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United States: Judicial Proceedings in Antitrust Action of Laker Airways Limited (Jurisdiction in Antitrust Action; British Injunctions)*
Published online by Cambridge University Press: 04 April 2017
Abstract
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- Judicial and Similar Proceedings
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- Copyright © American Society of International Law 1984
Footnotes
[The Introductory Note was prepared for International Legal Materials by Bruno A. Ristau, Esq., I.L.M. Editorial Advisory Committee.]
References
1 Also named as defendants were two American corporations, McDonnell Douglas Corp. and McDonnell Douglas Finance Corp.
2 Subsequently, on May 3, 1983, the District Court grantedpartial summary judgment in favor of Laker with respect to thedefense of forum nfin conveniens asserted by the defendants.Laker Airways Ltd. v. Pan American World Airways. 568 F.Supp. 811 (D.D.C. 1983).
3 On November 3, 1983, the House of Lords granted leave toLaker to appeal the judgment of the Court of Appeal. The appealis scheduled to be heard in June 1984.
* [See I.L.M. page 565.]
1 The appeal of the preliminary injunction at this earlystage of the proceedings has not permitted either findings offact by the district court or a thorough development of thefactual underpinnings of Laker's antitrust action.
2 Appendix of Record Excerpts Submitted on Behalf of Appellants Sabena and KLM at Tab 5 [hereinafter cited as RE]; Brief of Appellant KLM Royal Dutch Airlines at 5, 6.
3 Agreement Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning Air Services, 23 July 1977, 28 U.S.T. 5367, T.I.A.S. No. 8641. [hereinafter cited as Bermuda II Treaty].
4 Protection of Trading Interests Act, 1980, ch. 11, reproduced at RE Tab 9, supra note 2.
5 RE Tab 1, supra note 2.
6 Laker Airways Ltd. v. Pan American World Airways, 559 F. Supp. 1124 (D.D.C. 1983) [hereinafter cited as District Court Op.].
7 RE Tab 1, supra note 2.
8 District Court Op., 559 F. Supp. at 1139 n. 63.
9 Laker Airways Ltd. v. Pan American World Airways, 568 F. Supp. 811 (D.D.C. 1983).
10 British Airways Board v. Laker Airways Ltd., [1983] 3 W.L.R. 545, 549 [hereinafter cited as High Court Judgment], reproduced at Appendix to Memorandum as to Status of English Proceedings at Tab 5 [hereinafter cited as App.].
11 Id. at 568.
12 See supra note 4.
13 Id. §§ 1, 2, 4, 5, 6.
14 App. Tab 6, supra note 10.
15 British Airways Board v. Laker Airways Ltd., [1983] 3 W.L.R. 545, 573, 591, reproduced at App. Tab 5, supra note 10 [hereinafter cited as Court of Appeal Judgment].
16 App. Tab 7, supra note 10.
17 On 10 November 1983 the House of Lords granted Laker's petitions for leave to appeal the judgment of the Court of Appeal. This appeal is currently pending.
18 The four American defendants, who were also enjoined by the district court, have not appealed the decision.
19 McDougal, M. &Reisman, W., International Law in Contemporary Perspective 1295 (1981).Google Scholar
20 See, e.g., United States v. Mitchell, 553 F.2d 996, 1001 (5th Cir. 1977); Restatement (second) of the Foreign Relations Law of the United States § 38 (1965) [hereinafter cited as Restatement (second)].
21 See Restatement (second) of the Foreign Relations Law of the United States § 17 (1965); Restatement of the Foreign Relations Law of the United States (revised) §402(1) (a), (b) (Tentative Draft No. 2) (1981) [hereinafter cited as Restatement (REVISED)].
22 Federal Trade Comm'n v. Compagnie de Saint–Gobain– Pont–A–Mousson, 636 F.2d 1300, 1316 (D.C. Cir. 1980) ;United States v. Fernandez, 496 F.2d 1294 (5th Cir. 1974); Restatement (second) § 18(b), supra note 20; Restatement (revised) § 402(1) (c) (Tentative Draft No. 2), supra note 21.
23 See Steele v. Bulova Watch Co., 344 U.S. 280 (1952); Blackmer v. United States, 284 U.S. 421 (1932); Restatement (second) §30(1) (a), supra note 20; Restatement (revised) §402(2) (Tentative Draft No. 2), supra note 20.
24 The exercise of prescriptive jurisdiction is, however, subject to the limits of a state's jurisdiction to adjudicate and to enforce its regulations. See, e.g., Federal Trade Comm'n v. Compaanie de Saint–Gobain–Pont–A–Mousson, 636 F.2d 1300, 1316–17 (D.C. Cir. 1980).
25 See Restatement (second) § 37, § 30 Comment c, supra note 20.
26 See, e.g., United States v. Aluminum Co. of Am., 148 F.2d 416 (2d Cir. 1945) ; Strassheim v. Daily, 221 U.S. 280, 285 (1911); Deutsche Lufthansa Aktiengesellschaft v. Civil Aeronautics Board, 479 F.2d 912, 917 n.9 (D.C. Cir. 1973) ; Pacific Seafarers Inc. v. Pacific Far East Line, Inc., 404 F.2d 804, 814–15 (D.C. Cir. 1968), cert, denied, 393 U.S. 1093 (1969) ;Case of the S.S.“Lotus,” [1927] P.C.I.J., Ser. A., No. 10 at 18, 2 M. Hudson, World Court Reports 20.
27 See Restatement (second)§ 18 Illustration 2, supra note 20.
28 See, e.g., United States v. Fernandez, 496 F.2d 1294 (5th Cir. 1974) (conviction for possessing, uttering, and forging, in a foreign territory, United States Treasury checks which had been stolen in the United States).
29 See Restatement (revised) §403(1) (Tentative Draft No. 2), supra note 21
30 See, e.g., “Extraterritoriality and Conflicts of Jurisdiction,” U.S. Department of State Current Policy Bulletin No.481 (15 April 1983).Law and the International State System, 11 INT'L J.SOC. L. 11, 14–15 (1983).
31 See Rahl, , International Application of American Antitrust Laws: Issues and Proposals,2 N.W. J. INT'L L. & Bus. 336, 341 (1980)Google Scholar ; Picciotto, Jurisdictional Conflicts, International Google Scholar
32 These forums include, at least, the Federal Republic ofGerman, Austria, and the European Economic Community.See Gerber, The Extraterritorial Application of the German Antitrust Laws, 77 AM. J. INT'L L. 756 (1983) ; Rahl, International Application of American Antitrust Laivs: Issues and Proposals, 2 N.W. J. INT'L L. 336, 340–41 (1980).
33 Laker alleges that acts in furtherance of the unlawfulconspiracy occurred at the IATA meeting at Hollywood,Florida in 1981. Complaint 1122, Civil Action No. 83–0416(D.D.C. 1983), reproduced at RE Tab 3, supra note 2. Additionally,secret commissions may have been paid to travelagents within the United States to divert business away fromLaker. Complaint fi 28, Civil Action No. 82–3362 (D.D.C.1982), reproduced at App. Tab 5 p. 592, supra note 10.
34 See Pfizer Inc. v. India, 434 U.S. 308, 314 (1978).
35 Oral Argument Tr. at 32. See also United States Dept of Transportation, Research & Special Programs Admin., U.S. Int'l Air Travel Statistics, Table Ila at 2, 3; Table lid at 2, 3; Table Ilia at 55–57; Table Hid at 46–48; Table IV at 1, 10, 14 (1982).
36 Laker Br. at 4.
37 See id. at 5.
38 See Protocol Relating to United States–Netherlands Air Transport Agreement of 1957, 31 March 1978, art. 8(c), 29 U.S.T. 3088, 3098, T.I.A.S. No. 8998 [hereinafter cited as United States–Netherlands Air Transport Treaty] ; Protocol Relating to the United States of America–Federal Republic of Germany Air Transport Agreement of 1955,1 Nove mber 1978, arts. 8(c), 9(a), 30 U.S.T. 7323, 7340, T.I.A.S No. 9591 [hereinafter cited as United States–Germany Air Transport Treaty]. The British Government apparently recognizes this as a general rule, although it argues that immunity from United Statesantitrust laws follows under the Bermuda II Treaty and that application of those laws is inherently limited by territorial sovereignty. Partially in response to representations by counsel for the British Attorney–General that “Her Majesty's Government has consistently taken the position that British Enterprises engaged in transnational business operations should comply with the laws and governmental policies of the countries in which they transact business,” Justice Parker stated: “I would regard it as being inherent in the grant of permission to operate in the United States that the designated airlines comply with United States [antitrust] law.” See High Court Judgment at 564, 568, supra note 10. This position was qualified by the Court of Appeal. See Court of Appeal Judgment at 583–84, supra note 15.
39 See Foreign Sovereign Immunities Act, 28 U.S.C. §§ 1602– 1611 (1976) ; Agreement Providing for Nonassertion of Sovereign Immunity from Suit of Air Transport Enterprises, United States–Netherlands,. 19 June 1953, 4 U.S.T. 1610, T.I.A.S. No. 2828.
40 Cf. William Becker Travel Bureau, Inc. v. Sabena Belgian World Airways, 13 Av. Cas. 17,770 (S.D.N.Y. 1975) (Sabena subject to nondiscrimination provisions of Federal Aviation Act. 49 U.S.C. § 1374(b) (1976)).
41 See, e.g., Pfizer Inc. v. India, 434 U.S. 308 (1978). Cf. British Overseas Airways Corp. v. Civil Aeronautics Board, 304 F.2d 952 (D.C. Cir. 1962) (action brought by, inter alia, KLM and Sabena seeking review of proposed regulations).
42 See Teasdale v. Robinson, 290 F.2d 108, 114 (8th Cir. 1961) (fiduciary obligations of corporate officers to creditors are enforceable by the trustee in bankruptcy); 4 COLLIER ON BANKRUPTCY H704.02 (L. King 15th ed. 1983). Cf. handy v. Federal Deposit Insurance Corp., 486 F.2d 139, 148 (3d Cir. 1973), cert, denied, 416 U.S. 960 (1974) (stockholder free to initiate derivative action when receiver refuses to initiate suit necessary for protection of creditors).
43 United States v. Aluminum Co. of Am., 148 F.2d 416 (2d Cir. 1945). See also RESTATEMENT (REVISED) § 415(2), supra note 21: Any agreement in restraint of United States trade made outside of the United States, and any conduct or agreement in restraint of such trade carried out predominantly outside of the United States, is subject to the jurisdiction to prescribe of the United States, if a principal purpose of the conduct or agreement is to interfere with the com namerce of the United States, and the agreement or conduct has some effect on that commerce. (Tentative Draft No. 2).
44 See infra pp. 46–47.
45 See Br. of Appellant Sabena at 9.
46 See RESTATEMENT (SECOND) § 27, & id. Comment a, suvra note 20.
47 See, e.g., Cole v. Cunningham, 133 U.S. 107 (1890). Cf. Dames & Moore v. Regan, 453 U.S. 654 (1981).
48 Colorado River Water Conservancy Dist. v. United States, 424 U.S. 800, 817 (1976); Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456, 466 (1939) ; Kline v. Burke Const. Co., 260 U.S. 226, 230 (1922); Insurance Co. v. Brune's Assignee, 96 U.S. 588 (1877). However, proceedings in rem are usually restricted to one forum. See Princess Lida of Thurn & Taxis v. Thompson, 305 U.S. 456 (1939).
49 See, e.g., Bryant v. Atlantic Coast Line R.R., 92 F.2d 569(2d Cir. 1937) ; Blanchard v. Commonwealth Oil Co., 294F.2d 834, 839 (5th Cir. 1961). The rules against antisuit injunctions are more relaxedwhen the injunction runs against concurrent litigation withina single forum. In this situation respect for a co–equal sovereign'sjurisdiction is not implicated and is more easily outweighedby the economies achieved through avoidance ofduplicative actions. See Colorado River Water Conservancy Dist. v. United States, 424 U.S. 800, 817 (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 wasfirst invoked may be justified in restraining litigants fromprosecuting subsequently filed suits within the same courtsystem. Failure to distinguish between the different policiesinforming the discretion to issue intercourt and intracourtinjunctions 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 indenying injunctive relief against foreign action). In the intercourtcontext, similarity of the actions alone should not justifyan injunction. See supra note 48.
50 See, e.g., Compagnie des Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 887 (3d Cir. 1981), aff'd on other grounds, 456 U.S. 694 (1982) ; Canadian Filters (Harwich) Ltd. v. Lear–Siegler, Inc., 412 F.2d 577, 578 (1st Cir. 1969).
51 Peck v. Jenness, 48 U.S. 611, 624–25 (1849).
52 See, e.g., 28 U.S.C. § 2283: “A court of the United Statesmay not grant an injunction to stay proceedings in a Statecourt except as expressly authorized by Act of Congress, orwhere necessary in aid of its jurisdiction, or to protect or effectuate its judgments.” (emphasis added). This limitationon the authority of the federal courts to enjoin state courtseffectuates the strong policies of comity and mutual respectthat limit the discretion of courts to interfere with concurrentproceedings. These policies, which find such compelling expressionin ordering the intranational affairs of our dual courtsystem, apply a fortiori to injunctions affecting the exerciseof jurisdiction in foreign countries. Canadian Filters (Harwich) Ltd. v. Lear–Siegler, Inc., 412 F.2d 577, 578 (1st Cir.1969).
53 There is less justification for permitting a second actionafter a prior court has reached a judgment on the same issues.The parallel proceeding rule applies only until one courtreaches a judgment that may be pled as res judicata in theother. Princess Lida of Thurn & Taxis v. Thompson, 305 U.S.456, 466 (1939).
54 See Bethell v. Peace, 441 F.2d 495 (5th Cir. 1971) ; Scott v. Hunt Oil Co., 398 F.2d 810 (5th Cir. 1968). Since resjudicata and collateral estoppel may be pled in subsequentactions, a showing of harassment, bad faith, or other strongequitable circumstances should ordinarily be required. Cf. Donovan v. Dallas, 377 U.S. 408, 411–12 (1964) (state courtimproperly enjoined litigant's suit in federal court after adversestate court judgment since plea of res judicata was forsecond forum, not first forum, to determine) ; C. WRIGHT,A. MILLER & E. COOPER, 17 FEDERAL PRACTICE & PROCEDURE§ 4226 at 346–50 (1978).
55 See, e.g., Seattle Totems Hockey Club, Inc. v. National Hockey League, 652 F.2d 852, 856 (9th Cir. 1981), cert, denied,457 U.S. 1105 (1982); Cargill, Inc. v. Hartford Accid. & Indem. Co., 531 F. Supp. 710, 715 (D. Minn. 1982); Medtronic, Inc. v. Catalyst Research Corp., 518 F. Supp. 946 (D. Minn.),aff'd, 664 F.2d 660 (8th Cir. 1981).
56 “ Piper Aircraft Co. v. Reyno, 454 U.S. 235, 258–61 (1981);Pain v. United Technologies Corp., 637 F.2d 775, 786–94 (D.C.Cir. 1980).
57 Compagnie des Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 887 (3d Cir. 1981), aff'd on other grounds, 456 U.S. 697 (1982). See also Kline v. Burke Const. Co., 260 U.S. 226, 233 (1922) ; Atlantic Coast Line R.R. Co. v. Brotherhood of Locomotive Engineers, 398 U.S. 281, 295(1970) (where two courts have concurrent jurisdictionneither is ordinarily free to prevent either party from simultaneouslypursuing claims in both courts).However, where so many actions have been commenced thatthere is no advantage to be gained from the multiple actionsother than harassment and attrition, circumstances may justifyan injunction. See Sperry Rand Corp. v. Sunbeam Corp.,285 F.2d 542 (7th Cir. 1960) (dissolving an antisuit injunctionwhen the domestic action would not resolve the issues raisedin 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 throughmultiple suits brought for “commercial advantage rather thanhonest adjudication“). Even in this situation, deference tothe foreign proceedings is still an important factor to be considered.Id. at 647–48 (enjoining commencement of furtherpatent infringement suits against purchasers when one actionagainst manufacturer would resolve the issue of validity ofthe patent, but requiring the movant to apply for a stay in tenpreviously filed federal infringement actions instead of enjoiningthose actions).
58 See supra note 55.B”
59 Colorado River Water Conservancy Dist. v. United States,424 U.S. 800, 817 (1976); Compagnie des Bauxites de Guinea v. Insurance Co. of N. Am., 651 F.2d 877, 887 (3d Cir. 1981),aff'd on other grounds, 456 U.S. 694 (1982). Cf. C. WRIGHT,A. MILLER & E. COOPER, 17 FEDERAL PRACTICE & PROCEDURE§4225 at 336 (1978) (The “necessary in aid of its jurisdiction”exception of 28 U.S.C. §2283 “does not allow afederal court to enjoin state proceedings merely because they“to enjoin state proceedings to protect a judgment that theinvolve issues presented in a federal in personam action.”).Similarly, permitting the protection or effectuation of judgmentsunder 28 U.S.C. § 2283 does not allow a federal courtto enjoin state proceedings “to protect a judgment that thefederal court may make in the future but has not yet made.”C. WRIGHT, A. MILLER & E. COOPER, 17 FEDERAL PRACTICE &PROCEDURE § 4226 at 345 (1978).
60 See supra note 53.
61 Tahan v. Hodgson, 662 F.2d 862, 864 (D.C. Cir. 1981).
62 Id.
63 For example, the chronological order in which concurrentin personam suits are filed is often cited as a controllingfactor. E.g., Gage v. Riverside Trust Co., 86 F. 984(S.D. Cal. 1898). Taken literally, a general rule permittingthe earlier filed action to enjoin all subsequent actions woulddestroy the principle of concurrent jurisdiction. Cf. Compagnie des Bauxites de Guinea v. Insurance Corp. of N. Am., 651in commencing foreign action). However, when substantial time has elapsed between the commencement of the two actions,laches or similar equitable principles make it moreappropriate to enjoin the second action. See Seattle Totems Hockey Club, Inc. v. National Hockey League, 652 F.2d 852,855 (9th Cir. 1981), cert, denied, 457 U.S. 1105 (1982) ; United Cigarette Mach. Co. v. Wright, 156 F. 244 (E.D. N.C. 1907),aff'd, 193 F. 1023 (4th Cir. 1912). Cf. Saeman v. Everest & Jennings, Inc., 343 F. Supp. 457, 461–62 (N.D. 111. 1972) (actionstayed pending foreign proceeding filed three years earlier).
64 See James v. Grand Trunk Western R.R. Co., 14 111. 2d356, 152 N.E. 2d 858, cert, denied, 358 U.S. 915 (1958). Compliancewith interlocutory orders may be protected from foreigninterference as well. Omnium Lyonnais D'Etancheite et Revetement Asphalte v. Dow Chemical Co., 441 F. Supp. 1385(CD. Cal. 1977) (enjoining use of discovery materials inforeign proceedings in violation of terms of domestic discoveryorder).
65 See, e.g., Hyafill v. Buffalo Marine Const. Co., 266 F. 553(W.D. N.Y. 1919). Cf. State ex rel., General Dynamics Corp. v. Luten, 566 S.W. 2d 452 (Mo. 1978) (injunction reversed onengrounds,inter alia, that party had not demonstrated that theforeign court could not do full justice).
66 See, e.g., High Court Judgment at 568, supra note 10,where Justice Parker stated “it is common ground that ifLakers are allowed to pursue the American action B.A.'s andB.C.'s actions should be stayed or dismissed. They wouldserve no useful purpose and would merely involve both sidesin unnecessary expense.”
67 Oral Argument Tr. at 17,19.
68 See District Court Op., 559 F. Supp. at 1139 n. 63.
69 Cole v. Cunningham, 133 U.S. 107, 122–23 (1890) ; Seattle Totems Hockey Club, Inc. v. National Hockey League, 652 F.2d852, 855 (9th Cir. 1981); Canadian Filters (Harwich) Ltd. v. Lear–Siegler, Inc., 412 F.2d 577, 578–79 (1st Cir. 1969). See also 1A (Part 2) J. MOORE, W. TAGGART, A. VESTAL & J.WICKER, MOORE'S FEDERAL PRACTICE 1f .204 (1982) (“a courtmay enjoin a party from pursuing litigation in another courtwhich circumscribes the policy of the forum issuing the injunction“).
70 See Hilton v. Guyot, 159 U.S. 113, 164–65 (1895); Tahan v. Hodgson, 662 F.2d 862, 864 (D.C. Cir. 1981) ; Sangiovanni Hernandez v. Dominicana de Aviacion C. Por A., 556 F.2d 611,614 (1st Cir. 1977); RESTATEMENT (SECOND) OF CONFLICT OFLAWS § 117 Comment c (1971).
71 The specific reason for refusing recognition on publicpolicy grounds may vary. In foreign judgment cases, enforcement is denied because the judgment isdiredicated on lawsrepugnant to the domestic forum's conception of decency andjustice. In the context of antisuit injunctions, deference to theforeign proceeding may be denied because of the litigant's unconscionableevasion of the domestic laws, and not necessarilybecause of the inherent obnoxiousness of the forum laws towhich the litigant has resorted.
72 “Only in clear–cut cases ought it to avail defendant”Tahan v. Hodgson, 662 F.2d 862, 866 n. 17 (D.C. Cir. 1981).See also RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 117Comment c (1971).
73 Courts split when identifying those circumstances inwhich instituting a foreign proceeding constitutes an enjoinableevasion of forum law and policy. The experience of thestate courts, where the principle has been more often applied,gives no clear–cut rule. When the primary purpose of theforeign action is to avoid the regulatory effect of the domesticforum's statutes, then an injunction is more readily issued.See, e.g., Hoover Realty Co. v. American Inst, of Mktg. Syss., Inc., 24 Mich. App. 12, 179 N.W. 2d 683 (1970) ; Sandage v. Studebaker Bros. Mfg. Co., 142 Ind. 148, 41 N.E. 380(1895). On the other hand, merely seeking a remedy notavailable in the domestic forum may be proper. Tabor & Co. v. McNall, 30 111. App. 3d 593, 333 N.E. 2d 562 (1975);Lederle v. United Services Auto. Ass'n, 394 S.W. 2d 31 (Tex.Civ. App. 1965), vacated on other grounds, 400 S.W. 2d 749(Texas 1966) (injunction not ordinarily granted merely toprevent the invocation of more favorable law unless an actualevasion of the substantive law of the domicile will result).The standard of “unfair or unconscionable advantage” is employedby other courts. Keisker v. Bush, 210 Ky. 718, 276S.W. 815 (1925).The only guideline which emerges is the necessity of evaluatingthe merits of each claim in light of the particularequitable circumstances surrounding the dual litigation. Itshould be clear that the availability of slight advantages inthe substantive or procedural law to be applied in the foreigncourt does not signify an actionable evasion of domestic publicpolicy. See Piper Aircraft Co. v. Reyno, 454 U.S. 235 (1981).An impermissible evasion is much more likely to be foundwhen the party attempts to elude compliance with a. statute ofspecific applicability upon which the party seeking an injunctionmay have relied, and which is designed to effectuate importantstate policies.
74 United States v. Topco Associates, Inc., 405 U.S. 596, 610 (1972).
75 The specific terms of this treaty, upon which BritishCaledonian and British Airways rely to establish their purportedimmunity from United States antitrust laws, remainsunclear. Although the British Government interprets thetreaty as conferring immunity, there are no express provisionsto this effect The United States Government has not accededto this interpretation. Moreover, as the United Kingdomcourts recognize, the alleged attempts to interfere withLaker's refinancing arrangements fall outside of the range oftariff setting activities that would be immunized by the BermudaII Treaty. See Court of Appeal Judgment at 589, supranote 15 (holding that the refinancing allegations could not proceedindependently of the other claims on the ground that therefinancing allegations did not state an independent claim, butnot that they were immune under the Bermuda II Treaty);High Court Judgment at 566, supra note 10.
76 Air Transport Agreement Between the Government of theUnited States of America and the Government of Belgium,23 Oct. 1980, a r t 12, T.I.A.S. No. 9903 [hereinafter cited asUnited States–Belgium Air Transport Treaty].
77 United States–Netherlands Air Transport Treaty at art.6, 29 U.S.T. at 3095, supra note 38.
78 United States–Germany Air Transport Treaty at art. 6, 30U.S.T. at 7334, supra note 38.
79 E.g., Seattle Totems Hockey Club, Inc. v. National Hockey League, 652 F.2d 852, 855 (9th Cir. 1981), cert, denied, 457U.S. 1105 (1982) ; PPG Industries, Inc. v. Continental Oil Co.,492 S.W. 2d 297 (Tex. Civ. App. 1973).
80 Br. for Appellant Sabena at 15.
81 Comity teaches that the sweep of the injunction should beno broader than necessary to avoid the harm on which theinjunction is predicated. No injunction should be entered atall when less intrusive measures would redress the injurycaused by evasion of the public policies. Thus, although ourcounterparts on the United Kingdam courts may disagree, theEnglish injunctions against Laker cannot be justified as necessaryto prevent Laker's evasion of Britain's important publicpolicy of avoiding foreign remedies that could damage Britishtrading interests. The British injunction is not an antisuitinjunction designed to protect their jurisdiction to proceedwith the case. Rather, its only purpose is to destroy theUnited States District Court's jurisdiction.This harsh result is entirely unwarranted. Even thoughwe do not approve of them, the terms of the British Protectionof Trading Interest Act authorize postjudgment sanctions,repayment of litigation costs and damages, and even repaymentof judgments. In addition, Laker is subject tocriminal sanctions and fines if it violates the Act's prohibitions.These powerful mechanisms appear to be more thanadequate to protect whatever British economic interests theSecretary of State determines are adversely affected.
82 Blanchard v. Commonwealth Oil Co., 294 F.2d 834 (5thCir. 1961).
83 ” Doyle v. North Pacific Ry. Co., 55 F.2d 708 (D. Minn.1932). See also British Transport Comm'n v. United States,354 U.S. 129, 142 (1957) (“an injunction against suits beingfiled in foreign jurisdictions would be ineffective unless comityrequired its recognition“). Cf. Bossung v. District Court, 140Minn. 494, 168 N.W. 589 (1918) (lower court's stay of proceedingdue to foreign antisuit injunction reversed for abuseof discretion).
84 Comity is the usual basis for staying the domestic actiondue to a foreign antisuit injunction. However, comity doesnot apply to the appeal of KLM and Sabena. See infra partII. D.
88 James v. Grand Trunk Western R.R. Co., 14 111. 2d 356,152 N.E. 2d 858, cert, denied, 358 U.S. 915 (1958) (counterinjunctiongranted). But see Bryant v. Atlantic Coast Line R.R., 92 F.2d 569 (2d Cir. 1937) (counterinjunction denied).
86 See Pacific Employers Ins. Co. v. Industrial Accid. Comm'n, 306 U.S. 493 (1939).
87 Sabena Br. at 12 (emphasis added).
88 Oral Argument Tr. at 14–15.
9 Br. of Amici Curiae at 12 (footnote omitted).
90 See RESTATEMENT (REVISED) § 402 Comment b (TentativeDraft No. 2), supra note 21; RESTATEMENT (SECOND)§ 30 Comment b, supra note 20.
91 RESTATEMENT (SECOND) §37, supra note 20; id. §39Comment b, at 112. In most situations international law doesnot provide for choosing– among competing– bases of jurisdictionto prescribe conduct Id. It follows that no single base isinherently superior to any other, as appellants assert
92 RESTATEMENT (SECOND) § 30 Comment c, supra note 20.
93 **See, e.g., RESTATEMENT (SECOND) §40, supra note 20;RESTATEMENT (REVISED) §403 (Tentative Draft No. 2),supra note 21.
94 E.g., Pacific Employers Ins. Co. v. Industrial Accid. Comm'n, 306 U.S. 493 (1939) (Massachusetts not entitled toexclusive jurisdiction over workers compensation claim ofMassachusetts resident–employee); Case of the S.S. “Lotus,”(1927) P.C.I.J., Ser. A., No. 10 at 18, 2 M. Hudson, WorldCourt Reports 20 (France not entitled to exclusive jurisdictionover prosecution of allegedly negligent French vessel operator).
95 See Br. of Appellant Sabena at 16 n.l.
96 See Davidow, Extraterritorial Antitrust and the Concept of Comity, 15 J. WORLD TRADE L. 500, 508 (1981).
97 District Court Op., 559 F. Supp. at 1132.
98 Davidow, Extraterritorial Antitrust and the Concept of Comity, 15 J. WORLD TRADE L. 500, 508 (1981).
99 P. BLUMBERG, THE LAW OP CORPORATE GROUPS § 20.02(1988).
100 United States–Belgium Air Services Treaty at art 11 (2),supra note 76.
101 See United States–Netherlands Air Services Treaty at arts. 5, 6, 29 U.S.T. at 3094–95, supra note 38.
102 See Hilton v. Guyot, 159 U.S. 113, 164–65 (1895).
103 See Maier, Extraterritorial Jurisdiction at a Crossroads: An Intersection Between Public and Private International Law, 76 AM. J. INT'L L. 280, 283 (1982).
104 See Hilton v. Guyot, 159 U.S. 113, 164 (1895); Maier,Extraterritorial Jurisdiction at a Crossroads: An Intersection Between Public and Private International Law, 76 AM. J. INT'L 280, 282 (1982) (quoting U. HUBER, DE CONFLICTU LEGUM).In his classic COMMENTARIES ON THE CONFLICT OP LAWS 30,32–33 (1834) (Arno Press ed. 1972), Joseph Story also recognizedthat foreign laws ought to be given force in domesticforums only “so far as they do not prejudice the power orright of other governments, or of their citizens.” This principle,he stated,seems irresistibly to flow from the right and duty ofevery nation to protect its own subjects against injuriesresulting from the unjust and prejudicial influence offoreign laws; and to refuse its aid to carry into effect anyforeign laws, which are repugnant to its own interests andpolity.It is difficult to conceive, upon what ground a claimcan be rested, to give any municipal laws an extraterritorialeffect, when those laws are prejudicial to therights of other nations, or their subjects. It would at onceannihilate the sovereignty and equality of the nations,which should be called upon to recognise and enforcethem; or compel them to desert their own proper interestand duty in favour of strangers, who were regardless ofboth. A claim, so naked of principle and authority to supportit, is wholly inadmissible.See also id. at 37.
105 E.g., Tahan v. Hodgson, 662 F.2d 862, 864, 866 (D.C. Cir.1981) ; Clarkson Co., Ltd. v. Shaheen, 544 F.2d 624, 629 (2dCir. 1976); Somportex, Ltd. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 440 (3d Cir.), cert, denied, 405 U.S. 1017(1971); Kenner Prods. Co. v. Societe Fonciere et Financiere Agache–Willot, 532 F. Supp. 478, 479; Sumitomo Corp. v. Parakopi Compania Maratima, S.A., 477 F. Supp. 737, 742(S.D. N.Y. 1979), aff'd, 620 F.2d 286 (2d Cir. 1980); Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146 (D.S.C.1975).
106 Pacific Seafarers, Inc. v. Pacific Far East Line, Inc.,404 F.2d 804, 814 n.31 (D.C. Cir. 1968), cert, denied, 393 U.S.1093 (1969) (principles of comity are appropriately consideredwhen construing antitrust laws).
107 See National Bank of Canada v. Interbank Card Ass'n,666 F.2d 6, 8 (2d Cir. 1981).
108 See, e.g., Lauritzen v. Larsen, 345 U.S. 571, 582–83, 592–93(1953); United States v. Aluminum Co. of Am., 148 F.2d 416,443 (2dCir. 1945).
109 In this case, the injuries alleged in Laker's complaintsare clearly within the scope of the antitrust laws; the interestsat stake in Laker's action here are primarily those of UnitedStates consumers and lenders; and Congress has expresslyallowed foreign corporations to sue for violations of the Shermanand Clayton Acts. See Pfizer Inc. v. India, 434 U.S. 303,312 n.9 (1978). Regulation of the appellants' conduct isentirely consistent with their treaty obligations to conductbusiness here without participating in predatory or discriminatorypricing practices. Thus, “it is the Sherman Acfsapplicability, rather than its inapplicability, that is supportedby consideration of the ‘comity’ factors.” Pacific Seafarers, Inc. v. Pacific Far East Line, Inc., 404 F.2d 804, 814 n.31(D.C. Cir. 1968), cert, denied, 393 U.S. 1093 (1969).
110 A defendant's claims that foreign law forbids a foreignnational from prosecuting a United States antitrust actionshould be made initially in the United States District Courtfree from the coercive threat of a possible antisuit injunction.If justified by principles of comity or the lack of sufficient implicationof United States interests, that claim could begranted. In making such a ruling the district court would notnecessarily be required to resolve unsettled questions of foreignlaw, such as whether the foreign plaintiff would violateforeign law by suing under United States antitrust claims,since the district court would have discretion to stay theaction pending a special proceeding in the foreign courtbrought for the limited purpose of resolving that issue, if thestatus of the foreign law were unclear. See Lehman Bros. v. Schein, 416 U.S. 386, 389–91 (1974). Cf. Louisiana Power & Light Co. v. City of Thibodaux, 360 U.S. 25 (1959) (federaldistrict court properly stayed federal proceedings pending theinitiation and resolution of a state court action to construe anuninterpreted state statute).
111 See, e.g., Pacific Employers Ins. Co. v. Industrial Accid. Comm'n, 306 U.S. 493 (1939) ; James v. Grand Trunk Western R.R. Co., 14 111. 2d 356, 152 N.E. 2d 858, cert, denied, 358U.S. 915 (1958).
112 Tahan v. Hodgson, 662 F.2d 862, 864, 867–68 (D.C. Cir.1981).
113 See App. Tab 6, supra note 10.
114 Id.; Protection of Trading Interests Act § 1, supra note 4.
115 App. Tab 6, supra note 10 (emphasis added).
116 Letter from Peter J. Nickels to Clerk George A. Fisher, with attachment (5 Jan. 1984); letter from Carl W. Schwartzto Clerk George A. Fisher, with attachments (12 Jan. 1984)(see letters from Durrant Piesse to R.J. Ayling, Esq., of TheSolicitor's Office, Dept of Trade and Industry (20 Sept 198S,3 Oct 1983, 16 Nov. 1983, 12 Dec. 1983) [requesting permissionto use commercial information in responding to interrogatoriesserved by TWA] ; letters from R.J. Ayling to DurrantPiesse (21 Oct 1983, 9 Dec. 1983,15 Dec. 1983) [denying permissionbased on interpretation by the Secretary of State ofthe order and directions]). Apparently Laker argued to theSecretary of State that the order and directions do not barLaker from producing documents located in the United Statesand should therefore not be interpreted to prevent Laker fromanswering interrogatories based on information contained inthose documents. The Secretary of State interpreted the orderand directions literally, concluding that Laker's answers tointerrogatories may not disclose commercial information regardlessof whether the information was derived from documentsthat could be produced. Id.
117 A grand jury investigation may be pending. We are uninformed as to its current status.
118 Oral Argument Tr. at 26–37. As a general rule, the stockholdersand creditors of corporations injured by antitrust violationsdo not have standing to vindicate the injury. However,this rule is based on the fact that the direct victim of theinjury—the corporation—is ordinarily capable of protectingthe creditors' private interest and the public's general interestin effective antitrust enforcement P. AREEDA & D. TURNER,II Antitrust Law § 336(c) (1982). As in any derivative action,the case for creditor or stockholder standing would be strongerwhen the corporation could not enforce its own rights. See, e.g., Loeb v. Eastman Kodak Co., 183 F. 704, 709 (3d Cir.1910) (denying standing to a creditor of a bankrupt corporation,but stating a creditor should be permitted to sue in thename of the bankruptcy trustee if the latter were barred).In view of our disposition of this case, we need not decidewhether Laker's American creditors would have standing toredress Laker's alleged antitrust injuries.
119 For example, the directions issued pursuant to the orderstate in the broadest possible terms that Laker shall not “comply,or cause or permit compliance, whether by themselves,their officers, servants or agents, with any requirement to produce or furnish to the United States' Department of Justice, the grand jury or the District Court any document in theUnited Kingdom or any commercial information which relates to the said Department of Justice investigation or the grand jury or District Court proceedings.” See App. Tab 6, supranote 10.
120 See J. WATSON, THE PHILOSOPHY OF KANT 230–31 (1901).
121 Of course, the British government does not intend to invokethe Protection of Trading Interests Act to bar all jurisdictionexercised by United States courts over foreign airlines—just that necessary to provide a forum for the enforcementof American antitrust laws. This illustrates that theconflict here is between deeply felt and long held economicand political policies of both the United States and the Britishgovernments, and that the courts of the respective jurisdictionsare in no position to resolve that dispute by concedingcomity to the decrees of the other. The comity we are askedto invoke is thus comity for the British Executive—and thatis something better left to the American Executive to negoti–ate. Conceding comity to the actions of the British courts,which were brought about and directed rather specificallyby the actions of the British Executive, and whose sole purposeis the unilateral subjugation of United States intereststo those of Great Britain, would require the American judgesto abdicate their oath of office to uphold the laws of the UnitedStates. This we cannot conscientiously do, however much weunderstand and respect the position that our English judicialpeers are in. See infra parts II. F. 1 and II. F. 3.
122 Sabena has suggested that the alleged conspiracies mayimplicate the involvement of several British governmentalauthorities, including the Department of Trade, Civil AviationAuthority, and Bank of England. Br. of Appellant Sabenaat 9.
123 See generally, J. ATWOOD & K. BREWSTER, 1 ANTITRUSTAND AMERICAN BUSINESS ABROAD §§8.02, 8.12–8.14 (1981)(discussing applicability of Parker v. Brown, 317 U.S. 341(1943) ; Noerr/Pennington doctrine; and defense of foreigngovernmental compulsion).
124 District Court Op., 559 F. Supp. at 1139 n. 63. See also Cargill v. Hartford Acc'd & Indem. Co., 531 F. Supp. 710, 715(D. Minn. 1982) (refusing to enjoin commencement of suitsnot directly related to the domestic proceedings) ; Medtronic, Inc. v. Catalyst Research Corp., 518 F. Supp. 946, 954, 957(D. Minn.), aff'd, 664 F.2d 660 (8th Cir. 1981) (limiting injunctionto bar only foreign injunctive relief, but permittingcontinuation of foreign damage actions based on same claim).
125 Dissent Op. at 6.
126 159U.S. 113,164 (1895) (emphasisadded).
127 453 U.S. 654 (1981).
128 See infra note 177.
129 Dissent Op. at 4.
130 Id. at 6.
131 Id. at 4–5.
132 See supra note 110.
133 See App. Tab 2, supra note 10.
134 Pfizer Inc. v. India, 434 U.S. 308,314 (1978).
135 See Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134, 139 (1968) ; Westinghouse Electric Corp. v. City of Burlington, 351 F.2d 762, 770 (D.C. Cir. 1965) ;P. AREEDA & D. TURNER, II ANTITRUST LAW § 331 at 149–150(1982).
136 B 148 F.2d 416 (2d Cir. 1945).
137 See The Foreign Trade Antitrust Improvements Act of1982, 96 Stat. 1246, 15 U.S.C.A. §§ 6a, 45(a) (3) (1982). Inpassing this Act, which clarifies the applicability of UnitedStates antitrust laws to export trade, Congress did not changeeither (1) the ability of the courts to exercise comity or otherwiserecognize the peculiar problems associated with antitrustactions involving international transactions, or (2) the applicationof antitrust laws to conduct producing the requisiteeffect in United States territory. See Foreign Trade AntitrustImprovements Act of 1982, 97th Cong., 2d Sess., H. REP. 686at 13 (1982).
138 Although we take issue with the combative, intrusive method of frustrating United States jurisdiction through whichthe British Executive has exported these policies, contrary tothe implications of the dissent we do not find the British viewsto be inherently distasteful or unreasonable. Dissent Op. at 3.We reject any suggestion that the standard of justice underBritish antitrust laws, which provide only for single damages,is inferior to the treble damage provisions of United Stateslaws. Both sets of laws are designed to provide full justice tolitigants, although the particular form and availability ofremedies differs somewhat due to the divergent legislativeintent behind the laws. We are not asked and do not purportto pass judgment on the British attitude, but only resolve theextent of the United States District Court's discretion to executeits duty of upholding United States laws in the instantcircumstances.15,
139 Court of Appeal Judgment at 574, supra note 15. Thus,the Court of Appeal found it unnecessary to consider the correctnessof the judgment of the High Court of Justice. Id.
140 Mat 584.
141 Id. at 591. It is not at all clear to us that the Englishcourts were bound to uphold the Secretary's orders under thereasoning relied upon. We are not informed as to the exactscope of the English courts' authority to review actions of theexecutive for conformity to treaties or other governing law.Consequently we would never criticize or second guess thedecision of the Court of Appeals to affirm the Secretary's order.However, it does not necessarily follow from the obligationof the English court to sustain its Executive that theEnglish court must consider that the two British defendantswould be unjustly treated in the American courts becausethey were unable to make a proper defense, since their productionof documents has been by the British Executive order,not by any American act. If, because of their handicap inproof, these two defendants ultimately were to be unjustlytreated in the American courts, then the complaint of injusticeshould be frankly made by the British court to its own Executive,which is solely responsible for creating the British defendants'disability. Although it sustained the validity of theorder and directions issued by the British Executive, the courtwas free to point out that the problem of the two British defendantsarose because of the act of the British Executive indenying them access to their defensive proof, not because ofany violation of due process or injustice created by this particularAmerican court or the American court system. Norshould it be presumed that the American court would be obliviousto the handicap imposed on the British defendants, if suchxists, or powerless to take procedural steps to equalize matters.
Neither is it immediately apparent why the English injunctionis necessary to protect the British defendants from sufferinginjustice in the United States courts. The orders apparentlyapply equally to Laker, preventing it from furnishing documentsin the United Kingdom or any commercial informationrelating to the district court proceedings. As the Secretary ofState's refusal to permit Laker to use commercial informationin response to interrogatories served by the Americandefendants demonstrates, Laker is severely hampered in theadvancement of its claims. The British parties appear to beon 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 productionof documents and commercial information—the United Statesairlines are untouched. These defendants are free to assertdefenses, make discovery requests against Laker, and seekpenalties for non–compliance. Laker responds only at the riskof 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 Replyof Amici Curiae to Appellee's Memorandum as to Status ofEnglish 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 byparties to the U.S. action (including Lufthansa and Swissair).”(emphasis added). This is an impairment to justice asobjectionable as that complained of by the Court of Appeal.
We also note that the Court of Appeal may have temporarilylapsed from its resolve not to speculate about the merits ofLaker's antitrust claims under United States law when, tojustify its conclusion that Laker's entire claim arose out ofconduct related to the Bermuda II Treaty, the court concludedthat the alleged impedance of the financial rescue operationwas such an insignificant aspect of the alleged conspiracy thatthis assertion alone could not state a cognizable antitrustclaim. Court of Appeal Judgment at 589, supra note 15. Weraise these points not to suggest that the Court of Appeal's decision was wrongly decided under English law, but only todemonstrate the extreme degree of deference which that courtfelt obliged to grant to the legislative policies implemented inthe Secretary of State's order and directions.
142 British Airways Board v. Laker Airways Ltd. & Others(Judgment of 30 March 1983) at 7, reproduced at App. Tab 4, supra note 10.
143 See, e.g., RESTATEMENT (REVISED) §403 (Tentative Draft No. 2), supra note 21.
144 See Natural Resources Defense Council v. Nuclear Regulatory Comm'n, 647 F.2d 1345, 1357 (D.C. Cir. 1981) : “Somebalancing, or recognition of latent conflict of laws, would seemjudicious to reconcile the separate but not inconsistent nationalinterests … .” (emphasis respectively added and original).
145 Id. §403(2) (a), (b). See also Timberlane Lumber Co. v. Bank of America, 549 F.2d 597, 614 (9th Cir. 1976) (“relativesignificance of effects in the United States;” “the extentto which there is explicit purpose to harm or affect Americancommerce;” “the foreseeability of such effect;” “the relativeimportance to the violations charged of conduct within theUnited States as compared with conduct abroad;” nationalityor principal business locations of the parties); Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1297 (3d Cir.1979) (“Nationality of the parties,” “Existence of intent toharm or affect American commerce and its forseeability“).
146 RESTATEMENT (REVISED) § 403(a) (g), (h) (TentativeDraft No. 2), supra note 21. See also Timberlane Lumber Co. v. Bank of America, 549 F.2d 597, 614 (9th Cir. 1976) (“degreeof conflict with foreign law or policy“) ; Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287, 1297 (3d Cir.1979) (same).
147 RESTATEMENT (REVISED) § 403 (2) (c) (Tentative DraftNo. 2), supra note 21.
148 See Picciotto, Jurisdictional Conflicts, International Law and the International State System, 11 INT'L J. Soc. L. 11, 23–26 (1983) ; Davidow, Extraterritorial Antitrust and the Concept of Comity, 15 J. WORLD TRADE L. 500, 500–02 (1981);Rahl, International Application of American Antitrust Laws: Issues and Proposals, 2 N.Y. J. INT'L & Bus. 336, 340–41(1980).
149 RESTATEMENT (REVISED) at § 403(2) (d) (Tentative Draft No. 2), supra note 21 (emphasis added).
150 Id. §403(2) (c).
151 In Re Uranium Antitrust Litigation, 480 F. Supp. 1138, 1148 (N.D. 111. 1978).
152 Id. We note that under the Tentative Drafts of the RESTATEMENT REVISED) the reasonableness balancing couldeasily be circumvented. Section 415(2) permits the assertionof jurisdiction without a specific examination into reasonablenessunder § 403 (2) and (3) when there was a “principal purpose”to affect United States commerce. Compare §415(2)with § 415 (3). Since a principal purpose is often found wheneverthere are effects on United States commerce, the reasonablenesstext of § 403 (2) will often be superfluous.
153 National Bank of Canada v. Interbank Card Ass'n, 666F.2d 6 (2d Cir. 1981) ; In re Uranium Antitrust Litigation,617 F.2d 1248 (7th Cir. 1980).
154 See, e.g., Maier, Interest Balancing and Extraterritorial Jurisdiction, 31 AM. J. COMP. L. 579 (1983) ; Grippando,Declining to Exercise Extraterritorial Antitrust Jurisdiction on Grounds of International Comity: An Illegitimate Extension of the Judicial Abstention Doctrine, 23 VA. J. INT'L L.394 (1983) ; Kadish, Comity and the International Application of the Sherman Act: Encouraging Courts to Enter the Political Arena, 4 N.W. J. INT'L L. & Bus. 130 (1982); Rahl, International Application of American Antitrust Laws: Issues and Proposals, 2 N.W. J. INT'L & Bus. 336, 362–64 (1980).Cf. Juenger, Conflict of Laws: A Critique of Interest Analysis,32 AM. J. COMP. L. 1 (1984).
155 Congress is presumed to legislate within the constraintsof international law, unless it expressly manifests a contraryintent. Natural Resources Defense Council v. Nuclear Regulatory Comm'n, 647 F.2d 1345, 1357 (D.C. Cir. 1981) ; Federal Trade Comm'n v. Compagnie de Saint–Gobain–Pont–a–Mousson,636 F.2d 1300,1315 (D.C. Cir. 1980); See RESTATEMENT (REVISED)§ 134 (Tentative Draft No. 1) (1980), supra note 21; RESTATEMENT (SECOND) §3(3), supra note 20.
156 See. e.g., Montreal Trading Ltd. v. Amax, Inc., 661 F.2d 864, 870 (10th Cir. 1981), cert, denied, 455 U.S. 1001 (1982)(effects were so“speculative and insubstantial" that“neitherthe Constitution nor the Sherman Act was intended" to reachthe challenged conduct); Vespa of Am. Corp. v. Bajaj AutoLtd., 550 F. Supp. 224, 229 (N.D. Cal. 1982) (no effects) ;Conservation Council of W. Australia v. Aluminum Co. ofAm., 518 F. Supp. 270 (W.D. Pa. 1981) (no effects). Wherethere are only insubstantial or nonexistent effects on UnitedStates commerce, no interest balancing is necessary to concludethat jurisdiction does not exist. Indeed, application ofinterest balancing may obscure an accurate evaluation of thealleged effects resulting in an unwarranted extension of jurisdiction.See National Bank of Canada v. Interbank CardAss'n, 507 F. Supp. 1113 (S.D. N.Y. 1980) (applying interestbalancing and concluding that jurisdiction should be exercised),reversed, 666 F.2d 6 (2d Cir. 1981) (alleged effectswere not sufficiently anticompetitive to come within purviewof antitrust laws; no need to balance interests).
157 See, e.g., Wells Fargo & Co. v. Wells Fargo Express Co.,556 F.2d 406 (9th Cir. 1977) ; Timberlane Lumber Co. v.Bank of America, 549 F.2d 597 (9th Cir. 1976) ; Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287 (3d Cir. 1979)158 See Industrial Development Corp. v. Mitsui & Co., 671 F.2d 876, 884–85 (5th Cir. 1982), vacated on other grounds,103 S. Ct. 1244 (1983) (applying interest balancing to conclude that lower court erred in dismissing on jurisdictional grounds) ; United States v. Vetco, Inc., 691 F.2d 1281 (9th Cir.), cert, denied, 454 U.S. 1098 (1981) ; Daishowa Int'l v. North Coast Export Co., 1982–2 Trade Cas. U 64,774 (N.D. Cal.1982). This result has been predicted. See Davidow, Extraterritorial Antitrust and the Concept of Comity, 15 J. WORLD TRADE L. 500, 513 (1981).
157 See, e.g., Wells Fargo & Co. v. Wells Fargo Express Co.,556 F.2d 406 (9th Cir. 1977) ; Timberlane Lumber Co. v.Bank of America, 549 F.2d 597 (9th Cir. 1976) ; Mannington Mills, Inc. v. Congoleum Corp., 595 F.2d 1287 (3d Cir. 1979)
158 See Industrial Development Corp. v. Mitsui & Co., 671 F.2d 876, 884–85 (5th Cir. 1982), vacated on other grounds,103 S. Ct. 1244 (1983) (applying interest balancing to conclude that lower court erred in dismissing on jurisdictional grounds) ; United States v. Vetco, Inc., 691 F.2d 1281 (9th Cir.), cert, denied, 454 U.S. 1098 (1981) ; Daishowa Int'l v. North Coast Export Co., 1982–2 Trade Cas. U 64,774 (N.D. Cal.1982). This result has been predicted. See Davidow, Extraterritorial Antitrust and the Concept of Comity, 15 J. WORLD TRADE L. 500, 513 (1981).
159 Of course, international law forms a part of United States laws, and is enforced in United States courts. See, e.g., The Paquete Habana, 175 U.S. 677, 700 (1900) ; RESTATEMENT (REVISED) § 131, supra note 18.
160 See Sweeney, J. C. Oliver & Leech, N. The International Legal System 14–23 (1981)Google Scholar
161 See Maier, Interest Balancing and Extraterritorial Jurisdiction, 31 AM. J. COMP. L. 579, 593–95 (1983)
162 “ [I] n the conflict of laws it must often be a matter of doubt which should prevail; … whenever a doubt does exist, the court, which decides, will prefer the laws of its own country to that of the stranger.” Hilton v. Guyot, 159 U.S. 113, 165 (1895)
163 Recognition of this fact in no way derogates from the status of international law, since in questions of conflict between the substantive goals of nations asserting concurrent jurisdiction to prescribe international law is generally neutral. See RESTATEMENT (SECOND) § 39 Comment b, supra note 20.
164 Maier, Interest Balancing and Extraterritorial Jurisdiction, 31 AM. J. COMP. L. 579, 584–85 (1983).
165 See RESTATEMENT (REVISED) 403(1) (Tentative Draft No. 2), supra note 21. Compare RESTATEMENT (SECOND) OF THE CONFLICT OF LAWS § 9 (1971): “A court may not apply the local law of its own state to determine a particular issue unless such application of this law would be reasonable in the light of the relationship of the state and of other states to the person, thing or occurrence involved.”
166 See WHITEMAN, M. 5 DIGEST OF INTERNATIONAL LAW 218–19 (1965)Google Scholar
167 Picciotto, Jurisdictional Conflicts, International Law and the International State System, 11 INT'L J. Soc. L. 11, 14, 25 (1983)
168 Of course, there is no requirement that the forum with jurisdiction exercise it to the fullest extent possible. RESTATEMENT (SECOND) § 40, supra note 20.
169 An interest evaluation conducted through the balancing of competing interests can only function as an effective method of choosing between potential forums to the extent the less reasonable assertion is characterized as “unreasonable.” Thus, Section 403(2) of the RESTATEMENT (REVISED) (Tentative Draft No. 2) appears to deny the existence or even thetheoretical necessity of concurrent prescriptive jurisdiction.However, read narrowly, Section 403 does not require thisresult. The terms of Section 403(1) suggest that an evaluationof interests is essential in determining whether there aresufficient ("reasonable") national contacts with the underlyingtransaction to allocate prescriptive jurisdiction to a forum.This examination of the reasonableness of the domesticforum's contacts, without explicitly balancing the weight ofother foreign contracts, satisfies the prohibition of internationallaw against unreasonable assertions of prescriptivejurisdiction. See also RESTATEMENT (REVISED)§ 441 (TentativeDraft No. 2), supra note 21 (denning jurisdiction to adjudicateon the basis of reasonableness without referring to orbalancing the reasonableness of a second forum's adjudicatorycontacts).Because Congress and the Executive can neither anticipatenor resolve all conflicts with foreign prescriptive jurisdiction,they legitimately expect the full participation of the Judiciaryin minimizing conflicts of jurisdiction. See“Extraterritorialityand Conflicts of Jurisdiction," U.S. Department of StateCurrent Policy Bulletin No. 481 at 4 (15 April 1983). Evaluatingthe strength of the United States interests in a particulartransaction to determine the reasonableness of an assertionof jurisdiction is consistent with those expectations andassures that concurrent jurisdiction will never be lightlyassumed.
170 See Cory v. White, 457 U.S. 85, 89 (1982) ; Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U.S. 493(1939) ; Texas v. Florida, 306 U.S. 398, 410 (1938) ; Kline v. Burke Construction Co., 260 U.S. 226 (1922).
171 In some contexts, the Due Process Clause serves thisfunction in the state and federal courts of the United States.E.g., Texas v. New Jersey, 379 U.S. 674, 678 (1965); Hartford Accid. & Indem. Co. v. Delta Pine & Land Co 292 U S 143149 (1934). *'The actions of the British Government in this case indicatethat Britain regards the Bermuda II Treaty as just such aninterforum agreement, dislocating the application of the antitrustlaws from the conduct challenged in Laker's complaintHowever, since a dispute exists between the two governments,we can only assume that the United States Executive Branchdoes not interpret the agreement to confer an antitrust exemptionon United Kingdom air carriers.
172 See, e.g., RESTATEMENT (REVISED) §§ 412, 413 (TentativeDraft No. 2) supra note 21; RESTATEMENT (SECOND)§ 37 Reporter's Note 1, supra note 20.173 It may be that a rule of law should be developed allocatingexclusive prescriptive jurisdiction to the forum with themost significant nexus to the underlying conduct. Given theinherent difficulty of administering a n interest balancingformula, it is doubtful that a rule of exclusive jurisdictionbased on a common conception of reasonableness will be developedby national courts. The current litigation underscoresthis point: in the decades since the United States began applyingits antitrust laws to overseas conduct substantially affectingits territorial interests, neither the United States' norUnited Kingdom's courts have accepted the other courts' definitionof the legitimate scope of Prescriptive jurisdiction inthe antitrust area. It is to be hoped that the political branchesof government will eventually negotiate practical solutions, such as those undergirding the area of international taxation, which, through their reciprocal ordering of national regulation,render academic the issue of whether a country would otherwise have the sovereign right to exert its authority in a particular manner.
173 It may be that a rule of law should be developed allocating exclusive prescriptive jurisdiction to the forum with themost significant nexus to the underlying conduct. Given theinherent difficulty of administering a n interest balancingformula, it is doubtful that a rule of exclusive jurisdictionbased on a common conception of reasonableness will be developedby national courts. The current litigation underscoresthis point: in the decades since the United States began applyingits antitrust laws to overseas conduct substantially affectingits territorial interests, neither the United States' norUnited Kingdom's courts have accepted the other courts' definitionof the legitimate scope of Prescriptive jurisdiction inthe antitrust area. It is to be hoped that the political branchesf government will eventually negotiate practical solutions, such as those undergirding the area of international taxation, which, through their reciprocal ordering of national regulation, render academic the issue of whether a country would otherwise have the sovereign right to exert its authority in a particular manner.
174 See RESTATEMENT (REVISED) § 135(2) (Tentative Draft No. 1) (1980), supra note 20; J. SWEENEY, C. OLIVER, N. LEECH, THE INTERNATIONAL LEGAL SYSTEM 22 (1981).
175 We disagree with the dissenting opinion precisely becauseit comes to rest at this untenable position. The“dissent" actuallyagrees with much of this opinion: it recognizes thelegitimacy of the jurisdictional base to Laker's suit; it confirmsthe authority of the district court to issue a protectiveinjunction; and it would not preclude the district court fromissuing a more limited injunction on remand. It is only the"form" of the injunction drafted by the district court whichthe dissent finds so objectionable that reversal is advocated.
The dissent reaches this conclusion under the guise of"comity." However, the legal basis for this interpretation ofcomity is nonexistent. See supra pp. 63–67. Comity would bea more significant factor if the two appealing parties wereBritish corporations, but they are not. KLM and Sabena areDutch 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 andSabena have made no request to resort to their own courts inreliance on their own air service agreements or relevantdomestic legislation (e.g., Law of 27 March 1969, as Amendedon 21 June 1976, and Royal Decree of 6 February 1979 Concerningthe Regulation of Marine and Air Transport, atBulletin Usuel des Lois et Arretes, 1969, No. 723; id., 10 September1976, No. 1490, id., 1979, No. 464). We can only assumethat they do not intend to do so.The real motivation for the dissent's position is the desireto avoid further conflict with the laws of our close friends andallies about the application of domestic United States law.This is apparent from the dissent's concern that an affirmanceof the injunction would be regarded as“parochial," and fromits charge that the injunction obstructs the functioning of ourtwo countries' judicial system.We share the same concerns. However, a reversal wouldnot restore the“orderly operation" of our two nation's courts.Instead, it could permit one court entirely to shut down itsautonomous sister courts. This certainly does not seem likelyto foster parallel respect.Moreover, the existence of conflict alone does not establishthe judicial prerogative to relinquish prescriptive jurisdiction.Any legitimate assertion of prescriptive jurisdiction seeks toadvance the national interests undergirding the jurisdiction;an assertion of that prescriptive power in an area of concurrentjurisdiction 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 jurisdictionby knowingly issuing1 interdictory prohibitions and orders,worldwide in scope, after the United States District Court wasfully seized of jurisdiction and well on its way in the treatmentof Laker's antitrust suitFinally, we must remember that it is American statutorylaw which is challenged, not law made by the courts. Theseantitrust laws date back nearly one hundred years, when Congress began legislating to advance competition and consumerwell–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.
176 179 See, Maier, Interest Balancing and Extraterritorial Jurisdiction,31 AM. J. COMP. L. 579, 584–85 (1983). Althoughthis process may always be necessary on an ad hoc basis inresponse to specific suits, anticipatory arrangements could gofar in avoiding the problems we are confronted with today.E.g., Agreement Relating to Cooperation on Antitrust Matters,U.S.–Australia, 29 June 1982, T.I.A.S. No. 10365, reprinted at43 Antitrust & Trade Reg. Rep. (BNA), No. 1071, at 36(1 July 1982).
177 177 In this case the Bermuda II Treaty calls for negotiationand arbitration of disputes regarding its terms. Bermuda II Treaty, art. 17, 28 U.S.T. 5382–83, supra note 3. Althoughsome consultations may have occurred regarding the problemsassociated with the litigation and counterlitigation now pressedin the United States and United Kingdom, apparently neithergovernment has yet invoked its right to call for an arbitratedresolution of the scope of the Bermuda II Treaty's immunizationfrom United States antitrust laws. It may be that furtherefforts by the governments of both countries could helpresolve the deadlock which appears to be developing to thedetriment of the litigants' interests and the ultimate frustrationof the national policies of the United States and Great Britain.
178 If the United States Executive interpreted the BermudaII Treaty to waive both the obligation of United Kingdom aircarriers to comply with antitrust laws, and the right of thosecarriers to rely on the protection of those laws, then Laker'sclaim against the foreign airlines would probably fail. Ofcourse, if only the British airlines' duty of compliance wereceded by the treaty, then nothing would prevent Laker fromcontinuing its suit against KLM and Sabena.
1 Canadian Filters (Harwich) Ltd. v. Lear–Siegler, Inc., 412 F.2d 577, 578 (1st Cir. 1969).
2 It is far from clear to me that a refusal by the DistrictCourt to grant the injunctive relief requested by Laker as tothe foreign defendants would have sounded the death knellof Laker's antitrust action, inasmuch as the American defendantswould remain before the court in any event.
3 Evidencing comparable concern for principles of comity,the court in Medtronic, Inc. v. Catalyst Research Corp., 518F– SuPP– 946 (D. Minn. 1981), aff'd 664 F.2d 660 (8th Cir.1981), granted a narrow injunction preventing defendantfrom seeking an injunction against plaintiff's continued manufactureof a product which was the subject of a patent suitThe court specificaHy n o t ed that the relief would“in no wayinterfere with" defendant's foreign patent infringement andvalidity actions i n foreign courts.
4 The possible usefulness of Executive guidance in this matterhas appropriately been recognized by the district court.On November 17, 1983, Judge Greene appointed amicus curiaein this case to“assist the court in determining what action bythe Court is required or appropriate in light of the decisionsof the English authorities . . . ." Judge Greene suggested,among other things, that amicus“consider what relationship,if any, should be established with the Department of Justiceor the Department of State to enlist their cooperation orassistance."
1/ Pan American World Airways, Trans World Airlines, Inc., British Airways Board, Deutsche Lufthansa Aktiengesellschaft, Swiss Air Transport Company Limited, and British Caledonian Airways Limited.
2/ 2/ McDonnell Douglas Corporation and McDonnell Douglas Finance Corporation.
3/ Subsequently, four other airlines were added as defendants Tn two additional lawsuits, as follows: on February 15, 1983, Laker brought an action similar to No. 82–3362 against Sabena, Belgian World Airlines and KLM Royal Dutch Airlines (C.A. No. 83– 0416) and on September 22, 1983, it brought suit against Union deTransport Aeriens and Scandinavian Airlines System (C.A. No. 83–2791). The defendants in all three actions will generally be referred to herein as the“major airlines.”
4/ KLM and Sabena appealed this decision to the U.S. Court of Appeals for the District of Columbia Circuit. That appeal is pending.
5/ SJ See, e.g., Piper Aircraft v. Reyno, 454 U.S. 235 (1981);Industrial Investment Development Corp. v. Mitsui Co., Ltd., 671F.2d 876 (5th Cir. 1982), vacated on other grounds, 103 S.Ct.1244 (1983).
6/ As explained in the Opinion, the Court's decision was basedTnter alia on the following factual and legal considerations:that the plaintiff's choice of forum should normally be respected;that the hub or primary locus of the alleged conspiracy isthe United States; that only two of the defendants are British;that foreign courts lack jurisdiction to enforce the American antitrust laws; and that Great Britain provides no remedy for the alleged violations.
7/ Jj Mr. Justice Parker observed inter alia (Transcript of Proceedingsat p. 32) that although Parliament had extensively dealtwith certain aspects of American antitrust actions,“it has notsaid that such [actions] shall not be pursued.”By contrast, theU.S. Congress has directed, by its enactment of the Sherman andClayton Acts, that such actions may be brought here.
8/ English injunctions restraining the proceedings in thisCourt have thus been in effect since January 21, 1983 – a periodof almost ten months.
9/ But for the pendency of this Court's injunctions against theother defendants (see pp. 2–3 supra) the order of the Englishcourt would presumably prohibit Laker from proceeding in thecourts of this country against any of the defendants.
10/ On October 21, 1983, Mr. Justice Parker vacated this order, but only on the ground that he had“seen nothing which convincesme that if this relief is not granted at the present time — andI stress those words — injustice will be done to [GermanLufthansa and Swissair].”Accordingly, the .judge agreed to permitdiscovery to proceed in this Court with regard to the Germanand Swiss corporations for the time being.
11/ The flavor of the proceedings before the English courts andthe degree of interference their actions have encouraged areexemplified by a proposal made to the Queen's Bench by Lufthansaand Swissair that Laker be ordered to withdraw from the files ofthis Court a motion to compel discovery and to docket instead astipulation for an extension of time; by advice from Lufthansaand Swissair to the English court regarding the priority withwhich various motions shall be decided by this Court; and byexpressions from these airlines incorporated in countries locatedon the European continent that this United States court not beallowed“to issue orders that may come into conflict with ordersissued by [the English courts].”Affidavits and other paperssubmitted by Stephen Franklin Black, a member of the Bar of thisCourt, on October 21, 1983. See also Transcript of Proceedingsof the same date.
12/ 12/ As authority for his order, the Secretary of State reliedupon the Agreement between the United Kingdom and the UnitedStates Concerning Air Services, signed in Bermuda on July 23,1977 (generally referred to as Bermuda 2). It is not necessary,at this juncture, to inquire into the soundness of that reliance.Suffice it to say that there appears to be a disputebetween the governments of the two countries on the question ofwhether enforcement of the United States antitrust laws is inconflict with Bermuda 2, and what remedies, if any, are appropriatein case such a conflict does exist. The answers to thesequestions must, of course, be decided by the tribunal havingjurisdiction of the underlying controversy. See Part IV infra.Mr. Justice Parker found no basis for concluding that a conflictexisted between the application of United States antitrust lawsand the Bermuda 2 agreement, and that the alleged events constitutingthe“final blow”to Laker – pressure on the non–airline(Continued)McDonnell Douglas – had no conceivable relevance to Bermuda 2. Transcript of Proceedings of May 20, 1983 at pp. 36, 41.
13/ In yet another order, the Secretary generously gave hisconsent to the production of documents and information to UnitedStates courts by airlines incorporated in the United States(i.e., Pan American and TWA).
14/ The“bootstrap”or circular nature of the decision from thepoint of view of international law and relations is apparent. Acourt of the United States is prevented from proceeding becausethe defendants in the American lawsuit allegedly cannot fairlyestablish their defense here. But the English court whichreached this conclusion did so not on the basis of any act ofthis Court or of any party to the proceedings, but rather on thebasis of a decision made by an English official. To add to thecircularity, the possibility of action by the Secretary of Stateseems to have been originally raised as an option by the Masterof the Rolls, the author of the Court of Appeal judgment. SeeTranscript of Proceedings on March 30, 1983, at pp. 9, 13.
15/ Mr. that Justice Parker recognized this principle when he stated that
[i]t is possible that under American law[,]Bermuda 2 becomes part of that law withoutfurther enactment. If this is right, theAmerican courts will decide whether itseffect is to grant anti–trust exemption ornot. It may be that the American courts willso hold, in which case the anti–trust claimwill fail. If they do not so hold, then, ifother conditions are established, it willsucceed.
Transcript of Proceedings of May 20, 1983, at p. 35.
The federal courts are, of course, likewise not infrequently called upon to construe executive agreements with foreign governments,and to decide on their impact in the context of litigation.Dames & Moore v. Reagan, 453 U.S. 651 (1981); United States v. Pink, 315 U.S. 203 (1942); United States v. Belmont, 301 U.S. 324 (1937).
16/ See e.g., Societe Internationale v. Rogers, 357 U.S. 197TT958); United States v. Vetco, Inc., 691 F^2d 1281 (9th Cir.1981); Civil AeronauFics Board v. Deutsche LufthansaAktiengesellschaft, 591 F.2d 951 (D.C. Cir. 1979); In reWestinqhouse Electric Corp., 563 F.2d 992 (10th Cir. 1977).
17/ The theories underlying the efforts in and by the Englishcourts to halt the proceedings in this country against the majorairlines have undergone substantial shifts during the past tenmonths. First it was claimed that only the English courts, asdistinguished from the courts in this country, have jurisdiction;then it was said that the English courts are to be preferred overthe tribunals of the United States under the doctrine of forumnon conveniens; still later this was changed to an alleged conflictbetween United States antitrust laws and the Bermuda 2agreement; this was followed, subsequent to Mr. Justice Parker'sorder adverse to the major airlines, by the intervention of theEnglish Secretary of State; and the current rationale is, asnoted, that the defendants cannot receive the documents necessaryfor a fair trial in the United States because of the Secretary'sorder. Only one theme has remained constant: United Statescourts must not be allowed to pass on the merits of Laker's antitrustclaims.
18/ The complaint seeks over $1 billion in damages.
19/ The major airlines are providing many flights daily to and from the United States, and they are selling thousands of tickets to the American public through hundreds of outlets in the United States. If the English actions achieve their intended result,these airlines will continue to conduct substantial business inthis country without the slightest sanction, in spite of the factthat, according to an unresolved complaint, they have been andare in violation of United States law.
19/ The potential injury to the American consuming public fromsuch a development is obvious. Whatever may be the views of theEnglish or other foreign authorities on this matter. UnitedStates public policy is firmly opposed to monopolies and cartels.
20/ The potential injury to the American consuming public fromsuch a development is obvious. Whatever may be the views of theEnglish or other foreign authorities on this matter. UnitedStates public policy is firmly opposed to monopolies and cartels.
21/ See Pomeroy, I J., A Treatise on Equity Jurisprudence § 217(5th ed. 1941) (“the insufficiency and inadequacy of the legalremedies to meet the, requirements of justice . . constitute thefoundation of the … jurisdiction of equity”)Google Scholar
22/ Thus, in spite of criticisms leveled by the major airlinesin the English courts that American procedures are too slow (see559 F. Supp. at 1128 n.12), and their concurrent insistence thatthey were anxious“for a resolution of their dispute with Lakerin England at the earlier possible date”(transcript of Proceedingsof October 21, 1983) (emphasis added), this Court grantedinnumerable requests, induced by the English orders, for postponingthe discovery mandated by the Federal Rules of Civil Procedure,and it has taken no action sua sponte to move the litigationalong. Indeed,'in the interest of avoiding a conflict, theCourt has refrained from exercising its authority over the membersof its own Bar who, in compliance with the English orders,.have failed to carry out their obligations here. Compare 559F. Supp. at 1139 n.65.The Court still has no wish to preempt the jurisdictionasserted by the English tribunals, including the House ofLords. The course of action the Court has chosen is calculatedto achieve that end: it is unlikely that the pretrial proceedings(including any briefing in connection with the report of theamicus), and the trial, should there be a trial, will be concludedbefore the decision of the House of Lords is issued. The Court's course is also designed, however, to prevent the preemption of the jurisdiction of the courts of the United States bythe actions of the English tribunals.
23/ The view of the English courts appears to be that, even though this Court has jurisdiction over the controversy, conflicts are best avoided if the proceedings in England are allowed to take their normal course while proceedings in the United States are halted until the English courts have rendered their final decisions. See generally, transcript of proceedings before the Queen's Bench of October 21, 1983.
24/ This is so particularly since, due to the unprecedented actions of the English courts, the issues will necessarily be novel.
25/ Mr. Pollak is also a former Assistant to the President and a former Assistant Attorney General, and he is now a partner in the law firm of Shea and Gardner.