Cert Sought to Resolve Circuit Split on Anti-Suit Injunction Standard

Ship by Steven van Veen (CC BY-NC 2.0 DEED)

It is not uncommon for parties to a transnational dispute to file competing lawsuits in different nation’s courts. It is uncommon for a U.S. court to try to stop parties from pursuing such foreign parallel proceedings. The federal circuits have long used different standards for determining when to issue such antisuit injunctions. This Friday the Supreme Court will consider a cert petition asking it resolve that split. It should decline that invitation.

As Bill Dodge has previously described, the facts of Ganpat v. Eastern Pacific Shipping PTE, Ltd. are compelling—as are the contrasting views of the case presented by Judge James Ho (writing for the majority) and Judge Edith Jones (in dissent). The majority affirmed the grant of an antisuit injunction in favor of a seaman, an Indian citizen named Vishveshwar Ganpat Kholkar, and against a Singapore-based shipping company, Eastern Pacific Shipping (“EPS”). The antisuit injunction directed EPS to halt its action for a declaratory judgment in India, which EPS had filed after appearing in Kholkar’s U.S. action. Significantly, EPS had convinced the Indian court to issue its own antisuit injunction directing Kholkar to give up his U.S. litigation. The district court and the Fifth Circuit agreed that the Indian law suit was brought to harass and intimidate Mr. Kholkar and that an antisuit injunction was necessary to protect the U.S. court’s jurisdiction.

The Circuit Split

EPS has petitioned for certiorari, urging the Supreme Court to resolve the acknowledged circuit split over when district courts may issue antisuit injunctions in transnational cases. The Fifth Circuit, like the Seventh and the Ninth Circuits, employs the so-called “permissive” approach to anti-suit injunctions. That approach permits the use of anti-suit injunctions based on a balancing of three factors: (i) the inequitable hardship that the foreign suit would create, (ii) the potential that the foreign proceeding could frustrate and delay the U.S. suit, and (iii) the extent to which the two suits are duplicative.

Other circuits—including the Second, Third, Sixth, Eighth, and D.C. Circuits—apply a more “restrictive” approach to antisuit injunctions, limiting their issuance to circumstances when foreign proceedings threaten the U.S. court’s jurisdiction or an important national policy and placing greater emphasis on comity concerns. The First Circuit has attempted to chart a middle course, emphasizing the importance of international comity but taking into account factors like the good faith of the parties and the relative degree of progress in the two suits.

While this is an acknowledged circuit split, it is not entirely clear that it has much practical effect, as Kholkar has argued in opposition to certiorari. Regardless of the circuit, antisuit injunctions against foreign proceedings remain extremely rare. And in a case like this one—in which the foreign proceeding was filed more than a year after the U.S. proceeding and yet in which the foreign court had attempted to enjoin continued litigation in the United States—it would not have been an abuse of discretion to issue an antisuit injunction even under the restrictive approach. This case is thus not a good vehicle for resolving that circuit split.

Red Herrings

There are nonetheless two red herrings in Judge Jones’s dissent that could nonetheless draw the attention of the Supreme Court.

First, Judge Jones recharacterized the Fifth Circuit’s prior antisuit injunction decisions as turning on the degree of the lawsuit’s “foreignness”: when the Fifth Circuit has approved the use of antitsuit injunctions, she argues, the cases have involved U.S. parties; when it has disapproved the use of antisuit injunctions, the cases have involved foreign parties and otherwise lacked connections to the United States. The lack of a U.S. nexus of this case, she concluded, makes the use of an antisuit injunction particularly inappropriate.

The majority, however, correctly rejected tying antisuit injunctions to the degree of connection between the United States and the lawsuit. Such concerns about nexus, Judge Ho noted, are addressed through personal jurisdiction and venue—objections to both of which Eastern Pacific waived at the outset of the case, long before it filed its countersuit in India. Such concerns can also be addressed through forum non conveniens. But EPS waited more than two years to move for dismissal based on forum non conveniens, and the district court refused to grant it given that delay. The Fifth Circuit was correct: Antisuit injunctions are not a tool for policing the foreignness of litigation. They are at root a tool for protecting the jurisdiction of U.S. courts.

Nonetheless, the foreignness of this case might catch the eye of some of the Justices who have been skeptical of foreign plaintiffs bringing U.S. statutory causes of action in U.S. courts. But antisuit injunctions are also not the right tool for policing the reach of U.S. law. The district court applied Lauritzen v. Larsen (1953) to conclude that the Jones Act does indeed apply to Kholkar’s case. EPS will be able to appeal that determination at a later date. Nor is it inherently problematic that this is a dispute between foreign parties. Indeed, as I have thoroughly documented in a forthcoming article, the federal admiralty courts have heard cases involving only foreign parties since the earliest days of the Republic.

Second, Judge Jones seemed to suggest that antisuit injunctions should be governed by the four-part test for preliminary injunctions, which considers the movant’s likelihood of success on the merits, the likelihood of irreparable harm in the absence of an injunction, the balance of hardships between the parties, and the public interest. That suggestion comes out of left field: no matter what test each federal circuit uses to evaluate antisuit injunctions, none of them has invoked the four-part test for preliminary injunctions.

That makes sense because these two types of injunctions are doing different things. Preliminary (and permanent) injunctions reflect the merits of the case and the plaintiff’s requested relief. Antisuit injunctions have nothing to do with the merits; they are instead meant to protect the court’s jurisdiction so that it can reach the merits. Further, as the dissent itself emphasizes, international comity concerns are inherently implicated in antisuit injunctions aimed at foreign litigation—concerns that are almost always absent in the context of preliminary injunctive relief.

If there is a legal dispute here for the Supreme Court to resolve, it would be which of the federal circuits’ approaches to antisuit injunctions is preferable. And on that question, Eastern Pacific’s petition for certiorari makes a mountain out of a molehill.