Court Opinion

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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-13-2004

In Re Automotive
Precedential or Non-Precedential: Precedential

Docket No. 02-4272

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Recommended Citation
"In Re Automotive " (2004). 2004 Decisions. Paper 954.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/954

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                      PRECEDENTIAL         Raymond A. Just
                                           Shearman & Sterling
                                           55 California Street
IN THE UNITED STATES COURT OF              20 th Floor
            APPEALS                        San Francisco, CA 94104
     FOR THE THIRD CIRCUIT
          ____________                            Counsel for Appellant

               No. 02-4272                 Geoffrey C. Hazard, Jr. (Argued)
              ____________                 University of Pennsylvania
                                           The Law School
IN RE: AUTOMOTIVE REFINISHING              3400 Chestnut Street
  PAINT ANTITRUST LITIGATION               Philadelphia, PA 19104-6204

BASF AG and BASF COATINGS AG,              Gerald J. Rodos
                   Appellants              Barrack, Rodos & Bacine
         ____________                      2001 Market Street
                                           3300 Two Commerce Square
 Appeal from the United States District    Philadelphia, PA 19103
                 Court
For the Eastern District of Pennsylvania   Warren Rubin
         D.C. No.: MDL 1426                Law Offices of Bernard M. Gross
 District Judge: Honorable R. Barclay      1515 Locust Street, Suite 200
                Surrick                    Philadelphia, PA 19102
            ____________
                                           Joseph C. Kohn
      Argued: December 15, 2003            Robert J. LaRocca
                                           Kohn, Swift & Graf
Before: ROTH, McKEE, and ROSENN,           One South Broad Street, Suite 2100
           Circuit Judges                  Philadelphia, PA 19107

     (Filed   February 13, 2004   )        Howard I. Langer
                                           Columb, Honik & Langer
                                           121 South Broad Street, 9 th Floor
Stephen Fishbein (Argued)                  Philadelphia, PA 19107
Shearman & Sterling
599 Lexington Avenue                              Counsel for Appellees
New York, NY 10022
                                           William T. Hangley
Edward W. Madeira, Jr.                     Hangley, Aronchick, Segal & Pudlin
Matthew J. Hamilton                        One Logan Square, 27th Floor
Pepper Hamilton                            Philadelphia, PA 19103
18 th & Arch Streets
3000 Two Logan Square                             Counsel for Amicus-Appellant
Philadelphia, PA 19103                            Fedr. German Ind.
James J. Rodgers                                         The District Court denied the
Dilworth Paxson                                   motions to dismiss for lack of personal
1735 Market Street                                jurisdiction and the joint motion for a
3200 The Mellon Bank Center                       protective order filed by two German
Philadelphia, PA 19103                            corporations, BASF Aktiengesellschaft
                                                  (BASF AG) and BASF Coatings
       Counsel for Amicus-Appellant               Aktiengesellschaft (BASF Coatings)
       Fed. Republic Germany                      (collectively “appellants”), defendants in
                                                  the underlying antitrust litigation. The
             ____________                         District Court construed Section 12 of
                                                  the Clayton Act as authorizing
      OPINION OF THE COURT                        worldwide service of process
           ____________                           independently of the specific venue
                                                  provision contained in that statute. The
ROSENN, Circuit Judge.                            Court also held that personal jurisdiction
                                                  over the foreign corporations would be
                                                  measured on their contacts with the
         This certified interlocutory             United States as a whole, rather than with
appeal, arising out of alleged unlawful           the forum state. The Court finally
price-fixing by both domestic and                 rejected a rule favoring first resort to
foreign corporations, raises questions of         Hague Convention procedures for
considerable importance in antitrust              jurisdictional discovery of foreign
litigation involving foreign nationals.           defendants. BASF AG and BASF
Three of the issues are of first impression       Coatings timely appealed. We affirm.
to this Court. The first issue is whether
worldwide service of process authorized                               I.
under Section 12 of the Clayton Act, 15
U.S.C. § 22, upon foreign corporations is                 The underlying federal antitrust
independent of the specific venue                 class litigation involves sixty-three
provision contained in that statute. The          actions filed in five states, Pennsylvania,
second issue is whether a federal court’s         New Jersey, Ohio, Kentucky, and
personal jurisdiction over a foreign              Delaware, by private parties. Those
corporation in antitrust litigation may be        actions were transferred to, and
predicated on the foreign corporation’s           consolidated in, the United States District
contacts with the United States as a              Court for the Eastern District of
whole (national contacts analysis), rather        Pennsylvania for pre-trial purposes by
than with the specific forum in which the         the Judicial Panel on Multidistrict
court sits (local contacts analysis). The         Litigation.1 The class action complaint
final issue is whether jurisdictional
discovery from foreign nationals may
proceed under the Federal Rules of Civil          1
                                                   The defendants, in addition to the two
Procedure without first resorting to the          appellants here, are: PPG Industries, Inc.;
Hague Convention on the Taking of                 E.I. DuPont de Nemours and Company;
Evidence Abroad in Civil or Commercial            DuPont Performance Coatings, Inc.;
Matters (Hague Convention or                      Sherwin-William, Co.; Sherwin-William
Convention). 23 U.S.T. 2555, reprinted            Automotive Finishes Corporation; Akzo
in 28 U.S.C. § 1781 Note.                         Nobel Car Refinishers B.V., a Dutch
                                                  company; Akzo Nobel Coatings, Inc., a

                                              2
alleges that from 1993 to at least                 jurisdictional discovery.2 In response to
December 31, 2000, the foreign and                 the plaintiffs’ request for jurisdictional
domestic defendants conspired to raise             discovery, the appellants filed a joint
and maintain the prices of automotive              motion for a protective order, contending
refinish paint throughout the United               that the plaintiffs’ discovery request was
States. All defendants, except the                 overly broad and burdensome. They
appellants, have stipulated to                     argued also that any jurisdictional
certification of a national class consisting       discovery should proceed first under the
of all direct purchasers of automotive             Hague Convention, of which the United
refinishes from the defendants.                    States and Germany are signatories.

         The appellants filed motions to                  The reasons proffered by the
dismiss pursuant to Federal Rule of Civil          appellants’ expert, Martin Reufels, were
Procedure 12(b)(2) for lack of personal            that Germany, unlike the United States,
jurisdiction. In support of their motions          viewed the gathering of evidence as a
to dismiss, the appellants submitted               judicial, rather than private, function.
affidavits stating that they did not have          Therefore, Germany had a sovereign
presence in the state of Pennsylvania and
never sold any automotive refinish paint
to any customers in Pennsylvania. The              2
                                                     The District Court noted the following
plaintiffs replied that the appropriate            facts submitted by the plaintiffs: the
forum for measuring the appellants’                appellants are the holders of numerous
contacts for purposes of personal                  patents in the United States; in its
jurisdiction is the United States as a             publicly released documents, such as the
whole, rather than the forum state of              forms filed with the Securities and
Pennsylvania. The plaintiffs opposed the           Exchange Commission and annual
motions to dismiss and also served                 reports, and its web site, BASF AG
jurisdictional discovery requests pursuant         presents itself as part of a globally
to the Federal Rules of Civil Procedure,           integrated group, BASF or BASF Group,
seeking production of documents                    consisting of BASF AG, the parent
concerning the appellants’ contacts with           corporation in the group and its 153
the United States as a whole.                      consolidated subsidiaries; BASF AG
                                                   owns 100 percent of the shares of BASF
        The plaintiffs submitted publicly          Corporation, a domestic corporation
available information to show a threshold          located in New Jersey; BASF AG’s
case of personal jurisdiction based on the         publicly released documents show that it
appellants’ contacts with the United               sold approximately $1.5 billion in goods
States and support their request for               to its wholly owned subsidiary, BASF
                                                   Corporation, in 2000; according to
                                                   BASF’s website, BASF Coatings has a
                                                   “significant market position[ ] in North
U.S. corporation; and BASF                         America”; BASF Coatings maintains an
Corporation, a U.S. corporation based in           office in Michigan; and according to
New Jersey, which is part of the BASF              BASF AG’s 2001 annual report, the
Group, a global network of corporations            BASF Group explicitly endorses the
that include the two German                        “exchange of staff among BASF Group
corporations, which are the only                   companies” as being “critical” in
appellants in this interlocutory appeal.           achieving its worldwide corporate goals.

                                               3
interest in keeping discovery conducted           Court denied the appellants’ joint motion
within its borders in conformity with its         for a protective order requiring the
laws. According to Reufels, compelling            plaintiffs to conduct their jurisdictional
the appellants to produce documents               discovery first under the Hague
pursuant to the Federal Rules of Civil            Convention procedures, rather than the
Procedures would offend Germany’s                 Federal Rules of Civil Procedure.
sovereign interests.
                                                         Both the District Court and this
        In its order and careful                  Court granted the appellants’ petition for
accompanying opinion, the District                interlocutory appeal pursuant to 28
Court, Surrick, J., denied without                U.S.C. § 1292(b). The appellants raise
prejudice the appellants’ motions to              two issues for review on this
dismiss. Rejecting the appellants’                interlocutory appeal. The first issue is
contrary arguments, the Court construed           whether a plaintiff may invoke the
Section 12 of the Clayton Act as                  worldwide service of process provision
authorizing worldwide service of process          contained in Section 12 of the Clayton
independently of the specific venue               Act and, thus, national contacts analysis,
provision contained in that statute. The          without satisfying the specific venue
Court held that the relevant forum for            provision also contained in that statute.
purposes of proof of personal jurisdiction        The second issue is whether a plaintiff
was the United States as a whole, rather          may be permitted to seek jurisdictional
than the forum state of Pennsylvania.             discovery from foreign defendants under
The Court concluded that the plaintiffs           the Federal Rules of Civil Procedure
had made a threshold showing of                   without first resorting to the Hague
personal jurisdiction that warranted              Convention. We agree with the District
jurisdictional discovery.3 In a separate          Court and answer both in the
order and accompanying opinion, the               affirmative.4

                                                                      II.
3
 The appellants have not appealed from
the Court’s ruling that the plaintiffs have              The first issue raised by the
shown a prima facie case of personal
jurisdiction. Accordingly, we do not
review that ruling. “Prior to discovery, a        4
                                                   The District Court has original federal
plaintiff may defeat a motion to dismiss          question subject matter jurisdiction under
based on legally sufficient allegations of        28 U.S.C. § 1331 over this class action
jurisdiction.” In re Magnetic Audiotape           brought under 15 U.S.C. § 1 (section 1 of
Antitrust Litig., 334 F.3d 204, 206 (2d           the Sherman Act) and 15 U.S.C. §§ 15
Cir. 2003). The District Court rejected           and 26 (sections 4 and 16 of the Clayton
the plaintiffs’ arguments that the                Act). We have appellate jurisdiction
jurisdictional contacts of BASF                   under 28 U.S.C. § 1292(b) over this
Corporation, the wholly owned domestic            interlocutory appeal. Because the
subsidiary of BASF AG, should be                  certified issues on appeal involve pure
imputed to BASF AG and that the                   questions of law, we review the District
jurisdictional contacts of the appellants’        Court’s rulings de novo. Bowers v.
alleged co-conspirators should be                 National Collegiate Athletic Ass’n, 346
imputed to the appellants.                        F.3d 402, 410 (3d Cir. 2003).

                                              4
appellants involves two conceptually                     only in the judicial district
distinct, though intertwined, sub-issues.                whereof it is an inhabitant, but
One is whether the District Court erred in               also in any district wherein it may
ruling that the service of process                       be found or transacts business;
provision contained in Section 12 of the                 and all process in such cases may
Clayton Act is independent of the venue                  be served in the district of which
provision also contained in that statute.                it is an inhabitant, or wherever it
Two is whether the Court erred in ruling                 may be found.
that in federal antitrust litigation,
personal jurisdiction should be assessed          15 U.S.C. § 22 (emphasis added). 6
on the basis of the appellants’ contacts
with the United States as a whole
(national contacts analysis), rather than         6
                                                   Section 12 permits venue in any federal
with the forum state (local contacts              district in which a corporation is an
analysis). The two sub-issues are                 “inhabitant,” may be “found,” or
intertwined because if there is no specific       “transacts business.” Those terms are
venue limitation in federal antitrust             defined as follows:
litigation involving a foreign corporate
defendant, the defendant can be sued in                  Being an “inhabitant” is held to
any federal district court based on its                  mean incorporated under the laws
aggregate contacts with the United States                of that jurisdiction. E.g., Aro
as a whole. Because they are intertwined                 Manufacturing Co. v. Automobile
and because the appellants present them                  Body Research Corp., 352 F.2d
as a single integrated issue, we discuss                 400, 404 (1st Cir. 1965), cert.
them together. 5                                         denied, 383 U.S. 947, 86 S. Ct.
1199, 16 L. Ed. 2d 210 (1966).
                    A.                                   Being “found” in a district is
                                                         generally equated with “doing
       Section 12 of the Clayton Act                     business” there, and requires
provides:                                                greater contacts than does
                                                         “transacting business.” E.g.,
       Any suit, action, or proceeding                   Wood v. Santa Barbara Chamber
       under the antitrust laws against a                of Commerce, Inc., 507 F. Supp.
       corporation may be brought not                    1128 (D. Nev. 1980); Grappone,
                                                         Inc. v. Subaru of America, Inc.,
                                                         403 F. Supp. 123 (D.N.H. 1975);
5
 The Committee to Support the Antitrust                  Friends of Animals Inc. v.
Laws, a nonprofit corporation based in                   American Veterinary Medical
the District of Columbia, has submitted                  Ass’n, 310 F. Supp. 620
an amicus curiae brief in support of the                 (S.D.N.Y. 1970).
plaintiffs’ position on the two certified
issues. The amicus curiae briefs in               Gen. Elec. Co. v. Bucyrus-Erie Co., 550
support of the appellants’ position,              F. Supp. 1037, 1041 n.5 (S.D.N.Y.
submitted by the Federal Republic of              1982). A corporation is “found” where it
Germany and the Federation of German              has “presence” and “continuous local
Industries, do not address the first              activities” in the district. Caribe Trailer
certified issue.                                  Systems, Inc. v. Puerto Rico Maritime
                                                  Shipping Auth., 475 F. Supp. 711. 716

                                              5
Section 12, a long sentence, consists of                 interpretation is adopted, plaintiffs
two separate clauses, the first relating to              can rely on 28 U.S.C. § 1391(d)
venue and the second concerning service                  [the Alien Venue Statute] which
of process and, therefore, personal                      provides for venue in antitrust
jurisdiction. It is undisputed that the                  actions against foreign
second clause authorizes nationwide,                     corporations “in any district” and
indeed worldwide, service of process on                  on the second clause of Section 12
a defendant corporation in federal                       for personal jurisdiction over
antitrust litigation. The clause provides                defendants based on a minimum
that the defendant may be served                         contacts analysis considering their
“wherever it may be found,” that is,                     contacts with the United States as
wherever it is “doing business.” See,                    a whole. If the second
e.g., Go-Video, Inc. v. Akai Elec. Co.,                  interpretation prevails the service
Ltd., 885 F.2d 1406, 1413 (9th Cir. 1989)                provision is only effective when,
(Section 12 “authorizes worldwide                        pursuant to Section 12’s first
service of process”).                                    clause, the action is brought in a
                                                         district where the defendant
         The parties dispute whether the                 resides, is found or transacts
two clauses of Section 12 should be read                 business.
as an integrated whole or independently
of each other. Specifically, they dispute         In re Magnetic Audiotape Antitrust
whether the venue provision contained in          Litig., 171 F. Supp. 2d 179, 184
the first clause of Section 12 must be            (S.D.N.Y. 2001), vacated sub nom. on
satisfied before the plaintiffs could avail       other grounds, Texas Int’l Magnetics,
themselves of the authorization of                Inc. v. BASF Aktiengesellschaft, 31 Fed.
worldwide service of process contained            Appx. 738, 2002 WL 385569 (2d Cir.
in the second clause. As explained by             March 12, 2002). The plaintiffs dispute
one court:                                        whether the present litigation can only be
                                                  brought in a federal district where the
       [t]he dispute centers on whether           appellants are “residents,” may be
       the jurisdiction provision                 “found,” or “transact[ ] business” based
       operates independently from the            on their contacts with the forum district
       venue provision, specifically,             or state. They contend that it may be
       whether “in such cases” in the             brought in any federal district based on
       second clause refers to “any suit,         the appellant’s “minimum contacts” with
       action, or proceeding under the            the United States as a whole.
       antitrust laws against a
       corporation” or only to antitrust                 Currently, two sister Courts of
       actions against corporations               Appeals differ as to the construction of
       brought in a judicial district in          Section 12. The plaintiff-appellees rely
       which the corporation is either an         on the decision in Go-Video, Inc. v. Akai
       “inhabitant,” “may be found” or            Elec. Co., Ltd., 885 F.2d 1406 (9th Cir.
       “transacts business.” If the first         1989), and a majority of recent District
                                                  Courts’ opinions to support their
                                                  argument that the service or process
(D.D.C. 1979) (quoting Fox-Keller, Inc.           provision is independent of the specific
v. Toyota Motor Sales, U. S. A., Inc.,            venue provision. On the other hand,
338 F. Supp. 812, 815 (E.D. Pa. 1972)).           appellants rely on the decision in GTE

                                              6
New M edia Services Inc. v. Bellsouth            claimed that its construction of Section
Corp., 199 F.3d 1343 (D.C. Cir. 2000),           12 of the Clayton Act was the result of a
where the Court wrote:                           “plain” or “unadorned” reading of the
                                                 language of the statute, and implied that
        The language of the statute is           the Go-Video court’s construction was
        plain, and its meaning seems             the result of “literal convolutions.” GTE,
        clear: The clause before the semi-       at 1351.
        colon relates to a supplemental
        basis for venue in actions under                The Go-Video court did not find
        the Clayton Act; the clause after        the language of Section 12 to be clear or
        the semi-colon relates to                unambiguous. Go-Video, 885 F.2d at
        nationwide service of process in         1412 (quoting Judge Stewart’s linguistic
        antitrust cases; and invocation of       analysis of the syntactic structure of
        the nationwide service clause            Section 12 in Gen. Elec. Co. v. Bucyrus-
        rests on satisfying the venue            Erie Co., 550 F. Supp. 1037, 1042, 1042
        provision.                               n.7 (S.D.N.Y. 1982), without necessarily
                                                 endorsing his analysis).8 Instead of
Id. at 1350.

        The GTE court “aligned” itself                  which it (the corporation) is an
with the position taken by the Second                   inhabitant, or wherever it may be
Circuit forty years ago in Goldlawr, Inc.               found.” Thus, ‘in such cases,’
v. Heiman, 288 F.2d 579, 581 (2d Cir.                   Congress has seen fit to enlarge
1961) (holding in dicta that the expansive              the limits of the otherwise
service of process provisions was                       restricted territorial areas of
contingent on satisfaction of the specific              process. In other words, the
venue provision), rev’d on other grounds,               extraterritorial service privilege is
369 U.S. 463 (1962).7 The GTE court                     given only when the other
                                                        requirements are satisfied.
7
 The Goldlawr court concluded that               Goldlawr, 288 F.2d at 581.
Section 12
                                                 8
                                                  Judge Stewart wrote that “the usual
       specifies where suit against a            rules of syntax” would favor the
       corporation under the antitrust           construction of Section 12 that the
       laws may be brought, namely, in a         service of process clause is independent
       district where it is an inhabitant        of the venue clause:
       and also where “it may be found
       or transacts business.”                          The word “such” means “the
       Conversely, it should follow that                aforementioned,” Webster’s Third
       if a corporation is not an                       International Dictionary (unabr.
       inhabitant of, is not found in, and              ed. 1963). Thus, when “such”
       does not transact business in, the               precedes a noun it is assumed to
       district, suit may not be so                     refer to a particular antecedent
       brought. By statutory grant if suit              noun and any dependent adjective
       is brought as prescribed in this                 or adjectival clauses modifying
       section ‘all process in such cases               that noun, but not to any other part
       may be served in the district of                 of the preceding clause or

                                             7
relying on its own way of reading of the          Systems, Inc. v. Mitsubishi Corp., 967 F.
language of Section 12, as the GTE court          Supp. 364, 368 (E.D. Wis. 1997) (“In the
did, the Go-Video court found it                  case of the antitrust laws, it makes no
necessary to “interpret a passage in              sense to tie a district court’s jurisdiction
which antecedents and consequents are             to the state in which it sits; it neither
unclear by reference to the context and           promotes the enforcement of the antitrust
purpose of the statute as a whole.” Id.           laws nor the management of litigation.”);
The Go-Video court did not find the               Prof’l Adjusting Systems of America,
sparse legislative history of the Clayton         Inc. v. Gen. Adjustment Bureau, Inc.,
Act conclusive on the issue. 885 F.2d at          352 F. Supp. 648, 651 (E.D. Pa. 1972)
1410. There was evidence, however, that           (“The reason for the broad scope of the
“Congress viewed the questions of venue           Clayton Act venue provisions was to
and service of process separately, with           give plaintiff the widest possible
the latter issue of subsidiary importance.”       selection of venue for his benefit, to
Id.                                               promote a ‘private attorney general’ type
                                                  policy for exposing and policing
         The Go-Video court found it              combinations in restraint of trade.”). In
more helpful to rely on the general               light of the above authority and
interpretation that courts have given             comment, the Go-Video court found
Section 12. Id. “[C]ourts have viewed             itself “reluctant to adopt a construction
the section’s main contribution to be its         of section 12 which would, by limiting
expansion of the bounds of venue.” Id.            the availability of the valued tool of
(citing United States v. Scophony Corp.           worldwide service of process, recast its
of Am., 333 U.S. 795, 806-808 (1948) (            venue provision as a restrictive, rather
Section 12 substituted broad, practically-        than a broadening, provision and might
founded venue tests for the older, “hair-         prevent plaintiffs from pursuing
splitting legal technicalities” of the
Sherman Act); 15 Wright & M iller,
Federal Practice and Procedure, § 3818,           was enacted by Congress with the
at 109-10 (1976) (venue provisions of             remedial purpose of enlarging the venue
Clayton Act were “clearly broadening in           jurisdiction of the federal courts by
[their] effect”)). 9 See also Paper               substituting “practical, business
                                                  conceptions for the previous hairsplitting
                                                  legal technicalities encrusted on the
              sentence. Applying this             ‘found’-‘present’-‘carrying-on-business’
              rule to section 12, “in such        sequence. . . .” Id. The Court noted that
              cases” would refer to “any          the Congressional enactment “relieve[s]
              suit, action, or proceeding         persons injured through corporate
              under the antitrust laws            violations of the antitrust laws from the
              against a corporation,” and         ‘often insuperable obstacle’ of resorting
              not to anything else in             to distant forums for redress of wrongs
              section 12’s first clause.          done in the places of their business
                                                  residence. A foreign corporation no
Bucyrus-Erie, 550 F. Supp. at 1042 n.7.           longer could come to a district,
9
  As the Supreme Court noted in United            perpetuate there the injuries outlawed,
States v. Scophony Corp., 333 U.S. 795,          and then by retreating or even without
808 (1948), the third and final prong of          retreating to its headquarters defeat or
“transact[ing] business” in Section 12            delay the retribution due.” Id.

                                              8
legitimate claims under the antitrust                    Section 1391(d) is not like other
laws.” 885 F.2d at 1410-11.                      general venue provisions. Brunette held
                                                 that “Section 1391(d) is not derived from
        The Go-Video court also relied           the general venue statutes that [a special
on the Supreme Court’s case law                  venue provision might otherwise be read
regarding the relationship between               as] intended to replace.” Id. at 713.
federal venue statutes of general                Rather, Section 1391(d) derives from a
application and specific venue provisions        tradition going “back to the beginning of
contained in individual statutes to              the Republic” under which “suits against
support its holding that the provision for       aliens were left unrestricted, and could
worldwide service of process is                  be tried in any district, subject only to the
independent of the specific venue                requirement of service of process.” Id. at
provision in Section 12 of the Clayton           708. “The Brunette court interpreted §
Act. “[A]s a general matter, courts have         1391(d) to state ‘a principle of broad and
interpreted special venue provisions to          overriding application’ which prevented
supplement, rather than preempt, general         an alien defendant from using a narrower
venue statutes.” Id. at 1409 (citing 15          venue provision in another statute as a
Wright & Miller, supra, at 108-109)              ‘shield against suit.’” Go-Video,885
(“Supreme Court has held that special            F.2d at 1409-10 (citing Brunette, at 714).
venue statutes are supplemented by, and          “Absent some express congressional
are to be read in light of, liberalizing         intent to the contrary, a special venue
provisions of the general venue statutes”)       provision should not, under the clear
(citing Pure Oil v. Suarez, 384 U.S. 202         language of Brunette be deemed
(1966)).                                         exclusively controlling when the
                                                 defendant involved is an alien. The
        Of particular relevance to the Go-       principle that an alien may be sued in any
Video court was the Supreme Court’s              district is simply too deeply rooted to
discussion of the relationship between           assume otherwise.” Bucyrus-Erie, 550 F.
the Alien Venue Statute, 28 U.S.C. §             Supp. at 1040 (citing Brunette, at 714);
1391(d), a venue provision of general            see also Go-Video, at 1410.
applicability, and the specific venue
provision, 28 U.S.C. § 1400(b),                         The approach of the Go-Video
concerning actions for patent                    and Bucyrus-Erie courts is convincing
infringement, in Brunette Mach. Works,           and well reasoned in their construction of
Ltd. v. Kockum Indus., Inc., 406 U.S.            Section 12 of the Clayton Act.10 We,
706 (1972). The Supreme Court held
that the specific venue provision did not
bar the suit under which venue had been          10
                                                   We are not persuaded by the
satisfied under Section 1391(d), the             conclusions drawn by the GTE and
Alien Venue Statute, even though the             Goldlawr courts for the reasons
Court had previously held that the same          discussed by the Go-Video and Bucyrus-
patent venue statute did preclude the            Erie courts. First, because we do not
application of the general corporate             find the language of Section 12 to be
venue provision of § 1391(c). Brunette,          clear and unambiguous, we are not
at 713-14 (distinguishing Fourco Glass           persuaded by the “plain” or “unadorned”
Co. v. Transmirra Prods. Corp., 353 U.S.         reading of the statutory language by the
222 (1957)).                                     GTE court. We, therefore, believe that it
                                                 is necessary to consider the overall

                                             9
                                                   therefore, hold that the service of process
                                                   provision on foreign corporations is
purpose of the statute in construing the           independent of, and does not require
statutory language. Second, we agree               satisfaction of, the specific venue
with the analysis made in several District         provision under Section 12 of the
Courts’ decisions that the conclusions of          Clayton Act.
GTE and Goldlawr are not persuasive
because the defendant corporations in                                  B.
those two cases were not alien
corporations and were, instead, out-of-                    We also reject the appellants’
state corporations. The distinction is             argument that the District Court does not
crucial. “The general venue provision of           have personal jurisdiction over them
[28 U.S.C. § 1391(c)] governing such               because they do not have contacts with
domestic corporations is, in contrast to [§        the State of Pennsylvania. In this
1391(d)] governing alien corporations,             instance, Pennsylvania is the forum state
more difficult to satisfy than the                 because the underlying class actions have
[S]ection 12 venue requirements.”                  been transferred and consolidated for
Bucyrus-Erie, 550 F. Supp. at 1041 (first          pretrial purposes.11 At least two sister
two emphases added, the last emphasis in           Courts of Appeals have held that when
original). That is because the added
prong of “transacting business” in
Section 12 is easier to satisfy than the           involved only out-of-state domestic
traditional prongs of being an                     corporations, is unpersuasive.
“inhabitant” or “doing business.” Id. at           11
                                                      Underlying the appellants’ argument
1041 n.5 (“‘doing business’ . . . requires         for the local contacts analysis is an
greater contacts then does ‘transacting            assumption that the court’s personal
business’”). Because Goldlawr did not              jurisdiction is limited to the state to
involve an alien corporation, the                  which the class action has been
Goldlawr court, not surprisingly, did not          transferred. That assumption is
need to consider the impact of the                 unwarranted. Consolidation of the
general venue provision of § 1391(d).              underlying class action in Pennsylvania
As the Go-Video court observed, the                is only for pretrial purposes pursuant to
Goldlawr court’s conclusion is                     28 U.S.C. § 1407. As correctly
unpersuasive regarding the relationship            concluded by the District Court, the
of venue and jurisdiction under Section            transferee court can exercise personal
12 for two reasons. “First, [Goldlawr’s            jurisdiction to the same extent that the
conclusion in this regard] is dictum,              transferor court could. See In re Agent
unrelated to the actual holdings of the            Orange Prod. Liability Litig., 818 F.2d
case. Second, and more important,                  145, 163 (2d Cir. 1987); In re
Goldlawr was decided before the                    Telectronics Pacing Systems Inc., 953 F.
Supreme Court’s decisions in Pure Oil              Supp. 909 (S.D. Ohio 1997). Even under
and Brunette, decisions in which the               the local contacts analysis, personal
Supreme Court clarified the relationship           jurisdiction should be assessed at least
between specific statutory venue                   based on the appellants’ contacts with the
provisions and the general federal venue           five states where the individual actions
statutes [for alien corporations]. . . .”          were brought, New Jersey, Ohio,
Go-Video, 885 F.2d at 1411. For the                Delaware, Kentucky, and Pennsylvania.
same reasons, the GTE holding, which

                                              10
personal jurisdiction is invoked under the        process.12
Clayton Act, jurisdiction is based on the
defendants’ contacts with the United                      In the context of construing
States as a whole. Access Telecom, Inc.           Section 27, this Court has held broadly
v. MCI Telecomm. Corp., 197 F.3d 694,             that “a federal court’s personal
718 (5th Cir. 1999), cert. denied, 531            jurisdiction may be assessed on the basis
U.S. 917 (2000) (“When jurisdiction is            of the defendant’s national contacts when
invoked under the Clayton Act, the court          the plaintiff’s claim rests on a federal
examines the defendant’s contacts with            statute authorizing nationwide service of
the United States as a whole to determine         process.” Pinker v. Roche Holdings Ltd.,
whether the requirements of due process           292 F.3d 361, 369 (3d Cir. 2002). Then
have been met.”) (citing Go-Video); Go-           Chief Judge Becker wrote in Pinker:
Video, 885 F.2d at 1415 (affirming the
District Court’s holding that “worldwide                 Where Congress has spoken by
service provision of § 12 justifies its                  authorizing nationwide service of
conclusion that personal jurisdiction may                process, . . . as it has in the
be established in any district, given the                Securities Act, the jurisdiction of
existence of sufficient national                         a federal court need not be
contacts”).                                              confined by the defendant’s
                                                         contacts with the state in which
        We find support for our                          the federal court sits. See
construction of Section 12 of the Clayton                DeJames v. Magnificence
Act in the courts’ construction of Section               Carriers, Inc., 654 F.2d 280, 284
27 of the Securities Exchange Act of                     (3d Cir. 1981). Following this
1934. This section, modeled after                        reasoning, the district courts
Section 12 of the Clayton Act, provides                  within this Circuit have repeatedly
in relevant part:                                        held that a “national contacts
                                                         analysis” is appropriate “when
       Any suit or action to enforce any                 appraising personal jurisdiction in
       liability or duty created by this                 a case arising under a federal
       chapter or rules and regulations                  statute that contains a nationwide
       thereunder, or to enjoin any                      service of process provision.”
       violation of such chapter or rules
       and regulations, may be brought
       in any such district or in the             12
                                                    See, e.g., Go Video, 855 F.2d at 1414;
       district wherein the defendant is          Leasco Data Processing Equip. Corp. v.
       found or is an inhabitant or               Maxwell, 468 F.2d 1326, 1340 n.10 (2d
       transacts business, and process in         Cir. 1972); Bucyrus-Erie, 550 F. Supp. at
       such cases may be served in any            1043. Construing Section 27 of the
       other district of which the                Securities Exchange Act, Judge Friendly,
       defendant is an inhabitant or              writing for the court, concluded that the
       wherever the defendant may be              phrase “in such cases” in that statute is
       found.                                     independent of the venue provision and
                                                  “speaks expressly only to service of
15 U.S.C. § 78aa (emphasis added). The            process.” Leasco, at 1340 (citing United
two sections are remarkably similar in            States v. Scophony Corp., 333 U.S. 795
their provisions for venue and service of         (1948)).

                                             11
       AlliedSignal, Inc. v. Blue Cross            A.O. Yuganskneftegaz, 317 F.3d 202,
       of Calif., 924 F. Supp. 34, 36              207 (2d Cir. 2003) (when personal
       (D.N.J. 1996); see also Green v.            jurisdiction over a foreign corporation is
       William Mason & Co., 996 F.                 based in essence on the federal long-arm
       Supp. 394, 396 (D.N.J.1998)                 statute, due process analysis involves
       (“[A]n assessment of personal               contacts with the United States as a
       jurisdiction under [a statutory             whole); United States v. Swiss Am.
       provision authorizing nationwide            Bank, Ltd., 191 F.3d 30, 36 (1st Cir.
       service of process] necessitates            1999) (same); Fitzsimmons v. Barton,
       an inquiry into the defendant’s             589 F.2d 330, 333 n.4 (7th Cir. 1979);
       contacts with the national                  Mariash v. Morrill, 496 F.2d 1138, 1142-
       forum.”). We too are persuaded              43 (2d Cir. 1974) (service of process
       by the reasoning of our prior               under § 27 of Securities Exchange Act
       opinions on the subject, and,               requires examination of defendant’s
       consistent with several of our              contacts with the United States as a
       sister courts of appeals, hold that         whole).
       a federal court’s personal
       jurisdiction may be assessed on                     We agree with the holdings of our
       the basis of the defendant’s                foregoing sister Courts of Appeals and
       national contacts when the                  the rationale of our decision in Pinker
       plaintiff’s claim rests on a federal        that have construed the similarly worded
       statute authorizing nationwide              Section 27 of the Securities Exchange
       service of process.                         Act. We hold that personal jurisdiction
                                                   in federal antitrust litigation is assessed
Pinker, at 369-70 (emphasis in                     on the basis of a defendant’s aggregate
original).13 See also Dardana Ltd. v.              contacts with the United States as a
                                                   whole. Our holding in Pinker and on this
                                                   appeal is consistent with the Federal Rule
13
  Pinker, 292 F.3d at 369-70 (citing               of Civil Procedure 4(k)(2).14 Personal
Republic of Panama v. BCCI Holdings
(Luxembourg) S.A., 119 F.3d 935, 946-
47 (11th Cir. 1997); Busch v. Buchman,
Buchman & O’Brien Law Firm, 11 F.3d 14
                                                     Federal Rule of Civil Procedure 4(k)(2)
1255, 1258 (5th Cir. 1994); United                 provides:
Liberty Life Ins. Co. v. Ryan, 985 F.2d
1320, 1330 (6th Cir. 1993); United Elec.,                 If the exercise of jurisdiction is
Radio & Mach. Workers of Am. v. 163                       consistent with the Constitution
Pleasant St. Corp., 960 F.2d 1080, 1085                   and laws of the United States,
(1st Cir. 1992); Sec. Investor Protection                 serving a summons or filing a
Corp. v. Vigman, 764 F.2d 1309, 1316                      waiver of service is also effective,
(9th Cir. 1985), rev’d on other grounds,                  with respect to claims arising
Holmes v. Sec. Investor Protection                        under federal law, to establish
Corp., 503 U.S. 258 (1992); Autoscribe                    personal jurisdiction over the
Corp. v. Goldman & Steinberg, Inc.,                       person of any defendant who is
1995 WL 56662, at *3 (4th Cir. Feb. 3,                    not subject to the jurisdiction of
1995) (per curiam) (not precedential)                     the courts of general jurisdiction
(citing Hogue v. Milodon Engineering,                     of any state.
Inc., 736 F.2d 989, 991 (4th Cir. 1984)).

                                              12
jurisdiction therein is not limited to the                              III.
defendant’s contacts with a particular
federal judicial district or the forum state.                The second issue certified in this
We hold further that personal jurisdiction           appeal is whether we should adopt a first
under Section 12 of the Clayton Act is as            resort rule in favor of the procedures
broad as the limits of due process under             under the Hague Convention, rather than
the Fifth Amendment. See Go-Video,                   the Federal Rules of Civil Procedure, for
885 F.2d at 1415 (“Under the due                     jurisdictional discovery from foreign
process component of the Fifth                       defendants in foreign signatory “host”
Amendment, a court must consider                     nations. The appellants argue that
whether the maintenance of the suit (i.e.            jurisdictional discovery in Germany, a
the exercise of personal jurisdiction over           Convention signatory nation, should first
the defendants to the suit) offends                  proceed under the Convention
traditional notions of fair play and                 procedures, rather than the Federal
substantial justice.”) (citing Omni                  Rules. The Convention prescribes
Capital Int’l v. Rudolf Wolff & Co., Ltd.,           certain procedures by which a judicial
484 U.S. 97, 102-103 (1987); Int’l Shoe              authority in one contracting nation may
Corp. v. Washington, 326 U.S. 310, 316               request evidence located in another
(1945)). 15                                          nation. Our Supreme Court rejected a
                                                     first resort rule in favor of the
                                                     Convention in a case where personal
                                                     jurisdiction was not contested and the
“Under this provision, a defendant sued              discovery sought involved only the
under federal law may be subject to                  merits of the case. Societe Nationale
jurisdiction based on its contacts with the          Industrielle Aerospatiale v. United States
United States as a whole, when the                   Dist. Court for the S. Dist. of Iowa, 482
defendant is not subject to personal                 U.S. 522 (1987). The appellants argue
jurisdiction in any state. Rule 4(k)(2)              specifically that we should carve out a
confers personal jurisdiction over a                 narrow exception to the Aerospatiale
defendant so long as the exercise of                 decision where, as here, personal
jurisdiction comports with the Due                   jurisdiction has yet to be established and
Process Clause of the Fifth Amendment.”              the discovery sought is limited to proof
Dardana, 317 F.3d at 207 (citing 4                   of jurisdiction.16
Wright & Miller, Federal Practice and
Procedure § 1068.1, at 612, 616 (2002);                                  A.
Chew v. Dietrich, 143 F.3d 24, 27-28 (2d
Cir.), cert. denied, 525 U.S. 948 (1998)).
15
  We note, as did the Go-Video court,
that the Supreme Court has on two
                                                     16
                                                       The Federal Republic of Germany and
occasions explicitly declined to decide              the Federation of German Industries have
the constitutionality of national contacts           submitted briefs as amicus curiae in
analysis. See 885 F.2d at 1414 n.8                   support of the appellants’ position for
(citing Omni Capital Int’l v. Rudolf Wolff           this second issue on appeal, urging
& Co., Ltd., 484 U.S. 97, 102-103 n.5                reversal of the District Court. The brief
(1987); Asahi Metal Indus. v. Superior               of amicus curiae submitted by the
Court, 480 U.S. 102, 113 n.* (1987)                  Committee to Support the Antitrust Laws
(plurality opinion)).                                supports the plaintiffs’ position, urging
                                                     affirmation of the District Court .

                                                13
         Aerospatiale holds that the Hague          our Federal Rules. Id. at 542-44. The
Convention does not provide exclusive               concept of comity requires in this context
procedures for obtaining documents and              “a more particularized analysis” of the
information located in a foreign                    respective interests of the foreign host
signatory nation’s territory. Aerospatiale          nation and the requesting nation than a
first rejects a rule of exclusive use or a          blanket first resort rule would generate.
rule of first use as a matter of law in             Id. at 543-44. Aerospatiale notes that in
favor of the Convention on the ground               many situations, the Convention
that neither the language nor the                   procedures would be unduly time-
negotiating history of the Convention               consuming and expensive, and less likely
support such rules. Aerospatiale, 482               to produce needed evidence than direct
U.S. at 533-36. Specifically,                       use of the Federal Rules. Id. at 542-43.
Aerospatiale holds that the Convention’s            However, the Convention’s procedures,
plain language, as well as the history of           although not mandatory, are available
its proposal and ratification by the United         whenever they will facilitate the
States, unambiguously supports the                  gathering of evidence, and apply in the
conclusion that it was “intended as a               sense that they are one method of seeking
permissive supplement, not a preemptive             evidence that a court may elect. Id. at
replacement, for other means of                     541. Aerospatiale declines to hold “as a
obtaining evidence located abroad.” Id.             blanket matter that comity requires resort
at 536 (emphasis added). The                        to Hague evidence convention
Convention’s preamble speaks in non-                procedure.” Id. at 544. Therefore, the
mandatory terms, specifying its purpose             determination of whether to resort to the
to “facilitate” discovery and to “improve           Convention requires “prior scrutiny in
mutual judicial co-operation.” Id. at 534.          each case of the particular facts,
 Similarly, its text uses permissive                sovereign interests, and likelihood that
language, and does not expressly modify             such resort will prove effective.” Id.
the law of contracting states or require            (establishing the three-prong test for
them to use the specified procedures or             determining whether to resort to the
change their own procedures. Id.                    Convention).
Accordingly, the Convention does not
deprive the District Court of its                          Aerospatiale acknowledges that
jurisdiction to order, under the Federal            “both the discovery rules set forth in the
Rules of Civil Procedure, a foreign                 Federal Rules of Civil Procedure and the
national party to the proceeding to                 Hague Convention are the law of the
produce evidence physically located                 United States.” Id. at 533. However, the
within its territory. Id. at 539-40.                Federal Rules are “the normal methods”
                                                    for federal litigation involving foreign
         Aerospatiale rejects next a rule of        national parties unless the “optional” or
first resort favoring the Convention on             “supplemental” Convention procedures
grounds of international comity and                 prove to be conducive to discovery under
respect for the “judicial sovereignty” of           some circumstances. Id. at 536 (“the
the signatory nation in which evidence              Convention was intended as a permissive
sought is located. Id. at 542-43.                   supplement, not a pre-emptive
International comity does not require in            replacement, for other means of
all instances that American litigants first         obtaining evidence located abroad”)
resort to the Convention procedures                 (emphasis added), 538 (both the text and
before initiating discovery pursuant to             negotiating history of the Convention

                                               14
show that “it was intended to establish              Aerospatiale holding to the underlying
optional procedures that would facilitate            litigation where they have contested
the taking of evidence abroad”)                      jurisdiction and the discovery sought is
(emphasis added), 541 (“the optional                 limited to proof of jurisdiction. The
Convention procedures are available                  appellants seek our review of only the
whenever they will facilitate the                    District Court’s legal conclusion that the
gathering of evidence by the means                   Aerospatiale holding applies equally to
authorized in the Convention”)                       jurisdictional discovery. This certified
(emphasis added), 542 (“the normal                   issue involves a pure question of law,
methods of the Federal Rules of Civil                subject to our plenary and de novo
Procedure”) (emphasis added).                        review.

         Notwithstanding its rejection of                    Specifically, the appellants argue
the first resort rule, Aerospatiale instructs        that Aerospatiale is not applicable to
the American courts to “exercise special             jurisdictional discovery and that this
vigilance to protect foreign litigants from          Court should adopt a first resort rule in
the danger that unnecessary, or unduly               favor of the Hague Convention
burdensome, discovery may place them                 procedures based on considerations of
in a disadvantageous position.” Id. at               international comity and respect for the
546. “Judicial supervision of discovery              German sovereignty, the host signatory
should always seek to minimize its costs             nation where discovery is to be
and inconvenience and to prevent                     conducted. They argue that the
improper uses of discovery requests.                 Aerospatiale balancing approach is
When it is necessary to seek evidence                premised expressly on the existence of
abroad, however, the district court must             personal jurisdiction in that case. Where
supervise pretrial proceedings                       jurisdiction is disputed and not yet
particularly closely to prevent discovery            established, they assert the balancing
abuses.” Id.                                         approach must yield to a rule of first
                                                     resort.
        Aerospatiale has not explicitly
addressed, however, the issue of which                       The appellants stress the split of
party bears the burden of convincing the             authorities among federal district courts
court of an “optional” and                           and state courts regarding the extension
“supplemental” use of the Convention                 of Aerospatiale to jurisdictional
procedures in a particular case. Nor has             discovery. They cite for support Geo-
Aerospatiale, involving foreign                      Culture, Inc. v. Siam Inv. Mgmt. S.A.,
defendants over whom the trial court had             936 P.2d 1063, 1067 (Or. Ct. App. 1997)
undisputed personal jurisdiction,                    (requiring plaintiff to conduct
addressed the issue of what procedures to            jurisdictional discovery, at least initially,
follow in a case, as here, where                     only through the Hague Convention,
jurisdiction is contested and discovery              noting that plaintiff had failed to allege a
sought is limited only to proof of                   prima facie basis for asserting
jurisdiction.                                        jurisdiction over the defendant); Jenco v.
                                                     Martech Int’l, Inc., No. Civ. A. 86-4229,
                     B.                              1988 WL 54733 at *1 (E.D. La. May 19,
                                                     1988) (holding, with almost no
        The appellants argue that the                meaningful analysis, that certain
District Court erred in extending the                jurisdictional discovery requests must be

                                                15
made under the Hague Convention                      the Convention should be entitled to
because “[w]hile judicial economy may                substantial deference.
dictate that the Federal Rules of Civil
Procedure should be used, the interests of                   The appellants are correct that
protecting a foreign litigant in light of the        Aerospatiale makes numerous references
jurisdictional problems are                          to the existence of personal jurisdiction
paramount”)17 ; and Knight v. Ford Motor             in that case. We disagree, however, that
Co., 615 A.2d 297, 301 n.11 (N.J. Super.             the Aerospatiale holding is dependent on
Ct. Law Div. 1992) (noting, in dicta, that           personal jurisdiction. As concluded by
“[i]f jurisdiction does not exist over a             the District Court here and the District
foreign party . . . the Convention may               Court for the District of Columbia, which
provide the only recourse for obtaining              considered the same argument raised by
evidence”).                                          the same defendant, BASF AG, in In re
                                                     Vitamins Antitrust Litig., 120 F. Supp.
        The appellants rely also on a                2d 45, 49 (D.D.C. 2000), a trial court has
report by the Special Commission of the              authority to determine its jurisdiction.
Hague Conference attended, among                     See Ins. Corp. of Ireland, Ltd. v.
others, by delegations from the United               Compagnie des Bauxites de Guinee, 456
States and Germany. See Hague                        U.S. 694, 706 (1982) (“By submitting to
Conference on Private International Law:             the jurisdiction of the Court for the
Special Commission Report on the                     limited purpose of challenging
Operation of the Hague Service                       jurisdiction, the defendant agrees to
Convention and the Hague Evidence                    abide by that court’s determination on
Convention, April 1989, reprinted in 28              the issue of jurisdiction”). Because the
Int’l Law Materials 1556 (1989). The                 District Court has jurisdiction over these
report stated that while views varied as to          foreign defendants to the extent
whether the Hague Convention                         necessary to determine whether they are
“occupied the field and therefore                    subject to personal jurisdiction, we see
excluded application of domestic                     no legal barrier to exercising the
procedural rules,” “the Commission                   discretion given to trial courts by
thought that in all Contracting States,              Aerospatiale in cases of jurisdictional
whatever their views as to its exclusive             discovery. See In re Vitamins, at 49.
application, priority should be given to
the procedures offered by the Convention                     We agree with the majority of trial
when evidence located abroad is being                courts’ decisions that there should be no
sought.” Id. at 1564, 1569. The                      exception to the Aerospatiale holding for
appellants argue that the statement in the           jurisdictional discovery. See In re
report that “priority” should be given to            Vitamins, at 49; Rich v. KIS California,
                                                     Inc., 121 F.R.D. 254, 260 (M.D.N.C.
                                                     1988) (Aerospatiale “did not carve out
17
  Jenco left undisturbed a portion of the            any exception for disputes involving
magistrate’s opinion allowing                        personal jurisdiction”); Fishel v. BASF
interrogatories and document requests                Group, 175 F.R.D. 525, 529 (S.D. Iowa
directed at a foreign party to proceed               1997) (Aerospatiale provides that the
under the Federal Rules and overturned               Hague Convention procedures are
only the magistrate’s ruling allowing                optional and do not divest federal district
depositions to be taken under the Federal            courts of authority to order discovery
Rules.                                               under the Federal Rules); In re Bedford

                                                16
Computer Corp., 114 B.R. 2, 5-6 (Bankr.           raised in their motion.” See Fishel, 175
D.N.H. 1990) (citing Rich and allowing            F.R.D. at 529.
discovery limited to jurisdictional issues
to proceed under the Federal Rules).                      Accordingly, the distinction
                                                  drawn by the appellants between
        Unlike Geo-Culture, relied on by          “merits” discovery and “jurisdictional”
the appellants, where the plaintiff failed        discovery, predicated on a false
to allege even a prima facie case of              dichotomy of having and not having
personal jurisdiction, the District Court         jurisdiction, amounts to no real
found that the plaintiffs here had                difference because the court has
established a prima facie case of personal        jurisdiction for either type of discovery.18
jurisdiction, a conclusion not challenged         The undisputed presence of personal
by the appellants. The plaintiffs’                jurisdiction in Aerospatiale is, therefore,
allegations amounted, therefore, to more          tangential to its holding and irrelevant to
than “mere blanket fishing expeditions”           the issue of whether Aerospatiale applies
and were “not the type of bare-boned              also to jurisdictional discovery.
allegations that potentially could lead to
the fishing expeditions of obvious                        There are other reasons supporting
concern to the signatory countries.” In re        our conclusion that the Aerospatiale
Vitamins, 120 F. Supp. 2d at 50.                  balancing approach applies equally to the
                                                  determination of whether the Hague
         The appellants also relied on the        Convention procedures should be used
Federal Rules to challenge the District           initially for jurisdictional discovery.
Court’s personal jurisdiction. As we              First, where Aerospatiale has
have stated above, it is well established         categorically rejected a first resort rule
that the trial court has inherent power           for “merits” discovery, which we can
and jurisdiction to decide whether it has         expect to be more comprehensive or
jurisdiction. Ins. Corp. of Ireland, 456          burdensome than jurisdictional
U.S. at 706. The appellants’ arguments            discovery, there is more justification to
are also premised on the assumption that          reject a first resort rule for the more
there is no personal jurisdiction in this         limited and less intrusive jurisdictional
case. Such an assumption is premature             discovery. See Fishel, 175 F.R.D. at 529
and unwarranted unless the result of the          (“The ascertainment of facts bearing on
pending jurisdictional discovery shows            personal jurisdiction normally involves
otherwise. At this stage, where the               the least intrusive type of inquiries.”).
appellants have voluntarily appeared in
the court to challenge jurisdiction and                  Second, where Aerospatiale has
jurisdictional discovery is pending, the          rejected the first resort rule even though
District Court indisputably has                   the French defendants there may have
jurisdiction to determine whether there is
personal jurisdiction upon completion of
jurisdictional discovery. Moreover, the           18
                                                    No one would dispute that if
denial of resort to Hague convention              jurisdiction discovery yields no evidence
procedures for jurisdictional discovery is        sufficient to establish personal
not unfair to the appellants because they         jurisdiction, the court must dismiss the
“[had] taken advantage of the [Federal]           underlying action against the appellants,
[R]ule allowing them a preliminary                rather than deciding which set of
hearing and determination of the issues           procedural rules to apply.

                                             17
faced possible penal sanction under                 from a United States judicial or
France’s “blocking statute,” there is less          administrative proceeding pursuant to the
justification for us to adopt a first resort        Federal Rules.
rule where the appellants here face no
such sanction because Germany has no                        Third, where Aerospatiale has
“blocking statute.” 19 Aerospatiale                 rejected the adoption of a blanket first
reiterates the well-settled view that               resort rule based on the proffered reasons
“[blocking] statutes do not deprive an              of respecting the “judicial sovereignty”
American court of the power to order a              of the signatory host nation and
party subject to its jurisdiction to produce        preventing discovery abuse, the same
evidence even though the act of                     reasons proffered by the appellants here
production may violate that statute.” 482           must fail as well. 482 U.S. at 543-44
U.S. at 544-45 n.29 (concluding that “the           (finding no textual support in the Hague
enactment of such a statute by a foreign            Convention for a first resort rule and
nation” cannot be allowed to “graft a rule          opting for a three-prong balancing
of first resort onto the Hague                      approach), 545-46 (suggesting that
Convention, or otherwise to provide the             burdensome or intrusive discovery
nationals of such a country with a                  practice is not a sufficient ground for
preferred status in our courts”). Neither           adopting the first resort rule because the
the appellants nor their supporters,                trial court has an inherent duty to
Germany or the Federation of German                 supervise discovery and prevent
Industries, have disputed the plaintiffs’           discovery abuse).
statement that Germany, unlike France,
does not have a “blocking statute,”                         The appellants and their
criminal or civil, that specifically                supporters argue generally that Germany
prohibits production of documents in                is a civil law country where the gathering
connection with foreign judicial or                 of evidence is a judicial function and that
administrative proceedings. Nor have                pursuing discovery without resort to the
they identified a single instance where a           Convention may be deemed an affront to
German national has been prosecuted,                Germany’s sovereignty. The
penalized, or sanctioned under German               Aerospatiale Court, as well as other
law for complying with discovery orders             courts, has found such argument
                                                    “unpersuasive.” Id. at 543; see also
                                                    Great Lakes Dredge & Dock Co. v.
19
  Aerospatiale, 482 U.S. at 526 n.6                 Harnischfeger Corp., 1990 WL 147066,
(quoting Article 1A of the French                   at *2 (N.D. Ill. Sept. 25, 1990);
“blocking statute,” French Penal Code               Scarminach v. Goldwell GmbH, 531
Law No. 80-538) (“Subject to treaties or            N.Y.S. 2d 188, 191 (N.Y. Sup. Ct. 1988).
international agreements and applicable             As observed by the court in In re
laws and regulations, it is prohibited for          Vitamins, 120 F. Supp. 2d at 50, there is
any party to request, seek or disclose, in          no reason to assume that discovery under
writing, orally or otherwise, economic,             the Federal Rules would inevitably
commercial, industrial, financial or                offend Germany’s sovereign interest
technical documents or information                  because presumably Germany, like the
leading to the constitution of evidence             United States, would prohibit the alleged
with a view to foreign judicial or                  price-fixing conspiracy and would
administrative proceedings or in                    welcome investigation of such antitrust
connection therewith.”).                            violation to the fullest extent. See

                                               18
Germany’s Act Against Restraints of                 the District Court to restrict discovery
Competition § 1; Treaty Establishing the            abuse. We expect that the District Court
European Economic Community, Art.                   will follow Aerospatiale’s instruction
81(1). There is also no reason to                   and “exercise special vigilance” to
“believe that the sovereign interests of . .        protect appellants from unduly
. foreign signatory nations would be any            burdensome or abusive discovery.
more offended by [the] narrower                     Aerospatiale, at 546.
jurisdictional discovery than they would
be by the broader, merits-related                           We agree with the District Court’s
discovery allowed by Aerospatiale.” In              legal conclusion that the Aerospatiale
re Vitamins, 120 F. Supp. 2d at 51. We              balancing test applies equally to
likewise conclude that the appellants’              jurisdictional discovery and that there is
general argument is unpersuasive.20                 no first resort rule in favor of the Hague
                                                    Convention procedures for jurisdictional
         Similarly, following the                   discovery.
Aerospatiale holding, we also find
unpersuasive the appellants’ argument                                   C.
that a first resort to the Hague
Convention is required to avoid possible                    The appellants also argue
burdensome or intrusive discovery                   alternatively that even if the Aerospatiale
practice under United States law.                   balancing approach applies to
Aerospatiale, 482 U.S. at 545-46; see               jurisdictional discovery, the three-prong
also Great Lakes, 1990 WL 147066, at                test would favor first use of the
*2, and Scarminach, 531 N.Y.S. 2d at                Convention procedures in this case. The
191. Discovery abuse is an insufficient             District Court rejected that argument,
reason to avoid the Federal Rules                   ruling that the appellants bore the burden
because the appellants have remedies in             of persuasion under the balancing test
                                                    and that they failed to satisfy the burden.
                                                    The court concluded alternatively that
                                                    even if the plaintiffs bore the burden of
20
  Appellants and especially their                   persuasion, they had submitted adequate
supporters, Germany and the Federation              evidence to show that the balancing test
of German Industries, stress the                    disfavored first use of the Convention
controversial character of the “narrow              procedures for jurisdictional discovery in
majority” decision in Aerospatiale and              this case.
profess their strong disagreement with
the Aerospatiale holding that the Hague                     We agree first with the District
Convention procedures are merely an                 Court’s conclusion of law that the
optional supplement to the Federal Rules.           appellants bear the burden of persuasion
We must reject their invitation to deviate          as to the optional use of the Convention
from Aerospatiale based on the same                 procedures. See Aerospatiale, 482 U.S.
proffered reasons, found insufficient by            at 547 (stating that the court should give
the Aerospatiale Court, of respecting               “the foreign litigant a full and fair
international comity and preventing                 opportunity to demonstrate appropriate
discovery abuse. As a subordinate court,            reasons for employing Convention
we are bound by the Supreme Court’s                 procedures in the first instance, for some
precedent.                                          aspects of the discovery process”)
                                                    (emphasis added). This language seems

                                               19
to imply that the proposing party bears             Court’s decision in Société Nationale
the burden of persuasion. See also In re            Industrielle Aerospatiale v. United States
Vitamins, 120 F. Supp. 2d at 51-52                  District Court for the Southern District of
(holding that proposing party bears the             Iowa, 482 U.S. 522 (1987). The service
burden);Valois of Am., Inc. v. Risdon               provisions of the Hague Convention were
Corp., 183 F.R.D. 344, 346 (D. Conn.                adopted by the President and approved by
1997) (same); Doster v. Schenk A.G.,                a unanimous vote of the Senate in 1972.
141 F.R.D. 50, 51-52 (M.D.N.C. 1991)                Id. at 530. The provisions then became the
(“[I]t is more practical, if not logical, to        “law of the land,” coexisting with other
place the burden of persuasion on the               federal law such as the Federal Rules of
proponent of using the Hague                        Civil Procedure. U.S. Const. art. VI, cl. 2.
Convention.”); Rich, 121 F.R.D. at 257-             In Aerospatiale, the Hague Convention
58 (same); Benton Graphics v.                       was referred to as a “permissive
Uddeholm Corp., 118 F.R.D. 386, 389                 supplement” and an “optional procedure.”
(D.N.J. 1987) (same); but see Hudson v.             Id. at 536.        However the Hague
Hermann Pfauter GmbH & Co., 117                     Convention is only as “optional” as
F.R.D. 33, 38 (N.D.N.Y. 1987); Knight,              deciding to use the Federal Rules is
615 A.2d at 300.                                    “optional” in such a case. The Convention
                                                    does not overwrite the Federal Rules of
        We also agree with the District             Civil Procedure, but it is in no way inferior
Court’s conclusions that the appellants             to them.
have failed to satisfy their burden of
persuasion under the Aerospatiale                              Unfortunately, I believe the
balancing test and that the evidence on             language used in Aerospatiale has
record disfavors the first use of the               unintentionally compounded the problem
Convention procedures for jurisdictional            inherent with the Convention:                 that
discovery. The court’s conclusions in               “relatively few judges are experienced in
these two instances are reviewed only for           the area [of international law] and the
abuse of discretion, and we find none.              procedures of foreign legal systems are
                                                    often poorly understood.” Aerospatiale,
                    IV.                             482 US. at 552 (Blackmun, J., dissenting).
                                                    Many times, rather than wade through the
        For the foregoing reasons, the              mire of a complex set of foreign statutes
orders of the District Court certified for          and case law, judges marginalize the
review on this interlocutory appeal will            Convention as an unnecessary “option.” I
be affirmed. Costs are taxed against the            believe the Aerospatiale decision should
appellants.                                         be reexamined to ensure that lower courts
                                                    are in fact exercising “special vigilance to
ROTH, Circuit Judge, concurring21 :                 p r o t e c t f o r e i g n l it i g a n ts ” a n d
                                                    demonstrating respect “for any sovereign
       I write separately to express my             interest expressed by the foreign state.”
concern that the Hague Convention has               Id. at 485. Currently, I fear that many
been given short shrift since the Supreme           courts are simply discarding the treaty as
                                                    an unnecessary hassle.
   21
    Judge McKee shares the concerns                        Our sage colleague, Judge Joseph F.
expressed herein and joins this                     Weis, Jr., has opined that first resort to the
concurring opinion.                                 Hague Convention is in fact appropriate:

                                               20
       The arguments mustered                      Convention and the Hague Evidence
       against giving priority to                  Convention, April 1989, reprinted in 28
       Convention procedures are                   Int’l Law Materials 1556, 1569 (1989).
       n ot persu asiv e w he n                    Among the delegates at the 1989 meeting
       balanced with the                           of the Special Commission was one from
       overriding interests ,                      the United States.
       national and international,
       in mo re eff ective                                 I recognize that we are bound by
       implementation of the                       Aerospatiale but I believe that it is time for
       Evidence Convention. It                     the Supreme Court to revisit that decision
       should be remembered,                       – particularly because I perceive that many
       after all, that the treaty                  of our courts have not exercised the
       negotiated by the United                    “special vigilance to protect foreign
       States and the other                        litigants” that the Supreme Court
       signatories is for the                      anticipated.
       benefit of private litigants
       as a whole – some                                   Finally, under the precedent of
       inconvenience or expense                    Aerospatiale, I do not oppose the panel’s
       to an individual litigant                   conclusion that the burden of persuasion
       should not suffice to                       lies with the party advocating the use of
       jeopardize an arrangement                   the Hague Convention. In an ideal
       which bene fits many.                       world, however, if the treaty were to be
       Moreover, through                           given the priority to which its status as a
       ratification, the United                    ratified treaty entitles it, I do not believe
       States has agreed to honor                  that the burden of persuasion should lie
       the commitments which                       with the proponent of the Hague
       the treaty contains. The                    Convention procedures.
       judiciary should not lightly
       permit a private litigant to
       undermine express
       national policy.

Joseph F. Weis, Jr., The Federal Rules and
the Hague Conventions: Concerns of
Conformity and Comity, 50 U. Pitt. L.
Rev. 903, 931 (Spring, 1989).

        Judge Weis’s view mirrors the
conclusions of the Special Commission of
the Hague Conference of April 1989, that,
whatever the views of the delegates as to
application of domestic procedural rules,
“priority should be given to the procedures
offered by the Convention when evidence
located abroad is being sought.” Hague
Conference of Private International Law:
Special Commission Report on the
Operation of th e Hague Servic e

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