Opinion ID: 433759
Heading Depth: 2
Heading Rank: 2

Heading: Propriety of the Antisuit Injunction

Text: 63 It is well settled that English and American courts have power to control the conduct of persons subject to their jurisdiction to the extent of forbidding them from suing in foreign jurisdictions. 47 However, the fundamental corollary to concurrent jurisdiction must ordinarily be respected: 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. 48 The mere filing of a suit in one forum does not cut off the preexisting right of an independent forum to regulate matters subject to its prescriptive jurisdiction. For this reason, injunctions restraining litigants from proceeding in courts of independent countries are rarely issued. 49 64 A second reason cautioning against exercise of the power is avoiding the impedance of the foreign jurisdiction. Injunctions operate only on the parties within the personal jurisdiction of the courts. However, they effectively restrict the foreign court's ability to exercise its jurisdiction. 50 If the foreign court reacts with a similar injunction, no party may be able to obtain any remedy. 51 Thus, only in the most compelling circumstances does a court have discretion to issue an antisuit injunction. 65 There are no precise rules governing the appropriateness of antisuit injunctions. The equitable circumstances surrounding each request for an injunction must be carefully examined to determine whether, in light of the principles outlined above, the injunction is required to prevent an irreparable miscarriage of justice. Injunctions are most often necessary to protect the jurisdiction of the enjoining court, or to prevent the litigant's evasion of the important public policies of the forum. We consider the applicability of each category in turn.
66 Courts have a duty to protect their legitimately conferred jurisdiction to the extent necessary to provide full justice to litigants. Thus, when the action of a litigant in another forum threatens to paralyze the jurisdiction of the court, the court may consider the effectiveness and propriety of issuing an injunction against the litigant's participation in the foreign proceedings. 67 These situations may arise either before or after a judgment has been entered. 52 The policies that guide the exercise of discretion vary slightly in each situation. When the injunction is requested after a previous judgment on the merits, there is little interference with the rule favoring parallel proceedings in matters subject to concurrent jurisdiction. 53 Thus, a court may freely protect the integrity of its judgments by preventing their evasion through vexatious or oppressive relitigation. 54 68 However, when a party requests the issuance of an injunction to protect the court's jurisdiction before a judgment has been reached, the rules are less clear. Some courts issue the injunction when the parties and issues are identical in both actions, justifying the injunction as necessary to prevent duplicative and, therefore, vexatious litigation. 55 However, this rationale is prima facie inconsistent with the rule permitting parallel proceedings in concurrent in personam actions. The policies underlying this rule--avoiding hardship to parties and promoting the economies of consolidated litigation--are more properly considered in a motion for dismissal for forum non conveniens. 56 They 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. 57 69 Similarly, the possibility of an embarrassing race to judgment or potentially inconsistent adjudications 58 does not outweigh the respect and deference owed to independent foreign proceedings. 59 The parallel proceeding rule applies only until a judgment is reached in one of the actions. 60 After that point, the second forum is usually obliged to respect the prior adjudication of the matter. 61 If the rules regarding enforcement of foreign judgments are followed there will seldom be a case where parties reach inconsistent judgments. 70 There is little, if any, evidence of courts sacrificing procedural or substantive justice in an effort to race to a prior judgment. To the extent this slight risk exists it is outweighed by the more important policies favoring respect for concurrent proceedings. In any event, most forums need not fear that their crucial policies would be trampled if a foreign judgment is reached first, since violation of domestic public policy may justify not enforcing the foreign judgment. 62 71 These and other factors 63 relied upon to support issuance of prejudgment protective injunctions in aid of jurisdiction do not usually outweigh the importance of permitting foreign concurrent actions. Thus, although they suggest possible bases favoring the district court's decision to enjoin the appellants, we do not find them controlling. 72 The logical reciprocal of the parallel proceeding rule proves that there must be circumstances in which an antisuit injunction is necessary to conserve the court's ability to reach a judgment. Just as the parallel proceeding rule counsels against interference with a foreign court's exercise of concurrent jurisdiction, it authorizes the domestic court to resist the attempts of a foreign court to interfere with an in personam action before the domestic court. 64 When the availability of an action in the domestic courts is necessary to a full and fair adjudication of the plaintiff's claims, a court should preserve that forum. 65 5] Thus, where the foreign proceeding is not following a parallel track but attempts to carve out exclusive jurisdiction over concurrent actions, an injunction may be necessary to avoid the possibility of losing validly invoked jurisdiction. This would be particularly true if the foreign forum did not offer the remedy sought in the domestic forum. 73 The district court's injunction was clearly proper under these principles. As far as could be determined by the initial pleadings and papers filed, jurisdiction to prescribe was properly exercised. Consequently, the court's ability to render a just and final judgment had to be protected, absent clear evidence that the foreign action could fully consider the litigant's claims. 74 Appellants characterize the district court's injunction as an improper attempt to reserve to the district court's exclusive jurisdiction an action that should be allowed to proceed simultaneously in parallel forums. Actually, the reverse is true. The English action was initiated for the purpose of reserving exclusive prescriptive jurisdiction to the English courts, even though the English courts do not and can not pretend to offer the plaintiffs here the remedies afforded by the American antitrust laws. 75 Although concurrently authorized by overlapping principles of prescriptive jurisdiction, the British and American actions are not parallel proceedings in the sense the term is normally used. This is not a situation where two courts are proceeding to separate judgments simultaneously under one cause of action. Rather, the sole purpose of the English proceeding is to terminate the American action. The writs filed in the High Court of Justice sought to paralyze or halt the proceedings before the United States District Court. Although they also sought a determination that the defendants had not engaged in any unlawful conduct, the clear thrust of the requested relief was the termination of the United States antitrust claim. 66 Appellants conceded at oral argument that they are not interested in concurrent proceedings in the courts of the United Kingdom--they want only the abandonment or dismissal of the American action against them. 67 Further proof of this is Judge Greene's offer to draft the injunction more narrowly to permit certain proceedings that were not inconsistent with the unhindered continuation of the United States antitrust action. 68 That no suggestions were made by the appellants to narrow the injunction indicates that they are only interested in interfering with the antitrust action, and not in adjudicating the existence of an unlawful conspiracy under British law. 76 Judge Greene faced the stark choice of either protecting or relinquishing his jurisdiction. Midland Bank had previously obtained a preemptive interim injunction against Laker's naming it as a defendant in a United States antitrust action. Subsequently all of the foreign defendants in No. 82-3362 appeared in the High Court of Justice without notice to either Laker or the United States District Court and obtained interim protection. The remaining defendants, although domestic corporations, had to be restrained from attempting to follow the same path. It was equally clear that appellants also intended to seek English injunctive relief. Due to the lack of any prior notice by the four foreign defendants, the district court was threatened with a potential fait accompli by the appellants which would have virtually eliminated the court's effective jurisdiction over Laker's facially valid claim. Given the tensions between the parties, it is likely that the threat worsened every day. Thus, there was nothing improper in the district court's decision to enjoin appellants from seeking to participate in the English proceedings solely designed to rob the court of its jurisdiction.
77 Antisuit injunctions are also justified when necessary to prevent litigants' evasion of the forum's important public policies. 69 This principle 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. 70 Both rules recognize that a state is not required to give effect to foreign judicial proceedings grounded on policies which do violence to its own fundamental interests. 71 78 The standard for refusing to enforce judgments on public policy grounds is strict; defendants are rarely able to block judgments on these grounds. 72 Enjoining participation in a foreign lawsuit in order to preempt a potential judgment is a much greater interference with an independent country's judicial processes. It follows that an antisuit injunction will issue to preclude participation in the litigation only when the strongest equitable factors favor its use. 73 Both the importance to the forum of the law allegedly evaded, and the identity of the potentially evading party are relevant. 79 In this situation, the district court's injunction properly prevented appellants from attempting to escape application of the antitrust laws to their conduct of business here in the United States. KLM and Sabena seek to evade culpability under statutes of admitted economic importance to the United States 74 which are specifically applicable to their activities in the United States, and upon which Laker may have legitimately relied. 80 Whatever the merits of the British defendants' claims based upon the Bermuda II Treaty, 75 KLM and Sabena have no claim to antitrust immunity under their air service treaties. In fact, far from conferring any immunity, their treaties contain express language subjecting them to the jurisdiction of the United States over predatory pricing and abuse of monopoly power. Article Twelve of the United States-Belgium Air Transport Services Agreement provides, 81 (1) Each Party shall allow prices for air transportation to be established by each designated airline based upon commercial considerations in the marketplace. Intervention by the Parties shall be limited to: 82
83 (b) protection of consumers from prices that are unduly high or restrictive because of the abuse of a dominant position; and 84 (c) protection of airlines from prices that are artificially low because of direct or indirect governmental subsidy or support. 76 85 There is similar language in the United States-Netherlands air service agreement 77 and the United States-Germany 78 air service agreement. 86 These provisions were all negotiated recently, at a time when the countries could be expected to have been familiar with the United States' position regarding enforcement of its antitrust laws over foreign corporations operating in the United States. Significantly, in the face of these express treaty provisions appellants have not asserted before the United States courts any claim to immunity under the air service treaties. 87 In light of these treaty provisions, we find it offensive that KLM and Sabena attempt to ride on the coattails of the British airlines under the Bermuda II Treaty and the British Protection of Trading Interests Act, which were respectively intended to regulate British air carriage and to protect primarily the economic interests of British domestic corporations. We do not see how a suit by a British corporation against Dutch and Belgian corporations involving anticompetitive activities allegedly taken by the defendants to protect their United States-Dutch and United States-Belgian air markets adversely implicates British trading interests. British interests would be damaged only if a British corporation will have to pay the judgment. Conceivably, British trading interests may even be furthered by retaining KLM, Sabena, and the other non-British parties to the action, since a judgment against any one of them would contribute towards the full satisfaction of the creditors' claims against a British corporation in liquidation. 88 KLM and Sabena are not less properly enjoined from pursuing the British litigation by virtue of their status as foreign corporations. Because of the inherent interference of an antisuit injunction, injunctions are occasionally limited to restrain only residents of the forum state from pursuing foreign litigation, and do not necessarily run to all those who would be subject to the forum state's in personam jurisdiction. However, on occasion, circumstances have even permitted restraints on actions by foreign parties in other forums. 79 89 The propriety of such a restraint should be clear with respect to KLM and Sabena. Foreign corporations doing business in the enjoining forum are expected to abide by the forum's laws. We recognize that the British Government disputes the right of the United States to apply its antitrust laws to British air carriers operating in the United States. However, KLM and Sabena have not argued that their status as air carriers under their air service treaties guarantees them any special status in this regard. Indeed, their treaties permit signatory government intervention to redress predatory prices or abuse of dominant market position. In this situation, KLM and Sabena should be treated as any other resident or corporation operating within this country. They are not permitted to escape forum policies any more than other residents. 90 Sabena's argument that the district court's antisuit injunction compels Britain to acquiesce in conduct by its nationals that may violate its policies disfavoring international application of treble damages laws 80 is disengenuous. The district court's order does not compel Britain to do anything, but only preserves free access to United States courts. The British Government is free to pursue other sanctions against Laker. 81
91 The district court's injunction was within its discretion even though the United Kingdom courts have issued in personam injunctions stopping Laker from proceeding against British Airways and British Caledonian. Long experience derived from this country's federal system teaches that a forum state may, 82 but need not, 83 stay its own proceedings in response to an antisuit injunction against a party before the court. This is consistent with the general rule permitting concurrent proceedings on transitory causes of action. 84 In extreme cases it may even be necessary to issue a counterinjunction to thwart another state's attempt to assert exclusive jurisdiction over a matter legitimately subject to concurrent jurisdiction. 85 92 In suits involving states, even the Full Faith and Credit Clause does not compel recognition of an antisuit injunction. In Pacific Employers Insurance Co. v. Industrial Accident Commission 86 the Supreme Court held that when two states each create an exclusive remedy for a liability which each state has jurisdiction to impose, neither is bound to defer to the other's jurisdiction by enforcing the other jurisdiction's remedy to the exclusion of its own. Although one state may exercise its prescriptive jurisdiction to create an exclusive remedy for an injury, absent some other overriding constitutional stricture, that exclusivity is never so total as to prevent another sovereign from disregarding a foreign remedy in favor of its own administrative scheme tailored to serve its unique needs. 93 The same result is reached here a fortiori, since the mandatory policies of the Full Faith and Credit Clause do not apply to international assertions of exclusive jurisdiction. The antisuit injunction was a necessary and proper vehicle to protect the United States District Court's jurisdiction and prevent the evasion by KLM and Sabena of important domestic laws governing their conduct of business within the United States.