Commercial Litigation and Arbitration

Anti-Suit Injunction Barring Pursuit of Foreign Lawsuit — Circuit Split as to Standards — Comity Defined

H-D Michigan, LLC v. Hellenic Duty Free Shops S.A., 2012 U.S. Dist. LEXIS 14277 (E.D. Wis. Feb. 7, 2012):

On January 24, 2012, plaintiffs filed an emergency motion in this court for a preliminary anti-suit injunction asking that I order defendant to dismiss the Greek lawsuit. It is well settled that I have the power to order persons subject to personal jurisdiction in this court to refrain from pursuing a lawsuit in a foreign jurisdiction. Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 652 (2d Cir. 2004); Philips Med. Sys. Int'l v. Bruetman, 8 F.3d 600, 604 (7th Cir. 1993); Laker Airways Ltd. v. Sabena, Belgian World Airlines, et al., 731 F.2d 909, 926-27 (D.C. Cir. 1984). However, such an injunction should rarely be issued because of concerns for international comity. Id. Comity is "the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation." Hilton v. Guyot, 159 U.S. 113, 164 (1895). Although an anti-suit injunction binds only the party who is subject to personal jurisdiction in a United States court, it effectively restricts a foreign court's ability to exercise its jurisdiction. Laker Airways, 731 F.2d at 927. Therefore, the general rule is that parallel proceedings by two different courts exercising in personam jurisdiction should ordinarily be allowed to proceed simultaneously, at least until one court enters a final judgment that can be pleaded as res judicata in the other. Id. at 926-27.

In order for a U.S. court to consider issuing an anti-suit injunction, the party seeking the injunction must first prove that the parallel suits involve the same parties and that the resolution of the U.S. case will be dispositive of the foreign proceeding. E & J Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 991 (9th Cir. 2006); Quaak, et al. v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren, 361 F.3d 11, 16-17 (1st Cir. 2004); Allendale Mut. Ins. Co. v. Bull Data Sys., Inc., 10 F.3d 425, 431 (7th Cir. 1993). The circuits are split on the proper standard to be applied once this threshold requirement is met. The Seventh Circuit has adopted the "liberal" approach, under which a court must decide whether "letting the two suits proceed would be gratuitously duplicative, or as the cases sometimes say 'vexatious and oppressive.'" Allendale, 10 F.3d at 431 (quoting Seattle Totems Hockey Club, Inc. v. Nat'l Hockey League, 652 F.2d 852, 855 (9th Cir. 1981)). If equitable considerations weigh in favor of issuing an injunction, the court should issue one unless the opposing party provides some evidence that the issuance of an injunction would actually harm U.S. foreign relations. Id. In other words, a "purely theoretical" concern for international comity "ought not trump a concrete and persuasive demonstration of harm to the applicant for the injunction." Id. at 432-33. Under the "conservative" approach adopted by other circuits, a court must give more weight to the concern for comity and can issue an anti-suit injunction "only in the most compelling circumstances." Laker Airways, 731 F.2d at 927. For example, a court can issue an injunction where it is necessary to protect the issuing court's jurisdiction or to prevent evasion of the issuing court's important public policies. Id.

The difference between the liberal and conservative approaches seems largely semantic. In any case, I find that a preliminary anti-suit injunction is appropriate in this case under either approach.

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