Opinion ID: 433759
Heading Depth: 2
Heading Rank: 5

Heading: Judicial Reconciliation of Conflicting Assertions of Jurisdiction

Text: 143 We recognize that the district court's injunction, precipitated as it was by preemptive interim injunctions in the High Court of Justice, unfortunately will not resolve the deadlock currently facing the parties to this litigation. We have searched for some satisfactory avenue, open to an American court, which would permit the frictionless vindication of the interests of both Britain and the United States. However, there is none, for the British legislation defines the British interest solely in terms of preventing realization of United States interests. The laws are therefore contradictory and mutually inconsistent.
144 The conflict faced here is not caused by the courts of the two countries. Rather, its sources are the fundamentally opposed national policies toward prohibition of anticompetitive business activity. These policies originate in the legislative and executive decisions of the respective counties. 145 Congress has specifically authorized treble damage actions by foreign corporations to redress injuries to United States foreign commerce. 134 Equally significant, congress has designed the private action as a major component in the enforcement mechanism. The treble damage aspect of private recoveries is the centerpiece of that enforcement mechanism. 135 146 We find no indication in either the statutory scheme or prior judicial precedent that jurisdiction should not be exercised. Legitimate United States interests in protecting consumers, providing for vindicating creditors' rights, and regulating economic consequences of those doing substantial business in our country are all advanced under the congressionally prescribed scheme. These are more than sufficient jurisdictional contacts under United States v. Aluminum Co. of America 136 and subsequent case law to support the exercise of prescriptive jurisdiction in this case. Congress has been aware of the decades-long controversy accompanying the recurrent assertion of jurisdiction over foreign anticompetitive acts and effects in the United States dating back nearly forty years but has, with limited exceptions, 137 not yet chosen to limit the laws' application or disapprove of the consistent statutory interpretation reached by the courts. Thus, aside from the unprecedented foreign challenge to the application of the antitrust laws, there is nothing in either the facts alleged in the complaint or the circumstances of the litigation which suggests jurisdiction should not be exercised in Laker's suit. 147 The English courts have indicated that they, too, have acted out of the need to implement their mandatory legislative policy, and not out of any ill will towards our courts or the substantive law we are bound to follow. Although the injunctive relief sought by British Airways and British Caledonian set the stage for a direct conflict of jurisdiction, until action by the political branches of the English Government the English courts remained largely acquiescent to Laker's invocation of United States jurisdiction. Justice Parker's well reasoned judgment initially denied the injunctive relief sought by British Airways and British Caledonian. That judgment was rendered even after the district court issued the injunction under appeal here. 148 However, the government of the United Kingdom is now and has historically been opposed to most aspects of United States antitrust policy insofar as it affects business enterprises based in the United Kingdom. The British Government objects to the scope of the prescriptive jurisdiction invoked to apply the antitrust laws; the substantive content of those laws, which is much more aggressive than British regulation of restrictive practices; and the procedural vehicles used in the litigation of the antitrust laws, including private treble damage actions, and the widespread use of pretrial discovery. These policies have been most recently and forcefully expressed in the Protection of Trading Interests Act. 138 149 The nature of the direct conflict between the political-economic policies of the two countries is put into focus by considering whether the British Government would have been likely to attempt to stop Laker from suing in United States courts if Laker brought a suit other than an antitrust action. If Laker had sued the American defendants for fraud, or on a contract claim for failure of performance, the British would not have been at all interested in intervening, irrespective of the financial condition of Laker at the time it brought the suit. The indifference would not lessen whether British Airways and British Caledonian were included in the group sued by Laker in the United States court. It is the hated application of United States antitrust laws to conduct involving British corporations that has triggered the involvement of the British Government, and ultimately, the British courts. 150 Under the provisions of the Protection of Trading Interests Act, after Justice Parker refused relief, the English Secretary of State issued an order and directions prohibiting all those carrying on business in the United Kingdom, with the exception of United States designated air carriers, from complying with United States antitrust measures arising out of the provision of air carriage by United Kingdom designated airlines under the terms of the Bermuda II Treaty. Because these directions reflected the firm conclusion of the British Executive Branch that British trading interests were being threatened by Laker's antitrust claim, they presented an entirely different situation to the Court of Appeal than that which Justice Parker had faced. 139 The restrictions placed on the British airlines by these orders fundamentally altered the perceived ability of the Court of Appeal to permit concurrent actions. 140 Because the directions of the British Executive blocked British Caledonian and British Airways from complying with Laker's discovery requests, the court concluded that the British airlines could not thereafter adequately defend themselves. According to the Court of Appeal, this rendered Laker's claim wholly untriable and was therefore decisive. 141 151 Thus, to a large extent the conflict of jurisdiction is one generated by the political branches of the governments. There is simply no room for accommodation here if the courts of each country faithfully carry out the laws which they are entrusted to enforce. The Master of the Rolls expressed hope that the courts of the two countries will ... never be in conflict. The conflict, if there be conflict, will be purely one between the laws of the two countries, for which neither court is responsible. 142 We echo that hope.
152 Even as the political branches of the respective countries have set in motion the legislative policies which have collided in this litigation, they have deprived courts of the ability meaningfully to resolve the problem. The American and English courts are obligated to attempt to reconcile two contradictory laws, each supported by recognized prescriptive jurisdiction, one of which is specifically designed to cancel out the other. 153 The suggestion has been made that this court should engage in some form of interest balancing, permitting only a reasonable assertion of prescriptive jurisdiction to be implemented. 143 However, this approach is unsuitable when courts are forced to choose between a domestic law which is designed to protect domestic interests, and a foreign law which is calculated to thwart the implementation of the domestic law in order to protect foreign interests allegedly threatened by the objectives of the domestic law. 144 Interest balancing in this context is hobbled by two primary problems: (1) there are substantial limitations on the court's ability to conduct a neutral balancing of the competing interests, and (2) the adoption of interest balancing is unlikely to achieve its goal of promoting international comity. 154
155 Most proposals for interest balancing consist of a long list of national contacts to be evaluated and weighed against those of the foreign country. These interests may be relevant to the desirability of allocating jurisdiction to a particular national forum. However, their usefulness breaks down when a court is faced with the task of selecting one forum's prescriptive jurisdiction over that of another. 156 Many of the contacts to be balanced are already evaluated when assessing the existence of a sufficient basis for exercising prescriptive jurisdiction. 145 Other factors, such as the extent to which another state may have an interest in regulating the activity, and the likelihood of conflict with regulation by other states 146 are essentially neutral in deciding between competing assertions of jurisdiction. Pursuing these inquiries only leads to the obvious conclusion that jurisdiction could be exercised or that there is a conflict, but does not suggest the best avenue of conflict resolution. These types of factors are not useful in resolving the controversy. 157 Those contacts which do purport to provide a basis for distinguishing between competing bases of jurisdiction, and which are thus crucial to the balancing process, generally incorporate purely political factors which the court is neither qualified to evaluate comparatively nor capable of properly balancing. One such proposed consideration is the degree to which the desirability of such regulation [of restrictive practices] is generally accepted. 147 We doubt whether the legitimacy of an exercise of jurisdiction should be measured by the substantive content of the prescribed law. Moreover, although more and more states are following the United States in regulating restrictive practices, and even exercising jurisdiction based on effects within territory, 148 the differing English and American assessment of the desirability of antitrust law is at the core of the conflict. An English or American court cannot refuse to enforce a law its political branches have already determined is desirable and necessary. 158 The court is also handicapped in any evaluation of the existence of justified expectations that might be protected or hurt by the regulation in question. 149 In this litigation, whether the reliance of Laker and its creditors on United States antitrust laws is justified depends upon whether one accepts the desirability of United States anti-trust law. Whether the defendants could justifiably have relied on the inapplicability of United States law to their conduct alleged to have caused substantial effects in the United States is based on the same impermissible inquiry. The desirability of applying ambiguous legislation to a particular transaction may imply the presence or absence of legislative intent. However, once a decision is made that the political branches intended to rely on a legitimate base of prescriptive jurisdiction to regulate activities affecting foreign commerce within the domestic forum, the desirability of the law is no longer an issue for the courts. 159 The importance of regulation to the regulating state 150 is another factor on which the court cannot rely to choose between two competing, mutually inconsistent legislative policies. We are in no position to adjudicate the relative importance of antitrust regulation or nonregulation to the United States and the United Kingdom. It is the crucial importance of these policies which has created the conflict. A proclamation by judicial fiat that one interest is less important than the other will not erase a real conflict. 160 Given the inherent limitations of the Judiciary, which must weigh these issues in the limited context of adversarial litigation, we seriously doubt whether we could adequately chart the competing problems and priorities that inevitably define the scope of any nation's interest in a legislated remedy. This court is ill-equipped to balance the vital national interests of the United States and the [United Kingdom] to determine which interests predominate. 151 When one state exercises its jurisdiction and another, in protection of its own interests, attempts to quash the first exercise of jurisdiction it is simply impossible to judicially 'balance' these totally contradictory and mutually negating actions. 152 161 Besides the difficulty of properly weighing the crucial elements of any interest balancing formula, one other defect in the balancing process prompts our reluctance to adopt this analysis in the context of preservation of jurisdiction. Procedurally, this kind of balancing would be difficult, since it would ordinarily involve drawn-out discovery and requests for submissions by political branches. There was no time for this process in the present case. Either jurisdiction was protected or it was lost. It is unlikely that the employment of a hasty and poorly informed balancing process would have materially aided the district court's evaluation of the exigencies and equities of Laker's request for relief. 162
163 We might be more willing to tackle the problems associated with the balancing of competing, mutually inconsistent national interests if we could be assured that our efforts would strengthen the bonds of international comity. However, the usefulness and wisdom of interest balancing to assess the most reasonable exercise of prescriptive jurisdiction has not been affirmatively demonstrated. This approach has not gained more than a temporary foothold in domestic law. Courts are increasingly refusing to adopt the approach. 153 Scholarly criticism has intensified. 154 Additionally, there is no evidence that interest balancing represents a rule of international law. Thus, there is no mandatory rule requiring its adoption here, since Congress cannot be said to have implicitly legislated subject to these international constraints. 155 164 If promotion of international comity is measured by the number of times United States jurisdiction has been declined under the reasonableness interest balancing approach, then it has been a failure. Implementation of this analysis has not resulted in a significant number of conflict resolutions favoring a foreign jurisdiction. A pragmatic assessment of those decisions adopting an interest balancing approach indicates none where United States jurisdiction was declined when there was more than a de minimis United States interest. 156 Most cases in which use of the process was advocated arose before a direct conflict occurred when the balancing could be employed without impairing the court's jurisdiction to determine jurisdiction. 157 When push comes to shove, the domestic forum is rarely unseated. 158 165 Despite the real obligation of courts to apply international law and foster comity, domestic courts do not sit as internationally constituted tribunals. Domestic courts are created by national constitutions and statutes to enforce primarily national laws. 159 The courts of most developed countries follow international law only to the extent it is not overridden by national law. 160 Thus, courts inherently find it difficult neutrally to balance competing foreign interests. 161 When there is any doubt, national interests will tend to be favored over foreign interests. 162 This partially explains why there have been few times when courts have found foreign interests to prevail. 163 166 The inherent noncorrelation between the interest balancing formula and the economic realities of modern commerce is an additional reason which may underlie the reluctance of most courts to strike a balance in favor of nonapplication of domestic law. An assertion of prescriptive jurisdiction should ultimately be based on shared assessments that jurisdiction is reasonable. 164 Thus, international law prohibits the assertion of prescriptive jurisdiction unsupported by reasonable links between the forum and the controversy. 165 167 However, it does not necessarily follow, as the use of interest balancing as a method of choosing between competing jurisdictions assumes, that there is a line of reasonableness which separates jurisdiction to prescribe into neatly adjoining compartments of national jurisdiction. There is no principle of international law which abolishes concurrent jurisdiction. 166 Since prescriptive jurisdiction is based on well recognized state contacts with controversies, the reality of our interlocked international economic network guarantees that overlapping, concurrent jurisdiction will often be present. 167 There is, therefore, no rule of international law holding that a more reasonable assertion of jurisdiction mandatorily 168 displaces a less reasonable assertion of jurisdiction as long as both are, in fact, consistent with the limitations on jurisdiction imposed by international law. 169 That is the situation faced in this case: the territoriality and nationality bases of jurisdiction of the United Kingdom and the United States are both unimpeached. 168 In our federal system of parallel sovereign courts, several lines of cases recognize that prescriptive jurisdiction is often shared among several forums. 170 Those forums may participate in interforum compacts that provide a basis for allocating jurisdiction to one forum over another. 171 Similarly, the problems associated with overlapping bases of national taxation in international law are directly addressed by numerous bilateral and multilateral treaties rather than a judicially developed rule of exclusive jurisdiction grounded in a prioritization of the relative reasonableness of links between the state and the taxed entity. 172 Because we see no neutral principles on which to distinguish judicially the reasonableness of the concurrent, mutually inconsistent exercises of jurisdiction in this case, we decline to adopt such a rule here. 173
169 The district court could capitulate to the British attacking law, at the cost of losing its jurisdiction to implement the substantive policies established by Congress. Alternatively it can act to preserve its jurisdiction, running the risk that counterinjunctions or other sanctions will eventually preclude Laker from achieving any remedy, if it is ultimately entitled to one under United States law. In either case the policies of both countries are likely to be frustrated at the cost of substantial prejudice to the litigants' rights. 170 We unhesitatingly conclude that United States jurisdiction to prescribe its antitrust laws must go forward and was therefore properly protected by the district court. Despite the contrary assertions of the British government, there is no indication in this case that the limits of international law are exceeded by either country's exercise of prescriptive jurisdiction. But even so, application of national law may go forward despite a conflict with international law. Both Britain and the United States recognize this rule. 174 It follows a fortiori that national laws do not evaporate when counteracted by the legislation of another sovereign. 171 Although, in the interest of amicable relations, we might be tempted to defuse unilaterally the confrontation by jettisoning our jurisdiction, we could not, for this is not our proper judicial role. The problem in this case is essentially a political one, arising from the vast difference in the political-economic theories of the two governments which has existed for many years. Both nations have jurisdiction to prescribe and adjudicate. Both have asserted that jurisdiction. However, this conflict alone does not place the court in a position to initiate a political compromise based on its decision that United States laws should not be enforced when a foreign jurisdiction, contrary to the domestic court's statutory duty, attempts to eradicate the domestic jurisdiction. Judges are not politicians. The courts are not organs of political compromise. It is impossible in this case, with all the good will manifested by the English Justices and ourselves, to negotiate an extraordinarily long arms-length agreement on the respective impact of our countries' policies regulating anti-competitive business practices. 172 It is permissible for courts to disengage when judicial scrutiny would implicate inherently unreviewable actions, such as conduct falling within the act of state or sovereign immunity doctrines. But both institutional limitations on the judicial process and Constitutional restrictions on the exercise of judicial power make it unacceptable for the Judiciary to seize the political initiative and determine that legitimate application of American laws must evaporate when challenged by a foreign jurisdiction. 175 173 Unilateral abandonment by the Judiciary of legitimately prescribed national law in response to foreign counter-legislation would not materially advance the principles of comity and international accommodation which must form the foundation of any international system comprised of coequal nation states. The British Government's invocation of the Protection of Trading Interests Act to foreclose any proceeding in a non-English forum brought to recover damages for trade injuries caused by unlawful conspiracies is a naked attempt exclusively to reserve by confrontation an area of prescriptive jurisdiction shared concurrently by other nations. This assertion of interdictory jurisdiction propels into the courts a controversy whose eventual termination is restricted to two unsatisfactory alternatives: (1) either one state or the other will eventually capitulate, sacrificing its legitimate interests, or (2) a deadlock will occur to the eventual frustration of both the states' and the litigants' interests. The underlying goal of the legislation is apparently to compel the United States to cede its claims to regulate those aspects of its domestic economy deemed objectionable by the United Kingdom. However, the possibility of a cooperative, mutually profitable compromise by all affected countries is greatly restricted. Granting recognition to this form of coercion will only retard the growth of international mechanisms necessary to resolve satisfactorily the problems generated when radically divergent national policies intersect in an area of concurrent jurisdiction. 174 Rather than legitimizing the interference and stultifying effects that would follow widespread acceptance of interdictory jurisdiction, we prefer to permit Laker's suit, based as it is on well recognized prescriptive jurisdiction, to go forward as free as possible from the interference caused by foreign antisuit injunctions.