This Article addresses the problems United States plaintiffs may face when seeking enforcement of United States court awards of punitive damages in German courts. The authors show the close relationship between service of process and subsequent enforcement procedures in Germany. The analysis focuses on two recent German court decisions that provide indications of how German courts might respond to requests to serve process and to enforce judgments in actions seeking punitive or multiple damages. The fundamentally different approaches to punitive damages taken by the German and the United States legal systems create the difficulties encountered when these two systems intersect.
The Article first addresses the potential for difficulty in the service of process. Punitive damage complaints, if viewed as criminal in nature, would fall outside the scope of the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Hague Service Convention or Convention). A decision by the Oberlandesgericht Munchen (Court of Appeals at Munich), however, held that punitive damages would be characterized as civil in nature for the limited purpose of service of process under the Convention. Therefore, a United States plaintiff would be able to effect valid service under the Hague Service Convention via the German Central Authorities. Although the decision of the Oberlandesgericht Munchen is not binding on other German courts, the authors suggest that other German courts likely will adopt this characterization of punitive damages for service of process. The authors caution, however, that the question whether a German court would enforce a punitive damage judgment remains unresolved. According to the authors, a decision by the Landgericht Berlin (Trial Court at Berlin) indicates the manner in which a German court would analyze such a case. The Landgericht Berlin decision deals with "excessive," rather than punitive, damages. Nevertheless, the authors cite the decision as suggesting that civil damages characterized as punitive or multiple may violate German public policy, and thus the judgments would not be enforced by German courts.
The authors criticize the reasoning of the Landgericht Berlin decision. They categorize the court's reweighing of the evidence and its application of German substantive law to the facts as an impermissible revision au fond (a reexamination of the substantive basis of the foreign judgment). The authors speculate that if the Landgericht Berlin view prevails, this hostile approach could prompt United States courts to retaliate by refusing to enforce German court judgments.
The authors also question the blanket refusal of the Landgericht Berlin to enforce even the compensatory portion of the United States judgment. As a result of this refusal, the authors suggest that a litigant might have to forgo seeking punitive or multiple damages in the United States to ensure the enforceability of any compensatory award in Germany. The article concludes by emphasizing that the Landgericht Berlin decision, although not binding on subsequent courts, illustrates the skepticism United States plaintiffs may encounter when seeking enforcement of punitive damage awards in German courts.
Klaus J. Beucher and John B. Sandage,
United States Punitive Damage Awards in German Courts: The Evolving German Position on Service and Enforcement,
23 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vjtl/vol23/iss5/3