vacate a confessed judgment. Said the court:
"[I]f there is credible evidence supporting the defense . . . from which reasonable minds may reach
different conclusions, it is then the duty of the court to suspend the judgment and permit the issue
raised by the pleadings to be tried by a jury or, if a jury is waived, by the court."
Id. at 121-122, 158 N.E.2d at 375. (Emphasis supplied.) Thus, it would appear that the Ohio
confessed judgment may be opened if the debtor poses a jury question, that
Page 405 U. S. 190
is, if his evidence would have been sufficient to prevent a directed verdict against him. That standard
is a minimal obstacle. *
The fact that a trial judge is duty-bound to vacate judgments obtained through cognovit clauses
where debtors present jury questions is a complete answer to the contention that unbridled
discretion governs the disposition of petitions to vacate. See also Goodyear v. Stone, 169 Ohio St.
124, 158 N.E.2d 376 (1959); McMillen v. Willard Garage Inc., 14 Ohio App.2d 112, 115, 237 N.E.2d
155, 158 (1968); Central National Bank of Cleveland v. Standard Loan & Finance, 5 Ohio App.2d
101, 104, 195 N.E.2d 597, 600 (1964).
The record shows that the petitioners were given every opportunity after judgment to explain their
affirmative defense to the state courts, and that the defense was rejected solely because the
evidence adduced in support thereof was too thin to warrant further presentation to a jury.
* Thus, the Ohio system places no undue burden of proof upon the debtor desiring to open a
confessed judgment, in marked contrast to the Pennsylvania procedure involved in Swarb v. Lennox,
post, p. 405 U. S. 191. In Pennsylvania, in order to vacate such a judgment, a borrower must prove
his defense by the preponderance of the evidence, rather than by merely mustering enough evidence
to present a jury question. Once the judgment is vacated, moreover, he must again prevail by that
standard at a subsequent trial. In effect, the Pennsylvania confessed debtor is required to win two
consecutive trials, not simply one. Given the proclivities of reasonable men to differ over the
probative value of jury questions, the Pennsylvania requirement of twice sustaining the
preponderance of the evidence imposes a stiffer burden of persuasion.