Case: 09-10581 Document: 00511070058 Page: 1 Date Filed: 04/05/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
April 5, 2010
No. 09-10581 Lyle W. Cayce
Clerk
ROMULO DEL PRADO, on behalf of Himself and a Class of Judgment
Creditors of the Estate of Ferdinand E Marcos,
Plaintiff - Appellant
v.
B N DEVELOPMENT COMPANY INC; ELLESMERE INVESTMENT
CORPORATION INC; JASON DEVELOPMENT COMPANY INC; LANGLEY
INVESTMENT CORPORATION INC; PENDER INVESTMENT
CORPORATION INC; REVELSTOKE INVESTMENT CORPORATION INC;
VERNON INVESTMENT CORPORATION INC,
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Texas
Before REAVLEY, DAVIS, and STEWART, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge.
This case presents the question of whether a judgment entered in one
federal court and then registered in a second federal court pursuant to 28 U.S.C.
§ 1963, may be re-registered and enforced in a third federal court, a process
termed “successive registration.” Under § 1963, a judgment from one federal
court that is registered in another federal court “shall have the same effect as a
judgment of the district court of the district where registered and may be
enforced in like manner.” This statutory language, together with the authorities
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cited below, persuade us that registered judgments are to be given the same
effect as rendered judgments so that § 1963 permits registration and
enforcement of registered judgments in the third district court. We therefore
reverse the district court and remand the case.
I. FACTS
This case arises out of the class action brought against Ferdinand Marcos,
the former President of the Philippines. After President Marcos arrived in the
United States in 1986, he was served with numerous complaints claiming
damages for human rights violations. These cases were consolidated into the
federal district court in Hawaii. In 1991, the Hawaiian federal district court
certified the case as a class action. Between 1992 and 1995, three separate jury
trials were held concerning the issues of liability and damages. Ultimately,
President Marcos was cast in judgment for nearly $2,000,000,000 in damages to
the plaintiff-appellant class. Final judgment on the class action was entered in
the Hawaiian federal district court on February 3, 1995 (hereinafter “the
Hawaiian judgment”), and was thereafter affirmed by the Ninth Circuit. See
Hilao v. Estate of Marcos, 105 F.3d 767 (9th Cir. 1996) (“Hilao I”). In 1997, the
Ninth Circuit issued its mandate for the Hawaiian judgment.
In 1997, the plaintiff registered the Hawaiian judgment in the Northern
District of Illinois pursuant to 28 U.S.C. § 1963 (hereinafter “the Illinois
registered judgment”), as well as in other jurisdictions located outside of the
United States.
On April 8, 2005, the plaintiff registered the Hawaiian judgment in the
Northern District of Texas pursuant to 28 U.S.C. § 1963. The plaintiff also filed
a complaint against the defendants-appellees alleging they held legal title to
Texas property for which the Marcos estate held equitable title. The plaintiff
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sought to enforce the registered Hawaiian judgment in Texas by foreclosing on
that property.
In 2006, the defendants notified the plaintiff that the 1995 Hawaiian
judgment expired pursuant to Hawaiian Revised Statute § 657-5 1 before the
plaintiff had registered the Hawaiian judgment in the Northern District of
Texas. Recognizing this flaw in the registration, on June 5, 2006, the plaintiff
filed a motion in the Hawaiian federal district court for an extension of the
Hawaiian judgment. On June 27, 2006, the Hawaiian district court entered an
order extending the Hawaiian judgment. The Hawaiian district court reasoned
that the Hawaiian judgment was not final until the issuance of the mandate by
the Ninth Circuit in 1997. Based on that reasoning, the district court found that
the motion for extension was timely filed in the Hawaiian federal district court.
In 2008, the Ninth Circuit reversed and vacated the extension granted by
the Hawaiian district court. See Hilao v. Estate of Marcos, 536 F.3d 980 (9th Cir.
2008) (“Hilao II”). The Ninth Circuit held that the date of final judgment was
February 3, 1995, the date that the judgment was entered by the Hawaiian
district court, not the date of the issuance of the mandate by the Ninth Circuit
in 1997. Because HRS § 657-5 states that “[n]o extension of a judgment or
decree shall be granted unless the extension is sought within ten years of the
date the original judgment or decree was rendered,” the Ninth Circuit found that
1
HRS § 657-5 states:
Unless an extension is granted, every judgment and decree of any court of the
State shall be presumed to be paid and discharged at the expiration of ten years
after the judgment or decree was rendered. No action shall be commenced after
the expiration of ten years from the date a judgment or decree was rendered or
extended. No extension of a judgment or decree shall be granted unless the
extension is sought within ten years of the date the original judgment or decree
was rendered. A court shall not extend any judgment or decree beyond twenty
years from the date of the original judgment or decree. No extension shall be
granted without notice and the filing of a non-hearing motion or a hearing
motion to extend the life of the judgment or decree.
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relief on the plaintiff’s June 5, 2006 motion to extend the judgment was time-
barred.
On September 4, 2008, the plaintiff timely revived the Illinois registered
judgment in the Northern District of Illinois.2 On October 10, 2008, the plaintiff
registered the revived Illinois registered judgment in the Northern District of
Texas pursuant to § 1963. On October 14, 2008, the plaintiff filed a motion to
amend the original complaint filed on April 8, 2005, to reflect its intent to
enforce the revived Illinois registered judgment. Arguing that the court should
not recognize the Illinois registered judgment, the defendants filed a 12(b)(6)
motion to dismiss.
The Texas federal district court denied the plaintiff’s motion to amend the
complaint and granted the defendants motion to dismiss the plaintiff’s suit. The
plaintiff timely filed this appeal.
II. STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 15(a), a “court should freely give
leave [to file amended pleadings] when justice so requires.” We review the
district court’s denial of the plaintiff’s motion to amend for an abuse of
discretion. Forman v. Davis, 371 U.S. 178, 182 (1962). We review de novo an
order granting a 12(b)(6) motion to dismiss. In re: Katrina Canal Breaches
Litigation, 495 F.3d 191, 205 (5th Cir. 2007).
2
Under Illinois law, a judgment that has laid dormant for seven years must be revived
to be enforced. 735 ILCS 5/12-108(a). This is required even though a judgment does not
prescribe until the expiration of twenty years after its entry. 735 ILSC 2/1602(a), 5/13-218.
Thus, while the 1997 Illinois registered judgment was not time barred in 2008, before the
plaintiff could enforce the 1997 Illinois registered judgment, the plaintiff had to first revive
it.
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III. ANALYSIS
On appeal, the plaintiff argues that two judgments were properly
registered and may be enforced in the Northern District of Texas: (1) the
Hawaiian judgment, as registered in Texas on April 8, 2005, and (2) the Illinois
registered judgment, as successively registered in Texas on October 10, 2008.
The enforceability of these judgments is discussed separately.
A. Hawaiian Judgment
The plaintiff argues that the Hawaiian judgment did not become final
until December 6, 1995 because on that date the Hawaiian federal district court
entered a final judgment as to all of the consolidated actions in this matter.
Therefore, the plaintiff asserts that the Hawaiian judgment was properly
registered in Texas federal district court within ten years of its entry and may
be enforced in Texas.
The defendants counter that res judicata and collateral estoppel preclude
the plaintiff from re-litigating the date on which the Hawaiian judgment became
final for the purposes of triggering the ten year statute of limitations. According
to the defendants, the Ninth Circuit in Hilao II necessarily decided that the final
judgment was rendered by the Hawaiian federal district court for this purpose
on February 3, 1995. Because the plaintiff has already litigated the issue of
when the final judgment was entered and the Ninth Circuit has already reached
a conclusion on that issue, the defendants assert that the plaintiff is barred from
re-litigating the issue.
We agree with the defendants that the Ninth Circuit actually decided the
effective date of the Hawaiian judgment and that the plaintiffs are precluded
from re-litigating this issue. See United States v. Davenport, 484 F.3d 321,
325–26 (5th Cir.), cert. denied, 128 S.Ct. 805 (2007) (citations omitted)
(discussing res judicata); Pace v. Bogalusa City Sch. Bd., 403 F.3d 272, 290 (5th
Cir. 2005) (citations omitted) (discussing collateral estoppel). Moreover, the
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plaintiff waived its argument on this issue by failing to raise it to the district
court until the reply brief to a Motion for Reconsideration. See Browning v.
Navarro, 894 F.2d 99, 100 (5th Cir. 1990) (citations omitted) (“Generally
speaking a party may not raise an argument for the first time in a petition for
rehearing.”).
Because more than ten years passed between the entry of the Hawaiian
judgment and its registration in Texas, the Hawaiian judgment expired before
it was registered in Texas. A judgment may only be registered and enforced at
a time when the judgment is still enforceable in the state from which it is being
registered. See Home Port Rentals, Inc. v. Int’l Yachting Group, Inc., 252 F.3d
399, 405 (5th Cir. 2001). As such, the Hawaiian judgment may not be registered
and enforced by the Texas federal district court.
B. Illinois Registered Judgment
The plaintiff argues next that § 1963 permits the Illinois registered
judgment, which is valid and enforceable in the Northern District of Illinois,3 to
be successively registered and enforced in the Northern District of Texas. Sec.
1963 states in pertinent part:
A judgment in an action for the recovery of money . . . entered in any
. . . district court . . . may be registered by filing a certified copy of
the judgment in any other district . . . when the judgment has
become final by appeal or expiration of the time for appeal or when
ordered by the court that entered the judgment for good cause
shown. . . . A judgment so registered shall have the same effect as
a judgment of the district court of the district where registered and
may be enforced in like manner.
3
The Hawaiian judgment was registered in the Northern District of Illinois in 1997,
see Estate of Marcos Human Rights Litig. v. Estate of Marcos, 1997 U.S. Dist. LEXIS 10958
(N.D. Ill. 1997), and was revived on September 4, 2008. The defendants do not challenge that
the revived Illinois registered judgment is enforceable in Illinois; § 1963 clearly allows for its
enforcement. See, e.g., Home Port Rentals, 252 F.3d 399; Marx v. Go Pub. Co., 721 F.2d 1272
(9th Cir. 1982); Stanford v. Utley, 341 F.2d 265 (8th Cir. 1965).
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The defendants counter that successive registration is not allowed under
§ 1963 because a registered judgment is only derivative of the judgment of the
court where it was originally rendered and not an independent judgment of the
registering court; therefore, a registered judgment cannot be re-registered. In
other words, the defendants argue that the Illinois registered judgment is not an
independent judgment and, because the Hawaiian judgment expired, the Illinois
registered judgment cannot be successively registered.
To support this argument, the defendants assert that the Illinois judgment
does not qualify as an independent judgment because it was not “entered” 4 in a
federal district court pursuant to F ED. R. C IV. P. 58. Instead, the defendants
assert that a registered judgment is merely included in the court’s docket as an
attachment to a certification from the rendering court.
Despite the defendants’ argument, the record clearly indicates that on
September 4, 2008 the revived Illinois registered judgment was entered by the
Clerk of Court in the Northern District of Illinois as a separate document
entitled “Judgment in a Civil Case.” There is no merit to the defendants’
argument that the Illinois judgment was not an “entered” judgment.5
4
The first sentence of § 1963 states that “[a] judgment in an action for the recovery of
money . . . entered in any . . . district court . . . may be registered . . . .” (emphasis added).
5
While the defendants argument focuses on whether the Illinois registered judgment
was “entered,” examining the registration process for the Illinois judgment in the Northern
District of Texas makes it clear that a registered judgment is “entered” pursuant to FED . R.
CIV . P. 58. Upon registration in Texas, the Illinois registered judgment was filed in the
Northern District of Texas by the Clerk of Court. It was then given a docket number by the
Clerk of Court for the Northern District of Texas. Thereafter, the Illinois judgment was
indexed in the judgment index. As the registration procedure in the Northern District of
Texas makes clear, the same procedures are used to “enter” a registered judgment as are used
to “enter” a rendered judgment. See also Arenas v. Sternecker, 109 F. Supp. 1, 2 (D. Kan. 1953)
(“The term ‘registered’ is not defined; but, as applicable here, it seems to connote a filing with
the clerk and an entering upon the records in that office, in substantially the same manner
as a judgment rendered by this court.”).
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The final sentence of § 1963 clearly states that a registered judgment has
“the same effect as a judgment of the district court of the district where
registered and may be enforced in like manner.” In this case, we read that to
mean that once the Hawaiian judgment was registered in Illinois in 1997, the
Illinois registered judgment had the same effect as any judgment rendered in the
Northern District of Illinois and could be enforced as a judgment rendered in the
Northern District of Illinois.6
Our cases concerning registered judgments also support the principal that
a registered judgment has the same effect as a rendered judgment. For example,
in Cadle Co. v. Neubauer, 562 F.3d 369, 372 (5th Cir. 2009), we found that
“under the plain language of § 1963, [the plaintiff’s] registration of the . . . final
judgment in the Northern District of Texas is treated as a final judgment of the
Northern District of Texas.” 7 We reached the same conclusion in Home Port
6
See also United States v. Palmer, 609 F. Supp. 544, 547 (E.D. Tenn. 1985) (“The
language of [§ 1963] is absolutely clear that once the judgment is registered in the new district,
it “shall have the same effect as a judgment of the district court of the district where registered
. . .”); FEDERAL PROCEDURE : LAW YERS EDITION § 31:36 (West 2007) (footnotes omitted)
(“Registration of a judgment pursuant to [§ 1963] provides, so far as enforcement is concerned,
the equivalent of a new judgment of the registering court, and allows the judgment creditor
to pursue all remedies available in the district of registration for satisfaction of a debt, in
accordance with the laws of the registering state.”); WRIG HT , MILLER , & KANE , 11 FEDERAL
PRACTICE AND PROCEDURE § 2787 (West 1995) (footnote omitted) (“In terms of the effect of
registration, the statute is more than merely ministerial because it provides that a registered
judgment shall have the same effect as a judgment of the court in which it is registered and
that it may be enforced in the same manner as a judgment of the registration court.”).
7
The defendants argue that U.S. v. Kellum, 523 F.2d 1284 (5th Cir. 1975) precludes
our finding that a registered judgment is equivalent to a new, independent judgment. In
Kellum, a money judgment was entered against the defendants in the Northern District of
Mississippi. The Northern District of Mississippi money judgment was then registered in the
Southern District of Mississippi. The Government argued, inter alia, that the registration of
the money judgment in the Southern District of Mississippi revived and renewed the original
money judgment in the Northern District of Mississippi. The Kellum court disagreed with the
Government’s position, finding that the registration of a judgment did not revive the originally
entered judgment. While the Kellum court’s determination that a registered judgment does
not revive the originally entered judgment is clearly a correct statement of law. But the
holding of Kellum has no bearing on the facts of the case before us. The question in the
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Rentals when we found that a judgment registered in a Louisiana federal district
court had the same effect as if it had been rendered by a Louisiana federal
district court. 252 F.3d at 408 (“We simply cannot read the plain language of the
final sentence of § 1963 . . . any way other than as equating registration with a
new judgment-on-judgment, at least for purposes of enforcement within the
district of registration.”).8
Other circuits have also taken the position that “[a] registered judgment
is equivalent to a new federal judgment.” Febre, 1992 WL 288321, *1. E.g.,
Marx, 721 F.2d at 1273; Stanford, 341 F.2d at 267. Then Judge Blackmun
agreed with this principle when he wrote for the Eighth Circuit that:
The language [of § 1963] is clear, unambiguous and seemingly
purposeful. If registration is to “have the same effect as a
judgment”, it must, for our present enforcement purposes, mean just
that and not something else. To restrict registration to a procedural
and collection device for the foreign judgment itself, and to have it
expire with a foreign judgment, would give the words of the statute
a lesser status than their plain meaning and to make registration
something far inferior to a judgment on a judgment.
Id. at 269–70. In Hilao II, the Ninth Circuit echoed Judge Blackman’s opinion
by stating that “registering a judgment under 1963 is the functional equivalent
of obtaining a new judgment of the registration court.” 536 F.3d at 989.
instant case is not whether registration revived the original Hawaiian judgment; the question
is whether the Illinois judgment can be registered in Texas. As such, Kellum is not helpful in
resolving this issue in the instant case.
8
The defendants argue that Home Port Rentals limits the effect of registered judgments
because the court stated that a registered judgment was “a new judgment-on-judgment, at
least for purposes of enforcement within the district of registration.” See 252 F.3d at 408
(emphasis added). In Home Port Rentals, however, the court was not concerned with
successive registration. Instead, the court was only concerned with the enforceability of a
judgment registered directly from the rendering court. Therefore, we do not read the dicta of
Home Port Rentals as a signal that a registered judgment could not be successively registered.
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The authorities completely satisfy us that the Illinois registered judgment
was fully enforceable in Illinois and had all of the attributes of a judgment
rendered by the Northern District of Illinois. It follows, then, that the Illinois
judgment may be re-registered in the Northern District of Texas and enforced
in Texas. As the Seventh Circuit stated:
Upon receiving a certified copy of the judgment, the clerk of the
court in which the judgment is being registered merely enters the
sister court’s judgment on the docket. Once a certified copy of the
final judgment has been so registered, the judgment is treated as it
if [sic] were an original judgment of the registering court. A
registered judgment is equivalent to a new federal judgment
obtained by filing an independent action on the original judgment;
it has the same status as a judgment on a judgment.
Febre, 1992 WL 288321, *1.
There is no doubt that if the Northern District of Illinois rendered a money
judgment, that money judgment could be registered in the Northern District of
Texas and enforced in Texas pursuant to § 1963. If a registered judgment is to
be given “the same effect as a judgment of the district court of the district where
registered,” we see no reason why the Illinois registered judgment should not
also be capable of being registered in another federal court and enforced in that
court.
Examining parallel situations in our federal-state judicial system
reinforces our conclusion that the Illinois registered judgment should be given
the same dignity by the Northern District of Texas as a judgment originally
rendered by a Illinois federal district court. The Supreme Court has long held
that the Full Faith and Credit clause of the Constitution requires a state to give
a judgment on a judgment rendered by a different state court equal dignity to a
judgment rendered by its own state court. In Roche v. McDonald, 275 U.S. 449
(1928), the Court held that this principle was not limited to a one-step process
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in which only two states were involved. In Roche, a judgment was entered
against the defendant in Washington state court. The defendant then moved to
Oregon, so suit was brought against the defendant upon the Washington state
court judgment in Oregon state court and judgment was again rendered against
the defendant. Thereafter, the defendant moved back to Washington. By then,
the original Washington judgment had expired, so the plaintiff filed suit against
the defendant in Washington based on the valid Oregon state court judgment.
The Washington Supreme Court entered judgment in favor of the defendant
holding that because the statute of limitations had run on the Washington
judgment, the Oregon judgment was also not enforceable.
The U.S. Supreme Court reversed the Washington Supreme Court
judgment, stating:
the full faith and credit clause of the Constitution requires that the
judgment of a State court which had jurisdiction of the parties and
the subject-matter in suit, shall be given in the courts of every other
State the same credit, validity and effect which it has in the State
where it was rendered, and be equally conclusive upon the merits;
and that only such defenses as would be good to a suit thereon in
that State can be relied on in the courts of any other State.
Id. at 451.
Based on Roche, it is clear that the Full Faith and Credit clause allows for
a state court judgment to be rendered in one state court, sued on in a second
state court, and then the judgment on a judgment of the second state court
successively sued on in a third state court and that judgment on a judgment
enforced by the latter state court. The same result occurs when a plaintiff moves
its judgment between federal and state courts. The Full Faith and Credit Act,
28 U.S.C. § 1738, implements the Full Faith and Credit clause of the
Constitution by stating:
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Such Acts, records and judicial proceedings [of any State, Territory
or Possession] or copies thereof, so authenticated, shall have the
same full faith and credit in every court within the United States
and its Territories and Possessions as they have by law or usage in
the courts of such State, Territory or Possession from which they are
taken.
The Full Faith and Credit Act has been interpreted to require state courts to
give full effect to federal court judgments, see Stoll v. Gottlieb, 305 U.S. 165,
170–71 (1938), and federal courts to give full effect to state court judgments, see
Southern Jam, Inc. v. Robinson, 675 F.2d 94, 97–98 (5th Cir. 1982). This means
that under § 1738, a state court judgment may be rendered in one state court,
sued on as a judgment on a judgment in a second state court, and then the
judgment of the second state court may be successively sued on and enforced by
a federal district court. Likewise, a judgment rendered in a federal district court
may be sued on in a state court, and that state court judgment could be sued on
and enforced by a second state court.
At oral argument, the defendants acknowledged that if the plaintiff had
moved its judgment through the state court system or between federal and state
courts, the plaintiff would be allowed to enforce its judgment as described above.
The defendants argued that the Illinois registered judgment should be treated
differently than the judgment on a judgment in Roche because a defendant to a
registered judgment does not have the same procedural protections as he would
for a judgment on a judgment.
The defendants conclusory argument has two shortcomings. First, arguing
that a registered judgment is unenforceable for procedural reasons is an attack
on the enforceability of any registered judgment under § 1963. If procedural
deficiencies exist that would prevent enforcement of the Illinois registered
judgment, those same deficiencies would prevent enforcement of a judgment
originally rendered by the Northern District of Illinois (or any other federal
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district court) and registered in the Northern District of Texas. The plain text
of § 1963 and cases interpreting the statute plainly tell us that registered
judgments are enforceable and no procedural inadequacies have been identified
that even arguably preclude their enforcement.
More importantly, the defendants failed to demonstrate that they did not
receive notice or were impeded from raising any defense. The record is clear that
the defendants received notice in at least two instances when the Illinois
registered judgment was successively registered in the Northern District of
Texas. The defendants received notice on October 8, 2008 when the plaintiff
filed notice in the Northern District of Texas that it revived the Illinois
registered judgment, and again on October 14, 2008 when the plaintiff filed a
motion for leave to file an amended complaint to enforce the Illinois registered
judgment.
Similarly, the defendants do not show that they were impeded from raising
any defense. The only procedural vehicle provided under the Federal Rules to
a defendant to attack a final judgment in the district court after time has run to
file a Rule 59 motion is Rule 60(b). See Templet v. Hydrochem Inc., 367 F.3d 473,
483 (5th Cir. 2004). This circuit’s cases, and the majority of other circuits, are
clear that the defendant to a registered judgment is entitled to raise defenses
under Rule 60. E.g., Harper MacLeod Solicitors v. Keaty & Keaty, 260 F.3d 389,
395 (5th Cir. 2001).9 As such, we find no merit in the defendants’ procedural
argument that a registered judgment should not be given the same dignity as a
judgment on a judgment for these purposes.
9
See also On Track Transp., Inc. v. Lakeside Warehouse & Trucking, Inc., 245 F.R.D.
213, 216–20 (E.D. Pa. 2007) (discussing the position of the First, Second, Fifth, Seventh,
Ninth, and Tenth Circuits with regards to whether a court may entertain a motion under FED .
R. CIV . P. 60(b)); FEDERAL PROCEDURE : LAW YERS EDITION § 31:39; WRIG HT , MILLER , & KANE ,
11 FEDERAL PRACTICE AND PROCEDURE §§ 2787, 2865 nn.3–4.
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Given the ability of a plaintiff to enforce his judgment from one state to
another state, and between state and federal courts, it would be strange indeed
for Congress to intend for § 1963 to yield the incongruous result that federal
judgments, when registered in another federal district court, are not entitled to
their full effect. Moreover, the text of § 1963 and our cases interpreting the
statute support the conclusion that registered judgments should be given their
full effect. Because the Illinois registered judgment was equivalent to a new
federal judgment with the same status as a judgment on a judgment, it was also
be capable of being successively registered and enforced under § 1963 in the
Northern District of Texas.
IV. CONCLUSION
For the above stated reasons, we conclude that the district court erred in
finding that the Illinois judgment was not enforceable in Texas and the district
court abused its discretion by not allowing the plaintiff class to amend the
complaint to rely on the Illinois judgment. We therefore reverse the district
court’s denial of the plaintiff class’ motion to amend, as well as the district
court’s order granting the defendants’ 12(b)(6) motion to dismiss. We remand
this case to the district court for further proceedings consistent with this opinion.
REVERSED.
REMANDED.
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