Argued and Submitted May 9, 2012—Pasadena, California
Appeal from the United States District Court for the Central District of California Otis D. Wright, District Judge, Presiding D.C. No. 2:10-cv-06400-ODW-PJW
Steven J. Renick (argued), Eugene J. Egan, Paul Hanna, and Ladell Hulet Muhlestein, Manning & Kass Ellrod, Ramirez, Trester, Los Angeles, California, for Defendants-Appellants.
Robert W. Cohen (argued) and Mariko Taenaka, Law Offices of Robert W. Cohen, Los Angeles, California, for Plaintiff-Appellee.
Before: Harry Pregerson, Susan P. Graber, and Marsha S. Berzon, Circuit Judges.
Diversity/California's Uniform Foreign-Country Money Judgments Recognition Act
The panel affirmed the district court's judgment in favor of plaintiff awarding her, pursuant to California's Uniform Foreign-Country Money Judgments Recognition Act, Cal. Civ. Proc. Code §§ 1713–1724, monetary relief ordered by the courts of Japan.
Plaintiff sued Yuko Yasuma and the Saints of Glory Church (collectively, "the Church") in Japan, alleging that they had tortiously induced her to transfer nearly all of her assets to the Church. The Japanese courts awarded plaintiff a $1.2 million tort judgment. Plaintiff sought enforcement of the judgment in the United States District Court for the Central District of California. The Church asserted that the district court was both constitutionally and statutorily required to refuse recognition of the Japanese judgment because (1) the judgment burdened free exercise of religion in violation of the Religion Clauses; and (2) the judgment was not entitled to recognition or enforcement under the Uniform Act, because it was "repugnant to the public policy" embodied in the Religion Clauses.
The panel held: first, the district court's enforcement of this foreign-country money judgment did not constitute domestic state action triggering constitutional scrutiny; and, second, neither the judgment at issue in this particular case nor the cause of action on which it was based was so repugnant to public policy as to qualify for non-enforcement under the Uniform Act.
BERZON, Circuit Judge.
Our case involves novel issues concerning the enforcement of foreign-country money judgments that assertedly implicate the defendant's freedom of religion. Naoko Ohno sued Yuko Yasuma and the Saints of Glory Church (collectively, "the Church") in Japan, alleging that they had tortiously induced her to transfer nearly all of her assets to the Church. The Japanese courts awarded Ohno a $1.2 million tort judgment.
The Church contends that the judgment imposes liability for its religious teachings, in violation of its constitutional right to free exercise of religion. The Church makes two principal arguments on appeal: (1) that the district court's recognition and enforcement of the Japanese judgment is unconstitutional as a direct violation, by the court, of the Free Exercise Clause in the U.S. Constitution and the parallel provisions of the California Constitution, U.S. Const. amend. I; Cal. Const. art. I, § 4; and (2) that the Japanese judgment is not entitled to recognition or enforcement under California's Uniform Foreign-Country Money Judgments Recognition Act, Cal. Civ. Proc. Code §§ 1713–1724 ("Uniform Act"), because it is "repugnant to the public policy" embodied in the Religion Clauses.
We hold, first, that the district court's recognition and enforcement of the Japanese money judgment does not constitute "state action" triggering direct constitutional scrutiny and, second, that neither the Japanese judgment nor the cause of action on which it was based rises to the level of repugnance to the public policy of California or of the United States that would justify a refusal to enforce the judgment under the Uniform Act. Accordingly, we affirm the district court's judgment in Ohno's favor.
A. Facts and Procedural History
Ohno, a citizen of Japan, sued the Church in Tokyo District Court. She received a favorable judgment, upheld on appeal to Tokyo's High Court. Ohno then initiated an action for recognition and enforcement of the judgment in the United States District Court for the Central District of California, as Yasuma is a resident of Los Angeles and the Saints of Glory Church ("Saints of Glory") is a registered California religious corporation.
i. The Japanese Litigation
The following facts are summarized from the findings of the Tokyo trial court, as set forth in its judgment of August 28, 2009:
Ohno joined Saints of Glory in 1994 while working in London. Three years later, Ohno began regularly participating in prayer meetings, bible study, and worship at a branch of Saints of Glory in Tokyo. Part of the Church's program in Tokyo was playing for worshipers there tape recordings of sermons given every Sunday in California by Saints of Glory's principal pastor, Yasuma. Ohno listened to the tapes while attending church in Tokyo. Saints of Glory preached obedience to Jesus Christ and to Yasuma. Members were required to tithe one-tenth of their incomes, which Ohno did.
Ohno was obedient to Yasuma's advice and teachings in various areas of her life. For example, when Ohno learned that her father was terminally ill, Yasuma "stated something negative about [Ohno] going to see her father, " so Ohno did not return home to see him before he died and did not attend his funeral. Later, after Ohno informed Yasuma that she had lost her job, the Church convinced Ohno to live with another "church member in the same situation, " in what we infer from the record was a Church-owned or Church-affiliated residence in Tokyo. Also, after Yasuma repeatedly made negative statements about medications, Ohno ceased taking the anti-depressants and tranquilizers she had been prescribed when she was diagnosed with depression years earlier. At Yasuma's instruction, Ohno purchased Saints of Glory videos and books, which she began watching and reading repeatedly. Finally, the Church told Ohno not to purchase her own apartment when she tried to do so, and admonished her for negotiating a reduction in her rent.
Following all these events, and while suffering from both depression and general ataxia (a lack of muscle coordination due to damage to the nervous system), Ohno "became obsessed with a sense of guilt that she had not obeyed Jesus Christ." After Yasuma encouraged Ohno to make "givings" in late 2001, Ohno gave Yasuma and another church minister each 800, 000 Yen. Then, on January 2, 2002, Yasuma "took several hours to talk to [Ohno], in a talk referred to as '"Warnings" [or "Reprimands"], pressuring her to tithe'" (alteration in original). After the talk, Ohno felt "overcome with terror and compelled to tithe." Over the span of two months, Ohno closed her savings account and transferred 68, 678, 424 Yen to Saints of Glory, virtually all of Ohno's assets at that time.
A year after these transfers ("the Transfers"), Ohno was told she would be "driven out" of Saints of Glory because she "had not been obedient to Jesus Christ." The following May, the Church ordered her to leave the apartment where she was living. On the advice of her psychiatrist, Ohno then resumed taking medications for her depression. She also began participating in religious services at a different church.
Ohno eventually came to believe that she had been defrauded by the Church. She filed a complaint in 2007 in Tokyo District Court, asserting tort and unjust enrichment claims against Yasuma, Saints of Glory, and two other individual defendants not parties to the present enforcement action. The dispute centered on the circumstances in which Ohno had transferred the approximately $500, 000 to Saints of Glory between January and March 2002, leaving her essentially destitute. Ohno contended that the Transfers took place as a result of the Church's "fraudulent and threatening statements" to her while she was in a vulnerable mental and physical state. The Church argued that the contested Transfers were faith-based donations, and that Ohno sought return of the money because she no longer believed in the Church's teachings.
The litigation in Japan lasted over two years and involved several hearings, various filings, and a full merits trial, in which Yasuma and Saints of Glory appeared through counsel. The Tokyo District Court's judgment held Yasuma and Saints of Glory liable under Japanese Civil Code articles 709, 719, and 715, for illegally inducing Ohno to tithe "in such a way as to incite anxiety and cause terror to the Plaintiff who was already in [a] state of depression and was suffering from general ataxia." The Tokyo trial court concluded that Ohno's decision to give the Transfers "under such psychological condition" could not be said to have been made of her own free will, and awarded damages, including restitution of the 68, 678, 424 Yen Ohno had given to Saints of Glory in the disputed Transfers; 3, 000, 000 Yen for pain and suffering; and 7, 200, 000 Yen for attorney's fees. The total award was 78, 878, 424 Yen ($843, 235.66).
As to the grounds for the judgment, article 709 of the Japanese Civil Code, entitled "Damages in Torts, " provides: "A person who has intentionally or negligently infringe[d] any right of others, or legally protected interest of others, shall be liable to compensate any damages resulting in consequence." Minpô [Civ. C.] art. 709. Article 719 provides for joint and several liability of joint tortfeasors, Minpô [Civ. C.] art. 719, and article 715 provides for an employer's liability for the tortious actions of its employees, Minpô [Civ. C.] art. 715. The Japanese trial court did not specify precisely which right or legally protected interest the Church infringed; it stated only that the solicitation of donations from Ohno was illegal because it exceeded "the scope of what is socially appropriate."
Defendants appealed the judgment to the Tokyo High Court, which affirmed the lower court decision on all counts and dismissed the appeal.
ii. The Enforcement Action in Federal Court
Ohno next brought an international diversity action in the United States District Court for the Central District of California, seeking enforcement of the Japanese judgment against Yasuma and Saints of Glory under California's Uniform Act, Cal. Civ. Proc. Code §§ 1713–1724. In opposition to Ohno's motion for summary judgment, the Church argued that the Religion Clauses bar recovery in tort for the consequences of protected religious speech, including threats of divine retribution, and prohibit a court from judging the validity of the Church's religious teachings. The Japanese judgment, the Church argued, was inconsistent with these principles. The Church further asserted that the Japanese judgment is not entitled to recognition, both because it is "repugnant" to public policy embodied in the Religion Clauses and because it "was obtained through procedures not compatible with the requirements of due process of law." In the alternative, the Church requested that the motion for summary judgment be continued to permit additional discovery relating to the Japanese proceedings.
The district court granted summary judgment in favor of Ohno and entered judgment jointly and severally against Yasuma and Saints of Glory, holding the Japanese judgment not repugnant to the Religion Clauses. It also denied the Church's request for a continuance under Federal Rule of Civil Procedure 56(f),  citing the failure to identify with any specificity the facts sought through additional discovery and why the evidence to be obtained would preclude summary judgment. This timely appeal followed.
On appeal, the Church contends that the district court was both constitutionally and statutorily required to refuse recognition of the Japanese judgment because the judgment burdens free exercise of religion in violation of the Religion Clauses. As to the constitutional issue, the Church maintains that enforcement in the United States of a foreign-country judgment that would be violative of the Religion Clauses if issued by a domestic court is itself an exercise of state power, directly subject to constitutional constraints. Statutorily, the Church argues that a foreign-country judgment that impinges on American constitutional rights is necessarily repugnant to public policy, making its recognition under California's Uniform Act an abuse of discretion.
B. The Uniform Foreign-Country Money Judgments Recognition Act
In international diversity cases such as this one, "enforceability of judgments of courts of other countries is generally governed by the law of the state in which enforcement is sought." Yahoo! Inc. v. La Ligue Contrele Racismeet L'Antisemitisme, 433 F.3d 1199, 1212 (9th Cir. 2006) (en banc) (per curiam) ("Yahoo! II") (plurality opinion) (citing Bank of Montreal v. Kough, 612 F.2d 467, 469–70 (9th Cir. 1980)); see also id. at 1239–41 (Fisher, J., concurring in part and dissenting in part). In California, the Uniform Act regulates enforcement of the Japanese damages award at issue here. See Cal. Civ. Proc. Code §§ 1713–1724.
The present California foreign judgment enforcement statute was enacted in 2007 to replace the Uniform Foreign Money Judgments Recognition Act, formerly codified at California Civil Procedure Code sections 1713–1713.8, and applies to all recognition and enforcement actions commenced on or after January 1, 2008. See § 1724(a); see also Manco Contracting Co. (W.W.L.) v. Bezdikian, 45 Cal.4th 192, 204 (2008). California's Act was modeled on the 2005 Uniform Foreign-Country Money Judgments Recognition Act, 13 U.L.A. pt. II, at 18–38 (Supp. 2011), drafted by the National Conference of Commissioners on Uniform State Laws. See Manco Contracting Co., 45 Cal.4th at 198 (describing the background and purpose of the Uniform Act); Lyustiger v. Lysustiger (In re Marriage of Lyustiger), 177 Cal.App.4th 1367, 1369–70 (2009) (recounting the history of the Act in California).
California's Uniform Act provides that the courts of California "shall recognize a foreign-country judgment" for money damages that is final, conclusive, and enforceable where rendered, except if one or more of the mandatory grounds for non-recognition enumerated in § 1716(b), or discretionary grounds for non-recognition enumerated in § 1716(c), applies. § 1716(a). The only exception at issue in this appeal is § 1716(c)(3), which provides that a court is "not required to recognize a foreign-country judgment if . . . [t]he judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of [California] or of the United States." § 1716(c)(3).
Under the Uniform Act, the party seeking enforcement of a foreign judgment bears the initial burden of establishing that the judgment falls within the scope of the Act. § 1715(c). The parties here do not dispute that the Japanese judgment conforms to the threshold requirements for recognition: it grants recovery of a sum of money, as required by § 1715(a)(1); it is final, conclusive and enforceable in Japan, under § 1715(a)(2); and it is not a judgment for taxes, a fine or other penalty, or a judgment in connection with domestic relations, barred from recognition under § 1715(b).
Once coverage under the Uniform Act is established, the presumption in favor of enforcement applies, and the party resisting recognition of a foreign-country judgment "has the burden of establishing that a ground for nonrecognition stated in subdivision [§ 1716](b) or (c) exists." § 1716(d); see also Uniform Foreign-Country Money Judgments Recognition Act, 13 U.L.A. pt. II, at 19 (Supp. 2011) (Prefatory Note). The repugnancy ground for non-recognition of foreign judgments is therefore an affirmative defense. See § 1716(d). This statutorily specified burden applies equally where, as here, the ground of repugnancy is an asserted violation of federal constitutional norms. See, e.g., Sarl Louis Feraud Int'l ...