Kaepa, Inc. v. Achilles Corporation

WIENER, Before GARZA, EMILIO M. BENAVIDES, Judges. Circuit WIENER, Judge: Circuit primary presented by issue ap- peal is whether the district by court erred enjoining Defendant-Appellant Achilles Cor- poration from prosecuting an action it in Japan plaintiff, filed which essentially mirrored a previously lawsuit filed Plain- tiff-Appellee Kaepa, Inc. state court and being then prosecuted in federal district court Kaepa. private Given the nature dispute, the clear indications arising that claims from their con- adjudicated tract should country, duplicative and the and vexatious nature of action, Japanese we conclude that district court did not abuse its discretion barring of the litiga- tion. Accordingly, affirm we injunction.

I.

FACTS AND PROCEEDINGS This case arises out of a contractual dis- pute sophisticated, between two private cor- porations: Kaepa, an company American shoes; which manufactures athletic and Ac- hilles, enterprise business with approximate annual sales that one billion dol- In April companies lars. the two en- tered into distributorship agreement whereby rights Achilles obtained exclusive Kaepa’s market in Japan. footwear The dis- tributorship agreement expressly provided English language Texas and the law govern interpretation, would that it would Antonio, Texas, enforceable San court. with all of counterclaims consented that Achilles grant of the appealed the timely Achilles courts.1 the Texas injunction.2 increasingly dissatisfied Kaepa grew contract. under the performance Achilles’s 1994, Kaepa filed suit July of

Accordingly, in. II. (1) court, fraud and alleging in Texas by Achilles to misrepresentation negligent ANALYSIS distributor- into the Kaepa to enter induce (2) of contract breach THE ANTISUIT INJUNCTION and OF ship agreement, A. PROPRIETY Thereafter, removed the Achilles Achilles. argument primary Achilles’s court, par- and to federal district action give proper defer failed to discovery process began laborious ties principles of international ence production has resulted which to date an anti- Kaepa’s motion for granted it when In Feb- of documents. of thousands of tens decision to injunction. review the We in the Texas 1995, appearing after ruary of discret injunctive relief for abuse grant court, action, case to federal removing the standard, find deferential ion.3 Under discovery, comprehensive engaging and clearly upheld unless errone ings fact are Japan, action in brought its own “ Achilles subject ous, legal ‘are conclusions whereas (1) fraud mirror-image claims: alleging if incor will be and reversed to broad review into Achilles to enter Kaepa to induce ”4 rect.’ (2) breach of distributorship agreement, and by Kaepa. contract among circuit It is well settled have re including this one—which Texas, filed Kaepa promptly Back in courts — grant of an antisuit enjoin viewed asking the district motion power to courts have the the federal Japan its suit prosecuting Achilles from jurisdiction subject to enjoin persons (motion injunction). Achilles The circuits foreign suits.5 prosecuting from the federal court to dismiss in turn moved however, differ, proper legal standard on the non conve- ground of forum action on the determining employ when whether court denied Achilles’s The district niens. We injunctive power should be exercised.6 Kaepa’s mo- granted motion to dismiss an antisuit propriety have addressed to refrain enjoin, ordering Achilles occasions, in prior on two action and to file litigating Beard, Productions, 730 Apple Inc. v. agreement 4. Barrel language applicable 1. The (5th Cir.1984) (quoting Commonwealth F.2d 384 reads: Neal, 300, (5th 669 F.2d 304 Co. v. Insurance Life governed laws Agreement This shall Cir.1982)). Texas, U.S.A., and shall be of the State Co., Antonio, See, Bankers Trust e.g., Texas. The En- Ltd. v. in San 5. Gau Shan enforceable 1349, (6th Cir.1992); English China Agreement F.2d 1352 glish and the 956 of this version Choong Yong, Corp. 837 v. M.V. interpretation Trade & Dev. govern language shall 33, Cir.1987); (2d Airways v. Sabe F.2d na, 35 meaning phrases used herein. all words and 909, (D.C.Cir.1984); Seattle F.2d 926 731 [Achilles] consents Distributor Club, Hockey Hockey Inc. National Totems Texas, U.S.A. in the State 852, (9th Cir.1981), cert. League, 855 (1) permits clause The district court held 2902, denied, 73 457 U.S. Texas, (2) requires that the jurisdiction in (1982); re Reederei In Unterweser L.Ed.2d 1313 interpreted United agreement under States (5th Cir.1970), Gmbh, 428 890 aff'd party language. English Neither law and the banc, (1971), rev'd on rehearing 446 F.2d 907 en ruling. challenges this Zapata v grounds nom. Bremen other sub M/S 32 U.S. 92 S.Ct. Off-Shore challenge the denial of 2. does Achilles Peace, (1972); Bethell L.Ed.2d 513 motion to dismiss. 1971). Cir. Directories, Totems, Inc. v. Southwestern F.2d at 855- Compare, e.g., 3. Seattle See Western Shan, (5th Cir.1995); Unterweser, Bell, Apple F.2d 888 Gau 56 and Trade, Productions, Beard, and China Inc. v. Barrel (5th Cir.1984). Reederei Gmbh7 and case, Unterweser Bethell v. In the instant for example, it Emphasizing in simply Peace.8 both cases the need cannot be said that prevent oppressive litigation, vexatious or actually threatens rela we concluded that a district court does not tions between the United Japan. States and by issuing First, abuse discretion no public international impli issue is injunction when it has determined “that al cated private case: Achilles party is a lowing simultaneous engaged the same dispute contractual with anoth action in a forum private thousands of miles party. Second, er dispute has away ‘inequitable would result hardship’ long been firmly ensconced within the delay and ‘tend to speedy frustrate and confines of judicial the United system: and efficient determination of the cause.’”9 Achilles consented to Texas; The Seventh and the stipulated Ninth Circuits have that Texas law and English adopted10 either or toward”11 language “incline[d] govern would any dispute; ap approach, but employed other circuits have peared in an action brought Texas; re standard that principles elevates of interna moved that action Texas; to a federal court in comity tional to the virtual engaged exclusion of es discovery extensive pursuant sentially all other considerations.12 court; the directives of the federal then, with the federal action moving steadily urges give greater Achilles us to deference trial, brought toward identical claims in Ja latter, apply more restric- pan. circumstances, Under these we cannot that, tive standard. preliminarily We note conclude that the district grant court’s of an though even espoused the standard in Unter- antisuit any way trampled on weser and Bethell focuses on potentially comity. notions of vexatious foreign litigation, nature of it no means excludes princi- the consideration of contrary, On the the facts detailed above ples comity. decline, however, We strongly to re- support the conclusion that quire genuflect a district court to before a of the action would en- vague omnipotent comity every notion of tail “an duplication absurd of effort”13 and enjoin time that it must decide whether to inconvenience, would result in unwarranted foreign action. expense, and vexation. Achilles’s belated Unterweser, 7. 888. and witnesses ... [as well as] inconsis- rulings judgment”). tent or even a race to Bethell, 8. 441 F.2d 495. Philips 11. Sys. See Medical Int’l B.V. v. Bruet Unterweser, 9. (noting 428 F.2d at man, (7th 1993); Cir. see also injunctions well granted that antisuit have been Inc., Systems, Allendale Mut. Ins. Co. v. Bull Data (1) foreign litigation when poli- would frustrate a (7th Cir.1993). Sperry Rand Cf. cy issuing (2) injunction; of the forum (7th Corp. Corp., v. Sunbeam 285 F.2d 542 Cir. (3) oppressive; vexatious issuing or threaten the 1960). quasi (4) jurisdiction; court’s in rem or in rem prejudice considerations); equitable other See, Shan, 1355; e.g., 12. Gau 956 F.2d at China Bethell, ("[T]he also 441 F.2d at 498 court was Trade, 837 F.2d at 731 F.2d at relieving within its plaintiff discretion in 927, 937. The weakness in the foundation of the expense having litigate and vexation of opinion extensively dissent's is that it relies on court.”). Shan, Gau 956 F.2d at 1353 Cf. virtually disregarding these cases while our hold (concluding pri- that the Fifth Circuit “reifies] ings in Unterweser and Bethell. The strict stare marily upon considerations of vexatiousness or policy prevents decisis of this court us from oppressiveness in a race to in the for- joining abrogation holdings in the dissent's of the eign grounds forum as sufficient for an [antisuit] prior panels through of two pur on this issue Unterweser, injunction”) (citing 896); ported distinctions without real differences. See Totems, Seattle (discussing 652 F.2d at 855-56 Parker, (5th United States v. Cir. Bethell). Unterweserand 1996) (" panel may '[0]ne not overrule the deci right wrong prior panel, absent en Totems, (dis- sion— —of See Seattle 652 F.2d at 855-56 superseding contrary banc reconsideration or a cussing Bethell) (holding Unterweser and that it ") Supreme (quoting decision of the Court' grant is within the district court's discretion to Dyke, Cir.1991)). adjudication an antisuit when the likely an issue unnecessary delay "is to result in Allendale, expense and substantial inconvenience and to the 10 F.3d at 430-31. respective present pie opportunity to Japan the plaintiff putative ploy filing as In the legal involved.”16 issues Kaepa views Kaepa that against very same claims rely case, not the district did Achilles smacks instant against plaintiff had filed as it determining whether harassment, delay. Accord- any disputed facts cynicism, injunction. court did properly the district could ingly, we hold Kaepa’s compre- mo- by granting Moreover, parties presented abuse its discretion posi- injunction.14 of their support for an memoranda hensive Accordingly,

tions on issue. 65(a)(1) by failing not violate Rule court did REQUIREMENTS Rule B. granting hearing an oral before to conduct dis argues Achilles injunction. meet several by failing to trict court erred Proce Rule of Civil Federal requirements of argues that Achilles also injunction. issuing the antisuit dure 65 before 65(c) requiring by not violated Rule 65(a)(1) preliminary provides “[n]o Rule 65(c) provides Rule Kaepa post a bond. notice to without be issued shall injunction shall preliminary ... that “[n]o interpreted the party.” We have the adverse security by giving except upon the issue 65(a)(1) to mean requirement of Rule notice court deems applicant, such sum as the the in disputes presented, are factual that “where amount holding the proper....”17 opportunity given a fair must be parties the 65(c) security required pursuant to Rule of then- hearing present meaningful to trial discretion of the a matter for the “is before of those facts differing versions “may court,”18 court ruled that the we have granted.”15 injunction may be preliminary Thus, security require no at all.”19 however, elect to involved, no dispute is If factual no 65(e) by Rule did not violate the district court such circum required; hearing is under oral Kaepa post to a bond.20 failing compel only given “am- parties need be stances the Park, also 729 F.2d see 16. Commerce applicability of the also debated 14. 13(a) Corp. v. Dix Savings to claims and Loan Insurance of Civil Procedure Federal Federal Rule 13(a) Cir.1987). governs on, 554, (5th foreign brought courts. Jones Rule 835 F.2d 558 Cf. provides rele- compulsory Newton, 1316, (noting counterclaims and 1318 v. part: pleading shall counter- "A vant typically required hearing not motions is oral serving the any of which at the time claim pleading claim circuit); Security Exchange Commis in this any opposing against pleader has the Texas, Inc., Group 659 Financial sion v. First of or occur- party, out of the transaction if it arises 660, (5th 1981). Cir. F.2d 669 opposing subject that is the matter rence 13(a). party’s claim....” Fed.R.Civ.P. 65(c). 17. Fed.R.Civ.P. 13, Japa- Rule that under Achilles concedes compulsory counter- constitutes a nese action Guzman, Dispatch Company Casa Corrigan v. Nonetheless, argues 13 18. that Rule Achilles claim. 1978); 300, (5th City Cir. see brought 303 apply claims not does of Rapid Au Metropolitan for Atlanta Transit on as a basis v. thus cannot be relied Atlanta courts and (5th Japanese ac- Feb. prohibiting thority, Cir. Unit B F.2d 1094 636 grounds that decided on 1981). tion. As we have other In Company, Inc. v. But Continuum authority properly Cir.), (5th exercised Inc., the district reconsid cepts, F.2d 803 873 action, we need not enjoining the (5th Cir. grounds, 883 ered on other F.2d governs suits. Rule 13 address whether 1989). note, however, holding today is that our We purpose which is Rule consistent with Corrigan Dispatch, 303. " multiplicity actions and ‘prevent disputes single suit of all resolution in achieve " Moreover, party facts—the under the instant Seattle To- arising tems, common matters.' out of any party risk of enjoined being the that created (quoting Con- Southern at 854 by filing damages delay duplication Pickard, S.Ct. U.S. struction Co. second, Japan (1962)). mirror-image after contrac- suit in 9 L.Ed.2d consenting jurisdiction and substan- tually Freeport v. Mardian Park at DFW 15. Commence cannot be tive law Texas—the (5th Cir. Construction have its discretion: said to abused Farms, 1984) (discussing Inc. Marshall Durbin damages, them. cause to avoid not can work Inc., Organization, National Farmers 1971)). Cir. III. majority’s opinion grant does not principle weight it CONCLUSION deserves, I respectfully must dissent. reasons, foregoing For Kaepa’s enjoin court’s motion to I

litigation in Japan of Achilles’s action A AFFIRMED. quarrel I do not with the well established GARZA, M. Judge, EMILIO Circuit principle, relied on majority, that our

dissenting: power courts have the to control the conduct comity represents International principle persons subject jurisdiction, to their even paramount importance in our world of enjoining the extent of prose- them from increasing cuting ever economic interdependence. foreign jurisdiction. I write to Admitting “comity” may however, be a emphasize, somewhat that under concurrent concept1 elusive does mean jurisdiction, not that we can “parallel proceedings on the blithely ignore cautionary personam dictate.2 Un- same ordinarily claim should proceed we in each respect proceed less instance with allowed to simultaneously, at least independent for the of a sover- until a is reached in one which can courts, eign judicata provoking nation’s we risk as res pled retali- in the other.” turn, Sabena, Airways consequences ation Belgian Ltd. v. detrimental World Air- lines, beyond particu- reverberate far (D.C.Cir.1984).3 dispute lar private litigants. and its filing Amica- The parallel a second action in an- among sovereign ble relations nations and other necessarily does con- judicial systems depend recogni- on our prevent flict with or the first court from tion, courts, as federal exercising we share the legitimate jurisdic- its concurrent co-equal judicial international arena Id. at 926. case, with tion. ordinary In the both bodies, deprive and that we act to therefore a forums proceed should be free to judg- to a foreign jurisdiction ment, only court of by the most unhindered the concurrent exercise extreme circumstances. Because I feel that of court.4 another 1. As one commentator has observed: 3. See also Princess Lida Thurn and Taxis v. of 456, 466, 275, 280, Thompson, 305 U.S. 59 S.Ct. Comity variously has been defined as the basis (1939) ("[I]t 83 L.Ed. 285 is settled that where law, of international law, a rule of international judgment sought strictly personam, the law, synonym private a international court, the having state court and the federal law, courtesy, politeness, rule of choice of con- jurisdiction, may proceed concurrent the goodwill sovereigns, venience or between litigation at least until is obtained in necessity, expediency, reciprocity moral may up judicata one of them which be set as res high politics considerations of international other.”). in the maintaining concerned with amicable and relationships workable between nations. Supreme 4. The Court in Kline v. Burke Const. Paul, Law, Comity Joel R. in International 260 U.S. 43 S.Ct. L.Ed. (footnotes (1991) omitted). L.J. Harv.Int'l (1922), following say had the to about concurrent jurisdiction: Guyot, 2. See Hilton v. 159 U.S. 16 S.Ct. controversy question per- [A] over a mere of (1895), Supreme 40 L.Ed. 95 in which the Court liability possession sonal does not involve the stated: thing, brought or control of a and an action to sense, '‘Comity,” legal in the is neither a mat- impair liability enforce such a does not tend to hand, obligation, ter of absolute on the one nor or defeat the of the court in which will, courtesy good upon of mere and the oth- prior pending. action for same cause is recognition er. But it is the which one nation proceed way Each court is free to in its own territory legislative, allows within its executive, to the time, and its own without reference to the nation, judicial of another acts proceedings in the other court. Whenever a having regard duty due both to international judgment is rendered in one of the courts and convenience, rights and and other, its own pleaded judg- in the the effect of that persons citizens or of other who are under by application ment is to be determined protection of laws. principles adjudicata of res the court in 163-64, U.S. at pending orderly 16 S.Ct. at 143. which the action is in the still only be predictability which can harmed injunction runs of an antisuit The issuance resulting break- injunctions and the tolerating principle to this

directly counter reciprocity between cooperation down of An antisuit proceedings. parallel attempt Id. The different nations. issuing courts of ... message “conveys the jurisdiction over inter- exclusive foreign to exercise in the confidence so little court has essentially an affairs is dispute national economic given adjudicate a ability to court’s eco- realm of international unwilling intrusion into the even efficiently that it is fairly and appropriately be policy that should nomic Shan Co. possibility.” Gau allow the treaty making legislature and the our left to Trust Bankers Airways in Laker process.5 As the court Cir.1992). no difference It makes stated, explicit directive an “Absent injunction is addressed terms the formal authori- neither the Congress, court has injunction oper parties. The to the weigh institutional resources ability ty nor the foreign court’s to restrict ates that must be policy political factors effectively if it jurisdiction as exercise resolving competing claims itself. evaluated when foreign court to the addressed were contrast, diplomatic and jurisdiction. see also Airways, F.2d at Laker definition, are, 408, 413, de- Dallas, executive channels 377 U.S. City Donovan exchange, negotiate, and reconcile 1582-83, signed to 12 L.Ed.2d 409 accompany the realiza- (1964). problems which litigating Enjoining parties from sphere within the interests necessarily compro national will may association.” comity, and lead international principles mise at 955. example, For consequences. undesirable by issuing a may react foreign court require affir majority appears to any thereby preventing injunction, similar granting of an anti- showing that the mative Laker Air obtaining remedy. party from immediately injunction in this case would ways, 731 F.2d at 927. adversely concretely affect relations judg inclined to enforce also be less Japan. Un between the United enforce a The refusal to our courts. ment in this antisuit less there is evidence however, is less offensive foreign judgment, “actually the rela junction threaten” would foreign court from acting prevent the than countries, majority the two tions between place. Id. at hearing the matter first Al otherwise. to assume is comfortable Cf. Systems, v. Bull Data Ins. Co. lendale Mut. Cir.1993) (re Inc., 425, 431-33 10 injunctions to carve out Antisuit intended concrete harm quiring evidence of to jurisdiction may have unin- also exclusive States). the United tended, foreign relations of international widespread effects on suggest gone so far as to coop- have atmosphere of Some courts Without “an commerce. example, repre a nations,” might expect, for that we reciprocity between eration and convey then- foreign nation to consequences in- sentative of the ability predict future regarding country’s concern the issuance inevitably suffer. transactions will ternational See, e.g., injunction in that case. efficiently, effectively 'operate To and Id. 431; Sys. v. Philips Medical Int’l B.V. require degree of id. at markets a international today impose eco- jurisdiction, The States cannot as it would deter- United exercise of its arising any question expect other or law the world and mine fact nomic will on the rest of rule, progress the case. The there- in the fore, compliance, The if indeed it ever could. meek generally established that become has era is one of world economic interde- modem brought personam is in the action first where interdependence pendence, re- and economic personal judgment, another a and seeks comity quires cooperation and na- between jurisdic- same cause in action for the another tions. precluded. is not Co., v. Trust Gau Shan Co. Bankers 230, 43 S.Ct. at 81. U.S. 1349, (6th Cir.1992). generally See Thomas Note, Burke, Case Gau Shan Co. Bankers recog- E. Co. Circuit in Gau 5. As the Sixth Shan Role of What Should Be the Interna- Trust Co.: nized: Injunc- Comity the Issuance of Antisuit tional hegemony days over interna- of American The (1993). tions?, Com.Reg. L. & long passed. 18 N.C.J.Intl since economic affairs have tional Bruetman, (7th Cir.1993). Japanese suit and resulting “unwarrant- Insisting on of immediate inconvenience, evidence and con- ed expense, and vexation.”6 harm, diplomatic pro- crete of a form inconvenience, expense vexation, otherwise, test or is unrealistic however, are likely factors present be shortsighted. As with most re- transnational whenever there is an exercise of concurrent lations, potential harm to international jurisdiction by foreign court. Sea Contain comity caused specific issuance of a AB, ers Ltd. v. Stena antisuit pre- will as difficult to (D.C.Cir.1989). majority’s standard can dict, remedy. as it will be to precisely It is hold, therefore, be understood to that “a troubling uncertainty, this recogni- and the duplication parties issues, alone, tion that our courts ill equipped weigh are justify sufficient to a foreign injunc- antisuit types policy these consider- Shan tion.” Gau ations, that cautions respect- us to make the (con- 731 F.2d at 928 ful underlying deference international cluding that this rationale prima “is facie exception. the rule rather than the inconsistent with the permitting rule parallel proceedings in concurrent in personam ac- B tions”). standard, Under concurrent holding the district court in this jurisdiction involving tribunal will ease did not abuse enjoining its discretion rarely, ever, if request withstand the for an Achilles, corporation, pro- injunction. ceeding with its sovereign lawsuit filed in the Japan, majority nation of appears rely By focusing potential hardship primarily duplicative on the nature Kaepa having litigate forums,7 in two Reederei, Gmbh, 1, 12-13, Zapata, Unterweser 407 U.S. 92 S.Ct. Cf. 888, 890, (5th Cir.1970) (1972) ("There (affirming 32 L.Ed.2d issuance compelling are "allowing why freely negotiated where reasons private simulta- interna- agreement, fraud, tional fluence, neous of the same action in unaffected undue in- overweening away bargaining power, forum thousands of miles would result in such here, effect.”). 'inequitable given hardship' involved should be and 'tend to frustrate and Therefore, anything, if delay speedy district court's ac- and efficient determination reserving ”), tion—in exclusive over grounds the cause’ rev’d on other nom. sub directly parties’ suit—runs counter to the inten- Zapata Bremen 407 U.S. M/S Off-Shore tions, freely negotiated as evinced (1972); con- 32 L.Ed.2d 513 Seattle ("The expansion tract. id. of American busi- Hockey Hockey League, Totems Club v. National Cf. if, industiy encouraged ness and hardly will (9th Cir.1981) (affirming anti- contracts, notwithstanding solemn we insist on a adjudication sepa- where in two parochial concept disputes that all must be re- “likely rate unnecessary actions was to result in courts.”). solved under our laws and in our I delay expense and substantial inconvenience and persuaded by am also majority's reliance witnesses,” to the and "could result actions, on the by filing inference Achilles' rulings judgment”), inconsistent or even a race to Japan eight their in action some or seven months denied, rt. 457 U.S. 102 S.Ct. ce 2902, Texas, they cyni- after sued were "smacks of (1982). 73 L.Ed.2d 1313 cism, harassment, delay.” See China Trade Corp. Choong Yong, & Dev. v. M.V. majority by relying I also believe the errs on (2nd Cir.1987) (vacating injunction even two majority other factors in this case. The though second suit was filed almost two-and-a- that the par- reasons "clear indications suit); years half Compagnie after initial des Baux arising ties that claims from their contract Am., ites de v. Guinea Insurance N. Co. 651 of adjudicated country” should be sup- in this lends 877, 880, (3d Cir.1981) (vacating 887 in- port to the that the conclusion did court junction though even second was filed al- by enjoining not abuse its discretion the later). years most four I not believe that do litigation. majority reaches this conclusion motives, impure any, outweigh Achilles' if should though even the district court found the that important the interests of international jirrisdictional language parties' agreement Dallas, City issue in case. this v. Donovan Cf. of permissive jurisdiction, was of Texas rather than 408, 415, 1579, 1583, 377 U.S. 84 S.Ct. 12 majority appears exclusive. also to (1964) (Harlan, J., overlook (dis- dissenting) L.Ed.2d 409 dispute experienced the fact that this involves agreeing majority's holding with the the sophisticated perfect- businessmen who were power enjoin state was without court to federal capable ly negotiating of proceedings an exclusive forum though court even the suit was they had clause one. See harassing). desired Bremen found to be vexatious and M/S 632 by a comity, decision United the tional analysis that is more an majority applies the foreign court of deprive a court to in the context brought to bear appropriately supported far jurisdiction must be non conveni dismiss a motion to of forum justi- than would otherwise weightier factors F.2d at 928. Airways, 781 Laker

ens.8 See its own to decline fy that court’s decision appropriate decid are Considerations jurisdiction on non conveniens are not forum ing to decline whether grounds. deprive deciding to whether when persuasive policies “The jurisdiction. of another court .C pro parties and hardships to the avoiding of standard Accordingly, I believe the litiga consolidation moting the economies Second, Sixth, Cir- and D.C. followed the princi outweigh important not tion ‘do satisfactorily respects princi- more cuits compel deference and comity that ples of safeguards jurisdiction and ple of concurrent foreign pro respect for concurrent mutual comi- important interests international Thus, is that du better rule ceedings. standard, a district stricter ty. Under this alone is not and issues plication factors de- look to two court should in- of an antisuit justify issuance to sufficient injunc- ” to issue an antisuit termining whether F.2d at 1355 junction.’ Gau Shan 956 (1) foreign action threatens tion: whether 928); Airways, F.2d at (quoting Laker (2) court; and jurisdiction of the district Corp. v. M.V. Trade & Dev. see China attempt was an action to whether the (2nd Cir.1987); Choong Yong, 837 public policies of the district important evade v. In Guinea Compagnie Bauxites de des 1355; F.2d at court.10 Gau Shan (3d Am., 877, 887 N. surance Co. of Trade, Air F.2d at Laker China Cir.1981), grounds sub nom. on other aff'd ways, at 927. these Neither Ireland, Compag Ltd. v. Corp. Insurance present in this are case. factors Guinee, 456 U.S. de nie des Bauxites (1982). duty protect legiti- to have A “Courts 72 L.Ed.2d 492 102 S.Ct. jurisdiction to the mately extent conve- conferred non grounds dismissal forum justice litigants.” to necessary provide full case would court either niens F.2d at 927. Where Laker avoiding majority’s concern satisfy the effectively threatens harming proceeding concurrent parties, without hardship to the court, jurisdiction of the paralyze the comity.9 The dis- interests attempting however, foreign court is to where position, trict the ac- over carve out exclusive determina- non conveniens make the forum tion, injunction may legitimately Japanese court. In tion on behalf jurisdic- necessary protect the court’s of interna- important interests light of conveniens, necessary jurisdic- aid gress, tion, or where the doctrine of non 8. On forum 235, 258-61, judgments.”) Reyno, U.S. Piper protect Co. or to effectuate Aircraft 267-68, (1981). added). L.Ed.2d (emphasis Section 2283 "does not allow proceedings enjoin federal conveniens, I non a note 9. On the issue forum protect that the federal court dispute between an involves case yet has not made.” make in the future but Japanese company company and a American Airlines, Sabena, Belgian Airways World Ltd. v. agreement distributorship cov- over ering exclusive (internal (D.C.Cir.1984) n. 59 Many of market. shoe addition, omitted). quotation marks Japan. Fed third-parly Moreover, are witnesses located 13(a) inapplicable been held in this had Japan found that district court R.CivP. context, accordingly, parties, federal court adequate “a is for both forum" would "an Japanese Kaepa’s argument party a rejected by enjoining that a § from from barred Kaepa the same im- not treat court would that proceeding court on claim should in in partiality to Achilles an would be shown compulsory pleaded counterclaim have been as American court. Hockey prior suit." Totems in a federal Seattle Hockey League, 652 F.2d v. Club National apply required a similar- we are I note that (9th Cir.1981). rule of restraint This 855 n. 5 ly concurrent state in tolerance of strict standard regarding proceeding respect state court (“A § proceedings. See 28 U.S.C. greater force in the con- apply with even should may not United States an court injunction the foreign tribunals. text of stay proceedings in a State court by except expressly Act of Con- as authorized foreign rare eases where the juris- tion. those has been made to carve out exclusive interdictory parallel, action is rather than the diction on foreign behalf of the tribunal.11 injunction primarily antisuit issuance of an is example may As where need action not inconsistent with the defensive to act in protect jurisdiction, order to its principles comity. The court long-standing exception tolerating to the rule Airways in Laker affirmed the of an issuance jurisdiction concurrent recognized has been injunction foreign antisuit where the action for proceedings in quasi rem or in rem. foreign “was instituted the defendants for Trade, China 837 F.2d at 36.12 Because the purpose terminating the sole the United may pose second action an inherent threat to fact, claim.” Id. at 915. In the Brit- jurisdiction, the court’s basis for Appeals enjoined ish plain- Court had the injunction may appropriate in an in rem pursuing against tiff from its claims British quasi in proceeding. rem Id. “Where in defendants a United States court under jurisdiction is based presence prop- on the Significantly, United States law. Id. erty jurisdictional within the court’s bound- United States district court in Laker Air- aries, a proceeding concurrent foreign ways injunction also made clear that its was jurisdiction poses danger foreign solely protect jurisdiction by intended court will order the property transfer of the preventing taking any the defendants from jurisdictional out of the boundaries of the governmental action before a court or court, first depriving thus it of authority litiga- that would interfere with the over the matter. This concern of course is pending before the district court. Id. at present personam in this in injunction proceeding.” 919. The was not intended to Likewise, Gau Shan prevent proceedings all concurrent in courts, present this concern only is not in directly those which the current in threatened personam jurisdiction. proceeding, the district court’s the focus of which is a There is no agreement. distribution evidence this case that Achilles’ I note that action Reederei, Gmhh, Japan any way Unterweser threatens relied jurisdiction. majority, court’s proceeding, justify- exercise its concurrent was an in rem ing While the eventually permissive action the more applied standard proceed judgment to a pled which can be of an issuance in that court, judicata res attempt no case.13 11. See majority purports Gau Shan Co. v. Bankers Trust persuaded by not to be (6th Cir.1992) (concluding identify the distinctions I in Bethell and Unter- possibility foreign ruling might that a result are, however, They weser. distinctions that make voluntary merely dismissal of the suit was appropriate all the difference under the standard plaintiff’s prosecuting a threat to the interest in evaluating injunctions. for The issuance suit, and was not a threat to the judgment of an antisuit or in an after court). the United States proceeding well-recognized in rem falls under a exception to the otherwise strict standard articu- Donovan, 12. See also 377 U.S. at 84 S.Ct. at Second, lated Sixth and D.C. Circuits. (citing Princess Lida Thurn and Taxis Trade, (recognizing See China 837 F.2d at 36 Thompson, 305 U.S. 83 L.Ed. (1939)). long-standing exception tolerating rule usual proceedings proceeding concurrent in rem or precedent

13. The other Fifth Circuit relied on rem); quasi majority equally distinguishable and does (concluding may freely protect that "a court not control the outcome in this case. See Bethell integrity judgments by preventing of its Peace, (5th Cir.1971). panel 441 F.2d 495 through oppressive evasion vexatious relit- in Bethell reviewed an antisuit igation,” citing proposition). Bethell for this was issued after a had been en- procedural posture Given the in Bethell and Un- upon summary judgment. tered a motion for terweser, permissive applied "standard” affirming 441 F.2d at 496. In injunction, the issuance of the entirely these cases is consistent with the strict panel the Fifth Circuit also relied on Therefore, proposing today. standard I am con- "power equity of a court of of one state to asserts, trary majority adopting to what the prosecuting restrain its own actions citizens evaluating strict standard for the issuance of vex, in a sister state when such actions serve to harass, injunctions antisuit in the Fifth Circuit would not oppress opponent." an Id. at 498 added). require (emphasis any prior panel us to overrule decision did not discuss the comity. interests of international Court. Accordingly, respect- I Japan. action filed stricter factor of the second Under fully dissent. may injunction also be standard, an antisuit party seeks to evade appropriate where by bringing the forum policies of

important Co., 956 Gau Shan foreign court. suit in a injunction may be an at 1357. “While attempts to evade party appropriate when of the forum a statute compliance with in- policies, an public important effectuates merely prevent appropriate junction is not America, STATES of UNITED advantages in seeking ‘slight party Plaintiff-Appellee, ap- law to be procedural the substantive ” Trade, court.’ China plied Airways, (quoting SMITH-BOWMAN, Laker F.2d at 37 M. Germon 73).14 favoring policy Defendant-Appellant. at n. disputes of all single lawsuit resolution No. 94-11023. not, matter does arising out of a common earlier, important inter- outweigh the noted Appeals, United States Court Rather, comity. ests Fifth Circuit. factor under the second principle enunciated 14, 1996. Feb. foreign judg- rule that a “similar to the is full faith and credit ment not entitled will not be enforced the Constitution

under contrary to when the United States within policies of the forum public crucial requested.” Laker is which enforcement princi- at Under this Airways, 731 F.2d give required to effect to ple, a court is not to the forum’s that does violence Id. Since the fundamental interests. own a much issuance of an with a greater direct interference and more judicial process than is the foreign country’s judgment, it follows that to enforce a refusal should be issued Although circumstances. the most extreme majority questions purity of Achilles’ filing Japan, there is no motives in attempting to evade that Achilles is evidence policy the United States any important forum.

II supports issu- neither factor Because case, injunction I an ance of court abused its discretion believe the district prosecuting an by enjoining Achilles from party seeking upon n. 73 which the 14. See also ("An likely impermissible designed evasion is much more to effectuate relied and which is have party attempts to elude to be found when the important policies.”). specific applicability compliance with a statute of

Case Details

Case Name: Kaepa, Inc. v. Achilles Corporation

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Feb 14, 1996

Citation: 76 F.3d 624

Docket Number: 95-50278

Court Abbreviation: 5th Cir.