Amicus Curiae Brief — Caltex Petroleum Corp. v. Baris

.

JN FILED

MAR 2 4 1997,

No. 96-1339

In The

Supreme Court of the Gnited States

OCTOBER TERM, 1996

CALTEX PETROLEUM CORPORATION, et ai.,

m Petitioners,

VICTOR C. BARIS, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

MOTION FOR LEAVE TO FILE BRIEF AND

BRIEF OF THE AMERICAN PETROLEUM INSTITUTE

AS AMICUS CURIAE SUPPORTING PETITIONER

Joanne B. Grossman

Robert A. Long, Jr.*

R. Justin Smith

COVINGTON & BURLING

1201 Pennsylvania Avenue, N.W.

P.O. Box 7566 "=

Washington, D.C. 20044-7566

(202) 662-6000

Counsel for

The American Petroleum Institute

March 24, 1997 * Counsel of Record

In The

Supreme Court of the Gnited States

OCTOBER TERM, 1996

No. 96-1339

CALTEX PETROLEUM CORPORATION, et ai.,

¥ Petitioners,

VICTOR C. BARIS, ef al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

MOTION OF THE

AMERICAN PETROLEUM INSTITUTE FOR

LEAVE TO FILE BRIEF AS AMICUS CURIAE

The American Petroleum Institute ("API") hereby seeks

leave pursuant to this Court’s Rule 37.2 to file the attached

brief as amicus curiae in support of the Petitioners, Caltex

Petroleum Corporation, et al. While consent to file this brief

has been obtained from the Petitioners, most of the

Respondents have not responded to written and telephonic

requests that they grant their consent. Letters to counsel for

the parties requesting their consent, and respons:; from

counsel for petitioners and one respondent granting consent,

have been lodged with the Clerk.

API, a District of Columbia non-profit corporation, is a

national trade association whose more than 300 corporate

members represent all facets of the petroleum industry:

exploration, production, transportation, refining and

marketing. API frequently participates as amicus curiae in

judicial proceedings that have national significance and that

are likely to be of recurring interest to its members.

Although they are U.S. companies, many members of

API (and their international affiliates) have woridwide

operations and markets. The international aspects of their

business and the attractiveness of U.S. courts to foreign

claimants make it inevitable that API members will frequently

be sued in U.S. courts with respect to events taking place

overseas that have no connection with the U.S. jurisdictions

in which the suits are brought. API thus has a strong interest

in the development and application of the doctrine of forum

non conveniens.

In recent years, members of API have secured dismissals

of cases brought by foreign claimants in U.S. courts based on

the doctrine of forum non conveniens. The dismissals have

been conditioned on the members’ consenting to the

jurisdiction of foreign courts and accepting certain other

conditions, like those imposed on defendants and acted upon

by plaintiffs here, as the "price" of dismissal.’

API believes that its participation as amicus curiae will

provide the Court with a broader perspective on the question

presented and will bring into focus the national significance of

' In addition to this case, see Chick Kam Choo v. Exxon Corp., 486

U.S. 140 (1988); Farmanfarmaian v. Gulf Oil Corp., 588 F.2d 880 (2d

Cir. 1978); Koke v. Phillips Petroleum Co. , 730 F.2d 211 (Sth Cir. 1984),

overruled in part, In re Air Crash Disaster Near New Orleans, 821 F.2d

1147, 1163 n.25 (Sth Cir. 1987) (en banc); Needham v. Phillips Petroleum

Co., 719 F.2d 1481 (10th Cir. 1983); Delgado v. Sheil Oil Co., 890 F.

Supp. 1324 (N.D. Tex. 1995); Sequihua v. Texaco, Inc., 847 F. Supp. 61

(S.D. Tex. 1994).

tue proper application and enforcement of the forum non

conveniens doctrine. Accordingly, API respectfully seeks the

Court’s leave to file the attached brief supporting Petitioners.

March 24, 1997

Respectfully submitted,

Joanne B. Grossman

Robert A. Long, Jr.*

R. Justin Smith

COVINGTON & BURLING

1201 Pennsylvania Avenue, N.W.

P.O. Box 7566

Washington, DC 20044

(202) 662-6000

Counsel for

The American Petroleum Institute

*Counsel of Necord

QUESTION PRESENTED

The question presented by the petition for a writ of

certiorari is

Whether a federal court can protect and effectuate its

judgment by enjoining the continued prosecution of a

state-court suit brought on behalf of thousands of foreign

plaintiffs after the federal court had entered a final,

unappealed judgment that (a) dismissed the case "with

prejudice” on the ground of forum non conveniens and (b)

required the defendants to submit to prejudicial conditions

guaranteeing that the litigation would go on in the

plaintiffs’ home country?

Amicus curiae American Petroleum Institute will address

two subsidiary questions that are included within the question

presented:

1. Whether the "relitigation exception" to the Anti-

Injunction Act, 28 U.S.C. § 2283, perinits a federal court to

protect the claim-preclusive effect of its judgments.

2. Whether a court, in determining the claim-preclusive

effect of a previous order of dismissal, may disregard the

explicit statement that the dismissal was "with prejudice."

(i)

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES................. iv

INTEREST OF AMICUS CURIAE ............. 1

| WE 6 Pe ee a cc. 3

| REASONS FOR GRANTING THE PETITION ...... 5

CN 6c os eae oo 15

(iii) }

TABLE OF AUTHORITIES

Cases

American Dredging Co. v. Miller,

BOO Wc ME REDD 6 66 oe nee we e's

Baris v. Sulpicio Lines, Inc..,

932 F.2d 1540 (Sth Cir.),

cert. denied, 502 U.S. 963 (1991) .....

Charchenko v. City of Stillwater,

47 F.3d 981 (8th Cir. 1995) .........

Chick Kam Choo v. Exxon Corp.,

Be i WE bees ps ce eee

Costello v. United States,

Se | eee ee ee

Daewoo Electronics Corp. of America,

Inc. v. Western Automobile Supp!y Co..,

975 F.2d 474 (@th Cir. 1992) ........

De Aguilar v. Boeing Co., 11 F.3d 55

et ee I oe he ek sm Wwe

Delgado v. Shell Oil Co., 890 F. Supp.

ee Py Se

Deus v. Allstate Insurance Co..,

15 F.3d 506 (Sth Cir.), cert. denied,

RED Gy Sh re Ge we eae 0 ne ee

Farias v. Bexar County Board of Trustees,

925 F.2d 866 (Sth Cir.), cert. denied,

oR | ee

Farmanfarmaian v. Gulf Oil Corp..,

388 F.2d S80 (Gd Cir. 1975) .....'...°.

(iy)

(iv

Vv

Gulf Oil Corp. v. Gilbert, 330 U.S.

MRS nee ee ey, eke ES. ok ble 13

Hart v. Yamaha-Parts Distributors, Inc.,

787 F.2d 1468 (11th Cir. 1986) ............ li

Huguley v. General Motors Corp.,

Pee wae Bee Oe Ge, BO kc ss ok Ss ws 6

Ikospentakis v. Thalassic Steamship Agency,

oe oo Le A i4

In re G.S.F. Corp., 938 F.2d 1467

Se ee ars te a ek Se 6

King v. Provident Life & Accident

Insurance Co., 23 F.3d 926

EE erie i 14

Koke v. Phillips Petroleum Co..,

730 F.2d 211 (Sth Cir. 1984),

overruled in part, In re Air Crash

Disaster Near New Orleans, 821

F.2d 1147 (Sth Cir. 1987) (en banc) .......... 3

Needham v. Phillips Petroleum Co.,

719 F.2d 1481 (10th Cir. 1983) ............. 3

Parsons Steel, Inc. v. First Alabama Bank,

RS fe ee 7,9

Picco v. Global Marine Drilling Co.,

900 F.2d 846 (Sth Cir. 1990) ............. 14

Piper Aircraft Co. v. Reyno, 454 U.S.

Ries ETS A ag a a 2, 13

Saylor v. Lindsley, 391 F.2d 965

RN Ne Ee i ool ae cli 6 10

Sequihua v. Texaco, Inc..,

847 F. Supp. 61 (S.D. Tex. 1994) ........... 3

Staffer v. Bouchard Transportation Co..,

Gre ban ere cee cw. 1989)... ww kkk 5, 6

Vi

Toucey v. New York Life Insurance Co..,

Pe Se: RE o's Gk 8 hes ee eee bee 9

Villar v. Crowley Maritime Corp.,

990 F.2d 1489 (Sth Cir. 1993),

cert. denied, 510 U.S. 1044 (1994) .......... 14

Weissinger v. United States,

423 F.2d 795 (Sth Cir. 1970) ........ 10, 11, 12

Western Systems, Inc. -’. Ulloa,

958 F.2d 864 (9th Cir. 1992),

cert. denied, 506 U.S. 1050 (1993) ......... 6,9

Statutes and Rules

as Oe ho 0 & ooo Re kee 5,8

, See § XP ea rere ers 11

Pe: 2. ee. ee 06 oo ee Fb OE ERS 10, 11

Miscellaneous

H.R. Rep. No. 80-308, at A181-82 (1947),

reprinted in Revisorx’s Note to § 2283,

Be Ses i PD ow Pe Ae oe aks 9

George A. Martinez, The Anti-Injunction Act:

Fending Off the New Attack on the

Relitigation Exception, 72 Neb. L. Rev.

SRS ER ERT BFR LE mace Fest ae or 9

17 Wright, Miller & Cooper, Federal

Practice and Procedure (1996 Supp.) .......... 8

Restatement (Second) of Judgments (1982) .... 8, 12, 14

Restatement (Second) of Conflict of Laws (1971) ..... 13

:

:

In The

Supreme Court of the United States

OCTOBER TERM, 1996

No. 96-1339

CALTEX PETROLEUM CORPORATION, et ai.,

- Petitioners,

VICTOR C. BARIS, et al.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

BRIEF OF THE

AMERICAN PETROLEUM INSTITUTE

AS AMICUS CURIAE SUPPORTING PETITIONER

INTEREST OF AMICUS CURIAE

The American Petroleum Institute ("API") is a national

trade association whose more than 300 corporate members

represent all facets of the petroleum industry: exploration,

production, transportation, refining and marketing. API

frequently participates as amicus curiae in judicial proceedings

that have national significance and that are likely to be of

recurring interest to its members. As an amicus, API takes no

(1)

2

position on the facts or the legal merits of the underlying

claims by plaintiffs against defendants. API strongly believes,

however, that plaintiffs’ Louisiana state-court litigation against

defendants should be enjoined, because it is barred by the

District Court’s 1992 dismissal with prejudice. Since the

dismissal order imposed conditions that required the

defendants to waive valuable rights, and since plaintiffs have

taken advantage of these conditions, it would be particularly

unfair to allow the duplicative Louisiana litigation to proceed.

Although they are U.S. companies, many members of

API (and their international affiliates) have worldwide

operations and markets. The international aspects of their

business and the attractiveness of U.S. courts to foreign

claimants make it inevitable that API members will frequently

be sued in U.S. courts with respect to events taking place

overseas that have no connection with the U.S. jurisdictions

in which the suits are brought. See Piper Aircraft Co. v.

Reyno, 454 U.S. 235, 252 & n. 18 (1981) (American courts

are "extremely attractive to foreign plaintiffs" because U.S.

law imposes strict liability, plaintiffs may choose from 50

different jurisdictions with different legal rules, jury trials and

contingent-fee arrangements are available, and losing parties

are not taxed with their opponents’ legal costs). API thus has

a strong interest in the development and application of the

doctrine of forum non conveniens.

In recent years, members of API have secured dismissals

of cases brought by foreign claimants in U.S. courts based on

the doctrine of forum non conveniens. The dismissals have

been conditioned on the members’ consenting to the

jurisdiction of foreign courts and accepting certain other

3

conditions, like those imposed on defendants and acted upon

by plaintiffs here, as the "price" of dismissal.'

U.S. companies do not accept such conditions lightly,

because the consequences of subjecting themselves to the

jurisdiction of foreign courts, litigating under foreign legal

regimes, and agreeing to pay foreign judgments are

significant. API is accordingly concerned that, following

forum non conveniens dismissals, foreign plaintiffs might be

able both to take advantage of the conditions imposed on those

dismissals and to pursue duplicative litigation in the United

States. That is the situation presented here.

STATEMENT

This case has had a long and complex procedural history.

The underlying accident, a collision between two vessels in

Philippine waters, occurred in 1987. Litigation began shortly

thereafter in courts in the Philippines. A purported class

action was also filed in state court in Texas; this action was

removed to federal district court, and then dismissed in 1990

on forum non conveniens grounds. On appeal, the Fifth

Circuit vacated and remanded for a more thorough explication

of the forum non conveniens analysis. See Baris v. Sulpicio

Lines, Inc., 932 F.2d 1540, 1551-52 (5th Cir.), cert. denied,

502 U.S. 963 (1991). The court also required that conditions

be imposed on the dismissal to facilitate litigation in the courts

of the Philippines. See id.

' In addition to this case, see Chick Kam Choo v. Exxon Corp., 486

U.S. 140 (1988); Farmanfarmaian v. Gulf Oil Corp., 588 F.2d 880 (2d

Cir. 1978); Koke v. Phillips Petroleum Co. , 730 F.2d 211 (Sth Cir. 1984),

overruled in part, In re Air Crash Disaster Near New Orleans, 821 F.2d

1147, 1163 n.25 (Sth Cir. 1987) (en banc); Needham v. Phillips Petroleum

Co., 719 F.2d 1481 (10th Cir. 1983); Delgado v. Shell Oil Co., 890 F.

Supp. 1324 (N.D. Tex. 1995); Sequihua v. Texaco, Inc., 847 F. Supp. 61

(S.D. Tex. 1994).

4

While this appeal was pending, the plaintiffs filed a

second, identical suit in Texas court. This suit was also

removed to federal court and consolidated with the first

action. The district court then performed the forum non

conveniens analysis ordered by the Fifth Circuit, and entered

an order dismissing the consolidated actions with prejudice.

The plaintiffs sought and obtained a number of conditions on

this dismissal, including requirements that the defendants

(1) consent to service of process and jurisdiction in the

Philippines, (2) waive any statute of limitations defense,

(3) agree to use in the courts of the Philippines of materials

already acquired in U.S. discovery, (4) agree to produce

evidence and witnesses in the courts of the Philippines, and

(5) agree to satisfy any final judgment of those courts.”

After the dismissal, the plaintiffs initiated several suits in

the Philippines, taking full advantage of the defendants’

concessions. Then, in December 1993, a year after the order

of dismissal became final, the plaintiffs served on the

defendants an essentially identical class-action suit that they

had secretly filed in state court in Louisiana five years earlier,

and as to which they had requested that the clerk withhold

service. The defendants moved the Texas federal district

court to protect and effectuate its dismissal by enjoining the

Louisiana action. The district court denied the motion, and

the defendants appealed. On different grounds, a panel of the

Fifth Circuit affirmed. Rehearing en banc was granted, and

the panel’s opinion was vacated. The en banc court was,

however, equally divided (8 to 8), and so did not reach a

decision; this operated to affirm the judgment of the district

court. Petitioners have asked the Court to review this

decision.

2 The plaintiffs appealed from the dismissal order; their appeal was

dismissed as untimely in December 1992.

ee

—S—S—D

5

REASONS FOR GRANTING THE PETITION

This case presents the Court with an opportunity to

consider two separate but related issues, each of which has

divided the courts of appeals, and each of which is of great

importance to the continued vitality of the forum non

conveniens doctrine. The first of these issues is whether this

Court’s determination in Chick Kam Choo v. Exxon Corp.,

486 U.S. 140 (1988), that the relitigation exception to the

Anti-Injunction Act, 28 U.S.C. § 2283 (1994), is limited to

"claims or issues" that "actually have been decided by the

federal court," 486 U.S. at 148, should be read to prohibit

injunctions intended to protect the claim-preclusive effect of

a federal court’s judgment. The second issue is whether a

court assessing the claim-preclusive effect of a previous

dismissal is permitted to disregard the previous court’s

specific statement that the dismissal was "with prejudice."

1. In Chick Kam Choo, a federal court dismissed an

action on forum non conveniens grounds without specifying

that the dismissal was "with prejudice.” This Court held that

the relitigation exception to the Anti-Injunction Act did not

allow the federal court to enjoin a subsequent action in Texas

state court. The Court said that "an essential prerequisite for

applying the relitigation exception is that the claims or issues

which the federal injunction insulates from litigation in state

proceedings actually have been decided by the federal court."

486 U.S. at 148. Because "the Texas courts would apply a

significantly different forum non conveniens analysis," the

Court concluded that "whether the Texas state courts are an

appropriate forum” was an issue that had not been litigated in

the federal court. Jd. at 149 (emphasis in original).

The courts of appeals are divided over whether the

"actually . . . decided" requirement of Chick Kam Choo

applies to claim preclusion as well as issue preclusion. The

leading case on one side of the split is Staffer v. Bouchard

6

Transportation Co. , 878 F.2d 638 (2d Cir. 1989). In Staffer,

the Second Circuit, citing Chick Kam Choo’s statement that

the relitigation exception is limited to "claims or issues" that

"actually have been decided by the federal court," held that

the exception "does not protect the full res judicata effect of

the [first] court’s judgment; rather, it protects only matters

that actually have been decided by a federal court." Jd. at

643. Although Staffer did not use the terminology of issue

and claim preclusion, it clearly holds that Chick Kam Choo’s

"actually ... decided" requirement applies to claim

preclusion as well as issue preclusion. The Fifth Circuit

appears to agree with the Second Circuit’s approach in Staffer.

See Farias v. Bexar County Bd. of Trustees, 925 F.2d 866,

880 (Sth Cir.) (concluding that Chick Kam Choo does not

permit injunctions to protect the full claim-preclusive effect of

a judgment), cert. denied, 502 U.S. 866 (1991).’

In Western Systems, Inc. v. Ulloa, 958 F.2d 864 (9th Cir.

1992), cert. denied, 506 U.S. 1050 (1993), the Ninth Circuit

specifically rejected this holding of Staffer, concluding that to

read Chick Kam Choo in this way “would in essence be to

read res judicata entirely out of section 2283." Id. at 869-70.

Instead, the Ninth Circuit held that the relitigation exception

authorizes federal courts to issue injunctions to protect the full

claim-preclusive effect of their judgments. The Sixth and

Eighth Circuits have adopted a similar approach. See Huguley

v. General Motors Corp., 999 F.2d 142, 147-48 (6th Cir.

1993); Daewoo Electronics Corp. of America, Inc. v. Western

Auto Supply Co., 975 F.2d 474, 474-78 (8th Cir. 1992); see

also In re G.S.F. Corp., 938 F.2d 1467, 1478-79 (1st Cir.

1991) (applying Chick Kam Choo by analogy in a bankruptcy

3 In Deus v. Allstate Ins. Co., 15 F.3d 506, 525 (Sth Cir.), cert.

denied, 115 S. Ct. 573 (1994), the court, without citing Farias, came to

the opposite conclusion in dicta. Farias nevertheless remains the law of

the Fifth Circuit.

7

case, and reading it to permit an injunction to protect the

terms of a stipulation and release).‘

This case is an appropriate vehicle for resolving the split

between Staffer and Ulloa.° As explained more fully below,

see infra pp. 10-13, the district court’s dismissal "with

prejudice" is entitled to claim-preclusive effect. Under

Staffers reading of the Anti-Injunction Act, however, only the

issue-preclusive effect of a federal court’s judgment may be

protected by injunction. As Chick Kam Choo made plain,

issue preclusion does not run between a federal forum non

conveniens determination and a state court’s application of its

own, different forum non conveniens analysis.° Because the

district court’s forum non conveniens dismissal has no issue-

preclusive effect as to the Louisiana proceeding, that

* In Parsons Steel, Inc. v. First Alabama Bank, 474 U.S. 518 (1986),

the Court declined to reach the question whether the relitigation exception

permits the issuance of injunctions "in situations where the later state

action involves claims that could have been litigated, but were not actually

litigated, in the prior federal action.” Jd. at 526 n.4. The Court’s explicit

reservation of this question in Parsons Steel suggests that Chick Kam Choo,

which was decided shortly afterwards, and in which the Court also did not

need to reach this question, should be read to have left the question open.

> Both petitioners and respondents argued this question to the courts

below. See, e.g., Pet. C.A. Br. 32 (asserting that a dismissal “with

prejudice” is res judicata and can serve as the basis of an injunction, and

citing Ulloa for this proposition); Resp. C.A. Br. 38 (asserting that the

relitigation exception may only be applied on a “strong and unequivocal

showing of relitigation of the same issue").

© See 486 U.S. at 148 ("Federal forum non conveniens principles

simply cannot determine whether Texas courts, which operate under a

broad ‘open-courts’ mandate, would consider themselves an appropriate

forum for petitioner’s lawsuit. . . . Thus, whether the Texas state courts

are an appropriate forum for petitioner’s Singapore law claims has not yet

been litigated, and an injunction to foreclose consideration of that issue is

not within the relitigation exception.").

8

proceeding may not be enjoined under Staffer’s reading of the

Anti-Injunction Act.

Under the approach of Ulloa, however, which permits

injunctions based on both the issue-preclusive and the claim-

preclusive effects of a federal judgment, an injunction would

be permitted. The plaintiffs’ Louisiana action is based on the

same set of facts as the dismissed federal action, and therefore

is barred by principles of claim preclusion, and could be

enjoined by the district court. See Restatement (Second) of

Judgments § 24(1) (claim preclusion bars a separate action

based on the same "transaction, or series of transactions," as

the original action).

Ulloa’s is clearly the sounder approach. Although the

Court in Chick Kam Choo stated that the relitigation exception

is limited to "claims or issues" that "actually have been

decided by the federal court," 486 U.S. at 148, elsewhere in

its opinion, the Court described the relitigation exception as

"founded in the well-recognized concepts of res judicata and

collateral estoppel," implying that the application of claim

preclusion would be appropriate. Jd. at 147. See also 17

Wright, Miller & Cooper, Federal Practice and Procedure

§ 4226 at 202 n.12.1 (1996 Supp.) (concluding that Staffer

seems an "unduly restrictive" reading of Chick Kam Choo).

Staffer’s reading of Chick Kam Choo also clashes with the

plain language of the Anti-Injunction Act. The Act’s language

permits federal courts to enter injunctions to "protect or

effectuate" their judgments. 28 U.S.C. § 2283 (1994). A

large class of dismissals have claim-preclusive effect, but no

meaningful issue-preclusive effect; these include dismissals for

failure to prosecute, dismissals for failure to comply with the

Federal Rules or with an order of the court, and dismissals

following settlements. Under Staffer’s reading of the Act,

following a dismissal in one of these categories, the court

would have no power to enjoin an identical action brought in

9

state court; in other words, the court would be powerless to

"protect or effectuate" its judgment.’

The legislative history of the Anti-Injunction Act confirms

the conclusion that Congress intended to permit injunctions to

protect a judgment’s claim-preclusive effect. Congress added

the "protect or effectuate" language to the Anti-Injunction Act

with the intention of overruling Toucey v. New York Life Ins.

Co., 314 U.S. 118 (1941), in which this Court held that the

Act lacked a relitigation exception. See Parsons Steel, 474

U.S. at 524. The Revisor’s Note to § 2283 states that "the

revised section restores the basic law as generally understood

and interpreted prior to the Toucey decision.” See H.R. Rep.

No. 80-308, at A181-82 (1947), reprinted in Revisor’s Note

to § 2283, 28 U.S.C. p. 503 (1994); see also Parsons Steel,

474 U.S. at 524 (citing the Revisor’s Note as authority as to

Congress’s intent in amending section 2283). As generally

understood and interpreted before Toucey, the relitigation

exception permitted injunctions to protect a judgment’s claim-

preclusive effect. See George A. Martinez, The Anti-

Injunction Act: Fending Off the New Attack on the Relitigation

Exception, 72 Neb. L. Rev. 643, 662-69 (1993) (citing pre-

Toucey cases in which such injunctions were entered or

approved). The reach of the relitigation exception must

therefore be- interpreted in light of this pre-7Joucey practice.

7 The facts of Ulloa demonstrate what the consequences of this

powerlessness would be. In Ulloa, the plaintiff in a case that had been

proceeding for seventeen years in the United States District Court for the

District of Guam (with four appeals to the Ninth Circuit) concluded a

settlement, and then filed an essentially identical action in state court. See

Ulloa, 958 F.2d at 871. Because the case had been settled, issue

preclusion did not apply; only an injunction based on claim preclusion

would have sufficed to prevent the plaintiff from flouting a settlement

arrived at after seventeen years of litigation.

10

2. Apart from the question whether Chick Kam Choo

permits injunctions to protect the claim-preclusive effect of a

federal judgment, this case presents the question whether a

forum non conveniens dismissal "with prejudice" should be

accorded claim-preclusive effect. Once again, the courts of

appeals appear to be divided.

Two Circuits, the Second and the Eighth, are of the view

that a district court’s statement that its dismissal is "with

prejudice" should not be accorded any weight. In their view,

a court considering the preclusive effect of a prior dismissal

should concern itself only with the grounds for the dismissal,

not with the language of the order of dismissal. In Saylor v.

Lindsley, 391 F.2d 965, 967-68 (2d Cir. 1968), the Second

Circuit found that a prior dismissal should not be given claim-

preclusive effect, as the dismissal had been for failure to post

a bond, and hence was not "on the merits" for res judicata

purposes. The court noted that the dismissal had been "with

prejudice," see id. at 967, but did not accord this statement

any weight in its analysis. Similarly, in Charchenko v. City

of Stillwater, 47 F.3d 981, 985 (8th Cir. 1995), the court

considered only the grounds of the previous dismissal (which

had been for lack of jurisdiction), even though the previous

dismissal was "with prejudice.”

Two other Circuits — the Fifth and the Eleventh — have

endorsed a different approach. In the Fifth Circuit case,

Weissinger v. United States, 423 F.2d 795 (Sth Cir. 1970) (en

banc), a district court had dismissed "with prejudice” at the

end of a full trial, on the ground that the plaintiff had failed

to serve a demand on the defendants. Jd. at 796-97.°

® The vacated Fifth Circuit panel opinion attempted to distinguish

Weissinger, see Pet. App. 54a n.5, but its attempt is wholly unconvincing.

Weissinger’s interpretation of Fed. R. Civ. P. 41(b) did not turn on “three

sentences in rule 41(b) that since have been deleted,” but instead on the

current language of the Rule. See Weissinger, 423 F.2d at 798-99

ee ee

11

Weissinger found that this dismissal should be accorded claim-

preclusive effect, and hence barred a second suit on the same

claim. The Weissinger court concluded that it was bound to

follow the language of the dismissal order, and read Federal

Rule of Civil Procedure 41(b) to mean that a district court

may, by specifying that its dismissal is "with prejudice,” give

claim-preclusive effect to a dismissal that would not otherwise

be claim-preclusive. Jd. at 798-99. The court concluded that

the functional approach adopted by the Court in Costello v.

United States, 365 U.S. 265 (1961), applies only to dismissals

that, like the one at issue in Costello, do not specifically state

whether they are with prejudice. Jd. at 799. In Hart v.

Yamaha-Parts Distributors, Inc., 787 F.2d 1468, 1470 (11th

Cir. 1986), the Eleventh Circuit endorsed Weissinger’s

approach.

Weissinger’s approach is superior to that of Saylor and

Charchenko. A district court must have the power to control

the claim-preclusive effect of its own judgments; certain

situations, like those in Weissinger and in the present case,

require that a judgment that would not ordinarily be claim-

preclusive have claim-preclusive effect. The only instrument

by which a district court can exercise this power is through a

specification that a dismissal is "with prejudice." Of course,

a party that objects to a dismissal with prejudice is entitled to

take an appeal.

An approach intermediate between Saylor’s functional

approach and Weissinger’s emphasis on the language of the

order of dismissal would take equitable considerations into

account in determining whether to enforce a dismissal "with

(concluding, based on the present second sentence of Rule 41(b) and on the

present text of Rule 41(a), that it is "[t}he scheme of the Rules" to “give

full effect to unambiguous dismissal orders which specify that they are

‘with prejudice’ or ‘without prejudice’").

12

prejudice." This is the position endorsed by the Restatement

(Second) of Judgments. See Restatement (Second) of

Judgments § 20 cmt. n (1982) (stating that "in some instances,

the doctrines of estoppel or laches could require the

conclusion that it would be plainly unfair to subject the

defendant to a second action").? This approach is not as easy

to apply as Weissinger’s bright-line rule, but is still superior

to Saylor’s purely functional analysis.

The petitioners would prevail under either Weissinger’s

rule or the equitable approach proposed by the Restatement.

In this case, the district court’s original dismissal was "with

prejudice." Under Weissinger’s approach, the dismissal means

what it says, and hence would be given claim-preclusive

effect. The respondents were well aware that the district

court’s dismissal "with prejudice" could give rise to claim

preclusion.’° If they wished to contest this outcome, they

should have filed a timely appeal.

The petitioners would also prevail under an equitable

analysis. The district court’s forum non conveniens dismissal

imposed substantial burdens on the petitioners. It occurred

° Indeed, the Reporter’s Note to comment d to the same section cites

Weissinger as an instance of the application of the principle set forth in

comment n. The Weissinger court did comment on the equities of the case

before it: it observed, for instance, that "a dismissal specified to be with

prejudice, entered after full trial on all issues and with complete findings

and conclusions,” could not “be treated as a mere warm-up for another

trial if the unsuccessful party decides, without an appeal, that he would like

to go around the track again.” 423 F.2d at 800. These observations

appear to be an alternate ground for the Weissinger court’s decision.

10 See R. Vol. 6 at 1127 (asserting in a brief that defendants’ "effort

to obtain a dismissal with prejudice is a thinly veiled attempt to prevent

prosecution of the Plaintiffs’ claims not only in this forum, but also in the

State courts," and specifically referring to the preclusive effect on the

Louisiana suit).

13

after a detailed analysis (including submission by the

petitioners of several affidavits secured in the Philippines),

and required the petitioners to waive a number of valuable

legal rights.'' The respondents, for their part, instead of

filing a timely appeal, availed themselves of the conditions

imposed upon the forum non conveniens dismissal by initiating

litigation in the Philippines. They therefore accepted the

bargain inherent in the forum non conveniens dismissal.

3. The use of the forum non conveniens doctrine to

dismiss cases better tried in foreign courts serves a number of

important objectives. These include sparing the United States

courts, which are "extremely attractive to foreign plaintiffs,"

the burden of excessive litigation, Piper Aircraft Co. v. Reyno,

454 U.S. 235, 252 (1981); sparing our courts the need to

"untangle problems in conflict of laws," and in foreign law,

id. at 251 (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501,

509 (1947)); protecting the "local interest in having localized

controversies decided at home," Gulf Oil Corp., 330 U.S. at

509; freeing defendants from the burden of litigating in an

inconvenient or "vexatious" forum, id. at 508; and furthering

"These included waiving any challenge in the Philippines based on

service of process, jurisdiction, the statute of limitations, and the use of

U.S. discovery. Petitioners were also required to agree to produce

witnesses and evidence in the Philippines, and to satisfy any final judgment

of the Philippines courts. These were substantial concessions: to discuss

only the last of them, petitioners thereby waived any defense to U.S.

enforcement of a judgment of the courts of the Philippines based on

failures of those courts to accord petitioners due process of law. See

Restatement (Second) of Conflict of Laws § 98 (1971) (permitting such a

defense). Especially given the magnitude of the plaintiffs’ claims, the

prejudice to the petitioners associated with foregoing these rights may

fairly be compared with the prejudice to a defendant in an ordinary civil

case who must "prepare to meet the merits,” Costello’s test for the

circumstances in which a judgment is typically claim preclusive. See

Costello, 365 U.S. at 286.

14

international comity, see American Dredging Co. v. Miller,

510 U.S. 443, 466 (1994) (Kennedy, J., dissenting). Courts

often do as the district court in the present case did, and place

conditions on forum non conveniens dismissals designed to

ensure that the plaintiffs can pursue their claims in the foreign

forum. If conditional forum non conveniens dismissals are not

claim-preclusive,’* many plaintiffs will simply file a second

suit (perhaps secretly, as the respondents did) in a State that

applies a different forum non conveniens analysis, and the

defendant will be compelled to begin litigation anew."

Thus, in the absence of claim preclusion, conditional forum

non conveniens dismissals will have the perverse effect of

assuring the plaintiffs both a United States forum and a more

' A claim-preclusive forum non conveniens dismissal would not, of

course, bar the prosecution of litigation in the appropriate foreign forum;

it would, however, be claim-preclusive as to every other jurisdiction.

Courts have the general power to limit the claim-preclusive effects of their

own judgments, see King v. Provident Life & Acc'dent Ins. Co., 23 F.3d

926, 928-29 (Sth Cir. 1994); Restatement (Second) of Judgments § 26(1)(b)

(1982) (stating that claim preclusion does not apply if "[t}he court in the

first action has expressly reserved the plaintiff's right to maintain the

second action"); that is what has occurred in the present case.

'S Gaming is pervasive in forum non conveniens litigation; plaintiffs

all too often bring a collection of actions in different fora, either

simultaneously or seriatim. See, e.g., De Aguilar v. Boeing Co., 11 F.3d

55, 56 (Sth Cir. 1993) (four state court filings, all of which were removed

and dismissed on either forum non conveniens or collateral estoppel

grounds); Villar v. Crowley Maritime Corp., 990 F.2d 1489 (Sth Cir.

1993) (one federal and two state court filings), cert. denied, 510 U.S. 1044

(1994); Ikospentakis v. Thalassic Steamship Agency, 915 F.2d 176, 180

(Sth Cir. 1990) (finding it an abuse of discretion for the district court to

grant a plaintiff leave to obtain a voluntary dismissal from federal court in

order to re-file in Louisiana court and thereby to escape the effect of the

forum non conveniens doctrine, given the resulting prejudice to the

defendant); Picco v. Global Marine Drilling Co., 900 F.2d 846, 848 (Sth

Cir. 1990).

15

hospitable foreign forum. It will be a rare defendant that will

court this result by moving to dismiss on forum non

conveniens grounds; the continued vitality of the doctrine is

therefore at risk.'* Permitting forum non conveniens

dismissals to be claim-preclusive, and allowing a claim-

preclusive dismissal to serve as the basis of an injunction, will

ensure that the doctrine may be applied without leading to this

sort of wasteful and burdensome jurisdictional mitosis.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

Joanne B. Grossman

Robert A. Long, Jr.*

R. Justin Smith

COVINGTON & BURLING

1201 Pennsylvania Ave., N.W.

P.O. Box 7566

Washington, D.C. 20044-7566

(202) 662-6000

Counsel for

The American Petroleum Institute

March 24, 1997 * Counsel of Record

4 In his dissent in American Dredging, Justice Kennedy suggested that

that decision “makes forum non conveniens something of a derelict in

maritime law." 510 U.S. at 468-69. Either Staffer or Saylor would extend

this result to the law at large.