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As global markets expand and trans-border disputes multiply, American courts are pressed to certify transnational class actions -- i.e., class actions brought on behalf of large numbers of foreign citizens or against foreign defendants. While the Supreme Court's recent decision in Morrison v. National Australia Bank Ltd. is likely to reduce the number of "foreign-cubed" or "f-cubed" securities fraud class actions filed in the United States (at least in the short term), it is unlikely to inhibit the filing of transnational class actions involving securities listed on domestic stock exchanges, transnational class actions raising claims that arise under federal laws that apply extraterritorially, or transnational class actions against defendants whose conduct within the United States is the "focus" of Congressional concern. In short, even after Morrison, class counsel are likely to keep filing transnational class actions and defense counsel are likely to keep opposing them.

Defendants typically oppose certification by arguing that European courts will not recognize or accord preclusive effect to a judgment in the defendant's favor. Thus, defendants fear repetitive litigation on the same claim in foreign courts even if they prevail in an American court.

In addressing defendants' arguments, American courts carefully consider the likelihood that an American judgment will be recognized abroad. But they virtually never consider the preclusive effects, if any, that the judgment or court-approved settlement will receive or which country's preclusion law will determine those effects. The Article identifies and analyzes significant differences between American preclusion law and the preclusion laws of Europe. In light of these important differences, the Article strongly recommends that courts analyze recognition and preclusion issues separately, rather than conflating them.