The Arizona Supreme Court has ruled that a 2015 state law allows the Netherlands to enforce a $7.58 million judgment against Mesa-based MD Helicopters due to a nearly two decade-old contract dispute.
Earlier this year, the company asked the court to review a 2012 ruling by a Dutch court in The Hague that favored the Netherlands, saying the company had to pay out $7.58 million. The dispute began in 2001 when MD Helicopters sued the Netherlands National Police for failing to pay for an order for eight helicopters.
The Netherlands National Police countersued, stating that MD Helicopters had not delivered the helicopters on time. The court awarded the police the $7.58 million judgement.
The Supreme Court split on the decision 5-2, with Justices Bill Montgomery and Clint Bolick dissenting.
At issue was whether a 2015 change in Arizona law allows for the enforcement of foreign money judgments in Arizona. If so, it was an open question whether that requires the other nation to have to have passed a similar law, or whether previous rulings are enough.
The Arizona Foreign-Country Money Judgments Recognition Act created a process for which foreign judgments could be recognized and processed in Arizona, whereas previously things were more difficult. A lack of federal legislation on the issue and differing rules in courts across the world, such as South American courts prohibiting cross-examination, created issues for lawyers across the country and state. The Arizona law states that for a foreign judgment to be recognized in Arizona, the other country must also have a similar or reciprocal law.
MD Helicopters argued that the law prevented Arizona courts from recognizing the judgment because Dutch courts rely on case law, meaning they have no similar law for recognizing foreign judgments. However, the Supreme Court disagreed, saying that Dutch case law is similar to the principles of the Arizona law, something the lower courts had said as well.
The Supreme Court decided that the Arizona legislature, when crafting the law on foreign judgments, was looking into more than just laws that were created by a legislative body. The justices were concerned that having such a narrow definition could harm Arizona-based judgments in foriegn countries in the future.
The dissenting justices believed the ruling would only allow for the Netherlands to “recognize” what they did and not to actually enforce the judgement.
MD Helicopters, formerly McDonnell Douglas Helicopter Systems, was previously a subsidiary of Hughes Aircraft, the company that was founded by the famous businessman Howard Hughes.
The company is known for manufacturing high-grade military helicopters such as the AH-64 Apache attack helicopter as well as helicopters used by law enforcement. The Mesa Police Department’s air unit only uses MD Helicopters for its rotor-based aircraft.
A request for comment from MD Helicopters and the Netherlands State Police were unanswered.