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LAKER AIRWAYS LTD. v. PAN AM

December 20, 1984

LAKER AIRWAYS LIMITED, Plaintiff,
v.
PAN AMERICAN WORLD AIRWAYS, INC., et al., Defendants; LAKER AIRWAYS LIMITED, Plaintiff, v. SABENA, BELGIAN WORLD AIRWAYS, et al., Defendants; LAKER AIRWAYS LIMITED, Plaintiff, v. UNION DE TRANSPORT AERIENS, et al., Defendants



The opinion of the court was delivered by: GREENE

 This is an antitrust action brought by Laker Airways (Laker) against a number of American and foreign airlines. Presently before the Court is Laker's motion for an injunction to restrain British Airways Board Ltd. (British Airways) and British Caledonian Airways (British Caledonian) from petitioning the British Parliament or the British executive authorities to enact legislation which would prohibit Laker, under threat of criminal punishment, from continuing with this lawsuit. For an understanding of the issues, it is appropriate, at the outset, to summarize the course of this litigation to date.

 I

 On November 24, 1982, Laker brought an action in this Court under the Sherman Act (15 U.S.C. §§ 1 and 2) and the Clayton Act (15 U.S.C. § 15) against four American defendants and four foreign airlines. *fn1" On February 15, 1983, Laker brought a second action, this one against Sabena Belgian World Airlines (Sabena) and KLM Royal Dutch Airlines (KLM), and on September 22, 1983, a third action was filed, naming Union de Transports Aeriens (UTA) and Scandanavian Airlines System (SAS) as defendants. All three actions, which have since been consolidated, allege that the defendants were involved in a conspiracy to destroy Laker's transatlantic charters and its low-cost "Skytrain" service through a predatory pricing scheme and through interference with Laker's attempts to obtain necessary financing. It is further alleged that, as a result of this conspiracy, Laker was forced into liquidation.

 On January 21, 1983, British Airways filed an action against Laker in the Queen's Bench Division, Commercial Court of the High Court of Justice, in Great Britain, seeking a permanent injunction *fn2" to prevent Laker from continuing with its suit against British Airways in the United States. *fn3" Immediately thereafter, British Caledonian, Lufthansa, and Swissair filed similar actions in the British courts.

 The British High Court of Justice issued the requested injunctions, restraining Laker from taking "any further steps" to prosecute its claims in the courts of this country against the British airlines *fn4" or against Lufthansa and Swissair. *fn5"

 Faced with the fait accompli injunctions obtained by four of the defendants to this lawsuit, and concerned that the remaining defendants might take similar actions to frustrate the jurisdiction of this Court and Laker's ability to maintain its suit, this Court, upon Laker's request, enjoined the remaining four defendants -- TWA, Pan Am, McDonnell Douglas, and McDonnell Douglas Finance -- "from taking any action, in a foreign court or otherwise, that would in any way impair or otherwise interfere with the jurisdiction of this Court over the matters alleged in the Complaint herein or the freedom of the plaintiff to prosecute the instant proceeding." The Court subsequently issued essentially the same order against Sabena, KLM, UTA and SAS. *fn6" Laker Airways Ltd. v. Pan American World Airways, 559 F. Supp. 1124 (D.D.C. 1983). Sabena and KLM -- but not the other defendants -- appealed, claiming that this Court had no authority to restrain them from seeking orders in the British courts to prevent Laker from further prosecuting this lawsuit. However, the Court of Appeals affirmed this Court's decision in an exhaustive opinion which thoroughly discussed all the issues and canvassed all the relevant legal principles. Laker Airways v. Sabena Belgian World Airways, 235 U.S. App. D.C. 207, 731 F.2d 909 (D.C.Cir.1984).

 While these matters were being litigated in this country, the litigation initiated by some of the defendant airlines continued in the British courts. The British Court of Appeal, on July 27, 1983 issued a permanent injunction against Laker restraining it from taking further proceedings in this Court, and that injunction effectively blocked Laker from even filing pleadings, briefs, or other papers in this, its own lawsuit. The Court of Appeal injunction also ordered Laker to use its best endeavors to dismiss British Airways and British Caledonian Airways from this litigation.

 However, the House of Lords granted Laker's petition for leave to appeal, and on July 19, 1984, it overruled the Court of Appeal and dissolved the injunction which that court had issued. To forestall another round of applications and orders in Great Britain, Laker, immediately following the House of Lords decision, requested this Court to issue an injunction against the two British airlines similar to that which the Court had previously entered against the other defendants.

 In their briefs and in oral argument, British Airways and British Caledonian focused on the "or otherwise" language of the proposed injunction, claiming that it impermissibly infringed their right to seek relief from the British executive and legislative branches. Recognizing that this argument raised a complex question, the Court issued a temporary injunction only so as to preserve the status quo pending further briefing of the issue. 596 F. Supp. 202. Subsequently, in response to a request from British Airways, the Court agreed to set an expiration date of December 20, 1984, nine days after oral argument, on the status quo injunction. It is the "or otherwise" issue that is presently before the Court. *fn7"

 II

 As is obvious from this chronology, the current controversy has its roots in the previous attempts of British Airways and British Caledonian -- successful for about one and one-half years -- to frustrate the jurisdiction of this Court and to interfere with Laker's right to free access to the courts of this nation. *fn8" Rather than to defend this action in the normal, accepted manner, *fn9" these two defendants have consistently preferred to seek interdictory relief elsewhere. As the Court of Appeals has noted, they did not attempt to vindicate their legal arguments in a forum of competent jurisdiction but rather "to quash the practical power of the United States courts to adjudicate claims under United States law against defendants admittedly subject to the court's adjudicatory jurisdiction." Laker Airways Ltd. v. Sabena, supra, 731 F.2d at 938.

 One result of this unusual conduct of the defendants has been the generation of significant delays in the progress of this litigation. In November 1983, this Court noted that, during the pendency of the English proceedings, its processes in regard to this case were effectively at a standstill, both because of the British injunctions then pending against Laker and because of this Court's own determination, out of respect for considerations of comity, to avoid conflict with the British courts. *fn10" Delays in production of discovery materials have been commonplace, since some of the airlines based in various foreign countries, or the governments of those countries, decided to follow the lead of the British interference by relying upon foreign blocking statutes, and they thus achieved non-compliance with the Federal Rules governing discovery. *fn11" The sum total of these activities has changed the quality of this lawsuit from a garden-variety type of antitrust suit *fn12" into one involving an "unprecedented foreign challenge to the application of the antitrust laws." *fn13"

 Ultimately, some of these problems were resolved by the decision of the House of Lords. That tribunal concluded that this was a case in which "there is a single forum only that is of competent jurisdiction to determine the merits of the claim; and that single forum is a foreign court. For an English court to enjoin the claimant from having access to that foreign court is, in effect, to take upon itself a one-sided jurisdiction to determine the claim upon the merits against the claimant but also to prevent its being decided upon the merits in his favor." British Airways Board v. Laker Airways, [1984] 3 W.L.R. 413, 420, H.L.(E). As the House of Lords further explained, Laker, British Airways, and British Caledonian "voluntarily submitted themselves to a regulatory regime which, as far as their operations within the territorial jurisdiction of the United States were concerned, required that each of them should become subject to American domestic law including American antitrust law." Id. at 424. On this basis, Britain's highest tribunal rejected the claims of British Airways and British Caledonian that they had a right not to be sued by Laker in a foreign court, or conversely, that Laker, as a British corporation, had no right to bring suit against them, *fn14" and it concluded that the two British airlines had no right to an injunction preventing the United States courts from adjudicating this case.

 The judicial branches of both the United States and the Great Britain have thus now reached the same conclusion with respect to this litigation: this Court is the only forum of competent jurisdiction; it is the only forum in which Laker may present its substantive claims; and it is the only forum in which British Airways and British Caledonian Airways may present whatever defenses they may have.

 The British defendants now state that they will not seek further injunctions in foreign courts and that they are prepared to litigate this case in this forum. *fn15" Having said that, however, these defendants are now embarked upon yet another extraneous and disruptive effort: the attempted use of the British Parliament and the British executive authorities as means for aborting this lawsuit. It is defendants' claim on the present motion that, by forbidding them from taking action in a foreign court "or otherwise" that would interfere with the jurisdiction of this Court, the injunction would permissibly prevent them from requesting the British Parliament or the British executive authorities to enact legislation which would stop Laker, once again, from further prosecuting this lawsuit. *fn16"

 The legal issues presented by the British defendants with respect to this matter are discussed below. However, the Court cannot help but observe that, considering both their actions in this litigation thus far and their present effort at obstruction, the tenacity of these defendants in seeking a resolution of this lawsuit ...


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