JERRY E. SMITH, Circuit Judge:
Car crash victims' survivors sued the tire manufacturer and other defendants in state court. After defendants removed to federal court, the district court dismissed on grounds of forum non conveniens ("f.n.c."), finding Mexico to be the more convenient forum. The court also enjoined plaintiffs from pursuing any claim against defendants in Texas state court or federal court. We vacate the f.n.c. dismissal so that a return jurisdiction clause may be added, and we order that the injunction be modified to conform to the Anti-Injunction Act, 28 U.S.C. § 2283. The dismissal and injunction are otherwise free of error.
This action arises from an automobile accident in the state of Nuevo Leon, Mexico, that killed six passengers, all Mexican citizens. Plaintiffs and intervenors, who are family members of the decedents, allege that the vehicle and one of its tires were defective, that the vehicle was improperly maintained, and that the driver was careless. Plaintiffs first filed wrongful death and survival claims against defendants Bridgestone/Firestone, Inc. ("Bridgestone"), General Motors Corporation ("General Motors"), Lucent Technologies, Inc., and Lucent Technologies Maquiladoras, Inc.,
The instant case ("Vasquez II") was filed in Orange County, Texas, and removed to federal district court in Beaumont, Texas. That court dismissed on grounds of f.n.c., concluding that the dispute should be heard in Mexico. The location of the accident, the sources of proof, plaintiffs' home, and the lack of local interest were factors that the court found favored Mexico. The court also determined that Mexican law would govern. The court dismissed with prejudice, noting in its memorandum opinion that "[a] judgment of dismissal under forum non conveniens here should act to preclude a future lawsuit brought elsewhere in this country."
Before the court dismissed Vasquez II, plaintiffs filed a separate state court suit in Cameron County, Texas ("Vasquez III"). They initially were represented by different counsel before the dismissal of Vasquez II; at that time, counsel of record filed an amended petition and a petition in intervention on plaintiffs' behalf. Vasquez III was removed to federal court and ultimately dismissed by stipulation.
Following the f.n.c. dismissal in Vasquez II, plaintiffs also sued in Webb County, Texas. This suit, Vasquez IV, named five defendants not named in the three previous
The Vasquez II court later issued a permanent injunction that prohibited
The court reasoned that the All Writs Act, 28 U.S.C. § 1651(a), permitted it to protect the finality of its f.n.c. dismissal. Plaintiffs argue that the injunction violates the Anti-Injunction Act, specifically that it does not fall under the Act's relitigation exception. This appeal consolidates plaintiffs' challenge to the Vasquez II court's dismissal and the permanent injunction.
Federal courts apply the federal version of f.n.c. in resolving a motion to dismiss where the alternative forum is a foreign tribunal. De Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th Cir.1993). We review an f.n.c. dismissal for abuse of discretion. Gonzalez v. Chrysler Corp., 301 F.3d 377, 379 (5th Cir.2002), petition for cert. filed, 71 U.S.L.W. 3489 (Jan. 7, 2003) (No. 02-1044). To obtain an f.n.c. dismissal, a party must demonstrate (1) the existence of an available and adequate alternative forum and (2) that the balance of relevant private and public interest factors favor dismissal. Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 221-22 (5th Cir.2000). Under federal f.n.c. principles, the court properly found that Mexico is the more convenient forum.
An alternative forum is considered available if the entire case and all parties can come within its jurisdiction.
An alternative forum is adequate if "the parties will not be deprived of all remedies or treated unfairly, even though they may not enjoy the same benefits as they might receive in an American court." Gonzalez, 301 F.3d at 379-80 (citation and internal quotation marks omitted). In Gonzalez, we rejected the plaintiffs' contention that a foreign jurisdiction's decision to limit damages and limit the availability of strict liability—even to the point at which the lawsuit ceases to become economically viable—somehow renders
Once a court determines that there is an adequate alternative forum, it must balance the relevant private and public interest factors. Id. at 254-55. Private interest factors include
McLennan v. Am. Eurocopter Corp., Inc., 245 F.3d 403, 424 (5th Cir.2001) (internal quotation marks and citation omitted). In Piper, the Court stated that "there is ordinarily a strong presumption in favor of the plaintiff's choice of forum, which may be overcome only when the private and public factors clearly point towards trial in the alternative forum." 454 U.S. at 255, 102 S.Ct. 252. Still, the district court determined, consistently with Piper, that because plaintiffs are residents of a foreign country, their forum choice should be accorded less deference. Id. at 255-56.
Plaintiffs contend the court erred, because a treaty between the United States and Mexico, the International Covenant of Civil and Political Rights, entitles Mexican plaintiffs to the same deference as American citizens, only with the understanding that suing in the United States may be less convenient.
Analyzing the private factors, the court correctly determined that trial should be held in Mexico. The court emphasized that plaintiffs, the driver of the vehicle, and all decedents are Mexican citizens. In
Plaintiffs point out that documents relating to the design and manufacture of the vehicle's tires are located in the United States and must be translated into Spanish. They also aver that the court's refusal to permit additional discovery prevented them from demonstrating the exact role of General Motors and Bridgestone in designing and fabricating their products.
Assuming arguendo that all information relating to the design and manufacture of the tires and vehicle is located in the United States, we still find the court's analysis correct. The tires and vehicle were manufactured and sold in Mexico; the vehicle's servicing records and the driver's records —both vital to plaintiffs' alternative theories of liability—are also located there.
Plaintiffs maintain that the court erred in applying the relevant public f.n.c. factors, which are
McLennan, 245 F.3d at 424 (internal quotation marks and citation omitted). The court determined these factors favor trial in Mexico, because the case would overburden its already overcrowded docket, Texas has little local interest in the outcome, and Mexican law should govern the controversy.
Plaintiffs assert the location of Bridgestone's main plant in Orange County, Texas, refutes the court's conclusion that there is little local interest. In fact, the plant that plaintiffs reference is not the company's principal place of business, nor does it even produce tires. Conversely, Mexico has an interest in protecting its own citizens from defective products acquired in Mexico and causing injury there.
Plaintiffs are permitted to plead in the alternative. FED.R.CIV.P. 8(e)(2). For purposes of f.n.c., however, they cannot present only one of their multiple liability theories for the sole purpose of gaining a favorable forum.
For similar reasons, plaintiffs' contention that the court erred in its choice-of-law determination is unavailing.
Even if the design of the tires and vehicles is characterized as the conduct causing injury, the aggregate of other specific contacts favors application of Mexican law. As the court recognized, all the decedents and plaintiffs are citizens of Mexico, the accident and subsequent investigation took place in Mexico, and the vehicle and tires were manufactured and purchased there.
The most significant relationship test further requires that the specific contacts be evaluated in light of policy considerations. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 421 (Tex.1984). These considerations are
RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 6 (1971). A proper choice-of-law "achieve[s] the best possible accommodation" of both nations' policies. Id. cmt. f.
There is no guarantee that Nuevo Leon will remain an available forum or that defendants will submit to its jurisdiction. A return jurisdiction clause remedies this concern by permitting parties to return to the dismissing court should the lawsuit become impossible in the foreign forum. The "failure to include a return jurisdiction clause in an f.n.c. dismissal constitutes a per se abuse of discretion." Robinson v. TCI/US West Communications, Inc., 117 F.3d 900, 907-08 (5th Cir.1997). As we said in In re Air Crash Disaster, 821 F.2d at 1166:
The court did not include a return jurisdiction clause in its dismissal order, so we vacate and remand with instructions that one be added.
The district court halted plaintiffs' "judicial hopscotch" by invoking the All Writs Act, which 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." 28 U.S.C. § 1651. This power dovetails with the relitigation exception to the Anti-Injunction Act, which, although generally prohibiting federal courts from enjoining state proceedings, permits a court to enjoin a state court "where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283.
The relitigation exception is grounded in principles of res judicata and collateral estoppel. Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 147, 108 S.Ct. 1684, 100 L.Ed.2d 127 (1988). The test for the relitigation exception is the same test used to determine claim preclusion or res judicata: "(1) the parties in a later action must be identical to (or at least in privity with) the parties in a prior action; (2) the judgment in the prior action must have been rendered by a court of competent jurisdiction; (3) the prior action must have concluded with a final judgment on the
The permanent injunction prohibited plaintiffs and counsel from pursuing "any suit or cause of action against defendants" in any Texas state or federal court.
Plaintiffs contend the injunction is inappropriate because defendants failed to demonstrate imminent harm or the lack of an adequate remedy. Rondeau v. Mosinee Paper Corp., 422 U.S. 49, 57, 95 S.Ct. 2069, 45 L.Ed.2d 12 (1975). Plaintiffs argue that pleas of res judicata, where appropriate, are sufficient to protect the Vasquez II court's dismissal. The court's finding that Vasquez IV was plaintiffs' second attempt to relitigate its "final judgment" was sufficient, however, to enjoin further litigation. Quintero v. Klaveness Ship Lines, 914 F.2d 717, 721 (5th Cir.1990); Next Level, 179 F.3d at 257.
In Quintero, 914 F.2d at 720-21, we affirmed a decision to enforce the principles of res judicata in the first instance by enjoining state court relitigation of a choice-of-law determination. Though we conclude that the injunction impermissibly prohibits plaintiffs from suing in state court, the district court did not err by invoking the relitigation exception, which seeks to prevent the wasteful and harassing revisiting of previously decided matters.
At least where there is claim preclusion, the relitigation exception applies only to the actual parties of the first proceeding and those in privity with them. Rivet, 224 F.3d at 488. The permanent injunction designated "plaintiffs, their attorneys, their agents, and all persons acting on behalf of plaintiffs, or in concert with any and all of the plaintiffs or their attorneys," as well as the moving defendants. Vasquez IV contains two new plaintiffs—the parents of decedent Ivonne
Privity has been described as nothing more than a "legal conclusion that the relationship between the one who is a party on the record and the non-party is sufficiently close to afford application of the principle of preclusion." Southwest Airlines, Inc. v. Texas Int'l Airlines, Inc., 546 F.2d 84, 95 (5th Cir.1977) (citation omitted). Privity exists where, for example, a party's claim is derivative of the original party's claim.
Ivonne Juarez's estate representative, Jessica Juarez, is a party in Vasquez II, but her parents did not join the litigation until the advent of Vasquez IV. Given that both seek wrongful death claims on behalf of Ivonne Juarez and are represented by the same counsel, they are in privity with one another.
Our conclusion is bolstered by the fact that plaintiffs' counsel named Juarez's parents as parties in two motions filed in Vasquez II; the parents also submitted a list of all companies sued previously to the Vasquez II court. The court's reference to all parties acting "on behalf of" or "in concert with" plaintiffs means that Juarez's parents were among those properly enjoined.
The five new defendants, on the other hand, are not proper subjects of the injunction. The court enjoined suit against only the moving defendants and did not make any findings as to privity. Quintero, 914 F.2d at 721.
An f.n.c. dismissal, based on a doctrine "of procedure rather than of substance," Am. Dredging Co. v. Miller, 510 U.S. 443, 453, 114 S.Ct. 981, 127 L.Ed.2d 285 (1994), does not resolve the substantive merits and therefore falls outside the relitigation exception.
The Supreme Court vacated the injunction so far as it prohibited litigating the Singapore law claim, noting that the f.n.c. dismissal "did not resolve the merits of this claim." Id. at 148, 108 S.Ct. 1684. In other words, instead of the substantive
Rule 41(b) states that an order of dismissal "operates as an adjudication on the merits" unless the court states otherwise or the dismissal is for lack of jurisdiction, improper venue, or failure to join a party under Rule 19. FED.R.CIV.P. 41(b).
Previously, rule 41(b)'s effect regarding claim preclusion was questioned because of the limited enumerated exceptions to its default rule that judgments generally be deemed "on the merits." 18 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 4435, at 140 (2d ed.2002). Many types of dismissals "do not seem to fall within the categories `provided for in this rule' and yet clearly should not—and do not—operate as an adjudication that precludes a second action on the same claim." Id.
In Semtek Int'l, Inc. v. Lockheed Martin Corp., 531 U.S. 497, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001), the Court reigned in rule 41(b) as a determinant of claim-preclusion, recognizing that the meaning of "judgment on the merits" has changed over time and "has come to be applied to some judgments" (like the instant district court's f.n.c. dismissal) "that do not pass upon the merits of a claim and hence do not (in many jurisdictions) entail claim-preclusive effect." Id. at 502, 121 S.Ct. 1021. The Court determined that rule 41(b) primarily "relates to the dismissing court itself." That is, an "adjudication on the merits" bars refiling of the same claim in the same court but does not establish claim preclusion. Id. at 505-06, 121 S.Ct. 1021. Semtek held that when a diversity court dismisses a claim on state substantive law grounds, the preclusive effect of the judgment is measured not by rule 41(b), but by the preclusion law of the state in which the court sits.
The district court, although exercising diversity jurisdiction, dismissed on federal procedural grounds, thus distinguishing Semtek. And despite rule 41(b)'s enabling the court to prevent relitigation of federal f.n.c. principles in a Texas federal court,
Instead, we look to the longstanding rule that "federal common law governs the claim-preclusive effect of a dismissal by a federal court sitting in diversity." Id. at 508, 121 S.Ct. 1021 (citation omitted). Fortunately, Chick Kam Choo, which makes no mention of rule 41, reveals that an f.n.c. dismissal is not a claim-preclusive judgment.
Chick Kam Choo characterizes a dismissal based on federal f.n.c. principles as one not resolving the underlying substantive issues. 486 U.S. at 148, 108 S.Ct. 1684. The principle of f.n.c., as "nothing more or less than a supervening venue provision," Am. Dredging, 510 U.S. at 453, 114 S.Ct. 981, contemplates resolving the merits in another forum, negating the possibility of claim-preclusion. Although an f.n.c. dismissal designated on the merits may bar reconsideration of the claims in another Texas federal court,
Defendants seek to distinguish Chick Kam Choo because Texas f.n.c. law has changed; they argue that today Texas would apply the same or even a less deferential standard than the federal f.n.c. standard, permitting application of the relitigation exception. In contrast to the situation in Semtek, where the dismissal's preclusive effect was dictated by state preclusion law, defendants seek to have the preclusive effect of the f.n.c. dismissal turn on differences between federal and state f.n.c. law.
This would have the undesirable effect of varying the preclusive effect accorded a federal f.n.c. dismissal based on the law of the interpreting state. Instead, the type of federal common law applied to a federal procedural dismissal, unlike a dismissal based on state substantive law, does not incorporate state law. Semtek, 531 U.S. at 508, 121 S.Ct. 1021. The threats of "forum-shopping ... and ... inequitable administration
Whereas the f.n.c. dismissal did not decide the substantive merits of plaintiffs' claims, the court's choice of Mexican law did. This is somewhat counter-intuitive, given that a choice-of-law determination is a necessary part of an f.n.c. dismissal. Piper, 454 U.S. at 245, 102 S.Ct. 252. The result is that plaintiffs are not barred from pursuing their claims in Texas state court so long as they bring only Mexican law claims.
Key to Chick Kam Choo's reasoning is that a choice-of-law determination made in furtherance of an f.n.c. dismissal is a decision on the merits. Regarding the Texas law claims previously dismissed in federal court on grounds of f.n.c., Chick Kam Choo stated that the "validity of the claim was adjudicated" once the lower court determined that Singapore law governed. Chick Kam Choo, 486 U.S. at 150, 108 S.Ct. 1684. In other words, the district court's choice-of-law determination "necessarily precludes the application of Texas law, [so] an injunction preventing relitigation of that issue in state court is within the scope of the relitigation exception to the Anti-Injunction Act."
Following the reasoning of Chick Kam Choo, the district court's decision to apply Mexican law adjudicated plaintiffs' Texas law claims. Even if the other f.n.c. factors were found to favor Texas over Mexico, plaintiffs' Texas law claims would be unsustainable in light of the court's adverse choice-of-law determination. As the district court observed, it actually rendered two judgments: (1) Mexican law governs the controversy; and (2) the f.n.c. factors favor dismissal and trial in Mexico. Under Chick Kam Choo, only the former is a decision on the merits.
Even if a choice-of-law determination were not considered a judgment separate from the f.n.c. dismissal, issue preclusion would make it a proper subject of the relitigation exception. Next Level, 179 F.3d at 249-50. The choice-of-law issue was "distinctly put in issue, litigated, and determined in the former action." Brister v. A.W.I., Inc., 946 F.2d 350, 354 (5th Cir.1991) (citation omitted). As noted, federal courts apply the same choice-of-law analysis as the state in which they sit. Klaxon, 313 U.S. at 497, 61 S.Ct. 1020. Also, issue preclusion does not require that the accompanying judgment—in this case the f.n.c. dismissal—be adjudicated on the merits. Acree v. Air Line Pilots Ass'n, 390 F.2d 199, 203 (5th Cir.1968). Consistent, however, with Chick Kam Choo, our finding that the choice-of-law determination actually adjudicated the Texas state law claims, thereby triggering claim preclusion, prevents application of the injunction beyond the plaintiffs and those in privity.