Opinion for the Court filed by Circuit Judge WILKEY.
Dissenting Opinion filed by Circuit Judge STARR.
OUTLINE OF OPINION FOR THE COURT
Page Intoduction ............................................... 914 I. BACKGROUND ........................................... 916 A. Laker's Antitrust Claims .......................... 916 B. Litigation History ................................ 917 C. Current Appeals in this Court ..................... 920 II. ANALYSIS ............................................. 921 A. Bases of Concurrent Prescriptive Jurisdiction: Territoriality and Nationality .................... 921 1. Overview ....................................... 921 2. United States Jurisdictional Base .............. 922 a. Territorial Contacts Justifying Application of United States Antitrust Law .............................. 923 b. Adequacy of United States Territorial Interests ................................... 925 3. British Jurisdictional Base .................... 926 4. Concurrent Jurisdiction ........................ 926 B. Propriety of the Antisuit Injunction .............. 926 1. Protection of Jurisdiction ..................... 927 2. Evasion of Important Public Policies ........... 931 3. Effect of the English Injunctions .............. 933 C. Paramount Nationality ............................. 934 D. International Comity .............................. 937 E. Judicial Reconciliation of Conflicting Assertions of Jurisdiction ................................... 945 1. Nature of the Conflict ......................... 945 2. Judicial Interest Balancing .................... 948 a. Defects in the Balancing Process ............ 948 b. Promotion of International Comity ........... 950 3. Political Compromise ........................... 953 III. CONCLUSION ........................................... 955
WILKEY, Circuit Judge:
We review today the limits of a federal court's power to conserve its adjudicatory
If these defendants had been permitted to file foreign injunctive actions, the United States District Court would have been effectively stripped of control over the claims — based on United States law — which it was in the process of adjudicating. Faced with no alternative but acquiescence in the termination of this jurisdiction by a foreign court's order, United States District Judge Harold H. Greene granted Laker's motion for a preliminary injunction restraining the remaining defendants from taking part in the foreign action designed to prevent the district court from hearing Laker's antitrust claims.
Two of the defendants enjoined from taking part in the English proceeding, KLM Royal Dutch Airlines ("KLM") and Societe Anonyme Belge d'Exploitation de la Navigation Aerienne ("Sabena") now contend on appeal that the court abused its discretion. Their arguments are essentially two-fold: first, that the injunction tramples Britain's rights to regulate the access of its nationals to judicial remedies; second, that the injunction contravenes the principles of international comity which ordinarily compel deference to foreign judgments and which virtually always proscribe any interference with foreign judicial proceedings.
Our review of the limited available facts strongly suggests that both the United States and Great Britain share concurrent prescriptive jurisdiction over the transactions giving rise to Laker's claim. Ordinarily antisuit injunctions are not properly invoked to preempt parallel proceedings on the same in personam claim in foreign tribunals. However, KLM and Sabena do not qualify under this general rule because the foreign action they seek to join is interdictory and not parallel. It was instituted by the foreign defendants for the sole purpose of terminating the United States claim. The only conceivable benefit that KLM and Sabena would reap if the district court's injunction were overturned would be the right to attack the pending United States action in a foreign court. This would permit the appellants to avoid potential liability under the United States laws to which their business operations and treaty obligations have long subjected them. In these circumstances there is ample precedent justifying the defensive use of an antisuit injunction.
The injunction does not transgress either the principles of international comity or nationality-based prescriptive jurisdiction on which KLM and Sabena rely. Limitations on the application of comity dating from the origins of the doctrine recognize that a domestic forum is not compelled to acquiesce in pre-or postjudgment conduct by litigants which frustrates the significant policies of the domestic forum. Accession to a demand for comity predicated on the coercive effects of a foreign judgment usurping legitimately concurrent prescriptive jurisdiction is unlikely to foster the processes of accommodation and cooperation
The claims raised by KLM and Sabena do pose serious issues regarding the Judiciary's role in accommodating the conflicting implementation of concurrent prescriptive jurisdiction. We have necessarily inquired into the source of the conflict facing the courts of the United States and United Kingdom, and probed the extent to which the judicial processes may effectively be employed to resolve conflicts like the present one. Given the inherent limitations on the Judiciary's ability to adjust national priorities in light of directly contradictory foreign policies, there is little the Judiciary may do directly to resolve the conflict. Although the flash point of the controversy has been the antisuit injunctions, the real powder keg is the strongly mandated legislative policies which each national court is bound to implement. Thus, it is unlikely that the underlying controversy would be defused regardless of the action we take today.
Because the principles of comity and concurrent jurisdiction clearly authorize the use of a defensive preliminary injunction designed to permit the United States claim to go forward free of foreign interference, we affirm the decision of the district court.
This case raises especially troublesome issues on two different fronts. It represents a head-on collision between the diametrically opposed antitrust policies of the United States and United Kingdom, and is perhaps the most pronounced example in recent years of the problems raised by the concurrent jurisdiction held by several states over transactions substantially affecting several states' interests. These problems are all the more intractable because of the vehicles involved in the collision: antisuit injunctions designed to preempt the parties' access to the courts of foreign jurisdictions. The intersection of these issues confronts us with the Herculean task of accommodating conflicting, mutually inconsistent national regulatory policies while minimizing the amount of interference with the judicial processes of other nations that our courts will permit. Resolution of this appeal thus requires a clear grasp of both the underlying factual background of Laker's antitrust claims and the complex sequence of litigation and counterlitigation in which those claims have been asserted by Laker and attacked by the foreign defendants.
A. Laker's Antitrust Claims
Accepting the veracity of Laker's allegations for the purposes of this appeal only,
Laker's potential competitors allegedly resisted the entry of this new carrier, delaying the commencement of Laker's novel economy service for several years. However, by 1977 Laker obtained the necessary authorizations from the United States and British governments and inaugurated its low cost transatlantic airline service between London and New York.
The prices for scheduled transatlantic air service are substantially controlled by the International Air Transport Association
Notwithstanding this asserted predatory scheme, up until 1981 Laker managed to operate at a profit. At its zenith, Laker was carrying one out of every seven scheduled air passengers between the United States and England.
However, during 1981 Laker's financial condition rapidly deteriorated. In mid 1981 the pound sterling declined precipitously. A large segment of Laker's revenues was in pounds, but most of its debts, such as those on its United States financed fleet of DC-10 aircraft, and expenses were in dollars. Already weakened by the asserted predatory pricing scheme, Laker ran into repayment difficulties. Fearing financial collapse, it sought to have its repayment obligations refinanced.
At this point several airlines allegedly conspired to set even lower predatory prices. In October 1981 Pan American Airlines, Trans World Airlines, and British Airways dropped their fares for their full service flights to equal those charged by Laker for its no-frills service. They also allegedly paid high secret commissions to travel agents to divert potential customers from Laker. These activities further restricted Laker's income, exacerbating its perilous economic condition. At IATA meetings in December 1981 at Geneva, Switzerland, and in January 1982 at Hollywood, Florida, the IATA airlines allegedly laid plans to fix higher fares in the spring and summer of 1982 after Laker had been driven out of business.
IATA members also interfered with Laker's attempt to reschedule its financial obligations. After Laker arranged a refinancing agreement, KLM, Sabena, and other IATA airlines allegedly pressured Laker's lenders to withhold the financing which had previously been promised. As a result of these alleged conspiracies, Laker was forced into liquidation under Jersey law in early February 1982.
B. Litigation History
In the aftermath of these asserted conspiracies, Laker, through its liquidator, commenced an action in United States District Court for the District of Columbia to recover for the injuries sustained by the airline as a result of the alleged predatory pricing and unlawful interference with its refinancing arrangements. Laker's complaint filed on 24 November 1982, Civil Action No. 82-3362, alleged two counts: (1) violation of United States antitrust laws, and (2) a common law intentional tort. Named as defendants were four American corporations, Pan American World Airways, Trans World Airlines, McDonnell Douglas Corp., and McDonnell Douglas Finance Corp., as well as four foreign airlines, British Airways, British Caledonian Airways, Lufthansa, and Swissair.
Fearing that Laker would commence a second antitrust action against it, Midland
Shortly thereafter the four foreign defendants in No. 82-3362 initiated a similar suit in the High Court of Justice. Their writs filed on 21 January 1983 sought (1) a declaration that the four foreign defendants were not engaged in any unlawful combination or conspiracy, and (2) an injunction prohibiting Laker from taking any action in United States courts to redress an alleged violation by the defendants of United States antitrust laws. The writs specifically sought to compel Laker to dismiss its suit against the foreign defendants in No. 82-3362 and to prohibit Laker from instituting any other proceedings in any non-English forum to redress any alleged violation of English or other laws prohibiting intentional or unlawful commercial injury.
The substantive basis for the requested relief was the alleged inapplicability of United States antitrust laws under the Bermuda II Treaty
On 24 January 1983, to avoid being enjoined from continuing to sue the four United States defendants, Laker sought a temporary restraining order from the United States District Court preventing the American defendants from instituting similar preemptive proceedings in England. The order was granted the same day, and later extended pending a hearing on Laker's motion for a preliminary injunction.
Approximately three weeks later, on 15 February 1983, Laker commenced in the district court a second antitrust suit, Civil Action No. 83-0416. Appellants KLM and Sabena were named as defendants. A temporary restraining order was also entered against the appellants, preventing them from taking any action in a foreign court that would have impaired the district court's jurisdiction. This order was extended pending a hearing on Laker's motion for a preliminary injunction.
On 2 March 1983, the British defendants in No. 82-3362 successfully petitioned Justice Parker of the High Court of Justice to grant a second interim injunction against Laker preventing Laker from taking "any further steps" to prosecute its United States claim against the British airlines. Although the injunction was only designed to preserve the status quo pending a ruling by the High Court of Justice on the merits of the British airlines' suit seeking dismissal of No. 82-3362, the injunction prevented Laker from filing any discovery or other motions against British Airways and British Caledonian.
At a hearing held five days later, Laker's motion for a preliminary injunction against the four American defendants, KLM, and Sabena was considered by the United States District Court. By order
KLM Royal Dutch Airlines and Sabena Belgian World Airlines, joined by amici curiae Swissair and Lufthansa, now appeal the 7 March 1983 order and 9 March 1983 memorandum of the district court which enjoined KLM and Sabena from seeking an injunction against Laker's antitrust suit in the English courts. However, during the pendency of this appeal, the process of litigation and counterlitigation has continued in the United States and English courts.
On 29 March 1983, Justice Parker vacated his 2 March 1983 injunction against Laker's prosecution of its antitrust suit against the foreign defendants in No. 83-3362. This interim injunction was then reinstated pending appeal.
In April and May 1983 Laker continued its efforts to proceed in its United States antitrust actions while defending itself against the proceedings in the High Court of Justice which were designed to terminate its United States claims. On 26 April 1983 Laker issued a summons in the High Court of Justice seeking a dismissal or stay of the suits initiated by Lufthansa and Swissair. Laker also moved in the High Court of Justice for a discharge of the injunction granted on 21 January 1983. In a motion for partial summary judgment filed in the United States District Court, Laker affirmatively challenged the defendants' contentions that the action should be dismissed on forum non conveniens grounds. By an opinion and order dated 3 May 1983 the district court granted Laker's motion and held that the principles of forum non conveniens did not require that jurisdiction be relinquished.
In a judgment read by Justice Parker on 20 May 1983, the High Court of Justice held that the injunctive relief requested by the British airlines was not justified and terminated claims for relief filed by British Caledonian and British Airways.
Laker applied for judicial review of the validity of the order and directions. The Court of Appeal considered this application with the appeals by British Airways and British Caledonian of Justice Parker's judgment of 20 May 1983.
On 26 July 1983 the Court of Appeal announced its judgment that the order and directions were well within the power of the Secretary of State to issue, and hence valid. Because the order and directions of the British Executive prevented the British airline from complying with any requirements imposed by the United States District Court and prohibited the airlines from relying on their own commercial documents located within the United Kingdom to defend themselves against Laker's charges, the Court of Appeal concluded that the United States District Court action was "wholly untriable" and could only result in a "total denial of justice to" the British airlines.
After a hearing following judgment, the Court of Appeal granted an injunction (1) restraining Laker from taking any steps against British Airways and British Caledonian in the United States action, and (2) directing Laker to use its best efforts to have British Airways and British Caledonian dismissed from the United States action. The second aspect of the injunction was stayed pending appeal to the House of Lords.
C. Current Appeal in this Court
As the litigation now stands, British Airways and British Caledonian have obtained an injunction by the English Court of Appeal restraining Laker from prosecuting its civil antitrust claim against them. Swissair
Supported by amici curiae Swissair and Lufthansa, KLM and Sabena challenge the United States District Court's preliminary injunction on appeal to this court.
This appeal is the direct result of a clash between two governments asserting jurisdiction to prescribe law over a single series of transactions. The district court's injunction is defended by Laker as necessary to protect the court's jurisdiction. If there is no justification for the court's exercise of jurisdiction, the injunctive relief should necessrily fail. Similarly, if the United Kingdom courts would lack jurisdiction over a claim filed by Sabena and KLM, the district court should be under no obligation to defer to the actions of those foreign tribunals. A true conflict arises only if the national jurisdictions overlap. We must therefore begin our analysis with a review of the recognized bases supporting prescriptive jurisdiction, and then examine whether the alleged facts of this case satisfy those requirements.
A. Bases of Concurrent Prescriptive Jurisdiction: Territoriality and Nationality
Territoriality and nationality are the two fundamental jurisdictional bases on which courts of the United States and United Kingdom rely to assert control over the controversy between Laker and the antitrust defendants.
The prerogative of a nation to control and regulate activities within its boundaries is an essential, definitional element of sovereignty. Every country has a right to dictate laws governing the conduct of its inhabitants. Consequently, the territoriality base of jurisdiction is universally recognized. It is the most pervasive and basic principle underlying the exercise by nations of prescriptive regulatory power.
In the context of remedial legislation, prohibition of effects is usually indivisible from regulation of causes. Consequently, the principles underlying territorial jurisdiction occasionally permit a state to address conduct causing harmful effects across national borders. Territoriality-based jurisdiction thus allows states to regulate the conduct or status of individuals or property physically situated within the territory, even if the effects of the conduct are felt outside the territory.
Just as the locus of the regulated conduct or harm provides a basis of jurisdiction, the identity of the actor may also confer jurisdiction upon a regulating country. The citizenship of an individual or nationality of a corporation has long been a recognized basis which will support the exercise of jurisdiction by a state over persons. Under this head of jurisdiction a state has jurisdiction to prescribe law governing the conduct of its nationals whether the conduct takes place inside or outside the territory of the state.
Because two or more states may have legitimate interests in prescribing governing law over a particular controversy, these jurisdictional bases are not mutually exclusive. For example, when the national of one state causes substantial effects in another state, both states may potentially have jurisdiction to prescribe governing law.
2. United States Jurisdictional Base
The prescriptive application of United States antitrust law to the alleged conspiracies between KLM, Sabena, and the other antitrust defendants is founded upon the harmful effects occurring within the territory of the United States as a direct result of the alleged wrongdoing. Before we examine the nature of those effects and consider whether they support the prescriptive jurisdiction over the claimed conspiracies, we wish to make it clear that this aspect of territorial jurisdiction is entirely consistent with nationally and internationally recognized limits on sovereign authority.
It has long been settled law that a country can regulate conduct occurring outside its territory which causes harmful results within its territory.
Even if invisible, the radiating consequences of anti-competitive activities cause economic injuries no less tangible than the harmful effects of assassins' bullets or thieves' telephonic impulses. Thus, legislation to protect domestic economic interests can legitimately reach conduct occurring outside the legislating territory intended to damage the protected interests within the territory. As long as the territorial effects are not so inconsequential as to exceed the bounds of reasonableness imposed by international law,
The territorial effects doctrine is not an extraterritorial assertion of jurisdiction.
Certainly the doctrine of territorial sovereignty is not such an artificial limit on the vindication of legitimate sovereign interests that the injured state confronts the wrong side of a one-way glass, powerless to counteract harmful effects originating outside its boundaries which easily pierce its "sovereign" walls, while its own regulatory efforts are reflected back in its face.
a. Territorial Contacts Justifying Application of United States Antitrust Law.
The circumstances of this litigation suggest numerous American interests that would be vindicated if Laker is permitted to proceed with its antitrust claim. Although some of the alleged anticompetitive actions occurred within the United States,
A primary objective of antitrust laws is to preserve competition, and thus ultimately protect the interests of American consumers.
Because Laker is currently being liquidated, the claims of its creditors are even more directly at stake than consumer interests. Laker is now little more than a corporate conduit through which its assets, including any damages owed Laker, will pass to its creditors. Its antitrust action is primarily an effort to satisfy its creditors, who ultimately bear the brunt of the injury allegedly inflicted upon Laker.
Although the precipitous actions of the British airline defendants prevented the district court from conducting a thorough inquiry into the underlying facts relevant to this aspect of the litigation, the facts indicate that Laker's principal creditors are Americans. Laker's fleet of American manufactured DC-10 aircraft was largely financed by banks and other lending institutions in the United States.
In addition to the protection of American consumers' and creditors' interests, the United States has a substantial interest in regulating the conduct of business within the United States. The landing rights granted to appellants are permits to do business in this country. Foreign airlines fly in the United States on the prerequisite of obeying United States law.
This equivalency works in both directions. Foreign corporations are privileged to, and do, rely on United States law.
The United States has an interest in maintaining open forums for resolution of creditors' claims. Just as the appellants are expected to abide by the United States laws governing those who do business here, so is Laker entitled to the protection of those laws. Permitting Laker to maintain its antitrust suit satisfies the legitimate expectations of Laker and its creditors.
b. Adequacy of United States Territorial Interests
It is beyond dispute that these contacts support an exercise of jurisdiction under the Sherman and Clayton Acts. Jurisdiction exists under United States antitrust laws whenever conduct is intended to, and results in, substantial effects within the United States.
Substantial realization of those intended effects has also been alleged by Laker. Laker was forced into liquidation shortly after its refinancing attempts collapsed. Its creditors have not yet been satisfied. The downward pressure on fares induced by Laker's competition, which previously benefitted transatlantic passengers, has
3. British Jurisdictional Base
Some of the British jurisdictional contacts are territorial. The plaintiff did business on routes between the United States and United Kingdom. A number of the purported conspiratorial acts took place in Great Britain. The conspiracy allegedly caused bankruptcy of a corporation operating in Great Britain.
However, the primary base of jurisdiction is the British nationality of the parties involved in the transactions cited in Laker's complaint.
Regulating the activities of businesses incorporated within a state is one of the oldest and most established examples of prescriptive jurisdiction.
4. Concurrent Jurisdiction
The sufficiency of jurisdictional contacts with both the United States and England results in concurrent jurisdiction to prescribe. Both forums may legitimately exercise this power to regulate the events that allegedly transpired as a result of the asserted conspiracy.
Concurrent jurisdiction does not necessarily entail conflicting jurisdiction. The mere existence of dual grounds of prescriptive jurisdiction does not oust either one of the regulating forums. Thus, each forum is ordinarily free to proceed to a judgment.
In the current situation, appellants charge that the district court abused its discretion by forbidding them from joining the "parallel" proceeding in the English courts. They argue that this result is compelled both by principles of comity and by respect for a country's paramount interest in controlling the remedies available to its nationals. Before we can fully consider the extent of appellants' rights based on comity and Laker's nationality to participate in the English proceedings, we examine whether the district court's injunction contravenes the well-established limits on the use of in personam injunctions against litigation in foreign jurisdictions.
B. Propriety of the Antisuit Injunction
It is well settled that English and American courts have power to control the conduct of persons subject to their jurisdiction to the extent of forbidding them from suing in foreign jurisdictions.
A second reason cautioning against exercise of the power is avoiding the impedance of the foreign jurisdiction. Injunctions operate only on the parties within the personal jurisdiction of the courts. However, they effectively restrict the foreign court's ability to exercise its jurisdiction.
There are no precise rules governing the appropriateness of antisuit injunctions. The equitable circumstances surrounding each request for an injunction must be carefully examined to determine whether, in light of the principles outlined above, the injunction is required to prevent an irreparable miscarriage of justice. Injunctions are most often necessary to protect the jurisdiction of the enjoining court, or to prevent the litigant's evasion of the important public policies of the forum. We consider the applicability of each category in turn.
1. Protection of Jurisdiction
Courts have a duty to protect their legitimately conferred jurisdiction to the extent necessary to provide full justice to litigants. Thus, when the action of a litigant in another forum threatens to paralyze the jurisdiction of the court, the court may consider the effectiveness and propriety of issuing an injunction against the litigant's participation in the foreign proceedings.
These situations may arise either before or after a judgment has been entered.
However, when a party requests the issuance of an injunction to protect the court's jurisdiction before a judgment has been reached, the rules are less clear. Some courts issue the injunction when the parties and issues are identical in both actions, justifying the injunction as necessary to prevent duplicative and, therefore, "vexatious" litigation.
Similarly, the possibility of an "embarrassing race to judgment" or potentially inconsistent adjudications
There is little, if any, evidence of courts sacrificing procedural or substantive justice in an effort to "race" to a prior judgment. To the extent this slight risk exists it is outweighed by the more important policies favoring respect for concurrent proceedings. In any event, most forums need not fear that their crucial policies would be trampled if a foreign judgment is reached first, since violation of domestic public policy may justify not enforcing the foreign judgment.
These and other factors
The logical reciprocal of the parallel proceeding rule proves that there must be circumstances in which an antisuit injunction is necessary to conserve the court's ability to reach a judgment. Just as the parallel proceeding rule counsels against interference with a foreign court's exercise of concurrent jurisdiction, it authorizes the domestic court to resist the attempts of a foreign court to interfere with an in personam action before the domestic court.
The district court's injunction was clearly proper under these principles. As far as could be determined by the initial pleadings and papers filed, jurisdiction to prescribe was properly exercised. Consequently, the court's ability to render a just and final judgment had to be protected, absent clear evidence that the foreign action could fully consider the litigant's claims.
Appellants characterize the district court's injunction as an improper attempt to reserve to the district court's exclusive jurisdiction an action that should be allowed to proceed simultaneously in parallel forums. Actually, the reverse is true. The English action was initiated for the purpose of reserving exclusive prescriptive jurisdiction to the English courts, even though the English courts do not and can not pretend to offer the plaintiffs here the remedies afforded by the American antitrust laws.
Although concurrently authorized by overlapping principles of prescriptive jurisdiction, the British and American actions are not parallel proceedings in the sense the term is normally used. This is not a situation where two courts are proceeding to separate judgments simultaneously under one cause of action. Rather, the sole purpose of the English proceeding is to terminate the American action. The writs filed in the High Court of Justice sought to paralyze or halt the proceedings before the United States District Court. Although they also sought a determination that the defendants had not engaged in any unlawful conduct, the clear thrust of the requested relief was the termination of the United States antitrust claim.
Judge Greene faced the stark choice of either protecting or relinquishing his jurisdiction. Midland Bank had previously obtained a preemptive interim injunction against Laker's naming it as a defendant in a United States antitrust action. Subsequently all of the foreign defendants in No. 82-3362 appeared in the High Court of Justice without notice to either Laker or the United States District Court and obtained interim protection. The remaining defendants, although domestic corporations, had to be restrained from attempting to follow the same path. It was equally clear that appellants also intended to seek English injunctive relief. Due to the lack of any prior notice by the four foreign defendants, the district court was threatened with a potential fait accompli by the appellants which would have virtually eliminated
2. Evasion of Important Public Policies
Antisuit injunctions are also justified when necessary to prevent litigants' evasion of the forum's important public policies.
The standard for refusing to enforce judgments on public policy grounds is strict; defendants are rarely able to block judgments on these grounds.
In this situation, the district court's injunction properly prevented appellants from attempting to escape application of the antitrust laws to their conduct of business here in the United States. KLM and Sabena seek to evade culpability under statutes of admitted economic importance to the United States
Whatever the merits of the British defendants' claims based upon the Bermuda II Treaty,
There is similar language in the United States-Netherlands air service agreement
These provisions were all negotiated recently, at a time when the countries could be expected to have been familiar with the United States' position regarding enforcement of its antitrust laws over foreign corporations operating in the United States. Significantly, in the face of these express treaty provisions appellants have not asserted before the United States courts any claim to immunity under the air service treaties.
In light of these treaty provisions, we find it offensive that KLM and Sabena attempt to ride on the coattails of the British airlines under the Bermuda II Treaty and the British Protection of Trading Interests Act, which were respectively intended to regulate British air carriage and to protect primarily the economic interests of British domestic corporations. We do not see how a suit by a British corporation against Dutch and Belgian corporations involving anticompetitive activities allegedly taken by the defendants to protect their United States-Dutch and United States-Belgian
KLM and Sabena are not less properly enjoined from pursuing the British litigation by virtue of their status as foreign corporations. Because of the inherent interference of an antisuit injunction, injunctions are occasionally limited to restrain only residents of the forum state from pursuing foreign litigation, and do not necessarily run to all those who would be subject to the forum state's in personam jurisdiction. However, on occasion, circumstances have even permitted restraints on actions by foreign parties in other forums.
The propriety of such a restraint should be clear with respect to KLM and Sabena. Foreign corporations doing business in the enjoining forum are expected to abide by the forum's laws. We recognize that the British Government disputes the right of the United States to apply its antitrust laws to British air carriers operating in the United States. However, KLM and Sabena have not argued that their status as air carriers under their air service treaties guarantees them any special status in this regard. Indeed, their treaties permit signatory government intervention to redress predatory prices or abuse of dominant market position. In this situation, KLM and Sabena should be treated as any other resident or corporation operating within this country. They are not permitted to escape forum policies any more than other residents.
Sabena's argument that the district court's antisuit injunction "compels Britain to acquiesce in conduct by its nationals that may violate its policies disfavoring international application of treble damages laws"
3. Effect of the English Injunctions
The district court's injunction was within its discretion even though the United Kingdom courts have issued in personam injunctions stopping Laker from proceeding against British Airways and British Caledonian. Long experience derived from this country's federal system teaches that a forum state may,
In suits involving states, even the Full Faith and Credit Clause does not compel recognition of an antisuit injunction. In Pacific Employers Insurance Co. v. Industrial Accident Commission
The same result is reached here a fortiori, since the mandatory policies of the Full Faith and Credit Clause do not apply to international assertions of exclusive jurisdiction. The antisuit injunction was a necessary and proper vehicle to protect the United States District Court's jurisdiction and prevent the evasion by KLM and Sabena of important domestic laws governing their conduct of business within the United States.
C. Paramount Nationality
We turn now to the appellants' argument that Laker's nationality requires the United States District Court to defer to the injunctions issued by the courts of the United Kingdom.
KLM and Sabena do not dispute the power of the United States District Court to issue the injunction. They contend rather that the district court abused its discretion by issuing an antisuit injunction instead of relinquishing its jurisdiction, staying its proceedings, or adopting some other vehicle of conflict resolution. Appellants are therefore in the contradictory position of supporting the right of English courts to issue an antisuit injunction, but opposing the United States District Court's issuance of the same kind of injunction. The only way appellants can differentiate between the two injunctions is to focus on the nationality of Laker.
The similarity of the injunctions is underscored by the way Sabena phrased the issue posed by this case: "which sovereign, the United States or Great Britain, has the right to determine whether British law permits Laker to conduct private treble damage actions in the United States."
Appellants attempt to prioritize the authority of the courts to proceed in cases of concurrent jurisdiction by arguing that the nationality of the plaintiff gives the plaintiff's state an inherent advantage which displaces all other jurisdictional bases. They label this principle "paramount nationality," and present this as the theory of conflict resolution to be used when concurrent jurisdiction is present: "assuming that two or more states exercise jurisdiction over Laker's allegations, the state with jurisdiction over its national must have the paramount right to determine whether and, if so, where litigation by that national may go forward."
We are asked to recognize an entirely novel rule. Although a court has power to enjoin its nationals from suing in foreign jurisdictions, it does not follow that the United States courts must recognize an absolute right of the British government to regulate the remedies that the United States may wish to create for British nationals in United States courts. The purported principle of paramount nationality is entirely unknown in national and international law. Territoriality, not nationality, is the customary and preferred base of jurisdiction.
All proposed methods of avoiding conflicts stemming from concurrent jurisdiction indicate that nationality of the parties is only one factor to consider, not the paramount or controlling factor.
The rationale behind the claim of paramount nationality seems to be that particularly important foreign sovereign prerogatives are infringed when a foreign national sues in domestic courts against the wishes of a foreign state. However, this argument ignores the stronger policy interests of the domestic forum. If a country has a right to regulate the conduct of its nationals, then a fortiori it has the power to regulate the activities of its very governmental organizations, such as its courts, which it establishes and maintains for the purpose of furthering its own public policies.
United States courts must control the access to their forums. No foreign court can supersede the right and obligation
The position advanced by appellant would require United States courts to defer to British policy when there is no statement by Congress that it does not wish the courts to provide the remedy. Appellants' argument that there is no absolute duty to exercise jurisdiction has no merit in this context.
Besides lacking any basis in national or international law, and besides ignoring important domestic interests, the paramount nationality rule would generate more interference than it would resolve. Legislation based on nationality tends to encourage chauvinism and discrimination without enhancing international comity.
The paramount nationality rule would also be impractical to administer. It would be difficult or impossible to determine when the nationality of a corporation is sufficiently strong that legitimate territorial contacts should be nullified.
Finally, KLM and Sabena are not British nationals. Thus, their claims are fundamentally different from those advanced by British Airways and British Caledonian. Nothing gives KLM or Sabena a supreme right to vindicate the British national interests that may be implicated by Laker's suits. Sabena, at least, is specifically entitled to the protection of United States anti-trust laws under its air services agreement.
D. International Comity
Appellants and amici curiae argue strenuously that the district court's injunction violates the crucial principles of comity that regulate and moderate the social and economic intercourse between independent nations. We approach their claims seriously, recognizing that comity serves our international system like the mortar which cements together a brick house. No one would willingly permit the mortar to crumble or be chipped away for fear of compromising the entire structure.
"Comity" summarizes in a brief word a complex and elusive concept — the degree of deference that a domestic forum must pay to the act of a foreign government not otherwise binding on the forum. Since comity varies according to the factual circumstances surrounding each claim for its recognition, the absolute boundaries of the duties it imposes are inherently uncertain.
Comity is a necessary outgrowth of our international system of politically independent, socio-economically interdependent nation states. As surely as people, products and problems move freely among adjoining countries, so national interests cross territorial borders. But no nation can expect its laws to reach further than its jurisdiction to prescribe, adjudicate, and enforce. Every nation must often rely on other countries to help it achieve its regulatory expectations. Thus, comity compels national courts to act at all times to increase the international legal ties that advance the rule of law within and among nations.
However, there are limitations to the application of comity. When the foreign act is inherently inconsistent with the policies underlying comity, domestic recognition could tend either to legitimize the aberration or to encourage retaliation, undercutting the realization of the goals served by comity. No nation is under an unremitting obligation to enforce foreign interests which are fundamentally prejudicial to those of the domestic forum. Thus, from the earliest times, authorities have recognized that the obligation of comity expires when the strong public policies of the forum are vitiated by the foreign act.
Opinions vary as to the degree of prejudice to public policy which should be tolerated before comity will not be followed, but by any definition the injunctions of the United Kingdom courts are not entitled to comity. This is because the action before the United Kingdom courts is specifically intended to interfere with and terminate Laker's United States antitrust suit.
The district court's antisuit injunction was purely defensive — it seeks only to preserve the district court's ability to arrive at a final judgment adjudicating Laker's claims under United States law. This judgment would neither make any statement nor imply any views about the wisdom of British antitrust policy. In contrast, the English injunction is purely offensive — it is not designed to protect English jurisdiction, or to allow English courts to proceed to a judgment on the defendant's potential liability under English anticompetitive law free of foreign interference. Rather, the English injunction seeks only to quash the practical power of the United States courts to adjudicate claims under United States law against defendants admittedly subject to the courts' adjudicatory jurisdiction. The Court of Appeal itself recognized that there is no other forum available for resolution of Laker's claims.
It is often argued before United States courts that the application of United States antitrust laws to foreign nationals violates principles of comity. Those pleas are legitimately considered.
In this latter context we cannot rule that the district court abused its discretion to protect its jurisdiction. Between the state courts, the Full Faith and Credit Clause has not been held to compel recognition of an antisuit injunction.
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. The appeal to the recognition of comity by the American court in order to permit the critical issues to be adjudicated in England, which is the plea made by appellants here, thus comes based on a very strange predicate. Since the action seeking to determine Laker's right to recover for anticompetitive injuries was first instituted in the United States, the initial opportunity to exercise comity, if this were called for, was put to the United Kingdom courts. No recognition or acceptance of comity was made in those courts. The appellants' claims of comity now asserted in United States courts come burdened with the failure of the British to recognize comity.
Although reciprocity may no longer be an absolute prerequisite to comity,
There is simply no visible reason why the British Executive, followed by the British courts, should bar Laker's assertion of a legitimate cause of action in the American courts, except that the British government is intent upon frustrating the antitrust policies of the elective branches of the American government. The effort of the British therefore is not to see that justice is done anywhere, either in the United States or British courts, but to frustrate the enforcement of American law in American courts against companies doing business in America. Absent a clear treaty concluded by the United States Executive Branch, this simply cannot be agreed to by the courts of the United States.
Nothing in the British Executive order and directions suggests that they are entitled to comity. The order and directions purport to counteract United States regulation of international trade outside its territorial jurisdiction.
The English Executive has thus issued an order to every airline in the world doing business in England to refuse to submit to the jurisdiction of the American court and not to submit any documents from England pursuant to an order of the American court. If the exercise of "extraterritorial" jurisdiction under United States antitrust laws can ever be described as arrogant, the order and directions issued by the British Government certainly bear the same characteristic. United States antitrust laws are enforced where there is an impact in the United States, but only after an adjudication in the United States courts of a violation. Here the English Executive has presumed to bar foreigners from complying with orders of an American court before there is an adjudication by a court on the merits of the dispute.
Moreover, since oral argument before this court, the English Secretary of State has interpreted the order and directions to bar the furnishing of any "commercial information," even that located exclusively within United States territory.
This development completely undermines the appellants' strongest argument in favor of the application of comity — namely, that all United States interests protected under the antitrust laws could be adequately enforced through means other than a treble damage suit, such as a civil or criminal action brought by the Government,
If we are guided by the ethical imperative that everyone should act as if his actions were universalized, then the actions of the British Executive in this particular matter scarcely meet the standard of Kant.
No facts have been presented here suggesting that the antitrust suit adversely affects the operations of foreign governments. Laker is a privately owned airline. To the extent KLM and Sabena are governmentally owned, they are non-British. The ownership of these airlines implicates no significant interests of Britain as a state. The parties have not seriously asserted otherwise.
Similarly, the parties have not invoked either the sovereign immunity doctrine or the act of state doctrine, which insulate from review those foreign governmental actions which are not compatible with judicial scrutiny in our domestic courts. That neither of these doctrines even arguably would apply here is further evidence that no significant British or other governmental interest would be violated by Laker's suit.
Although unlikely, it may subsequently be shown that there was sufficient foreign governmental involvement that enforcement of United States antitrust laws is not appropriate.
Finally, we note that the district court did grant comity to the English orders and proceedings to the extent it could do so consistently with its duty to defend its jurisdiction. The court offered to narrow the scope of its preliminary injunction if KLM or Sabena would submit language permitting the defendants to proceed in Great Britain without leaving them free to secure orders which would interfere with the district court's pending litigation.
Now a word about the position of our dissenting colleague. We submit that the dissent relies on a skewed view of comity, ignoring the significant prejudice to the
The interpretation of international comity propounded by the dissent is a weak reed indeed under the aggravated facts of this case; it does not rest upon any legal precedent, and ignores the previously recognized limits on the doctrine. The central authority quoted, Hilton v. Guyot, recognizes that comity never obligates a national forum to ignore "the rights of its own citizens or of other persons who are under the protection of its laws."
The dissent reaches this tenuous legal conclusion by attempting to discern the implications of Dames & Moore v. Regan, which suggests that a national government may prohibit its nationals from suing in national or other forums.
However, in Dames & Moore, the action taken by our government preserved the United States claims and established a remedy for enforcing them against the previously blocked assets of a foreign country — hence against that foreign country. In contrast, the British government, insofar as British corporations are concerned, would just cancel the entire claim — without even permitting single damages. Thus, because Dames & Moore allowed a substitute procedure for enforcing the claims, we cannot equate it with the British position here, even against its own British corporations.
Additionally, this is not a suit against a government, but a private action against a private corporation on a claim based on monopolistic practices. The instant facts are thus so far removed from Dames & Moore that it cannot be said that there is anything in the spirit of Dames & Moore which is being violated by the court's injunction.
Dames & Moore is silent about the limits on the enforcement of a prohibition against suing in a particular forum. Although a United States citizen would violate United States law by suing in a foreign court in violation of executive agreements similar to those in Dames & Moore, the United States could enforce its own interests without interfering with the autonomy of the foreign judiciary or course of the foreign proceeding. One need look no further than the Protection of Trading Interests Act for any number of remedies: the foreign award could be subject to clawbacks in United States courts, and criminal penalties or fines could be levied. Other civil sanctions could be exacted, such as revocation of business licenses and operating permits. Clearly the United States could enforce its own treaty obligations or domestic interests without taking the initiative to interfere with a foreign jurisdiction. Thus, there is nothing in Dames & Moore which suggests that a district court may not exercise
Moreover, where in Dames & Moore the vigorously asserted position of the Executive Branch was a crucial factor in favor of upholding restricted access to domestic forums, here it is the inaction and silence of the Executive Branch which is said to shut off the availability of the United States forum. Only a very small percentage of private antitrust actions are graced by the intervention of the Antitrust Division of the Department of Justice. This has never before been a prerequisite to maintaining a private antitrust claim. If we were to hold that the absence of this intervention indicated a weakness in Laker's case, or prevented it from going forward, we would be making new antitrust law indeed — law which would directly contravene the congressional purposes in establishing a private right of action.
There are other weighty reasons why the absence of any current expression of affirmative United States interest should not be fatal to Laker's antitrust action. The American Executive has been in contact with the British Executive seeking to iron out differences under the Bermuda II Treaty.
The sensitive status of current negotiations may even preclude the Department of State from actively participating in this litigation. Significantly, the British Government is not involved in this litigation either, presumably confining itself to consultation and to the creation and interpretation of the executive orders giving rise to the controversy. This counsels against inviting the Executive to present the views of the United States on remand. Unless and until the views of the American Executive are made known, the absence of any Executive expression of United States sovereign or other interests should not be a bar to proceeding with Laker's suit, or to the protection of jurisdiction to hear the claim.
Putting aside the lack of any clear basis in comity, the result reached by the dissent would reverse the district court for abuse of discretion, although the district court has attempted to do what the dissent chastizes the court for omitting. The request for preliminary injunctive relief required immediate action; the dissent itself recognizes that the injunction was "fashioned under the strain of critical moments."
The parties made no request to narrow that injunction. This omission is relevant, not as a waiver of their right to make further requests, but as evidence that there is no narrow relief which can be drafted to protect the admittedly legitimate United States jurisdiction while permitting participation in a British proceeding intended to terminate the American action. It is incongruous to suggest that comity requires a reversal of the district court so that the court can renew its previous offer.
In fact, the dissent offers no practical guidance about how the district court's jurisdiction can be guaranteed under the microscopic range of discretion apparently contemplated in the "further proceedings aimed at narrowing the injunction."
Instead, Lufthansa and Swissair seek a declaration that they did not breach English and other laws regulating restrictive practices. The writs specifically exclude any requests for a declaratory judgment concerning whether United States antitrust laws are violated. However, the accompanying request for relief, which it must be assumed they intend to seek if they succeed in obtaining a favorable declaratory judgment, is not so limited: it seeks an injunction against any action in United States courts based on United States antitrust laws.
To the extent the dissent would permit the district court to preserve its jurisdiction under the terms of a more limited injunction along the lines contemplated by the district court's proposal, the net result on the desired remand would not be much different from that reached by the majority. There is nothing in our opinion which prevents KLM and Sabena from reconsidering their position or proposing a modification of the district court's order if anything less than complete frustration of the district court's jurisdiction would satisfy the appellants' objective.
E. Judicial Reconciliation of Conflicting Assertions of Jurisdiction
We recognize that the district court's injunction, precipitated as it was by preemptive interim injunctions in the High Court of Justice, unfortunately will not resolve the deadlock currently facing the parties to this litigation. We have searched for some satisfactory avenue, open to an American court, which would permit the frictionless vindication of the interests of both Britain and the United States. However, there is none, for the British legislation defines the British interest solely in terms of preventing realization of United States interests. The laws are therefore contradictory and mutually inconsistent.
1. Nature of the Conflict
The conflict faced here is not caused by the courts of the two countries. Rather, its sources are the fundamentally opposed national policies toward prohibition of anticompetitive business activity. These policies originate in the legislative and executive decisions of the respective counties.
Congress has specifically authorized treble damage actions by foreign corporations to redress injuries to United States foreign commerce.
We find no indication in either the statutory scheme or prior judicial precedent that jurisdiction should not be exercised. Legitimate United States interests in protecting consumers, providing for vindicating creditors' rights, and regulating economic consequences of those doing substantial
The English courts have indicated that they, too, have acted out of the need to implement their mandatory legislative policy, and not out of any ill will towards our courts or the substantive law we are bound to follow. Although the injunctive relief sought by British Airways and British Caledonian set the stage for a direct conflict of jurisdiction, until action by the political branches of the English Government the English courts remained largely acquiescent to Laker's invocation of United States jurisdiction. Justice Parker's well reasoned judgment initially denied the injunctive relief sought by British Airways and British Caledonian. That judgment was rendered even after the district court issued the injunction under appeal here.
However, the government of the United Kingdom is now and has historically been opposed to most aspects of United States antitrust policy insofar as it affects business enterprises based in the United Kingdom. The British Government objects to the scope of the prescriptive jurisdiction invoked to apply the antitrust laws; the substantive content of those laws, which is much more aggressive than British regulation of restrictive practices; and the procedural vehicles used in the litigation of the antitrust laws, including private treble damage actions, and the widespread use of pretrial discovery. These policies have been most recently and forcefully expressed in the Protection of Trading Interests Act.
The nature of the direct conflict between the political-economic policies of the two countries is put into focus by considering whether the British Government would have been likely to attempt to stop Laker from suing in United States courts if Laker brought a suit other than an antitrust action. If Laker had sued the American defendants for fraud, or on a contract claim for failure of performance, the British would not have been at all interested in intervening, irrespective of the financial
Under the provisions of the Protection of Trading Interests Act, after Justice Parker refused relief, the English Secretary of State issued an order and directions prohibiting all those carrying on business in the United Kingdom, with the exception of United States designated air carriers, from complying with United States antitrust measures arising out of the provision of air carriage by United Kingdom designated airlines under the terms of the Bermuda II Treaty. Because these directions reflected the firm conclusion of the British Executive Branch that British trading interests were being threatened by Laker's antitrust claim, they presented an entirely different situation to the Court of Appeal than that which Justice Parker had faced.
2. Judicial Interest Balancing
Even as the political branches of the respective countries have set in motion the legislative policies which have collided in this litigation, they have deprived courts of the ability meaningfully to resolve the problem. The American and English courts are obligated to attempt to reconcile two contradictory laws, each supported by recognized prescriptive jurisdiction, one of which is specifically designed to cancel out the other.
The suggestion has been made that this court should engage in some form of interest balancing, permitting only a "reasonable" assertion of prescriptive jurisdiction to be implemented.
a. Defects in the Balancing Process
Most proposals for interest balancing consist of a long list of national contacts to be evaluated and weighed against those of the foreign country. These interests may be relevant to the desirability of allocating jurisdiction to a particular national forum. However, their usefulness breaks down when a court is faced with the task of selecting one forum's prescriptive jurisdiction over that of another.
Many of the contacts to be balanced are already evaluated when assessing the existence of a sufficient basis for exercising prescriptive jurisdiction.
Those contacts which do purport to provide a basis for distinguishing between competing bases of jurisdiction, and which are thus crucial to the balancing process, generally incorporate purely political factors which the court is neither qualified to evaluate comparatively nor capable of properly balancing. One such proposed consideration is "the degree to which the desirability of such regulation [of restrictive practices] is generally accepted."
The court is also handicapped in any evaluation of "the existence of justified expectations that might be protected or hurt by the regulation in question."
The "importance of regulation to the regulating state"
Given the inherent limitations of the Judiciary, which must weigh these issues in the limited context of adversarial
Besides the difficulty of properly weighing the crucial elements of any interest balancing formula, one other defect in the balancing process prompts our reluctance to adopt this analysis in the context of preservation of jurisdiction. Procedurally, this kind of balancing would be difficult, since it would ordinarily involve drawn-out discovery and requests for submissions by political branches. There was no time for this process in the present case. Either jurisdiction was protected or it was lost. It is unlikely that the employment of a hasty and poorly informed balancing process would have materially aided the district court's evaluation of the exigencies and equities of Laker's request for relief.
b. Promotion of International Comity
We might be more willing to tackle the problems associated with the balancing of competing, mutually inconsistent national interests if we could be assured that our efforts would strengthen the bonds of international comity. However, the usefulness and wisdom of interest balancing to assess the most "reasonable" exercise of prescriptive jurisdiction has not been affirmatively demonstrated. This approach has not gained more than a temporary foothold in domestic law. Courts are increasingly refusing to adopt the approach.
If promotion of international comity is measured by the number of times United States jurisdiction has been declined under the "reasonableness" interest balancing approach, then it has been a failure. Implementation of this analysis has not resulted in a significant number of conflict resolutions favoring a foreign jurisdiction. A pragmatic assessment of those decisions adopting an interest balancing approach indicates none where United States jurisdiction
Despite the real obligation of courts to apply international law and foster comity, domestic courts do not sit as internationally constituted tribunals. Domestic courts are created by national constitutions and statutes to enforce primarily national laws.
The inherent noncorrelation between the interest balancing formula and the economic realities of modern commerce is an additional reason which may underlie the reluctance of most courts to strike a balance in favor of nonapplication of domestic law. An assertion of prescriptive jurisdiction should ultimately be based on shared assessments that jurisdiction is reasonable.
However, it does not necessarily follow, as the use of interest balancing as a method of choosing between competing jurisdictions assumes, that there is a line of reasonableness which separates jurisdiction to prescribe into neatly adjoining compartments of national jurisdiction. There is no principle of international law which abolishes concurrent jurisdiction.
In our federal system of parallel sovereign courts, several lines of cases recognize that prescriptive jurisdiction is often shared among several forums.
3. Political Compromise
The district court could capitulate to the British attacking law, at the cost of losing its jurisdiction to implement the substantive policies established by Congress. Alternatively it can act to preserve its jurisdiction, running the risk that counterinjunctions or other sanctions will eventually preclude Laker from achieving any remedy, if it is ultimately entitled to one under United States law. In either case the policies of both countries are likely to be frustrated at the cost of substantial prejudice to the litigants' rights.
We unhesitatingly conclude that United States jurisdiction to prescribe its antitrust laws must go forward and was therefore properly protected by the district court. Despite the contrary assertions of the British government, there is no indication in this case that the limits of international law are exceeded by either country's exercise of prescriptive jurisdiction. But even so, application of national law may go forward despite a conflict with international law. Both Britain and the United States recognize this rule.
Although, in the interest of amicable relations, we might be tempted to defuse unilaterally the confrontation by jettisoning our jurisdiction, we could not, for this is not our proper judicial role. The problem in this case is essentially a political one, arising from the vast difference in the political-economic theories of the two governments which has existed for many years. Both nations have jurisdiction to prescribe and adjudicate. Both have asserted that jurisdiction. However, this conflict alone does not place the court in a position to initiate a political compromise based on its decision that United States laws should not be enforced when a foreign jurisdiction, contrary to the domestic court's statutory duty, attempts to eradicate the domestic jurisdiction. Judges are not politicians. The courts are not organs of political compromise. It is impossible in this case, with all the good will manifested by the English Justices and ourselves, to negotiate an extraordinarily long arms-length agreement on the respective impact of our countries' policies regulating anti-competitive business practices.
It is permissible for courts to disengage when judicial scrutiny would implicate inherently
Unilateral abandonment by the Judiciary of legitimately prescribed national law in response to foreign counter-legislation would not materially advance the principles of comity and international accommodation which must form the foundation of any international system comprised of coequal nation states. The British Government's invocation of the Protection of Trading Interests Act to foreclose any proceeding in a non-English forum brought to recover damages for trade injuries caused by unlawful conspiracies is a naked attempt exclusively to reserve by confrontation an area of prescriptive jurisdiction shared concurrently by other nations. This assertion of interdictory jurisdiction propels into the courts a controversy whose eventual termination is restricted to two unsatisfactory alternatives: (1) either one state or the other will eventually capitulate, sacrificing its legitimate interests, or (2) a deadlock will occur to the eventual frustration of both the states' and the litigants' interests. The underlying goal of the legislation is apparently to compel the United States to cede its claims to regulate those aspects of its domestic economy deemed objectionable by the United Kingdom. However, the possibility of a cooperative, mutually profitable compromise by all affected countries is
Rather than legitimizing the interference and stultifying effects that would follow widespread acceptance of interdictory jurisdiction, we prefer to permit Laker's suit, based as it is on well recognized prescriptive jurisdiction, to go forward as free as possible from the interference caused by foreign antisuit injunctions.
The conflict in jurisdiction we confront today has been precipitated by the attempts of another country to insulate its own business entities from the necessity of complying with legislation of our country designed to protect this country's domestic policies. At the root of the conflict are the fundamentally opposed policies of the United States and Great Britain regarding the desirability, scope, and implementation of legislation controlling anticompetitive and restrictive business practices.
No conceivable judicial disposition of this appeal would remove that underlying conflict. Because of the potential deadlock that appears to be developing, the ultimate question is not whether conflicting assertions of national interest must be reconciled, but the proper forum of reconciliation. 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.
However, in the absence of some emanation from the Executive Branch,
Under these circumstances, judicial precedent construing the prescriptive jurisdiction of the United States antitrust laws unequivocally holds that the antitrust laws should be applied. That jurisdiction is well within the bounds of reason imposed by international law. Because the factual circumstances of this case made a preliminary injunction imperative to preserve the court's jurisdiction, and because that injunction is not proscribed by the principles of international comity, the district court acted within its discretion.
The decision of the district court is therefore
STARR, Circuit Judge, dissenting:
It is with reluctance that I am constrained to dissent, for there is much in the majority's thorough opinion with which I fully agree. The majority's opinion demonstrates persuasively that the jurisdictional basis for Laker's action in the United States District Court is firmly established under settled principles of United States and international law. Judge Wilkey's scholarly analysis further demonstrates that it is not at all unusual for a court vested with jurisdiction to issue appropriate orders to vindicate that jurisdiction, even when such orders arrest the prosecution of actions in the courts of another sovereign.
But it is my judgment that principles of comity among the courts of the international community counsel strongly against the injunction in the form issued here. The concept of comity of nations, a "blend of courtesy and expedience,"
159 U.S. 113, 164, 16 S.Ct. 139, 143, 40 L.Ed. 95 (1895).
The difficulty in applying this open-ended idea stems from the fact that "`[c]omity,' in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other." Id. at 163-64, 16 S.Ct. at 143-144. Few hard-and-fast rules or talismanic tests are to be found. Nonetheless, it is clear that under appropriate circumstances, United States courts will invoke the principle of comity in recognition of the interests of another sovereign.
In light of these principles, it is important to note that this is, at bottom, a private antitrust action filed in a United States court by a foreign litigant against, among others, four United States corporate defendants. This is plainly not an action informed with a public interest beyond that implicated by any private litigant enforcing admittedly important congressionally granted rights. Not only is the instant action not brought by the United States to vindicate sovereign United States interests, but no evidence has been manifested of any sovereign United States interest in the present suit. For whatever reason, and I do not pretend to powers of divination as to why, the Executive has been silent as to what, if any, public interests are touched by Laker's antitrust suit.
In stark contrast, it is clear beyond cavil that the British Executive is emphatically interested in this suit brought by a British subject in United States courts. This sovereign interest articulated by representatives of Her Majesty's government, premised upon British disaffection for the operation and reach of United States antitrust laws, is one that I cannot in conscience
To be sure, Laker's status as a British subject, without more, does not mean that United States courts must unalterably bow to the rulings of British courts in actions filed after the instant suit was in progress. The majority has indeed persuasively demonstrated that no principle of "paramount nationality" is recognized in international law. But I am persuaded that it is not at all incompatible with our oath of office for United States judges to recognize the practical reality that the United Kingdom may in fact ultimately have power to prevent Laker's maintaining any United States antitrust action. And the exercise of such a power should not automatically, without benefit of the views of either the British or United States Executive, be deemed violative of United States public policy. For it seems to me that, while the facts of the case are indeed distinguishable, the spirit of the Supreme Court's ruling in Dames & Moore v. Regan, 453 U.S. 654, 101 S.Ct. 2972, 69 L.Ed.2d 918 (1981), suggests strongly that a sovereign government can prohibit one of its nationals from proceeding in a particular forum, and indeed can require actions to be brought in a specific forum which may not at all be to the citizen's liking. It would appear, albeit from a vantage point from which I confess the players and movements can be perceived only dimly, that the British Executive is moving toward the exercise of precisely the power recognized unanimously as to the Presidency by the United States Supreme Court in Dames & Moore.
Admittedly, Dames & Moore was grounded upon the President's foreign relations power, and evidenced the United States judiciary's appropriate and understandable reluctance to take actions that would disrupt or unwind the foreign policy actions of the Executive, particularly in connection with a matter of such moment as the implementation of accords effecting the extrication of American hostages from Tehran. Here, in contrast, the British Executive appears to be proceeding not from the compelling circumstances of a hostage crisis but from its antipathy toward United States antitrust laws. But it is, in my judgment, not for me to say whether the British Executive's attitude in this respect is reasonable or unreasonable. With all respect to the majority, I am not endowed with sufficient knowledge or information on the limited record before us to pass judgment on the British views that my brethren find so distasteful. It may be that the application of United States antitrust laws under the circumstances of Laker's transatlantic traffic is eminently sound and reasonable under principles governing the regulation of trade that is both within and beyond national borders. But today's decision will not settle the raging debate across the Atlantic, and indeed throughout much of the industrialized world, about the application of domestic United States law.
The injunction sustained today is, I am thus constrained to conclude, unduly sweeping in light of considerations of comity. To be sure, as the majority quite properly notes, KLM and Sabena failed to avail themselves of the District Court's invitation for suggestions to narrow the injunction's sweep. But failure to seek a narrowing of the order, while reducing the foreign airlines' equities in this court, does not end the issue for me. We take the injunction as we find it, and it cannot reasonably be maintained that the foreign airlines have waived any objection to the order. Indeed, Laker does not so argue, and the majority quite rightly does not ground its result on any such principle.
And so we face the injunction itself. By its terms, the District Court's order quite literally forbids the foreign airlines from entering any court in the world, including
Thus, I would favor vacating the present injunction and remanding the case to the District Court for consideration of narrowing its order. The District Court might well decide to enjoin KLM and Sabena only from seeking countersuit injunctive relief pendente lite in the English courts, thus allowing them to follow the example of Lufthansa and Swissair in bringing declaratory judgment actions. This would allow two or more related actions — Laker's antitrust suit and the foreign defendants' declaratory judgment action in foreign court — to proceed simultaneously, without any direct interference from the other sovereign's courts. This type of injunction seems clearly preferable on comity grounds.
A foreign court would thus be allowed to adjudicate the status of the parties before it under that nation's laws and regulatory provisions, including any applicable aviation treaties. If both the United States and foreign actions proceeded to judgment, choice of law questions would likely be presented in the execution of the judgments and would be considered at that stage of the litigation. However, several developments in this matter could moot this potential conflict, including a negotiated settlement of the inter-governmental dispute over the scope and applicability of United States antitrust laws; a decision against Laker on the merits in the United States District Court; or a judicial decision against the foreign defendants in the foreign court. A narrow injunction would thus preserve the possibility that the ultimate conflict-of-laws questions would be mooted, either through diplomatic channels or a defeat either for Laker or the foreign airlines in their respective actions. The narrower injunction would result in substantially less interference with foreign courts, with no "surrender" of the jurisdiction of the United States over Laker's antitrust claims.
I would further suggest that in the exercise of its sound discretion the District Court invite the Executive to present the views of the United States. Those views might well have an important bearing upon the extent of the sovereign interests of the United States, if any, in this action.
A tempest has been brewing for some time among the nations as to the reach of this country's antitrust laws, and today's decision strikes a strong blow in favor of what will be viewed by many of our friends and allies as a rather parochial American outlook. But whether that blow is well conceived, it is, with all respect, at tension with the orderly operation of our two nations' respective judicial systems. As both the majority and the District Court recognize,
(Tentative Draft No. 2).
The rules against antisuit injunctions are more relaxed when the injunction runs against concurrent litigation within a single forum. In this situation respect for a co-equal sovereign's jurisdiction is not implicated and is more easily out-weighed by the economies achieved through avoidance of duplicative actions. See Colorado River Water Conservancy Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 1246, 47 L.Ed.2d 483 (1976); Roth v. Bank of the Commonwealth, 583 F.2d 527, 538 (6th Cir.1978). When both actions involve the same parties, issues, and underlying transactions the court whose jurisdiction was first invoked may be justified in restraining litigants from prosecuting subsequently filed suits within the same court system. Failure to distinguish between the different policies informing the discretion to issue intercourt and intracourt injunctions may suggest an inappropriate rule. See, e.g., Western Electric Co. v. Milgo Electronic Corp., 450 F.Supp. 835, 837 (S.D.Fla.1978) (relying on federal intracourt cases in denying injunctive relief against foreign action). In the intercourt context, similarity of the actions alone should not justify an injunction. See supra note 48.
However, where so many actions have been commenced that there is no advantage to be gained from the multiple actions other than harassment and attrition, circumstances may justify an injunction. See Sperry Rand Corp. v. Sunbeam Corp., 285 F.2d 542 (7th Cir.1960) (dissolving an antisuit injunction when the domestic action would not resolve the issues raised in the foreign proceeding and there was no evidence of harassment); Commercial Acetylene Co. v. Avery Portable Lighting Co., 152 F. 642, 647 (E.D.Wis.1906), aff'd, 159 F. 935 (7th Cir.1908) (the court may prevent oppression through multiple suits brought for "commercial advantage rather than honest adjudication"). Even in this situation, deference to the foreign proceedings is still an important factor to be considered. Id. at 647-48 (enjoining commencement of further patent infringement suits against purchasers when one action against manufacturer would resolve the issue of validity of the patent, but requiring the movant to apply for a stay in ten previously filed federal infringement actions instead of enjoining those actions).
The only guideline which emerges is the necessity of evaluating the merits of each claim in light of the particular equitable circumstances surrounding the dual litigation. It should be clear that the availability of slight advantages in the substantive or procedural law to be applied in the foreign court does not signify an actionable evasion of domestic public policy. See Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). An impermissible evasion is much more likely to be found when the party attempts to elude compliance with a statute of specific applicability upon which the party seeking an injunction may have relied, and which is designed to effectuate important state policies.
This harsh result is entirely unwarranted. Even though we do not approve of them, the terms of the British Protection of Trading Interests Act authorize postjudgment sanctions, repayment of litigation costs and damages, and even repayment of judgments. In addition, Laker is subject to criminal sanctions and fines if it violates the Act's prohibitions. These powerful mechanisms appear to be more than adequate to protect whatever British economic interests the Secretary of State determines are adversely affected.
See also id. at 37.
We reject any suggestion that the standard of justice under British antitrust laws, which provide only for single damages, is inferior to the treble damage provisions of United States laws. Both sets of laws are designed to provide full justice to litigants, although the particular form and availability of remedies differs somewhat due to the divergent legislative intent behind the laws. We are not asked and do not purport to pass judgment on the British attitude, but only resolve the extent of the United States District Court's discretion to execute its duty of upholding United States laws in the instant circumstances.
Neither is it immediately apparent why the English injunction is necessary to protect the British defendants from suffering injustice in the United States courts. The orders apparently apply equally to Laker, preventing it from furnishing documents in the United Kingdom or any commercial information relating to the district court proceedings. As the Secretary of State's refusal to permit Laker to use commercial information in response to interrogatories served by the American defendants demonstrates, Laker is severely hampered in the advancement of its claims. The British parties appear to be on an equal footing.
If there is any injustice created in the proceedings, it is between Laker and the American defendants. The order and directions have been interpreted to bar only Laker's production of documents and commercial information — the United States airlines are untouched. These defendants are free to assert defenses, make discovery requests against Laker, and seek penalties for non-compliance. Laker responds only at the risk of incurring British sanctions under the order and directions. The order and directions thus leave one group of parties — the American defendants — free to conduct their litigation — while hampering the other party — the plaintiff. See also Reply of Amici Curiae to Appellee's Memorandum as to Status of English Proceedings at 4: "Lufthansa and Swissair are advised, however, that the Directions do prevent U.K. nationals [e.g. Laker] ... from complying with discovery demands by parties to the U.S. action (including Lufthansa and Swissair)." (emphasis added). This is an impairment to justice as objectionable as that complained of by the Court of Appeal.
We also note that the Court of Appeal may have temporarily lapsed from its resolve not to speculate about the merits of Laker's antitrust claims under United States law when, to justify its conclusion that Laker's entire claim arose out of conduct related to the Bermuda II Treaty, the court concluded that the alleged impedance of the financial rescue operation was such an insignificant aspect of the alleged conspiracy that this assertion alone could not state a cognizable antitrust claim. Court of Appeal Judgment at 589, supra note 15. We raise these points not to suggest that the Court of Appeal's decision was wrongly decided under English law, but only to demonstrate the extreme degree of deference which that court felt obliged to grant to the legislative policies implemented in the Secretary of State's order and directions.
However, read narrowly, Section 403 does not require this result. The terms of Section 403(1) suggest that an evaluation of interests is essential in determining whether there are sufficient ("reasonable") national contacts with the underlying transaction to allocate prescriptive jurisdiction to a forum. This examination of the reasonableness of the domestic forum's contacts, without explicitly balancing the weight of other foreign contracts, satisfies the prohibition of international law against unreasonable assertions of prescriptive jurisdiction. See also RESTATEMENT (REVISED) § 441 (Tentative Draft No. 2), supra note 21 (defining jurisdiction to adjudicate on the basis of reasonableness without referring to or balancing the reasonableness of a second forum's adjudicatory contacts).
Because Congress and the Executive can neither anticipate nor resolve all conflicts with foreign prescriptive jurisdiction, they legitimately expect the full participation of the Judiciary in minimizing conflicts of jurisdiction. See "Extraterritoriality and Conflicts of Jurisdiction," U.S. Department of State Current Policy Bulletin No. 481 at 4 (15 April 1983). Evaluating the strength of the United States interests in a particular transaction to determine the reasonableness of an assertion of jurisdiction is consistent with those expectations and assures that concurrent jurisdiction will never be lightly assumed.
The actions of the British Government in this case indicate that Britain regards the Bermuda II Treaty as just such an interforum agreement, dislocating the application of the antitrust laws from the conduct challenged in Laker's complaint. However, since a dispute exists between the two governments, we can only assume that the United States Executive Branch does not interpret the agreement to confer an antitrust exemption on United Kingdom air carriers.
The dissent reaches this conclusion under the guise of "comity." However, the legal basis for this interpretation of comity is nonexistent. See supra pp. 942-944. Comity would be a more significant factor if the two appealing parties were British corporations, but they are not. KLM and Sabena are Dutch and Belgian entities. They are attempting to use the law and courts of a third country, Britain, to frustrate a previously commenced action in the United States. KLM and Sabena have made no request to resort to their own courts in reliance on their own air service agreements or relevant domestic legislation (e.g., Law of 27 March 1969, as Amended on 21 June 1976, and Royal Decree of 6 February 1979 Concerning the Regulation of Marine and Air Transport, at Bulletin Usuel des Lois et Arretes, 1969, No. 723; id., 10 September 1976, No. 1490, id., 1979, No. 464). We can only assume that they do not intend to do so.
The real motivation for the dissent's position is the desire to avoid further conflict with the laws of our close friends and allies about the application of domestic United States law. This is apparent from the dissent's concern that an affirmance of the injunction would be regarded as "parochial," and from its charge that the injunction obstructs the functioning of our two countries' judicial system.
We share the same concerns. However, a reversal would not restore the "orderly operation" of our two nation's courts. Instead, it could permit one court entirely to shut down its autonomous sister courts. This certainly does not seem likely to foster parallel respect.
Moreover, the existence of conflict alone does not establish the judicial prerogative to relinquish prescriptive jurisdiction. Any legitimate assertion of prescriptive jurisdiction seeks to advance the national interests undergirding the jurisdiction; an assertion of that prescriptive power in an area of concurrent jurisdiction may give rise to allegations of parochialism. Protecting the prescriptive jurisdiction of the United States, which the dissent admits is legitimate, can hardly be more "parochial" than the British attempts to destroy that jurisdiction by knowingly issuing interdictory prohibitions and orders, worldwide in scope, after the United States District Court was fully seized of jurisdiction and well on its way in the treatment of Laker's antitrust suit.
Finally, we must remember that it is American statutory law which is challenged, not law made by the courts. These antitrust laws date back nearly one hundred years, when Congress began legislating to advance competition and consumer well-being in the United States. Up to now, the courts and the Executive have had no choice but to follow the mandate of Congress. Critics concerned with parochialism should direct those attacks to that Branch, not to the Judiciary.