Goss International Corp. v. Man Roland Druckmaschinen Aktiengesellschaft

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 06-2658
___________
Goss International Corporation, *
formerly known as Goss Graphic *
Systems, Inc., a Delaware corporation, *
*
Plaintiff/Appellee, *
*
v. *
*
Man Roland Druckmaschinen *
Aktiengesellschaft, a German *
corporation; Man Roland, Inc., a * Appeal from the United States
Delaware corporation; Koenig & Bauer * District Court for the
Aktiengesellschaft, a German * Northern District of Iowa.
corporation; KBA North America, *
Inc., a Delaware corporation, *
*
Defendants, *
*
Tokyo Kikai Seisakusho, Ltd., a *
Japanese corporation; TKS (U.S.A.), *
Inc., a Delaware corporation, *
*
Defendants/Appellants, *
*
Mitsubishi Heavy Industries, Ltd., a *
Japanese corporation; MLP U.S.A., *
Inc., a Delaware corporation, *
*
Defendants, *
____________________________ *
*
The Government of Japan, *
*
Amicus on Behalf of Appellants. *
___________
Submitted: September 28, 2006
Filed: June 18, 2007 (corrected 7/31/07)
___________
Before RILEY, SMITH, and BENTON, Circuit Judges.
___________
RILEY, Circuit Judge.
On December 3, 2003, a jury found Japanese-based Tokyo Kikai Seisakusho,
Ltd. (TKS), liable to Goss International Corporation (Goss), under the Antidumping
Act of 1916 (the 1916 Act), 15 U.S.C. § 72 (repealed 2004), which made it unlawful
for foreign persons to sell imported articles within the United States at a price
substantially less than the actual market value or wholesale price at the time of
exportation, with the intent of destroying or injuring an industry in the United States.
The judgment, inclusive of statutory treble damages, attorney fees, and costs,
amounted to more than $35,000,000.
During the pendency of TKS’s appeal, Congress prospectively repealed the
1916 Act. See Miscellaneous Trade & Technical Corrections Act of 2004, Pub. L.
No. 108-429, § 2006, 118 Stat. 2434, 2597 (2004). Shortly thereafter, the Japanese
government passed “The Special Measures Law concerning the Obligation to Return
Profits Obtained pursuant to the Antidumping Act of 1916 of the United States, etc.,
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Law No. 162, 2004”1 (Special Measures Law), a clawback statute2 allowing Japanese
nationals to sue for the recovery of any judgment entered against them under the 1916
Act.
On June 15, 2006, the district court granted Goss’s motion for preliminary
injunction, prohibiting TKS from filing suit in Japan under the Special Measures Law.
On June 19, 2006, TKS paid the judgment in full, and the district court entered a
satisfaction of judgment on June 21, 2006. On June 23, 2006, TKS filed this
interlocutory appeal. In light of the changed circumstances since the district court
entered its preliminary injunction, we vacate the district court’s preliminary
injunction.
I. BACKGROUND
Goss and TKS both manufacture and supply newspaper printing presses and
press additions. Goss was the major manufacturer of large printing presses in the
United States for more than a century and enjoyed dominance in the United States
printing press market into the late 1990s. Goss Int’l Corp. v. Man Roland
1
Amerika gasshuukoku no 1916 nen no han futou renbai hou ni motoduki uketa
rieki no henkan gimu tou ni kansuru tokubetsu sochi hou [Special Measures Law],
Law No. 162 of 2004.
2
A clawback statute is a countermeasure that enables defendants who have paid
a multiple damage judgment in a foreign country to recover the multiple portion of
that judgment from the plaintiff. See generally, Joseph E. Neuhaus, Note, Power to
Reverse Foreign Judgments: The British Clawback Statute Under International Law,
81 Colum. L. Rev. 1097, 1097-98 (1981) (citing the Protection of Trading Interests
Act, 1980, c.11, § 5 (U.K.)); Joseph P. Griffin, United States Antitrust Laws and
Transnational Business Transactions: An Introduction, 21 Int’l Law. 307, 327 (1987)
(discussing clawback legislation enacted by the United Kingdom, Australia, and
Canada that allows companies which have paid treble damages under United States
antitrust law judgments to “sue the successful plaintiff in the local courts for a return
of all or a portion of the damages”).
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Druckmaschinen Aktiengesellschaft (Goss I), 434 F.3d 1081, 1084-85 (8th Cir.), cert.
denied, 126 S. Ct. 2363 (2006).
In the 1970s, TKS began selling its presses and press additions in the United
States. By the 1980s, TKS obtained contracts with large United States newspapers,
including The Wall Street Journal, The Washington Post, and the Newark Star-
Ledger. Between 1991 and 2000, TKS began “dumping” its products, that is, selling
them in the United States at prices substantially below the market value of its similar
products in Japan. During that period, TKS sold $125,000,000 worth of printing press
additions in the United States. Goss, on the other hand, lost contracts because
customers expected Goss to lower its prices to match TKS’s prices. In 2000, Goss did
not make a single printing press equipment sale. See id. at 1085.
In March 2000, Goss brought a civil action against TKS alleging violations of
the 1916 Act. See id. at 1087. On December 3, 2003, a jury found in Goss’s favor
and awarded $10,539,949 in damages. See id. at 1087-88. The district court
statutorily trebled the damages, pursuant to the 1916 Act, and entered judgment
against TKS in the amount of $31,619,847, plus interest and costs. See id. at 1088.
The district court also awarded $3,484,158 in attorney fees and expenses, and
$681,475.05 in costs. TKS appealed.
On December 3, 2004, Congress repealed the 1916 Act. Because the repeal was
prospective, it did not affect Goss’s judgment. Japan considered the prospective
repeal to be inconsistent with the United States’s obligations under World Trade
Organization (WTO) agreements.3 Consequently, on December 8, 2004, Japan
3
The United States, Japan, and the European Communities (EC) are members
of the WTO, which is an international trade organization established in 1995 to
administer trade agreements, provide a forum for trade negotiations, and handle trade
disputes between member nations. In November 1998, the EC asked the WTO’s
Dispute Settlement Body (DSB) to establish a dispute settlement panel because of
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pending litigation in the United States against EC entities under the 1916 Act. The EC
argued the 1916 Act was inconsistent with WTO covered agreements, and therefore
the United States breached its WTO obligations by failing to repeal the 1916 Act.
Japan registered the same complaint in June 1999. The United States defended its
position, insisting the trade effects of the 1916 Act were de minimis, and pointing out
that in the eighty-two years since its passage, no money damages or other relief ever
had been awarded under the 1916 Act. The DSB agreed to establish dispute panels
to review the EC’s and Japan’s complaints.
In 2000, the dispute panels concluded (1) the 1916 Act violated WTO covered
agreements, including the General Agreement on Tariffs and Trade 1994 (GATT), the
Anti-dumping Agreement (the Agreement on Implementation of Art. VI of the
GATT), and the WTO Agreement; and (2) benefits accruing to the EC and Japan
under the WTO Agreement had been nullified or impaired. The panels’ decisions
recommended the United States “bring the 1916 Act into conformity with its
obligations under the WTO Agreement.” The DSB adopted the panels’ decisions and
authorized arbitration to determine a reasonable time period for the United States to
implement the provisions of the panels’ decisions.
The United States requested extensions to the implementation period,
explaining more time was necessary for Congress to enact legislation repealing the
1916 Act. Japan and the EC agreed to the extensions on the condition “the proposal
and the draft Bill specifically addressed the repeal of the Act and the effect of the
repeal were applicable to all actions pending on the date of enactment of the repeal
Act, and to all actions filed after the date of enactment.” However, in June 2002, the
EC and Japan reactivated arbitration when a bill was introduced in Congress providing
for the prospective repeal of the 1916 Act.
In February 2004, the WTO arbitrators approved the suspension of concessions
to the United States. The suspension allowed for, among other things, a level of
nullification equal to the total amount of any final judgments and/or settlement claims
awarded under the 1916 Act. See generally World Trade Organization Appellate
Body Reports, 2000, United States–Anti-Dumping Act of 1916,
http://www.wto.org/english/tratop_e/dispu_e/ab_reports_e.htm (last visited June 12,
2007).
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enacted the Special Measures Law, a clawback statute authorizing Japanese
corporations and/or Japanese nationals to sue in Japanese courts for recovery of the
full amount of any judgment, plus interest, attorney fees and costs, awarded under the
1916 Act. Special Measures Law, art. 3, 6. The Special Measures Law holds any
wholly-owned parent companies and subsidiaries of the party that prevailed under the
1916 Act jointly and severally liable for the clawback judgment. Id. Goss Graphic
Systems Japan (Goss Japan), which is located in Tokyo, is a wholly-owned subsidiary
of Goss.
On November 24, 2004, by stipulation of the parties, TKS agreed not to file a
lawsuit under the Special Measures Law until after TKS exhausted its appeal in the
antidumping action. The stipulation also required TKS to provide Goss fourteen days’
notice of its intention to pursue a remedy under the Special Measures Law. On
January 26, 2006, our court affirmed the jury verdict and damages award in the
antidumping action, see Goss I, 434 F.3d at 1084, and on June 5, 2006, the United
States Supreme Court denied TKS’s petition for writ of certiorari, see Tokyo Kikai
Seisakusho, Ltd. v. Goss Int’l Corp., 126 S. Ct. 2363 (2006).
The same day the Supreme Court denied TKS’s petition, TKS notified Goss of
its intent to file suit under the Special Measures Law. Goss filed a motion for
preliminary and permanent antisuit injunction to prevent TKS “from usurping the
Court’s jurisdiction and frustrating the Court’s judgment.” On June 15, 2006, the
district court issued a preliminary antisuit injunction enjoining TKS from filing suit
under the Special Measures Law. Goss Int’l Corp. v. Tokyo Kikai Seisakusho, Ltd.
(Goss P.I.), 435 F. Supp. 2d 919, 931 (N.D. Iowa 2006). On June 19, 2006, TKS paid
the judgment in full, and the district court entered a satisfaction of judgment on June
On December 3, 2004, Congress repealed the 1916 Act, specifying the repeal
“shall not affect any action under [the 1916 Act] that was commenced before the date
of the enactment of this Act and is pending on such date.” Pub. L. No. 108-429,
§ 2006(a)-(b), 118 Stat. 2434, 2597.
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21, 2006. On August 9, 2006, pursuant to TKS’s motion, the district court terminated
TKS’s bond stating, “[t]he supersedeas bond, which was posted to protect the original
judgment of the court, cannot be held in a speculative fashion to protect a possible
award for attorney fees and costs spent on a possible decision granting a permanent
anti-suit injunction that may possibly be appealed.”
II. DISCUSSION
A. Proper Standard for Issuance of a Foreign Antisuit Injunction
The propriety of issuing a foreign antisuit injunction is a matter of first
impression for our circuit. Other circuits having decided the issue agree that “federal
courts have the power to enjoin persons subject to their jurisdiction from prosecuting
foreign suits.” Kaepa, Inc. v. Achilles Corp., 76 F.3d 624, 626 (5th Cir. 1996); see
Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909, 926 (D.C. Cir.
1984) (citing Cole v. Cunningham, 133 U.S. 107, 116-17 (1890)). The circuits are
split, however, on the level of deference afforded to international comity in
determining whether a foreign antisuit injunction should issue.
The First, Second, Third, Sixth, and District of Columbia Circuits have adopted
the “conservative approach,” under which a foreign antisuit injunction will issue only
if the movant demonstrates (1) an action in a foreign jurisdiction would prevent
United States jurisdiction or threaten a vital United States policy, and (2) the domestic
interests outweigh concerns of international comity. See Quaak v. Klynveld Peat
Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 17 (1st Cir. 2004) (adopting the
“conservative approach,” which questions “whether the foreign action either imperils
the jurisdiction of the forum court or threatens some strong national policy” and
“accords appreciably greater weight to considerations of international comity”); see
also Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 161 (3d Cir. 2001) (same); Gau Shan
Co. v. Bankers Trust Co., 956 F.2d 1349, 1355 (6th Cir. 1992) (same); China Trade
& Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35-37 (2d Cir. 1987) (same); Laker
Airways, 731 F.2d at 926-34 (same). Under the conservative approach, “[c]omity
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dictates that foreign antisuit injunctions be issued sparingly and only in the rarest of
cases.” Gau Shan Co., 956 F.2d at 1354 (citing Laker Airways, 731 F.2d at 927); see
also China Trade, 837 F.2d at 35-36 (holding an antisuit injunction “effectively
restricts the jurisdiction of the court of a foreign sovereign,” thus, such orders “should
be used sparingly, and should be granted only with care and great restraint” (internal
quotation marks and citations omitted)).
In contrast, the Fifth and Ninth Circuits follow the “liberal approach,” which
places only modest emphasis on international comity and approves the issuance of an
antisuit injunction when necessary to prevent duplicative and vexatious foreign
litigation and to avoid inconsistent judgments. See Kaepa, Inc., 76 F.3d at 627-28(concluding a district court does not abuse its discretion by issuing an antisuit
injunction when litigation of the same action in a foreign forum “would result in
inequitable hardship and tend to frustrate and delay the speedy and efficient
determination of the cause” (internal quotations omitted)); see also E. & J. Gallo
Winery v. Andina Licores S.A., 446 F.3d 984, 989-91 (9th Cir. 2006) (applying the
Fifth Circuit’s standard for issuance of an antisuit injunction (citing Karaha Bodas Co.
v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 364 n.19,
366-67 (5th Cir. 2003))). The Seventh Circuit similarly has indicated its agreement
with the liberal approach. See Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d
425, 430-31 (7th Cir. 1993).
Under either the conservative or liberal approach, “[w]hen a preliminary
injunction takes the form of a foreign antisuit injunction, [courts] are required to
balance domestic judicial interests against concerns of international comity.” Karaha
Bodas Co., 335 F.3d at 366. We agree with the observations of the First Circuit that
the conservative approach (1) “recognizes the rebuttable presumption against issuing
international antisuit injunctions,” (2) “is more respectful of principles of international
comity,” (3) “compels an inquiring court to balance competing policy considerations,”
and (4) acknowledges that “‘issuing an international antisuit injunction is a step that
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should ‘be taken only with care and great restraint’ and with the recognition that
international comity is a fundamental principle deserving of substantial deference.”
Quaak, 361 F.3d at 18 (quoting Canadian Filters (Harwich) Ltd. v. Lear-Siegler, Inc.,
412 F.2d 577, 578 (1st Cir. 1969)). Likewise, we agree with the Sixth Circuit’s
observation the liberal approach “conveys the message, intended or not, that the
issuing court has so little confidence in the foreign court’s ability to adjudicate a given
dispute fairly and efficiently that it is unwilling even to allow the possibility.” Gau
Shan Co., 956 F.2d at 1355.
Although comity eludes a precise definition, its importance in our globalized
economy cannot be overstated. Compare Hilton v. Guyot, 159 U.S. 113, 164 (1895)
(defining comity as “the recognition which one nation allows within its territory to the
legislative, executive or judicial acts of another nation”), with Turner Entm’t Co. v.
Degeto Film GmbH, 25 F.3d 1512, 1519 n.10 (11th Cir. 1994) (noting commentators
have defined comity using terms such as, “courtesy, politeness, convenience or
goodwill between sovereigns, a moral necessity, expediency, reciprocity or
consideration of high international politics concerned with maintaining amicable and
workable relationships between nations” (internal quotation marks omitted)). Indeed,
the “world economic interdependence has highlighted the importance of comity, as
international commerce depends to a large extent on ‘the ability of merchants to
predict the likely consequences of their conduct in overseas markets.’” See Quaak,
361 F.3d at 19 (quoting Gau Shan Co., 956 F.2d at 1355)). We also note, the
Congress and the President possess greater experience with, knowledge of, and
expertise in international trade and economics than does the Judiciary. The two other
branches, not the Judiciary, bear the constitutional duties related to foreign affairs.
For these reasons, we join the majority of our sister circuits and adopt the conservative
approach in determining whether a foreign antisuit injunction should issue.
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B. Application of the Standard
1. District Court’s Decision
In the absence of guidance from our circuit or the Supreme Court regarding the
standard for issuing an antisuit injunction, the district court noted the split of authority
and concluded under either the conservative or the liberal approach, “it is settled that
considerations of comity have diminished force when, as here, one court has already
reached judgment.” Goss P.I., 435 F. Supp. 2d at 928 (citing Paramedics
Electromedicina Comercial, Ltda. v. G.E. Med. Sys. Info. Techs., Inc., 369 F.3d 645,
655 (2d Cir. 2004)). In reaching this conclusion, the district court relied on the
seminal case of Laker Airways Ltd. v. Sabena, Belgian World Airlines, wherein the
Court of Appeals for the District of Columbia Circuit made an exhaustive inquiry into
the propriety of issuing a foreign antisuit injunction. See Laker Airways, 731 F.2d at
909-59.4
As an initial matter, the district court noted the parties agreed the district court
had equitable power to issue a foreign antisuit injunction to enjoin a party before it
from pursuing litigation in a foreign forum, and “the All Writs Act, 18 U.S.C. § 1651,
empowers the court to issue an injunction barring TKS from filing suit under the
Japanese Special Measures Law.” Goss P.I., 435 F. Supp. 2d at 924-25.
The district court next determined TKS’s proposed invocation of the Special
Measures Law was “a direct attack on [the] court’s judgment in favor of Goss and a
4
While applying our circuit’s traditional four-factor preliminary injunction
analysis under Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109, 114 (8th
Cir. 1981) (en banc), the district court recognized the awkward fit of such an analysis
in cases involving foreign antisuit injunctions. See Goss P.I., 435 F. Supp. 2d at 926
n.7. We agree. The analysis for issuing a foreign antisuit injunction primarily should
focus on (1) whether an action in the foreign jurisdiction prevents United States
jurisdiction or threatens a vital United States policy, and (2) whether the domestic
interests outweigh concerns of international comity. We focus our review, therefore,
upon the district court’s analysis of these particular factors.
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frontal assault on the jurisdiction of [the] court and the federal judiciary as a whole,”
an assault instituted “‘for the sole purpose of terminating’ [the] court’s judgment in
Goss’s favor.” Id. at 929 (quoting Gau Shan Co., 956 F.2d at 1356 (quoting Laker
Airways, 731 F.2d at 915)). The district court reasoned TKS’s proposed litigation was
“clearly vexatious and oppressive” because TKS effectively sought to terminate the
district court’s judgment in favor of Goss, and “thereby in a single filing attempting
to undo six years of federal court litigation.” Id. The district court acknowledged that
the issuance of an antisuit injunction “would be deeply offensive to the Japanese
government” and “may have international repercussions,” but nonetheless determined
“its interest in protecting the integrity of its judgments and jurisdiction outweighs
concerns over international comity.” Id. The district court concluded:
The fact that the legislative and executive branches were aware of this
court’s judgment and deliberately chose not to undo it through a
retroactive repeal of the 1916 Act must inform the weight this court must
give to international comity in this case. It is not the province of this
court or the federal judiciary in general to rewrite the foreign policy of
the United States government, as expressed by the legislative and
executive branches of government.
Id. at 930.
Thus, the district court found the factors weighed in Goss’s favor and issued a
preliminary injunction. Id. at 931. In doing so, the district court stressed the order
enjoined only TKS, not the Japanese government or judiciary, from availing itself of
the Special Measures Law until the district court determined the merits of Goss’s
permanent injunction motion.
On appeal, TKS argues, because the judgment has been paid, a Japanese suit
under the Special Measures Law would not threaten the jurisdiction of the United
States. TKS further argues the United States would be deeply offended if a foreign
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court granted an antisuit injunction under similar circumstances. TKS concedes a
United States court may properly enjoin a party from seeking an order in a foreign
court that would deprive the United States court of jurisdiction over a claim properly
before it, but a United States court may not prevent a foreign national from taking
recourse to its own courts for relief under a foreign statute that does not interfere with
the jurisdiction of the United States courts. TKS further contends, under the district
court’s rationale, all actions under foreign clawback statutes are subject to injunction
because all foreign clawback statutes would deprive United States courts of
jurisdiction. Finally, TKS claims no vital American policy is being protected by the
antisuit injunction.
2. Standard of Review
Our standard of review over the issuance of a preliminary injunction is a
familiar one. “We review the District Court’s material factual findings for clear error,
its legal conclusions de novo, and the court’s equitable judgment–the ultimate
decision to grant the injunction–for an abuse of discretion.” Heartland Acad. Cmty.
Church v. Waddle, 335 F.3d 684, 689-90 (8th Cir. 2003).
An abuse of discretion occurs when a relevant factor that should have
been given significant weight is not considered, when an irrelevant or
improper factor is considered and given significant weight, or when all
proper and no improper factors are considered, but the court in weighing
those factors commits a clear error of judgment.
Baker Elec. Coop., Inc. v. Chaske, 28 F.3d 1466, 1472 (8th Cir. 1994) (quotation
omitted).
3. Goss’s Antisuit Injunction
At the outset of our review, we acknowledge the district court’s unenviable task
to navigate the uncharted waters of foreign antisuit injunctions. We begin our review
with a discussion of the instructive Laker Airways case relied upon by the district
court. Laker Airways (Laker) brought an antitrust action against four foreign airlines
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and four domestic corporations in the United States District Court for the District of
Columbia. Laker Airways, 731 F.2d at 917. Shortly after Laker filed the lawsuit, the
foreign defendants filed an action in the United Kingdom’s High Court of Justice,
requesting a declaration of non-liability and an injunction to prevent Laker from
pursuing remedies in the United States courts under United States antitrust laws. Id.
at 918. The requested relief stemmed from the alleged incompatibility between
United States antitrust laws with their consequent treble damages on the one hand, and
the Bermuda II Treaty and the British Protection of Trading Interests Act on the other.
Id. The United Kingdom’s High Court of Justice granted the injunction, which
effectively terminated Laker’s pending United States litigation as to the four foreign
defendants. Id. In the district court, Laker successfully enjoined the remaining
domestic defendants and two foreign airline defendants in a second antitrust action
from filing any action in a foreign court that “would interfere with the district court’s
jurisdiction over the matters alleged in the complaint.” Id. at 918-19.
On appeal, the Laker Airways defendants argued “the injunction was
unnecessary to protect the district court’s jurisdiction and violate[d] their right to take
part in the ‘parallel’ actions commenced in the English courts.” Id. at 921. A divided
panel affirmed the decision, concluding an injunction by the United Kingdom’s High
Court of Justice would have stripped the United States court of control over Laker’s
pending litigation. Id. at 955-56. The court did not reach this conclusion without
much deliberation, first recognizing “the fundamental corollary to concurrent
jurisdiction must ordinarily be respected: parallel proceedings on the same in
personam claim should ordinarily be allowed to proceed simultaneously, at least until
a judgment is reached in one which can be pled as res judicata in the other.” Id. at
926-27. The court cautioned that while foreign antisuit injunctions only operate on
the parties within the court’s jurisdiction, “they effectively restrict the foreign court’s
ability to exercise its jurisdiction.” Id. at 927.
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In deciding the propriety of issuing an antisuit injunction, the Laker Airways
court established factors to be considered, which included protecting United States
jurisdiction, preserving important United States public policies, and balancing
domestic interests with the principles of international comity. Id. at 926-45. The
court recognized the futility of an interest balancing test in determining prescriptive
jurisdiction because the “courts are forced to choose between a domestic law which
is designed to protect domestic interests, and a foreign law which is calculated to
thwart the implementation of the domestic law in order to protect foreign interests
allegedly threatened by the objectives of the domestic law.” Id. at 948. While
acknowledging the domestic courts’ obligation “to apply international law and foster
comity,” the court conceded that, when in doubt, “national interests will tend to be
favored over foreign interests.” Id. at 951. The court concluded, to protect properly
the jurisdiction of the United States over the prescriptive jurisdiction of its United
States antitrust laws, the district court acted within its discretion by enjoining the
defendants from pursuing an injunction in the United Kingdom’s High Court of
Justice. Id. at 955-56. The court recognized, however, along with this act of
preserving its own jurisdiction ran “the risk that counterinjunctions or other sanctions
will eventually preclude Laker from achieving any remedy, if it is ultimately entitled
to one under United States law. In either case the policies of both countries are likely
to be frustrated at the cost of substantial prejudice to the litigants’ rights.” Id. at 953.
As in Laker Airways, most cases dealing with foreign antisuit injunctions
involve simultaneous litigation in both United States and foreign courts. In Gau Shan
Co. v. Bankers Trust Co., for example, a borrower brought an action in a United States
district court against its lender for fraud in connection with a loan note. Gau Shan
Co., 956 F.2d at 1352. When the lender tried to file an action in Hong Kong against
the borrower for failure to pay the loan note, the United States court granted the
borrower’s motion for a foreign antisuit injunction. Id. The Sixth Circuit reversed,
holding a parallel suit did not threaten United States jurisdiction and international
comity precluded the issuance of an antisuit injunction. Id. at 1355-59. The court
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reasoned, “The possibility that a holding of a Hong Kong court might permit [the
lender] to gain control of [the borrower] is not a threat to the jurisdiction of the United
States courts; rather, it is merely a threat to [the borrower]’s interest in prosecuting its
lawsuit.” Id. at 1356. Similarly, in China Trade & Dev. Corp. v. M.V. Choong Yong,
the Second Circuit reversed the issuance of an antisuit injunction, concluding parallel
litigation in the United States and Korea concerning a Korean corporation’s liability
did not frustrate an important United States policy or threaten the jurisdiction of the
United States courts. China Trade, 837 F.2d at 34.
Other courts have upheld the issuance of a foreign antisuit injunction in the face
of parallel litigation. For example, in Quaak v. Klynveld Peat Marwick Goerdeler
Bedrijfsrevisoren, when investors filed a securities fraud class action lawsuit in a
United States district court against Klynveld Peat Marwick Goerdeler
Bedrijfsrevisoren (KPMG-B), KPMG-B was also a defendant in a contemporaneous
criminal action in Belgium. Quaak, 361 F.3d at 14. The class action plaintiffs sought
documents from KPMG-B, but KPMG-B claimed Belgian law prohibited KPMG-B
from releasing the information. Id. at 14-15. Thereafter, KPMG-B instituted an
action in the Belgian judicial system seeking to enjoin the class action plaintiffs from
“taking any step” toward the discovery requests and to impose substantial penalties
on parties pursuing discovery procedures. Id. The class action plaintiffs countered
this move by filing a motion in the United States action and obtaining a foreign
antisuit injunction against KPMG-B to prevent KPMG-B from pursuing the Belgian
injunctive action. Id. On appeal, the First Circuit affirmed the injunction, agreeing
with the district court that the character of the foreign action, the public policy of
protecting investors against fraud, and the need to protect the court’s jurisdiction all
counterbalanced comity concerns under the peculiar circumstances of the case. Id. at
20.5
5
Foreign antisuit injunctions also have been dealt with in the context of
compelling arbitration, see Paramedics Electromedicina, 369 F.3d at 648-49, and
enforcing arbitration agreements, see Karaha Bodas Co., 335 F.3d at 359-60.
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The case before us does not fit within the category of cases in which foreign
antisuit injunctions have been considered. We do not believe the rationale of those
cases compels an injunction in the present case.
First, although the All Writs Act, 28 U.S.C. § 1651(a), authorizes federal courts
to “issue all writs necessary or appropriate in aid of their respective jurisdictions and
agreeable to the usages and principles of law,” the Act does not create an independent
source of federal jurisdiction. Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 31
(2002) (quoting 28 U.S.C. § 1651(a) and declaring the All Writs Act does not
establish the original jurisdiction to support removal jurisdiction); see Achtman v.
Kirby, McInerney & Squire, LLP, 464 F.3d 328, 333-34 (2d Cir. 2006) (rejecting the
district court’s assertion that an injunction issued pursuant to the All Writs Act
provided the court with subject matter jurisdiction concluding, “[t]o hold otherwise
would make mincemeat of the limited grants of jurisdiction bestowed upon us”);
Sprint Spectrum L.P. v. Mills, 283 F.3d 404, 413 (2d Cir. 2002) (noting the All Writs
Act, while not conferring an independent basis of jurisdiction, “‘provides a tool courts
need in cases over which jurisdiction is conferred by some other source’” (quoting
United States v. Tablie, 166 F.3d 505, 507 (2d Cir. 1999) (per curiam))); Phillips
Beverage Co. v. Belvedere S.A., 204 F.3d 805, 806 (8th Cir. 2000) (concluding the
district court had continuing jurisdiction, therefore the All Writs Act provided the
district court the authority to prevent a party from making an end run around the
district court’s previous denial of interim relief by enjoining the party from seeking
relief elsewhere); Westinghouse Elec. Corp. v. Newman & Holtzinger, P.C., 992 F.2d
932, 937 (9th Cir. 1993) (concluding the All Writs Act does not operate to confer
jurisdiction upon the district court, rather the Act only aids jurisdiction the district
court already possesses).6 In this case, at the time the district court issued the
6
“Although not a base of jurisdiction, the All Writs Act has been held to give
the federal courts the power to implement the orders they issue by compelling persons
not parties to the action to act, or by ordering them not to act.” 14A Charles Alan
Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3691
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preliminary antisuit injunction, the district court clearly possessed jurisdiction over
the case and parties pursuant to 28 U.S.C. § 1331, and TKS had not paid the monetary
judgment. Thus, the district court retained ancillary enforcement jurisdiction until
satisfaction of the judgment. See Peacock v. Thomas, 516 U.S. 349, 356-57 (1996)
(“Without jurisdiction to enforce a judgment entered by a federal court, ‘the judicial
power would be incomplete and entirely inadequate to the purposes for which it was
conferred by the Constitution.’” (quoting Riggs v. Johnson County, 73 U.S. 166, 187
(1867) (“[T]he jurisdiction of a court is not exhausted by the rendition of the
judgment, but continues until that judgment shall be satisfied.”))).
Now, however, the antidumping litigation has culminated: a verdict was entered
for Goss, which we affirmed on appeal; TKS paid the judgment; and the district court
lifted the stay of the supersedeas bond. Therefore, the judgment now is rendered,
paid, and satisfied. No pending litigation, other than this appeal, remains in the
United States courts. Thus, the request for injunctive relief is not for the prevention
of interdictory jurisdiction by Japanese courts. Instead, the United States courts are
being asked to prevent TKS from seeking a remedy available solely in Japan. Neither
the All Writs Act nor the court’s ancillary enforcement jurisdiction provides the
district court with a separate source of jurisdiction to enjoin TKS under these
circumstances. See Peacock, 516 U.S. at 358 (“In determining the reach of the federal
courts’ ancillary jurisdiction, we have cautioned against the exercise of jurisdiction
over proceedings that are ‘entirely new and original,’ or where ‘the relief [sought is]
of a different kind or on a different principle’ than that of the prior decree.” (quoting
Krippendorf v. Hyde, 110 U.S. 276, 285 (1884), and Dugas v. Am. Surety Co., 300
U.S. 414, 428 (1937), respectively)).
(3d ed. 1998). See, e.g., Sprint Spectrum, 283 F.3d at 413-14 (concluding the district
court had the authority under the All Writs Act to compel a third party, without whom
there would have been no underlying case or controversy, to perform the third party’s
contractual obligations to prevent the frustration of the district court’s orders
previously issued in the underlying action).
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Second, in cases involving parallel litigation in foreign countries, once one
court reaches a final judgment, the role of comity for antisuit injunction purposes
essentially is moot because there is no longer tension with the foreign country over
concurrent jurisdiction. Instead, the doctrine of res judicata should apply as a defense
to further litigation of the same issues. As the Laker Airways court explained,
“Comity ordinarily requires that courts of a separate sovereign not interfere with
concurrent proceedings based on the same transitory claim, at least until a judgment
is reached in one action, allowing res judicata to be pled in defense.” Laker Airways,
731 F.2d at 939.
The issues previously decided below in the district court are different from the
issues sought to be litigated in the foreign jurisdiction. TKS now seeks to litigate in
Japan a cause of action solely available in Japan and not previously litigated in the
antidumping litigation. The issues are not the same simply because TKS’s cause of
action under the Special Measures Law rests on the imposition of an adverse judgment
against TKS under the 1916 Act.
Third, we disagree with the district court’s assertion that Congress’s decision
to repeal the 1916 Act prospectively, rather than retroactively, may play a role in the
decision to grant a foreign antisuit injunction to protect the court’s jurisdiction or an
important United States policy. Nothing in the repeal of the 1916 Act, nor any
principle of law (aside from the doctrines of res judicata and collateral estoppel, which
are inapplicable here), confers jurisdiction upon the court to maintain authority over
the parties now that judgment has been satisfied. Cf. Canady v. Allstate Ins. Co., 282
F.3d 1005, 1013 (8th Cir. 2002) (applying the relitigation exception of the All Writs
Act, which protects from future litigation, a claim or issue that relates back to a prior
federal court decision). Indeed, in repealing the 1916 Act, the Committee on the
Judiciary (Committee) was clearly acting in response to the WTO proceedings and the
potential for retaliation against the United States for not repealing the 1916 Act. See
H.R. Rep. No. 108-415, at 5 (2004). The Committee knew the European Union (EU)
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approved a regulation banning “the recognition and application of decisions taken
under the 1916 Act within EU countries,” and “allow[ing] EU-based companies and
citizens to claim damages (with interest) for any penalties associated with [the 1916
Act’s] application.” Id. The dissenting members of the Committee also knew the
EU’s “blocking” regulation provided “EC companies with a right to recover any costs
incurred in 1916 Act litigation.” Id. at 18.
The district court also placed too much emphasis on the impact of the Special
Measures Law on United States public policy. The Special Measures Law has a one-
time application: There is no pending litigation under the now-defunct 1916 Act; Goss
received the only judgment ever granted under the Act; thus, the only lawsuit possible
under the Special Measures Law can be brought against Goss alone. Our
consideration of international comity must allow the Japanese courts, in the first
instance, to determine the enforceability of the Special Measures Law, which will
undoubtedly involve application of Japanese precedent and domestic policy, and the
Japanese courts’ own consideration of international comity. If the Japanese judiciary
upholds the enforceability of the Special Measures Law, it must next determine
whether jurisdiction over Goss exists to maintain the lawsuit. International comity
requires us to give deference to the Japanese courts to interpret Japanese laws. Goss
is not precluded from seeking affirmative defenses under Japanese law in defending
itself from the countermeasure. Furthermore, the United States representative to the
WTO may seek to enforce provisions of the WTO Agreement to prevent TKS from
enforcing the Special Measures Law as a suspension of obligations.7
We are profoundly aware a judgment in favor of TKS under the Special
Measures Law would effectively nullify the remedy Goss legitimately procured in the
7
We have not been apprised whether the DSB found Japan’s Special Measures
Law consistent with the WTO’s suspension of concessions to the United States or
whether the Special Measures Law otherwise has been challenged before the WTO.
See supra n.3.
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United States courts. Although such a result understandably is objectionable to Goss,
it does not threaten United States jurisdiction or any current United States policy. Cf.
Gau Shan Co., 956 F.2d at 1356 (concluding the possibility a foreign court’s holding
might threaten the United States plaintiff’s interest in prosecuting its lawsuit is not a
threat to the jurisdiction of the United States courts); Sea Containers Ltd. v. Stena AB,
890 F.2d 1205, 1213-14 (D.C. Cir. 1989) (holding no basis for an antisuit injunction
existed because the issues litigated in the foreign court were different despite the fact
that successful litigation in the foreign court would effectively overturn a decision of
the United States court).
As in Laker Airways, the matter before us did not begin as an international
jurisdictional standoff.8 Rather, it arose out of the legislative policies of the United
States and Japan, which resulted in “a head-on collision between the diametrically
opposed antitrust policies of the United States and [Japan].” Laker Airways, 731 F.2d
at 916, 948. Unlike Laker Airways, however, the present case involves no pending
litigation between the parties (other than the present appeal) in the United States
courts. Consequently, regardless of our approval or disapproval of clawback litigation
in a particular foreign court, given the present posture of this case, it is beyond our
limited jurisdiction and contrary to principles of comity to prevent TKS from seeking
an action under the Special Measures Law in Japan. See Neighborhood Transp.
8
The Laker Airways court discussed the tension between the antitrust laws of
the United States and the United Kingdom, and the potential ramifications under the
Protection of Trading Interests Act, 1980, c.11, § 5 (U.K.), a British clawback statute,
which provides protection from multiple damage awards imposed under the laws of
countries outside the United Kingdom. See Laker Airways, 731 F.2d at 943; see also
Laker Airways Ltd. v. Pan Am. World Airways, 559 F. Supp. 1124, 1137 (D.D.C.
1983) (“The Protection of Trading Interests Act of 1980 directs British courts not to
enforce treble damage awards against British firms, and . . . [its] ‘clawback’ provision
allows non-United States firms doing business in the United Kingdom to sue there to
recover two-thirds of treble damage awards levied against them in the United
States.”).
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Network, Inc. v. Pena, 42 F.3d 1169, 1172 (8th Cir. 1994) (noting federal courts “can
only hear actual ‘cases or controversies’ as defined by Article III of the Constitution,”
and “[w]hen a case on appeal no longer presents an actual, ongoing case or
controversy, the case is moot and the federal court no longer has jurisdiction to hear
it” (citing Preiser v. Newkirk, 422 U.S. 395, 401 (1975))).
Although the Special Measures Law, like other clawback or blocking
provisions, can be regarded as an affront to the laws and judicial rules of the United
States, see, e.g., Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct., 482 U.S.
522, 542-44 & n.29 (1987) (discussing France’s blocking statute aimed at frustrating
the disfavored United States antitrust discovery rules, and concluding the Hague
Convention did not deprive the district court of jurisdiction it otherwise possessed to
order a foreign national to produce evidence physically located within a foreign
signatory nation), the United States Executive and Legislative Branches, not the
Judiciary, are the governmental bodies to address those diplomatic tensions, see, e.g.,
Dames & Moore v. Regan, 453 U.S. 654, 686-87 (1981) (concluding, under the
specific facts of the case, the district court properly denied injunctive relief because
the President acted within his executive powers in nullifying claims pending in the
United States court against Iranian assets); Karaha Bodas Co., 335 F.3d at 373
(concluding the district court acted in contravention of a treaty–the United Nations
Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 330
U.N.T.S. 38, codified at 9 U.S.C. § 201–by enjoining a party from seeking an action
to annul an arbitration award).
The propriety of the Special Measures Law, and TKS’s action thereunder, are
matters for the Japanese courts in the first instance. Any response by the United
States, such as a blocking statute for protection against a judgment awarded under the
Special Measures Law or trade sanctions against Japan, must come through authorized
representatives of the United States Executive or Legislative Branches, not the
Judiciary. As the Laker Airways court observed,
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The resources of the Judiciary are inherently limited when faced with an
affirmative decision by the political branches of the government to
prescribe specific policies. Absent an explicit directive from Congress,
this court has neither the authority nor the institutional resources to
weigh the policy and political factors that must be evaluated when
resolving competing claims of jurisdiction. In contrast, diplomatic and
executive channels are, by definition, designed to exchange, negotiate,
and reconcile the problems which accompany the realization of national
interests within the sphere of international association. These forums
should and, we hope, will be utilized to avoid or resolve conflicts caused
by contradictory assertions of concurrent prescriptive jurisdiction.
Laker Airways, 731 F.2d at 955.
The district court’s obvious purpose in issuing the antisuit injunction was to
constrain TKS from undermining six years of litigation by seeking recovery under the
newly promulgated Japanese Special Measures Law. At the time the district court
issued the injunction, TKS had not paid its judgment and the district court had not
lifted the stay on TKS’s performance bond. Given the status of the case at the time
the injunction issued, the district court maintained ancillary enforcement jurisdiction
to preserve the judgment and pursue collection. Thus, we need not decide whether the
district court abused its discretion in issuing the preliminary antisuit injunction at that
juncture. However, the jurisdictional circumstances and comity considerations have
changed because there is no longer an outstanding judgment to protect. Given the
criteria for granting a foreign antisuit injunction set forth and discussed herein, we
conclude, under the facts of this case, the maintenance of the antisuit injunction on a
satisfied judgment cannot be justified.9
9
We recognize there are cases where the satisfaction of judgment is not, as here,
solely the payment of a money judgment. Therefore, we reach no categorical
conclusion regarding the propriety of the issuance of an antisuit injunction in all cases
involving the preservation of a judgment.
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III. CONCLUSION
We vacate the district court’s grant of a preliminary antisuit injunction and
remand for dismissal of Goss’s motion for injunctive relief.
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