IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 95-50278

KAEPA, INC.,

Plaintiff-Appellee,

versus

ACHILLES CORPORATION,

Defendant-Appellant.

Appeal from the United States District Court

For the Western District of Texas

 

February 14, 1996

Before WIENER, EMILIO M. GARZA, and BENAVIDES, Circuit Judges.

WIENER, Circuit Judge:

The primary issue presented by this appeal is whether the

district court erred by enjoining Defendant-Appellant Achilles

Corporation from prosecuting an action that it filed in Japan as

plaintiff, which essentially mirrored a lawsuit previously filed by

Plaintiff-Appellee Kaepa, Inc. in state court and then being

prosecuted in federal district court by Kaepa. Given the private

nature of the dispute, the clear indications by both parties that
 

1The applicable language of the agreement reads:

This Agreement shall be governed by the laws of the State

of Texas, U.S.A., and shall be enforceable in San

Antonio, Texas. The English version of this Agreement

and the English language shall govern the interpretation

and meaning of all words and phrases used herein.

Distributor [Achilles] consents to jurisdiction in the

State of Texas, U.S.A.

The district court held that this clause (1) permits jurisdiction

in Texas, and (2) requires that the agreement be interpreted under

United States law and the English language. Neither party

challenges this ruling.

2

claims arising from their contract should be adjudicated in this

country, and the duplicative and vexatious nature of the Japanese

action, we conclude that the district court did not abuse its

discretion by barring the prosecution of the foreign litigation.

Accordingly, we affirm the grant of the antisuit injunction. 

I.

FACTS AND PROCEEDINGS

This case arises out of a contractual dispute between two

sophisticated, private corporations: Kaepa, an American company

which manufactures athletic shoes; and Achilles, a Japanese

business enterprise with annual sales that approximate one billion

dollars. In April 1993, the two companies entered into a

distributorship agreement whereby Achilles obtained exclusive

rights to market Kaepa's footwear in Japan. The distributorship

agreement expressly provided that Texas law and the English

language would govern its interpretation, that it would be

enforceable in San Antonio, Texas, and that Achilles consented to

the jurisdiction of the Texas courts.1

Kaepa grew increasingly dissatisfied with Achilles's
 

2Achilles does not challenge the denial of its motion to

dismiss.

3

performance under the contract. Accordingly, in July of 1994,

Kaepa filed suit in Texas state court, alleging (1) fraud and

negligent misrepresentation by Achilles to induce Kaepa to enter

into the distributorship agreement, and (2) breach of contract by

Achilles. Thereafter, Achilles removed the action to federal

district court, and the parties began a laborious discovery process

which to date has resulted in the production of tens of thousands

of documents. In February 1995, after appearing in the Texas

action, removing the case to federal court, and engaging in

comprehensive discovery, Achilles brought its own action in Japan,

alleging mirror-image claims: (1) fraud by Kaepa to induce

Achilles to enter into the distributorship agreement, and (2)

breach of contract by Kaepa.

Back in Texas, Kaepa promptly filed a motion asking the

district court to enjoin Achilles from prosecuting its suit in

Japan (motion for an antisuit injunction). Achilles in turn moved

to dismiss the federal court action on the ground of forum non

conveniens. The district court denied Achilles's motion to dismiss

and granted Kaepa's motion to enjoin, ordering Achilles to refrain

from litigating the Japanese action and to file all of its

counterclaims with the district court. Achilles timely appealed

the grant of the antisuit injunction.2
 

3See Western Directories, Inc. v. Southwestern Bell, 63 F.3d

1378, 1390 (5th Cir. 1995); Apple Barrel Productions, Inc. v.

Beard, 730 F.2d 384, 386 (5th Cir. 1984).

 

4Apple Barrel, 730 F.2d 384 (quoting Commonwealth Life

Insurance Co. v. Neal, 669 F.2d 300, 304 (5th Cir. 1982)).

 

5See, e.g., Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349,

1352 (6th Cir. 1992); China Trade & Dev. Corp. v. M.V. Choong Yong,

837 F.2d 33, 35 (2d Cir. 1987); Laker Airways v. Sabena, 731 F.2d

909, 926 (D.C. Cir. 1984); Seattle Totems Hockey Club, Inc. v.

National Hockey League, 652 F.2d 852, 855 (9th Cir. 1981), cert.

denied, 457 U.S. 1105 (1982); In Re Unterweser Reederei Gmbh, 428

F.2d 888, 890 (5th Cir. 1970), aff'd on rehearing en banc, 446 F.2d

907 (1971), rev'd on other grounds sub nom. Bremen v. Zapata

Offshore Co., 407 U.S. 1 (1972); Bethell v. Peace, 441 F.2d 495,

498 (5th Cir. 1971).

4

II.

ANALYSIS

A. PROPRIETY OF THE ANTISUIT INJUNCTION

Achilles's primary argument is that the district court failed

to give proper deference to principles of international comity when

it granted Kaepa's motion for an antisuit injunction. We review

the decision to grant injunctive relief for abuse of discretion.3

Under this deferential standard, findings of fact are upheld unless

clearly erroneous, whereas legal conclusions "`are subject to broad

review and will be reversed if incorrect.'"4

It is well settled among the circuit courtsSQincluding this

oneSQwhich have reviewed the grant of an antisuit injunction that

the federal courts have the power to enjoin persons subject to

their jurisdiction from prosecuting foreign suits.5 The circuits

differ, however, on the proper legal standard to employ when
 

6Compare, e.g., Seattle Totems, 652 F.2d at 855-56 and

Unterweser, 428 F.2d 888 with Gau Shan, 956 F.2d at 1355 and China

Trade, 837 F.2d at 36; 

 

7Unterweser, 428 F.2d 888.

 

8Bethell, 441 F.2d 495.

 

9Unterweser, 428 F.2d at 890, 896 (noting as well that

antisuit injunctions have been granted when foreign litigation

would (1) frustrate a policy of the forum issuing the injunction;

(2) be vexatious or oppressive; (3) threaten the issuing court's in

rem or quasi in rem jurisdiction; or (4) prejudice other equitable

considerations); see also Bethell, 441 F.2d at 498 ("[T]he court

was within its discretion in relieving the plaintiff of expense and

vexation of having to litigate in a foreign court."). Cf. Gau

Shan, 956 F.2d at 1353 (concluding that the Fifth Circuit "rel[ies]

primarily upon considerations of vexatiousness or oppressiveness in

a race to judgment in the foreign forum as sufficient grounds for

an [antisuit] injunction") (citing Unterweser, 428 F.2d at 896);

Seattle Totems, 652 F.2d at 855-56 (discussing Unterweser and

Bethell).

5

determining whether that injunctive power should be exercised.6 We

have addressed the propriety of an antisuit injunction on two prior

occasions, in In Re Unterweser Reederei Gmbh7 and Bethell v. Peace.

8

Emphasizing in both cases the need to prevent vexatious or

oppressive litigation, we concluded that a district court does not

abuse its discretion by issuing an antisuit injunction when it has

determined "that allowing simultaneous prosecution of the same

action in a foreign forum thousands of miles away would result in

`inequitable hardship' and `tend to frustrate and delay the speedy

and efficient determination of the cause.'"9 The Seventh and the
 

10See Seattle Totems, 652 F.2d at 855-56 (discussing Unterweser

and Bethell) (holding that it is within the district court's

discretion to grant an antisuit injunction when the adjudication of

an issue "is likely to result in unnecessary delay and substantial

inconvenience and expense to the parties and witnesses . . . [as

well as] inconsistent rulings or even a race to judgment").

 

11See Philips Medical Sys. Int'l B.V. v. Bruetman, 8 F.3d 600,

605 (7th Cir. 1993); see also Allendale Mut. Ins. Co. v. Bull Data

Systems, Inc., 10 F.3d 425, 431 (7th Cir. 1993). Cf. Sperry Rand

Corp. v. Sunbeam Corp., 285 F.2d 542 (7th Cir. 1961).

 

12See, e.g., Gau Shan, 956 F.2d at 1355; China Trade, 837 F.2d

at 36; Laker Airways, 731 F.2d at 927, 937. The weakness in the

foundation of the dissent's opinion is that it relies extensively

on these cases while virtually disregarding our holdings in

Unterweser and Bethell. The strict stare decisis policy of this

court prevents us from joining in the dissent's abrogation of the

holdings of two prior panels on this issue through purported

distinctions without real differences. See United States v.

Parker, No. 94-10557, slip op. 1367, 1370 (5th Cir. Jan. 3, 1996)

("`[O]ne panel may not overrule the decisionSQright or wrongSQof a

prior panel, absent en banc reconsideration or a superseding

contrary decision of the Supreme Court'") (quoting In re Dyke, 943

F.2d 1435, 1442 (5th Cir. 1991)).

6

Ninth Circuits have either adopted10 or "incline[d] toward"11 this

approach, but other circuits have employed a standard that elevates

principles of international comity to the virtual exclusion of

essentially all other considerations.12

Achilles urges us to give greater deference to comity and

apply the latter, more restrictive standard. We note preliminarily

that, even though the standard espoused in Unterweser and Bethell

focuses on the potentially vexatious nature of foreign litigation,

it by no means excludes the consideration of principles of comity.

We decline, however, to require a district court to genuflect

before a vague and omnipotent notion of comity every time that it

must decide whether to enjoin a foreign action. 

In the instant case, for example, it simply cannot be said
 

13Allendale, 10 F.3d at 430-31.

7

that the grant of the antisuit injunction actually threatens

relations between the United States and Japan. First, no public

international issue is implicated by the case: Achilles is a

private party engaged in a contractual dispute with another private

party. Second, the dispute has been long and firmly ensconced

within the confines of the United States judicial system: Achilles

consented to jurisdiction in Texas; stipulated that Texas law and

the English language would govern any dispute; appeared in an

action brought in Texas; removed that action to a federal court in

Texas; engaged in extensive discovery pursuant to the directives of

the federal court; and only then, with the federal action moving

steadily toward trial, brought identical claims in Japan. Under

these circumstances, we cannot conclude that the district court's

grant of an antisuit injunction in any way trampled on notions of

comity. 

On the contrary, the facts detailed above strongly support the

conclusion that the prosecution of the Japanese action would entail

"an absurd duplication of effort"13 and would result in unwarranted

inconvenience, expense, and vexation. Achilles's belated ploy of

filing as putative plaintiff in Japan the very same claims against

Kaepa that Kaepa had filed as plaintiff against Achilles smacks of

cynicism, harassment, and delay. Accordingly, we hold that the

district court did not abuse its discretion by granting Kaepa's
 

14The parties also debated the applicability of Federal Rule

of Civil Procedure 13(a) to claims brought in foreign courts. Rule

13(a) governs compulsory counterclaims and provides in relevant

part: "A pleading shall state as a counterclaim any claim which at

the time of serving the pleading the pleader has against any

opposing party, if it arises out of the transaction or occurrence

that is the subject matter of the opposing party's claim . . . ."

FED. R. CIV. P. 13(A). 

Achilles concedes that under Rule 13, the Japanese action

constitutes a compulsory counterclaim. Nonetheless, Achilles

argues that Rule 13 does not apply to claims brought in foreign

courts and thus cannot be relied on as a basis for prohibiting the

prosecution of the Japanese action. As we have decided on other

grounds that the district court properly exercised its authority in

enjoining the Japanese action, we need not address whether Rule 13

governs foreign suits. We note, however, that our holding today is

consistent with the purpose of Rule 13, which is to "`prevent

multiplicity of actions and to achieve resolution in a single suit

of all disputes arising out of common matters.'" Seattle Totems,

652 F.2d at 854 (quoting Southern Construction Co. v. Pickard, 371

U.S. 57 (1962)).

 

 

15Commerce Park at DFW Freeport v. Mardian Construction Co.,

729 F.2d 334, 342 (5th Cir. 1984) (discussing Marshall Durbin

Farms, Inc. v. National Farmers Organization, Inc., 446 F.2d 353

(5th Cir. 1971)).

8

motion for an antisuit injunction.14

B. RULE 65 REQUIREMENTS

Achilles also argues that the district court erred by failing

to meet several requirements of Federal Rule of Civil Procedure 65

before issuing the antisuit injunction. Rule 65(a)(1) provides

that "[n]o preliminary injunction shall be issued without notice to

the adverse party." We have interpreted the notice requirement of

Rule 65(a)(1) to mean that "where factual disputes are presented,

the parties must be given a fair opportunity and a meaningful

hearing to present their differing versions of those facts before

a preliminary injunction may be granted."15 If no factual dispute

is involved, however, no oral hearing is required; under such
 

16Commerce Park, 729 F.2d at 341; see also Federal Savings and

Loan Insurance Corp. v. Dixon, 835 F.2d 554, 558 (5th Cir. 1987).

Cf. Jones v. Newton, 775 F.2d 1316, 1318 (noting that an oral

hearing on motions is typically not required in this circuit);

Security and Exchange Commission v. First Financial Group of Texas,

Inc., 659 F.2d 660, 669 (5th Cir. 1981). 

 

17FED. R. CIV. P. 65(c).

 

18Corrigan Dispatch Company v. Casa Guzman, 569 F.2d 300, 303

(5th Cir. 1978); see also City of Atlanta v. Metropolitan Atlanta

Rapid Transit Authority, 636 F.2d 1084, 1094 (5th Cir. Unit B Feb.

1981). But see Continuum Company, Inc. v. Incepts, Inc., 873 F.2d

801, 803 (5th Cir.), reconsidered on other grounds, 883 F.2d 333

(5th Cir. 1989).

 

19Corrigan Dispatch, 569 F.2d at 303.

9

circumstances the parties need only be given "ample opportunity to

present their respective views of the legal issues involved."16 In

the instant case, the district court did not rely on any disputed

facts in determining whether it could properly grant an antisuit

injunction. Moreover, both parties presented comprehensive

memoranda in support of their positions on the issue. Accordingly,

the district court did not violate Rule 65(a)(1) by failing to

conduct an oral hearing before granting the antisuit injunction. 

Achilles also argues that the district court violated Rule

65(c) by not requiring Kaepa to post a bond. Rule 65(c) provides

that "[n]o . . . preliminary injunction shall issue except upon the

giving of security by the applicant, in such sum as the court deems

proper . . . ."17 In holding that the amount of security required

pursuant to Rule 65(c) "is a matter for the discretion of the trial

court,"18 we have ruled that the court "may elect to require no

security at all."19 Thus, the district court did not violate Rule
 

20Moreover, under the instant factsSQthe party enjoined being

the party that created any risk of damages for delay or duplication

by filing the second, mirror-image suit in Japan after

contractually consenting to the jurisdiction and substantive law of

TexasSQthe district court cannot be said to have abused its

discretion: The injunction can only work to avoid damages, not

cause them. 

 

21 As one commentator has observed:

Comity has been defined variously as the basis of international law,

a rule of international law, a synonym for private international

law, a rule of choice of law, courtesy, politeness, convenience or

goodwill between sovereigns, a moral necessity, expediency,

reciprocity or considerations of high international politics

concerned with maintaining amicable and workable relationships

between nations.

Joel R. Paul, Comity in International Law, 32 Harv. Int'l L.J. 1, 1-2 (1991)

(footnotes omitted). 

 

22 See Hilton v. Guyot, 159 U.S. 113, 16 S. Ct. 139, 40 L. Ed.

95 (1894), in which the Supreme Court stated: 

"Comity," in the legal sense, is neither a matter of absolute

obligation, on the one hand, nor of mere courtesy and good will,

upon the other. But it is the recognition which one nation allows

within its territory to the legislative, executive, or judicial acts

-10-

65(c) by failing to compel Kaepa to post a bond.20

III.

CONCLUSION

For the foregoing reasons, the district court's grant of

Kaepa's motion to enjoin the litigation of Achilles's action in

Japan is

AFFIRMED.

EMILIO M. GARZA, Circuit Judge, dissenting:

International comity represents a principle of paramount

importance in our world of ever increasing economic

interdependence. Admitting that "comity" may be a somewhat elusive

concept21 does not mean that we can blithely ignore its cautionary

dictate.22 Unless we proceed in each instance with respect for the
of another nation, having due regard both to international duty and

convenience, and to the rights of its own citizens or of other

persons who are under protection of its laws.

159 U.S. at 163-64, 16 S. Ct. at 143.

 

23 See also Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456,

466, 59 S. Ct. 275, 280, 83 L. Ed. 285 (1939) ("[I]t is settled that where the

judgment sought is strictly in personam, both the state court and the federal

independent jurisdiction of a sovereign nation's courts, we risk

provoking retaliation in turn, with detrimental consequences that

may reverberate far beyond the particular dispute and its private

litigants. Amicable relations among sovereign nations and their

judicial systems depend on our recognition, as federal courts, that

we share the international arena with co-equal judicial bodies, and

that we therefore act to deprive a foreign court of jurisdiction

only in the most extreme circumstances. Because I feel that the

majority's opinion does not grant the principle of international

comity the weight it deserves, I must respectfully dissent.

I

A

I do not quarrel with the well established principle, relied

on by the majority, that our courts have the power to control the

conduct of persons subject to their jurisdiction, even to the

extent of enjoining them from prosecuting in a foreign

jurisdiction. I write to emphasize, however, that under concurrent

jurisdiction, "parallel proceedings on the same in personam claim

should ordinarily be allowed to proceed simultaneously, at least

until a judgment is reached in one which can be pled as res

judicata in the other." Laker Airways Ltd. v. Sabena, Belgian

World Airlines, 731 F.2d 909, 926-27 (D.C. Cir. 1984).23 The filing
court, having concurrent jurisdiction, may proceed with the litigation at least

until judgment is obtained in one of them which may be set up as res judicata in

the other.").

 

24 The Supreme Court in Kline v. Burke Const. Co., 260 U.S. 226, 43 S.

Ct. 79, 67 L. Ed. 226 (1922), had the following to say about concurrent

jurisdiction:

[A] controversy over a mere question of personal liability does not

involve the possession or control of a thing, and an action brought

to enforce such a liability does not tend to impair or defeat the

jurisdiction of the court in which a prior action for the same cause

is pending. Each court is free to proceed in its own way and its

own time, without reference to the proceedings in the other court.

Whenever a judgment is rendered in one of the courts and pleaded in

the other, the effect of that judgment is to be determined by the

application of the principles of res adjudicata by the court in

which the action is still pending in the orderly exercise of its

jurisdiction, as it would determine any other question of fact or

law arising in the progress of the case. The rule, therefore, has

become generally established that where the action first brought is

in personam and seeks only a personal judgment, another action for

the same cause in another jurisdiction is not precluded.

260 U.S. at 230, 43 S. Ct. at 81.

-12-

of a second parallel action in another jurisdiction does not

necessarily conflict with or prevent the first court from

exercising its legitimate concurrent jurisdiction. Id. at 926. In

the ordinary case, both forums should be free to proceed to a

judgment, unhindered by the concurrent exercise of jurisdiction in

another court.24

The issuance of an antisuit injunction runs directly counter

to this principle of tolerating parallel proceedings. An antisuit

injunction "conveys the message . . . that the issuing court has so

little confidence in the foreign court's ability to adjudicate a

given dispute fairly and efficiently that it is unwilling even to

allow the possibility." Gau Shan Co. v. Bankers Trust Co., 956

F.2d 1349, 1355 (6th Cir. 1992). It makes no difference that in

formal terms the injunction is only addressed to the parties. The
-13-

antisuit injunction operates to restrict the foreign court's

ability to exercise its jurisdiction as effectively as if it were

addressed to the foreign court itself. Laker Airways, 731 F.2d at

927; Donovan v. City of Dallas, 377 U.S. 408, 413, 84 S. Ct. 1579,

1582-83, 12 L. Ed. 2d 409 (1964). Enjoining the parties from

litigating in a foreign court will necessarily compromise the

principles of comity, and may lead to undesirable consequences.

For example, the foreign court may react by issuing a similar

injunction, thereby preventing any party from obtaining a remedy.

Laker Airways, 731 F.2d at 927. The foreign court may also be less

inclined to enforce a judgment by our courts. The refusal to

enforce a foreign judgment, however, is less offensive than acting

to prevent the foreign court from hearing the matter in the first

place. Id. at 931.

Antisuit injunctions intended to carve out exclusive

jurisdiction may also have unintended, widespread effects on

international commerce. Without "an atmosphere of cooperation and

reciprocity between nations," the ability to predict future

consequences of international transactions will inevitably suffer.

Id. To operate effectively and efficiently, international markets

require a degree of predictability which can only be harmed by

antisuit injunctions and the resulting breakdown of cooperation and

reciprocity between courts of different nations. Id. The attempt

to exercise exclusive jurisdiction over international economic

affairs is essentially an intrusion into the realm of international
 

25 As the Sixth Circuit in Gau Shan Co. recognized:

The days of American hegemony over international economic affairs

have long since passed. The United States cannot today impose its

economic will on the rest of the world and expect meek compliance,

if indeed it ever could. The modern era is one of world economic

interdependence, and economic interdependence requires cooperation

and comity between nations.

Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349, 1354 (6th Cir. 1992). See

generally Thomas E. Burke, Case Note, Gau Shan Co. v. Bankers Trust Co.: What

Should Be the Role of International Comity in the Issuance of Antisuit

Injunctions?, 18 N.C. J. Int'l L. & Com. Reg. 475 (1993).

-14-

economic policy that should appropriately be left to our

legislature and the treaty making process.25 As the court in Laker

Airways stated, "Absent an explicit directive from Congress, this

court has neither the authority nor the institutional resources to

weigh the policy and political factors that must be evaluated when

resolving competing claims of jurisdiction. In contrast,

diplomatic and executive channels are, by definition, designed to

exchange, negotiate, and reconcile the problems which accompany the

realization of national interests within the sphere of

international association." Laker Airways, 731 F.2d at 955.

The majority appears to require an affirmative showing that

the granting of an antisuit injunction in this case would

immediately and concretely affect adversely the relations between

the United States and Japan. Unless there is evidence that this

antisuit injunction would "actually threaten" the relations between

the two countries, the majority is comfortable to assume otherwise.

Cf. Allendale Mut. Ins. Co. v. Bull Data Systems, Inc., 10 F.3d

425, 431-33 (7th Cir. 1993) (requiring evidence of concrete harm to

the foreign relations of the United States). Some courts have gone
 

26 Cf. In re Unterweser Reederei, Gmbh, 428 F.2d 888, 890, 896 (5th Cir.

1970) (affirming issuance of antisuit injunction where "allowing simultaneous

prosecution of the same action in a foreign forum thousands of miles away would

result in 'inequitable hardship' and 'tend to frustrate and delay the speedy and

efficient determination of the cause'"), rev'd on other grounds sub nom. M/S

Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 92 S. Ct. 1907, 32 L. Ed. 2d 513

(1972); Seattle Totems Hockey Club v. National Hockey League, 652 F.2d 852, 856

(9th Cir. 1981) (affirming antisuit injunction where adjudication in two separate

-15-

so far as to suggest that we might expect, for example, a

representative of the foreign nation to convey their country's

concern regarding the issuance of an antisuit injunction in that

case. See, e.g., id. at 431; Philips Medical Sys. Int'l B.V. v.

Bruetman, 8 F.3d 600, 605 (7th Cir. 1993). Insisting on evidence

of immediate and concrete harm, in the form of a diplomatic protest

or otherwise, is both unrealistic and shortsighted. As with most

transnational relations, the potential harm to international comity

caused by the issuance of a specific antisuit injunction will be as

difficult to predict, as it will be to remedy. It is precisely

this troubling uncertainty, and the recognition that our courts are

ill equipped to weigh these types of international policy

considerations, that cautions us to make the respectful deference

underlying international comity the rule rather than the exception.

B

In holding that the district court in this case did not abuse

its discretion by enjoining Achilles, a Japanese corporation, from

proceeding with its lawsuit filed in the sovereign nation of Japan,

the majority appears to rely primarily on the duplicative nature of

the Japanese suit and the resulting "unwarranted inconvenience,

expense, and vexation."26 The inconvenience, expense and vexation,
actions was "likely to result in unnecessary delay and substantial inconvenience

and expense to the parties and witnesses," and "could result in inconsistent

rulings or even a race to judgment"), cert. denied, 457 U.S. 1105, 102 S. Ct.

2902, 73 L. Ed. 2d 1313 (1982).

 

27 I also believe the majority errs by relying on two other factors in

this case. The majority reasons that the "clear indications by both parties that

claims arising from their contract should be adjudicated in this country" lends

support to the conclusion that the district court did not abuse its discretion

by enjoining the foreign litigation. The majority reaches this conclusion even

though the district court found that the jurisdictional language in the parties'

agreement was permissive of Texas jurisdiction, rather than exclusive. The

majority also appears to overlook the fact that this dispute involves experienced

and sophisticated businessmen who were perfectly capable of negotiating an

exclusive forum clause had they desired one. See Bremen v. Zapata, 407 U.S. 1,

12-13, 92 S. Ct. 1907, 1914, 32 L. Ed. 2d 513 (1972) ("There are compelling

reasons why a freely negotiated private international agreement, unaffected by

fraud, undue influence, or overweening bargaining power, such as that involved

here, should be given effect."). Therefore, if anything, the district court's

action))in reserving exclusive jurisdiction over this suit))runs directly counter

to the parties' intentions, as evinced by their freely negotiated contract. Cf.

id. ("The expansion of American business and industry will hardly be encouraged

if, notwithstanding solemn contracts, we insist on a parochial concept that all

disputes must be resolved under our laws and in our courts."). I am also not

persuaded by the majority's reliance on the inference that Achilles' actions, by

-16-

however, are factors likely to be present whenever there is an

exercise of concurrent jurisdiction by a foreign court. Sea

Containers Ltd. v. Stena AB, 890 F.2d 1205, 1213-14 (D.C. Cir.

1989). The majority's standard can be understood to hold,

therefore, that "a duplication of the parties and issues, alone, is

sufficient to justify a foreign antisuit injunction." Gau Shan

Co., 956 F.2d at 1353; see also Laker Airways, 731 F.2d at 928

(concluding that this rationale "is prima facie inconsistent with

the rule permitting parallel proceedings in concurrent in personam

actions"). Under this standard, concurrent jurisdiction involving

a foreign tribunal will rarely, if ever, withstand the request for

an antisuit injunction. 

By focusing on the potential hardship to Kaepa of having to

litigate in two forums,27 the majority applies an analysis that is
filing their action in Japan some seven or eight months after they were sued in

Texas, "smacks of cynicism, harassment, and delay." See China Trade & Dev. Corp.

v. M.V. Choong Yong, 837 F.2d 33, 34-35 (2nd Cir. 1987) (vacating injunction even

though second suit was filed almost two-and-a-half years after initial suit);

Compagnie des Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 880,

887 (3d Cir. 1981) (vacating injunction even though second suit was filed almost

four years later). I do not believe that Achilles' impure motives, if any,

should outweigh the important interests of international comity at issue in this

case. Cf. Donovan v. City of Dallas, 377 U.S. 408, 415, 84 S. Ct. 1579, 1583,

12 L. Ed. 2d 409 (1964) (Harlan, J., dissenting) (disagreeing with the majority's

holding that the state court was without power to enjoin federal court

proceedings even though the suit was found to be vexatious and harassing).

 

28 On the doctrine of forum non conveniens, see Piper Aircraft Co. V.

Reyno, 454 U.S. 235, 258-61, 102 S. Ct. 252, 267-68, 70 L. Ed. 2d 419 (1981).

-17-

more appropriately brought to bear in the context of a motion to

dismiss for forum non conveniens.

28 See Laker Airways, 731 F.2d at

928. Considerations that are appropriate in deciding whether to

decline jurisdiction are not as persuasive when deciding whether to

deprive another court of jurisdiction. "The policies of avoiding

hardships to the parties and promoting the economies of

consolidation litigation 'do not outweigh the important principles

of comity that compel deference and mutual respect for concurrent

foreign proceedings. Thus, the better rule is that duplication of

parties and issues alone is not sufficient to justify issuance of

an antisuit injunction.'" Gau Shan Co., 956 F.2d at 1355 (quoting

Laker Airways, 731 F.2d at 928); see also China Trade & Dev. Corp.

v. M.V. Choong Yong, 837 F.2d 33, 36 (2nd Cir. 1987; Compagnie des

Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 887

(3d Cir. 1981), aff'd on other grounds sub nom. Insurance Corp. of

Ireland, Ltd. v. Compagnie des Bauxite de Guinee, 456 U.S. 694, 102

S. Ct. 2099, 72 L. Ed. 2d 492 (1982). A dismissal on grounds of

forum non conveniens by either court in this case would satisfy the
 

29 On the issue of forum non conveniens, I note that this case involves

a dispute between an American company and a Japanese company over an exclusive

distributorship agreement covering the Japanese shoe market. Many of the thirdparty witnesses are located in Japan. Moreover, the district court found that

Japan would be "an adequate forum" for both parties, and rejected Kaepa's

argument that a Japanese court would not treat Kaepa with the same impartiality

that would be shown to Achilles in an American court.

 

30 I note that we are required to apply a similarly strict standard in

tolerance of concurrent state court proceedings. See 28 U.S.C. § 2283 ("A court

of the United States may not grant an injunction to stay proceedings in a State

court except as expressly authorized by Act of Congress, or where necessary in

aid of its jurisdiction, or to protect or effectuate its judgments.") (emphasis

-18-

majority's concern with avoiding hardship to the parties, without

harming the interests of international comity.29 The district court

is not in a position, however, to make the forum non conveniens

determination on behalf of the Japanese court. In light of the

important interests of international comity, the decision by a

United States court to deprive a foreign court of jurisdiction must

be supported by far weightier factors than would otherwise justify

that court's decision to decline its own jurisdiction on form non

conveniens grounds. 

C 

Accordingly, I believe that the standard followed by the

Second, Sixth, and D.C. Circuits more satisfactorily respects the

principle of concurrent jurisdiction and safeguards the important

interests of international comity. Under this stricter standard,

a district court should look to only two factors in determining

whether to issue an antisuit injunction: (1) whether the foreign

action threatens the jurisdiction of the district court; and (2)

whether the foreign action was an attempt to evade important public

policies of the district court.30 Gau Shan Co., 956 F.2d at 1355;
added). Section 2283 "does not allow a federal court to enjoin state proceedings

to protect a judgment that the federal court may make in the future but has not

yet made." Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909,

929 n.59 (D.C. Cir. 1984) (internal quotation marks omitted). In addition, FED.

R. CIV. P. 13(a) had been held inapplicable in this context, and accordingly, "a

federal court is barred by § 2283 from enjoining a party from proceeding in state

court on a claim that should have been pleaded as a compulsory counterclaim in

a prior federal suit." Seattle Totems Hockey Club v. National Hockey League, 652

F.2d 852, 855 n.5 (9th Cir. 1981). This rule of restraint and respect regarding

state court proceeding should apply with even greater force in the context of

foreign tribunals.

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China Trade, 837 F.2d at 36; Laker Airways, 731 F.2d at 927.

Neither of these factors are present in this case.

"Courts have a duty to protect their legitimately conferred

jurisdiction to the extent necessary to provide full justice to

litigants." Laker Airways, 731 F.2d at 927. Where the concurrent

proceeding effectively threatens to paralyze the jurisdiction of

the court, or where the foreign court is attempting to carve out

exclusive jurisdiction over the action, an antisuit injunction may

legitimately be necessary to protect the court's jurisdiction. In

those rare cases where the foreign action is interdictory rather

than parallel, the issuance of an antisuit injunction is primarily

a defensive action not inconsistent with the principles of

international comity. The court in Laker Airways affirmed the

issuance of an antisuit injunction where the foreign action "was

instituted by the foreign defendants for the sole purpose of

terminating the United States claim." Id. at 915. In fact, the

British Court of Appeals had enjoined the plaintiff from pursuing

its claims against British defendants in a United States court

under United States law. Id. Significantly, the United States

district court in Laker Airways also made clear that its injunction
 

31 See Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349, 1354 (6th Cir.

1992) (concluding that the possibility that a foreign ruling might result in the

voluntary dismissal of the suit was merely a threat to the plaintiff's interest

in prosecuting its suit, and was not a threat to the jurisdiction of the United

States court).

 

32 See also Donovan, 377 U.S. at 412, 84 S. Ct. at 1582 (citing Princess

Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 59 S. Ct. 275, 83 L. Ed. 285

(1939)).

-20-

was intended solely to protect its jurisdiction by preventing the

defendants from taking any action before a foreign court or

governmental authority that would interfere with the litigation

pending before the district court. Id. at 919. The injunction was

not intended to prevent all concurrent proceedings in foreign

courts, only those which directly threatened the district court's

jurisdiction. There is no evidence in this case that Achilles'

action in Japan in any way threatens the district court's exercise

of its concurrent jurisdiction. While the Japanese action may

eventually proceed to a judgment which can be pled as res judicata

in the district court, no attempt has been made to carve out

exclusive jurisdiction on behalf of the foreign tribunal.31

As an example of where a court may need to act in order to

protect its jurisdiction, a long-standing exception to the rule

tolerating concurrent jurisdiction has been recognized for

proceedings in rem or quasi in rem. China Trade, 837 F.2d at 36.32

Because the second action may pose an inherent threat to the

court's basis for jurisdiction, an antisuit injunction may be

appropriate in an in rem or quasi in rem proceeding. Id. "Where

jurisdiction is based on the presence of property within the
 

33 The other Fifth Circuit precedent relied on by the majority is

equally distinguishable and does not control the outcome in this case. See

Bethell v. Peace, 441 F.2d 495 (5th Cir. 1971). The panel in Bethel reviewed an

antisuit injunction that was issued only after a judgment had been entered upon

a motion for summary judgment. 441 F.2d at 496. In affirming the issuance of

the injunction, the Fifth Circuit panel also relied on "the power of a court of

equity of one state to restrain its own citizens from prosecuting actions in a

sister state when such actions serve to vex, harass, or oppress an opponent."

Id. at 498. The panel did not discuss the interests of international comity.

The majority purports not to be persuaded by the distinctions I identify

in Bethel and Unterweser. They are, however, distinctions that make all the

difference under the appropriate standard for evaluating antisuit injunctions.

The issuance of an antisuit injunction after judgment or in an in rem proceeding

falls under a well-recognized exception to the otherwise strict standard

articulated by the Second, Sixth and D.C. Circuits. See China Trade, 837 F.2d

at 36 (recognizing long-standing exception to usual rule tolerating concurrent

proceedings for proceeding in rem or quasi in rem); Laker Airways, 731 F.2d at

928 (concluding that "a court may freely protect the integrity of its judgments

by preventing their evasion through vexatious or oppressive relitigation," and

citing Bethel for this proposition). Given the procedural posture in Bethel and

Unterweser, the permissive "standard" applied in these cases is entirely

consistent with the strict standard I am proposing today. Therefore, contrary

to what the majority asserts, adopting the strict standard for evaluating the

issuance of antisuit injunctions in the Fifth Circuit would not require us to

overrule any prior decision by this Court. 

-21-

court's jurisdictional boundaries, a concurrent proceeding in a

foreign jurisdiction poses the danger that the foreign court will

order the transfer of the property out of the jurisdictional

boundaries of the first court, thus depriving it of jurisdiction

over the matter. This concern of course is not present in this in

personam proceeding." Gau Shan Co., 956 F.2d at 1358. Likewise,

this concern is not present in the current in personam proceeding,

the focus of which is a distribution agreement. I note that In re

Unterweser Reederei, Gmbh, relied on by the majority, was an in rem

proceeding, justifying the more permissive standard applied to the

issuance of an antisuit injunction in that case.33

Under the second factor of the stricter standard, an antisuit

injunction may also be appropriate where a party seeks to evade

important policies of the forum by bringing suit in a foreign
 

34 See also Laker Airways, 731 F.2d at 931 n.73 ("An impermissible

evasion is much more likely to be found when the party attempts to elude

compliance with a statute of specific applicability upon which the party seeking

an injunction may have relied and which is designed to effectuate important state

policies.").

-22-

court. Gau Shan Co., 956 F.2d at 1357. "While an injunction may

be appropriate when a party attempts to evade compliance with a

statute of the forum that effectuates important public policies, an

injunction is not appropriate merely to prevent a party from

seeking 'slight advantages in the substantive or procedural law to

be applied in a foreign court.'" China Trade, 837 F.2d at 37

(quoting Laker Airways, 731 F.2d at 931, n.73).34 The policy

favoring the resolution in a single lawsuit of all disputes arising

out of a common matter does not, as noted earlier, outweigh the

important interests of international comity. Rather, the principle

enunciated under the second factor is "similar to the rule that a

foreign judgment not entitled to full faith and credit under the

Constitution will not be enforced within the United States when

contrary to the crucial public policies of the forum in which

enforcement is requested." Laker Airways, 731 F.2d at 931. Under

this principle, a court is not required to give effect to a

judgment that does violence the forum's own fundamental interests.

Id. Since the issuance of an antisuit injunction is a much greater

and more direct interference with a foreign country's judicial

process than is the refusal to enforce a judgment, it follows that

an antisuit injunction should only be issued in the most extreme

circumstances. Although the majority questions the purity of
-23-

Achilles's motives in filing suit in Japan, there is no evidence

that Achilles is attempting to evade any important policy of the

United States forum. 

II

Because neither factor supports the issuance of an antisuit

injunction in this case, I believe the district court abused its

discretion by enjoining Achilles from prosecuting an action filed

in Japan. Accordingly, I respectfully dissent.