Court Opinion

ID: 8956486
Source: CourtListenerOpinion
Date Created: 2022-11-27 09:21:15.367281+00
Date Added: 2024-06-11T17:10:06.297209
License: Public Domain

BRIGHT, Senior Circuit Judge,
dissenting:
I dissent.
The district court determined this case to be an appropriate one for issuance of an injunction. Judge Motley, in an unpublished opinion, wrote:
It is this court’s view that the instant case is an “appropriate” one [for an injunction]. The Second Circuit deemed that Eddie [Eddie S.S. Co. v. P.T. Karana Line, 739 F.2d 37 (2d Cir.), cert. denied, 469 U.S. 1073, 105 S.Ct. 568, 83 L.Ed.2d 508 (1984) ] was not an appropriate case to depart from the general principle [that a federal court sitting in admiralty lacks the power to issue an injunction] because in that case, the court decided that the equitable relief requested should not have been granted by any court. The Second Circuit suggested that the attachment order which the plaintiffs in that case requested be enjoined “seemfed] to have no impact on the New York proceedings” in question in that case. In comparison, this court finds that the injunction requested in this case is closely bound to the proceedings scheduled to take place in this court, and should be issued by this court. Thus, this court is presented with an appropriate case under which to depart from the rule that a court sitting in admiralty cannot issue an injunction.
China Trade and Dev. Corp. v. M.V. Chong Yong, No. 85 Civ. 8794, slip op. at *387-8 (S.D.N.Y. July 2, 1987) [Available WESTLAW, 1987 WL 13732]. I agree with this reasoning.
In its analysis of whether equitable considerations justified the issuance of an injunction, the court found the crucial facts relating to injunctive relief as follows:
Plaintiffs in this action, Chunghua Trade and Development Corp., China Trade and Development Corp. and Soybean Importers Joint Committee of the Republic of China purchased 25,000 metric tons of U.S. soybeans in November of 1984. Subsequently, plaintiffs contracted with defendant, Ssangyong Shipping Co. Ltd. to transport the cargo from Tacoma, Washington, where it was loaded to two ports in Taiwan. While in transit, the ship carrying the soybeans went aground. Plaintiffs allegedly sustained between $6,000,000 and $7,000,000 of damages to its cargo. Plaintiffs claim this grounding was caused by an unsea-worthy engine, while defendants contend that it was as a result of an error in navigation.
Ssangyong sold the wreck, collecting $11,000,000 from its underwriters. Soon thereafter, plaintiffs attached another of the defendant’s ships, the M V BOO YONG, in order to obtain security for damages which might be assessed against the defendant company. The ship was attached in California. The defendant agreed to appear in this action in the Southern District of New York and post security in the amount of $1,800,000 in return for the release of the M V BOO YONG.
Discovery for the case proceeded and was completed. Trial was scheduled by this court, without objection, for September 21,1987. Ssangyong, however, some 2V2 years after [the accident and IV2 years after] this action was begun, then proceeded to file a suit in Pusan Court of the Republic of Korea, naming the same parties to the action, as well as the same issues. Plaintiffs herein move to enjoin the defendant from proceeding with that action.
The court finds as facts that the parties to the two actions are the same and that resolution of the action before this court would be dispositive of the Korean action.
The court also finds that the Korean action would be vexatious to plaintiffs, and that the Korean action could potentially frustrate the proceedings before this court.
Id. at 2-3. Those facts receive ample support from the record, and I accept them as true for the purposes of this appeal.
In addressing its power, as well as the discretionary factors in the issuance of an injunction barring a litigant from pursuing a simultaneous remedy in a foreign forum, the district judge stated:
The first question that this court must address is whether it should grant an injunction enjoining the defendants from proceeding with their lawsuit in Korea. It is recognized that courts have the power to enjoin litigants from pursuing simultaneous contests in a foreign forum. Seattle Totems Hockey Club, Inc. v. National Hockey League, 652 F.2d 852 (9th Cir.1981), cert. denied, 457 U.S. 1105, 102 S.Ct. 2902, 73 L.Ed.2d [1313]; American Home Assurance Co. v. Insurance Co. of Ireland Ltd., 603 F.Supp. 636 (S.D.N.Y.1984) (Carter, J.); Harvey Aluminum v. American Cyanamid Co., 203 F.2d 105, 108 (2d Cir.1953); Garpeg Ltd. v. United States, 583 F.Supp. 789, 798 (S.D.N.Y.1984) (Sweet, J.). However, comity militates against granting such relief, since the issuance of an injunction can deprive the other country in which the suit is instituted of its sovereignty to some extent. Laker Airways v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C.Cir.1984). Defendants rely heavily on Laker, which suggests that “The fundamental corollary to concurrent jurisdiction must ordinarily be respected: parallel proceedings in the same in personam claim should ordinarily be allowed to proceed simultaneously, at least until a judgment is reached in one which can be pled as res judicata in the other.” Id. Laker, however, also emphasizes that if a substantial amount of time has elapsed between the commence*39ment of the two actions, equitable principles make it more appropriate to enjoin the second action. Id. at 929 n. 63. In the instant case, almost 2lh years elapsed before the defendants brought suit in Korea, making this an appropriate case to issue an injunction even under the strict standard required by Laker.
Courts in the Southern District of New York have not fully accepted the stringent Laker standard, and have adopted a two-pronged test in order to determine whether a court should issue an injunction enjoining a foreign proceeding. The test set forth in American Home Assurance Co. v. Insurance Co. of Ireland Ltd., 603 F.Supp. 636 is as follows. First, the parties must be the same. It is undisputed that this prong of the test is satisfied in the instant case. Second, the resolution of the first action must be dispositive of the action to be enjoined. In the case at bar, plaintiffs have shown that they have raised the same issue of defendants’ liability as defendants have raised in the Korean action. It appeared at oral argument that defendants do not even dispute that the same issues are to be tried in both courts. The second prong of the test is, therefore, satisfied.
According to American Home Assurance, “[w]hen these threshold requirements are met, five factors are suggested in determining whether the foreign action should be enjoined: (1) frustration of a policy in the enjoining forum; (2) the foreign action would be vexatious; (3) a threat to the issuing court’s in rem or quasi in rem jurisdiction; (4) the proceedings in the other forum prejudice other equitable considerations; or (5) adjudication of the same issue in separate actions would result in delay, inconvenience, expense, inconsistency, or a race to judgment.” Id. at 643. Two of the five factors seem to apply to the instant case. Clearly the action in Korea would be vexatious to the plaintiffs, considering that defendants waited 2lh years to commence the action in that forum and had never made a motion, mention or pled forum non conveniens with regard to the proceeding in the United States. Moreover, it appears that defendants would like to get what would amount to a declaratory judgment from the Korean court stating that they are not liable for the damages incurred by plaintiff, thus rendering a judgment by this court in favor of plaintiff unenforceable in that locale. Such a result could frustrate the outcome of the proceeding in the United States. It seems as if a race to judgment between the two forums would necessarily result if defendants were allowed to pursue the lawsuit in Korea. Furthermore, the second action in Korea will force plaintiffs to pursue a course of action half way around the world, forcing plaintiffs to incur great expense. Thus, there is a strong argument for this court to issue an injunction against the defendants.
Id. at 3-6. I approve of this analysis and would affirm the grant of the injunction in this case.
In examining the record, I also note several additional factors which would justify restricting Ssangyong Shipping from seeking to affect the New York litigation by proceeding with a declaratory judgment action in Korea.
1. Ssangyong has agreed to litigating the damage action in the Southern District of New York. That litigation will resolve the liability issues under provisions of the United States Carriage of Goods by Sea Act of 1936, 46 U.S.C. § 1300, et seq. (1982). The same Act will underlie the liability determination in Korea.
2. The Korean action may serve only as a harassment to plaintiff and will multiply legal proceedings. Should the Korean courts absolve Ssangyong of responsibility for the cargo loss, that judgment, for want of personal jurisdiction over the ship or the parties or for other reasons, may not affect the action of the Southern District of New York in its proceeding. Should the courts of Korea find liability, the plaintiffs may, nevertheless, be required to proceed with a full trial in New York, or the case in the Southern District of New York may already have been concluded.
*40It seems to me that in this day of exceedingly high costs of litigation, where no comity principles between nations are at stake in resolving a piece of commercial litigation, courts have an affirmative duty to prevent a litigant from hopping halfway around the world to a foreign court as a means of confusing, obfuscating and complicating litigation already pending for trial in a court in this country. This is especially true when that court has been processing the case for almost two years and has acquired personal jurisdiction over the parties and subject matter jurisdiction over the claim.
I perceive no abuse of a trial judge’s discretion in the ruling of Judge Motley. I would affirm the grant of the injunction in this case.