Comity, Cooperation, and Defection

A common theme in discussions of comity is that comity promotes coopera-tion among States. Consistent with that theme, a number of scholars have used game theory to analyze rules based on comity principles.¹⁷ This part de-scribes and expands on those analyses.

In the rest of this part, I follow Andrew Guzman and assume that States are

“rational, self-interested, and able to identify and pursue their interests.¹⁸ Those interests are a function of state preferences, which are assumed to be exogenous and fixed. States do not concern themselves with the welfare of other states but instead seek to maximize their own gains or payoffs.” As Guzman notes, these assumptions “are standard assumptions among social scientists and many international law scholars” and “[t]hey imply that states will only cooperate when doing so increases their own payoffs.”¹⁹

I. Granting Comity as Cooperation

The most common view treats comity-based deference to another State’s de-cision as cooperative behavior. Conversely, when courts refuse to defer (not granting comity), they are defecting from the cooperative solution.

The scholarly literature on the recognition of foreign judgments illustrates this view. The usual starting point is the assumption that mutual recognition of judgments is the optimal solution – that States in the aggregate benefit most if they recognize each other’s judgments. But individually, each State prefers that judgments in favor of its nationals be recognized and that judgments against its nationals be denied recognition. Based on these assumptions,

15 Lenenbach (1993), 273.

16 See sub-part B.

17 Rotem (2010); Whincop (1999); Lee (2006); Stevens (2002); Brand (1995); see also Dodge (2002, 220–26) (using prisoners’ dilemma game to analyze prescriptive comity).

18 Guzman (2008), 17.

19 The analysis here considers only simple, two-party games – focusing on the behav-ior of States – as does the existing literature. A more sophisticated analysis would use dynamic games with both businesses and States as actors to examine how businesses respond to different comity-based rules. Such an analysis is beyond the scope of this paper.

eign judgment recognition can be modeled as a prisoners’ dilemma game.

Table 2 shows the payoffs.

State A prefers to defect regardless of whether State B cooperates or de-fects. Likewise, State B prefers to defect regardless of whether State A coop-erates or defects. Even though collectively they would be better off cooperat-ing – i.e., recognizcooperat-ing the other’s judgments on the basis of comity – the equilibrium outcome is that both defect.

Table 2: Prisoner’s Dilemma Game

State B

Cooperate Defect

State A Cooperate 4, 4 0, 6

Defect 6, 0 2, 2

As is well known, this outcome holds only in the case of a one-shot game. In an iterated prisoners’ dilemma game, States may be able to reach the optimal solution by cooperating (perhaps using a tit-tat strategy and enforcing for-eign judgments only on the basis of reciprocity).²⁰ The broader point for the economics of comity is that on these assumptions, granting comity by recog-nizing foreign judgments is the cooperative outcome. Refusing to grant comi-ty (refusing to recognize foreign judgments) is defection.

An alternative view is that cooperation might in fact be individually ration-al for a State – that is, the game might be an assurance game or “stag hunt”

rather than a prisoners’ dilemma.²¹ If, for example, the cost savings of not relitigating the dispute resolved in a foreign judgment are sufficiently high, or

“[i]f judgment enforcement is appropriately considered an issue of free movement of economic rights” such that the theory of comparative advantage applies, then a State may individually have the incentive to cooperate rather than defect.²² The payoffs for such a game are shown in Table 3.

Table 3: Assurance or “Stag Hunt” Game State B

Cooperate Defect

State A Cooperate 4, 4 0, 2

Defect 2, 0 3, 3

An assurance game differs from a prisoners’ dilemma game because it is no longer the case that each State individually has the incentive to defect. In-stead, the game has dual equilibria (cooperate/cooperate and defect/defect)

20 Rotem (2010).

21 Brand (1995); Whincop (1999); Rotem (2010).

22 Brand (1995), 625.

and the problem becomes one of coordination. In this setting, comity might be

“cheap talk” that enables States to coordinate on the optimal solution of coop-eration.²³

This usual analysis implicitly assumes that all foreign judgments are ones that should be enforced. But what if the foreign judgment is not one that nor-matively should be enforced? What if the entry of judgment in the first place is an opportunistic attempt by a State to benefit its own citizen at the expense of a citizen of a foreign State? If so, then recognizing that judgment would be rewarding defection by the State that entered the judgment. By refusing to recognize the opportunistic foreign judgment, a State is not defecting but ra-ther is sanctioning (or at least not rewarding) defection by the ora-ther State.²⁴ On this view, the grounds for denying recognition of foreign judgments can be understood as identifying circumstances in which denying recognition would be sanctioning the other State’s defection rather than itself being defec-tion.

II. Refusing Comity as a Sanction for Defection

Not all cases in which a court declines to grant comity necessarily involve defection by that court. To the contrary, if the foreign State itself is defecting, a refusal to grant comity (refusing to defer to the other State’s action) can be a form of sanction imposed on the defecting State.²⁵ One example, noted above, is when a court refuses to recognize a foreign judgment on one of the standard grounds.²⁶ Another might be when a court enters an anti-suit injunction against litigation in a foreign court. The court of appeals in Laker Airways stated the point well:

When the foreign act is inherently inconsistent with the policies underlying comity, domestic recognition could tend either to legitimize the aberration or to encourage retaliation, undercutting the realization of the goals served by comity.²⁷

With this latter example, examining the economics of comity provides insight into when a grant of an anti-suit injunction might be appropriate.

23 McAdams (2009), 233–35.

24Whincop (1999), 426 (“[I]t is no surprise that the common law required that the judgment court be jurisdictionally competent in a common law sense. This permits the recognising court to deter cheating by credibly threatening punishment on a tit -for-tat (case-by-case) basis.”).

25Whincop (1999), 426 (“Courts can perform these disciplinary functions in another way – by grant of an anti-suit injunction restraining a plaintiff from invoking the exorbi-tant jurisdiction.”).

26 See sub-part D(I).

27 Laker Airways, Ltd. v. Sabena Belgian World Airlines, 731 F.2d, 909, 937 (D.C.

Cir. 1984).

Commentators have identified three circumstances in which courts are willing to grant anti-suit injunctions:

[C]ourts have directed anti-suit injunctions at proceedings in other jurisdictions in order to achieve one of three broadly stated objectives: the prevention of highly inconvenient or vexatious litigation, the vindication of a prior and independent obligation not to sue, and preservation of the enjoining court’s own jurisdiction or other local policy-based need to forestall foreign judicial proceedings.²⁸

Taking them in reverse order: the third objective – preserving the enjoining court’s own jurisdiction – reasonably could be construed as seeking to identi-fy cases in which the foreign court is acting opportunistically (defecting). The second objective – vindicating a prior and independent obligation not to sue – is addressed in sub-part E.

The first objective – preventing inconvenient or vexatious litigation – is the most difficult to evaluate. This objective seems to focus on the behavior of the parties rather than on the behavior of the foreign court. As such, it does not itself provide a reason to believe that the foreign court is acting opportunisti-cally. On the other hand, if the foreign court is facilitating the vexatious litiga-tion, that fact would provide evidence of opportunistic behavior such that comity would not preclude issuing an anti-suit injunction.²⁹ But what if the party is merely taking advantage of a structural characteristic of the foreign court system that makes the litigation vexatious (such as lengthy delays in resolving cases, so that even if the foreign court sought to restrain the alleged-ly vexatious litigation it would take years before it could do so)?³⁰ In such a case, my tentative view is that the failure or inability to provide sufficient procedural protections for foreign litigants could be viewed as defection by the foreign State such that comity would not preclude the grant of an anti-suit injunction.

III. Comity and Uncertainty

The preceding two sections assume that a court can determine with certainty whether a foreign State is acting opportunistically. But that, of course, is not

28 Bermann (1990), 608.

29 Although the case ultimately was decided based on the existence of an exclusive fo-rum selection clause, the facts of E&J Gallo Winery v. Andina Licores S.A., 446 F.3d 984 (9^th Cir. 2006) – in which the foreign court appointed a guardian for the American com-pany without giving it notice – provide a possible illustration of opportunistic behavior by the foreign State.

30 Hartley (2005), 815–21.

the case. Whenever a court decides whether to grant comity to the decision of a foreign State, it is deciding in the absence of complete information.³¹

As such, comity can be seen as reflecting a court’s default presumption as to whether foreign States are likely to cooperate or defect. Accordingly, if the court is unable to determine whether to defer using the usual doctrinal means (that is, using proxies to identify cooperation or defection), it then grants com-ity if its default presumption is that foreign States likely are cooperating or refuses to grant comity if its default presumption is that foreign States likely are defecting.

The competing approaches of the U.S. circuit courts to the issuance of anti-suit injunctions illustrate the point.³² Courts that follow the so-called “con-servative” standard are reluctant to grant anti-suit injunctions, relying heavily on comity concerns as the rationale. Courts following the “liberal” standard are much more willing to grant anti-suit injunctions and place less weight on comity. Other courts follow an intermediate standard that takes a middle ground between the two extremes. By comparison, as noted above, the ECJ has construed Brussels Regulation 44/2001 as based on “mutual trust” such that the courts of one EU member State may never enter an anti-suit injunc-tion against litigainjunc-tion in the courts of another EU member State.³³

Courts following the conservative standard (those less willing to grant anti-suit injunctions) adopt the default presumption that foreign States likely are cooperating, while those following the liberal standard (those more willing to grant anti-suit injunctions) adopt the default presumption that foreign States likely are defecting. The ECJ’s “mutual trust” standard, by comparison, is a conclusive presumption that other EU member states are cooperating. This distinction among the various standards then can be evaluated empirically: if foreign lawsuits tend to reflect opportunism by the foreign States in certain circumstances, the liberal standard is more appropriate; if foreign lawsuits tend not to reflect opportunism by foreign States, the conservative standard is more appropriate; and if such suits never reflect opportunism by foreign States (in the case of EU member States), then the ECJ approach is more ap-propriate.³⁴

31 I appreciate Dieter Schmidtchen for highlighting this issue.

32 Ali et al. (2008).

33 See sub-part B.

34 Another consideration, of course, is administrative costs, which I do not analyze at length here. But if the likelihood of State opportunism (i.e., defection) is sufficiently low, and the costs of identifying such opportunism sufficiently high, a “mutual trust” standard may be appropriate even if there is some non-zero likelihood of opportunism.