Vasquez v. Bridgestone ( 2003 )

United States Court of Appeals
Fifth Circuit
F I L E D
April 4, 2003
In the
Charles R. Fulbruge III
Clerk
United States Court of Appeals
for the Fifth Circuit
_______________
m 01-41161
_______________
MARIA O. VASQUEZ, ET AL.,
Plaintiffs-Appellants,
ALEJANDRA MARLEN R. DELUNA,
Intervenor Plaintiff-Appellant,
VERSUS
BRIDGESTONE/FIRESTONE, INC., ET AL.,
Defendants-Inervenor
Defendants- Appellees.
*******************
_______________
m 02-40053
_______________
MARIA O. VASQUEZ, ET AL.,
Plaintiffs-Appellants,
ALEJANDRA MARLEN R. DELUNA,
Intervenor Plaintiff-Appellant,
DANA R. ALLISON, ET AL.,
Appellants,
VERSUS
BRIDGESTONE/FIRESTONE, INC., ET AL.
Defendants-Appellees,
_________________________
Appeals from the United States District Court
for the Eastern District of Texas
_________________________
Before GARWOOD, SMITH, and BARKSDALE, manufacturer and other defendants in state
Circuit Judges. court. After defendants removed to federal
court, the district court dismissed on grounds
JERRY E. SMITH, Circuit Judge: of forum non conveniens (“f.n.c.”), finding
Mexico to be the more convenient forum. The
Car crash victims’ survivors sued the tire court also enjoined plaintiffs from pursuing
2
any claim against defendants in Texas state should act to preclude a future lawsuit brought
court or federal court. We vacate the f.n.c. elsewhere in this country.”
dismissal so that a return jurisdiction clause
may be added, and we order that the injunction Before the court dismissed Vasquez II,
be modified to conform to the Anti-Injunction plaintiffs filed a separate state court suit in
Act, 28 U.S.C. § 2283. The dismissal and Cameron County, Texas (“Vasquez III”).
injunction are otherwise free of error. They initially were represented by different
counsel before the dismissal of Vasquez II; at
I. that time, counsel of record filed an amended
This action arises from an automobile ac- petition and a petition in intervention on plain-
cident in the state of Nuevo Leon, Mexico, tiffs’ behalf. Vasquez III was removed to fed-
that killed six passengers, all Mexican citizens. eral court and ultimately dismissed by stip-
Plaintiffs and intervenors, who are family ulation.2
members of the decedents, allege that the
vehicle and one of its tires were defective, that Following the f.n.c. dismissal in Vasquez II,
the vehicle was improperly maintained, and plaintiffs also sued in Webb County, Texas.
that the driver was careless. Plaintiffs first This suit, Vasquez IV, named five defendants
filed wrongful death and survival claims not named in the three previous suits:
against defendants Bridgestone/Firestone, Inc. Bridgestone Corporation, Bridgestone/Fire-
(“Bridgestone”), General Motors Corporation stone de Mexico, S.A., Rudolph Miles and
(“General Motors”), Lucent Technologies, Sons, Inc., Dicex International, Inc., and the
Inc., and Lucent Technologies Maquiladoras, driver of the vehicle, Villanueva. Vasquez IV
Inc.,1 in federal district court in Brownsville, also included two new plaintiffs, the parents of
Texas (“Vasquez I”). That suit was dismissed one of the deceased crash victims, Ivonne
for lack of diversity jurisdiction. Juarez. After defendants removed Vasquez IV
to federal court, the Vasquez II court sua
The instant case (“Vasquez II”) was filed in sponte issued a temporary restraining order
Orange County, Texas, and removed to federal barring plaintiffs and their attorneys from ar-
district court in Beaumont, Texas. That court guing their pending motion to remand and
dismissed on grounds of f.n.c., concluding that from prosecuting any new suits.
the dispute should be heard in Mexico. The
location of the accident, the sources of proof, The Vasquez II court later issued a
plaintiffs’ home, and the lack of local interest permanent injunction that prohibited
were factors that the court found favored
Mexico. The court also determined that plaintiffs, their attorneys, their agents,
Mexican law would govern. The court dis- and all persons acting on behalf of plain-
missed with prejudice, noting in its tiffs, or in concert with any and all of the
memorandum opinion that “[a] judgment of plaintiffs or their attorneys from
dismissal under forum non conveniens here prosecuting, filing, or pursuing any suit
1 2
Lucent Technologies, Inc., and Lucent The Vasquez II court found that Vasquez III
Technologies Maquiladoras, Inc., have since settled was “an attempt by the Plaintiffs to relitigate this
and are no longer parties to this appeal. case.”
3
or case or cause of action against the found that defendants’ stipulation to submit to
defendants herein in any district court of a Mexican court’s jurisdiction in the state of
the State of Texas, and any United Nuevo Leon made Mexico an available forum.
States District Court in the State of Tex- Plaintiffs now argue that because Mexican fed-
as against the said movants. eral law provides greater damages than does
the law of Nuevo Leon, defendants should
The court reasoned that the All Writs Act, 28 have been required to submit to the jur-
U.S.C. § 1651(a), permitted it to protect the isdiction of a Mexican federal court in Mexico
finality of its f.n.c. dismissal. Plaintiffs argue City. Forum availability and adequacy are sep-
that the injunction violates the Anti-Injunction arate inquiries, however, so we reject
Act, specifically that it does not fall under the plaintiffs’ attempt to bootstrap the two.
Act’s relitigation exception. This appeal con- Indeed, plaintiffs do not dispute that an
solidates plaintiffs’ challenge to the Vasquez II available Mexican forum exists in the courts of
court’s dismissal and the permanent injunction. Nuevo Leon.
II. An alternative forum is adequate if “the
Federal courts apply the federal version of parties will not be deprived of all remedies or
f.n.c. in resolving a motion to dismiss where treated unfairly, even though they may not en-
the alternative forum is a foreign tribunal. De joy the same benefits as they might receive in
Aguilar v. Boeing Co., 11 F.3d 55, 58 (5th an American court.” Gonzalez, 301 F.3d at
Cir. 1993). We review an f.n.c. dismissal for 379-80 (citation and internal quotation marks
abuse of discretion. Gonzalez v. Chrysler omitted). In Gonzalez, we rejected the
Corp., 301 F.3d 377, 379 (5th Cir. 2002), plaintiffs’ contenti on that a foreign
petition for cert. filed, 71 U.S.L.W. 3489 (Jan. jurisdiction’s decision to limit damages and
7, 2003) (No. 02-1044). To obtain an f.n.c. limit the availability of strict liabilitySSeven to
dismissal, a party must demonstrate (1) the the point at which the lawsuit ceases to
existence of an available and adequate become economically viableSSsomehow
alternative forum and (2) that the balance of renders that jurisdiction inadequate. Id. at
relevant private and public interest factors 381. Importantly, Gonzalez also involved
favor dismissal. Alpine View Co. v. Atlas Mexican plaintiffs suing an American vehicle
Copco AB, 205 F.3d 208, 221-22 (5th Cir. manufacturer over a car accident in Mexico.
2000). Under federal f.n.c. principles, the Id. at 383. The fact that Mexico provides a
court properly found that Mexico is the more wrongful death cause of action, albeit with
convenient forum. severe damage caps,4 makes the country an
A.
An alternative forum is considered available 3
(...continued)
if the entire case and all parties can come
1987) (en banc), vacated on other grounds sub
within its jurisdiction.3 The district court nom. Pan Am. World Airways, Inc. v. Lopez, 490
U.S. 1032 (1989).
3 4
In re Air Crash Disaster Near New Orleans, Defendants’ expert stated that Nuevo Leon
La. on July 9, 1982, 821 F.2d 1147, 1165 (5th Cir. law limits wrongful death liability to approximately
(continued...) (continued...)
4
adequate forum. Piper Aircraft Co. v. Reyno, only with the understanding that suing in the
454 U.S. 235, 255 (1981). United States may be less convenient.5 Article
14(1) of the treaty states, inter alia: “All per-
B. sons shall be equal before the courts and tribu-
Once a court determines that there is an ad- nals. In the determination of . . . rights and
equate alternative forum, it must balance the obligations in a suit at law, everyone shall be
relevant private and public interest factors. Id. entitled to a fair and public hearing by a
at 254-55. Private interest factors include competent, independent, and i mpartial
tribunal.”6 We need not decide this issue,
the relative ease of access to sources of however, because the private and public
proof; the availability of compulsory factors “clearly point towards” trial in
process for attendance of unwilling, and Mexico.7 Piper, 454 U.S. at 255.
the cost of obtaining attendance of
willing, witnesses; the possibility of view Analyzing the private factors, the court cor-
of premises, if view would be rectly determined that trial should be held in
appropriate to the action; and all other Mexico. The court emphasized that plaintiffs,
practical problems that make trial of a the driver of the vehicle, and all decedents are
case easy, expeditious and inexpensive. Mexican citizens. In addition, the vehicle and
tires were manufactured, purchased, and main-
McLennan v. Am. Eurocopter Corp., Inc., 245
F.3d 403, 424 (5th Cir. 2001) (internal
5
quotation marks and citation omitted). In Plaintiffs cite In re Bridgestone/Firestone,
Piper, the Court stated that “there is ordinarily Inc. Tires Products Liability Litig., 190 F. Supp.
a strong presumption in favor of the plaintiff’s 2d 1125, 1136 (S.D. Ind. 2002), which held that
the Treaty of Peace, Friendship, Navigation and
choice of forum, which may be overcome only
Commerce between the United States and Vene-
when the private and public factors clearly
zuela gives “expatriate U.S. nationals and treaty
point towards trial in the alternative forum.” nationals residing in their home countries . . . the
454 U.S. at 255. Sti ll, the district court same preference of their choice of forum, with the
determined, consistently with Piper, that consideration that suing in a United States forum
because plaintiffs are residents of a foreign while residing in a foreign country is less likely to
country, their forum choice should be be convenient.” Plaintiffs, however, invoke the
accorded less deference. Id. at 255-56. International Covenant on Civil and Political
Rights, a separate treaty, so it is hard to see how In
Plaintiffs contend the court erred, because re Bridgestone/Firestone is relevant.
a treaty between the United States and 6
Mexico, the International Covenant of Civil International Covenant on Civil and Political
and Political Rights, entitles Mexican plaintiffs Rights, Dec. 16, 1966, art. 14(1), 999 U.N.T.S.
171.
to the same deference as American citizens,
7
See James v. Gulf Int’l Marine Corp., 777
F.2d 193, 194 n.2 (5th Cir. 1985) (stating that
4
(...continued) even where courts have interpreted forum-access
$5,700 plus an unspecified amount of “moral treaty provisions broadly, they have “still
damages” designed to compensate for humiliation, dismissed suits where the balance weighs in favor
injury to reputation, and mental anguish. of another forum”).
5
tained in Mexico. The vehicle had a Mexican Assuming arguendo that all information re-
owner, and the trip took place entirely in lating to the design and manufacture of the
Mexico. All the physical evidence and medical tires and vehicle is located in the United
reports are in Mexico; conducting trial in the States, we still find the court’s analysis
United States would require the translation of correct. The tires and vehicle were
numerous reports and witness testimony. manufactured and sold in Mexico; the vehicle’s
Federal courts have no power of compulsory servicing records and the dri ver’s
process over Mexican citizens, including the recordsSSboth vital to plaintiffs’ alternative
surviving driver and passenger, police, and theories of liabilitySSare also located there.
mechanics who serviced and maintained the
vehicle. C.
Plaintiffs maintain that the court erred in
Plaintiffs point out that documents relating applying the relevant public f.n.c. factors,
to the design and manufacture of the vehicle’s which are
tires are located in the United States and must
be translated into Spanish. They also aver that administrative difficulties flowing from
the court’s refusal to permit additional court congestion; the local interest in
discovery prevented them from demonstrating having localized controversies decided
the exact role of General Motors and at home; the interest in having the trial
Bridgestone in designing and fabricating their of a diversity case in a forum that is at
products.8 Yet, even without the aid of home with the law that must govern the
additional discovery, plaintiffs argued in the action; the avoidance of unnecessary
district court that the design information is problems in conflict of laws, or in the
located in the United States, so we do not see application of foreign law; and the
how they have been prejudiced.9 unfairness of burdening citizens in an
unrelated forum with jury duty.
8
Again, plaintiffs’ reliance on In re Bridge- McLennan, 245 F.3d at 424 (internal
stone/Firestone Tires Products Liability Litig., quotation marks and citation omitted). The
190 F. Supp. 2d 1125, is problematic. Although, court determined these factors favor trial in
in that case, the multi-district litigation court de- Mexico, because the case would overburden
nied the defendant’s motion to dismiss on grounds its already overcrowded docket, Texas has
of f.n.c., some of the vehicles and tires, unlike the little local interest in the outcome, and
situation in this case, were manufactured in the Mexican law should govern the controversy.
United States. Id. at 1139-40. More importantly,
the suit involved traffic accidents in Colombia, not
Mexico; that country’s procedure rules would have Plaintiffs assert the location of Bridge-
required American deponents to travel there to stone’s main plant in Orange County, Texas,
ratify their testimony. Id. at 1138. Finally, the
court believed that political unrest could make trial
in Colombia difficult. Id. at 1143-44.
9
(...continued)
9
See HC Gun & Knife Shows, Inc. v. City of ing that a discovery ruling should be reversed only
Houston, 201 F.3d 544, 549 (5th Cir. 2000) (stat- if the complaining party demonstrates that it was
(continued...) prejudiced by the ruling).
6
refutes the court’s conclusion that there is little Plaintiffs are permitted to plead in the al-
local interest. In fact, the plant that plaintiffs ternative. FED. R. CIV. P. 8(e)(2). For pur-
reference is not the company’s principal place poses of f.n.c., however, they cannot present
of business, nor does it even produce tires. only one of their multiple liability theories for
Conversely, Mexico has an interest in pro- the sole purpose of gaining a favorable forum.
tecting its own citizens from defective prod-
ucts acquired in Mexico and causing injury For similar reasons, plaintiffs’ contention
there.10 that the court erred in its choice-of-law
determination is unavailing.11 A federal court
The linchpin of plaintiff’s argumentSSthat sitting in diversity applies the conflict-of-laws
the alleged wrongful act was the original de- rules of the state in which it sits. Klaxon Co.
sign of the vehicle and tiresSSreaches back too v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496
far in the accident’s causal chain. Identifying (1941). Texas applies the “most significant re-
the situs of the wrongful conduct as an lationship” test, Gutierrez v. Collins, 583
American designer’s drawing board ignores S.W.2d 312, 318-19 (Tex. 1979), which con-
the production, sale, and alleged failure of the siders various contacts: the place where the in-
product, which all occurred in Mexico. If jury occurred, the place where the injury caus-
accepted, plaintiffs’ argument would curtail ing conduct occurred, the parties’ residence,
the rights of foreign governments to regulate and the place where the relationship, if any,
their internal economies and threaten to engulf between the parties is centered.12
American courts with foreign claims, Gulf Oil
Corp. v. Gilbert, 330 U.S. 501, 508 (1947). Even if the design of the tires and vehicles
In addition, plaintiffs’ attempt to place the is characterized as the conduct causing injury,
alleged wrongful conduct in the United States the aggregate of other specific contacts favors
ignores their own alternative liability theories application of Mexican law. As the court rec-
that improper maintenance and careless driving ognized, all the decedents and plaintiffs are cit-
caused the accident. izens of Mexico, the accident and subsequent
investigation took place in Mexico, and the
vehicle and tires were manufactured and
purchased there.
10
See Delgado v. Shell Oil Co., 231 F.3d 165,
181 (5th Cir. 2000) (“[T]hose foreign countries The most significant relationship test fur-
[where the plaintiffs hailed from and had suffered ther requires that the specific contacts be eval-
injury] obviously have an interest in protecting the uated in light of policy considerations. Dun-
rights and welfare of their citizens.”); Kamel v. can v. Cessna Aircraft Co., 665 S.W.2d 414,
Hill-Rom Co., 108 F.3d 799, 804-05 (7th Cir.
1997) (noting that Indiana residents “have a mere
passing interest” where a foreign plaintiff is injured
in a foreign land); Torreblanca de Aguilar v. 11
We review a court’s choice-of-law
Boeing Co., 806 F. Supp. 139, 144 (E.D. Tex. determination de novo. Spence v. Glock, Inc., 227
1992) (stating that Mexico has a “paramount in- F.3d 308, 311 (5th Cir. 2000).
terest” in resolving claims brought by Mexican
12
plaintiffs arising from an air crash in Mexico that RESTATEMENT (SECOND) OF CONFLICT OF
was investigated by Mexican authorities). LAWS § 145 (1971).
7
421 (Tex. 1984). These considerations are Uniformity, predictability, and accommodation
of the competing policies of the two nations
(a) the needs of the interstate and favor applying Mexican law.
international systems; (b) the relevant
policies of the forum; (c) the relevant D.
policies of other interested states and the There is no guarantee that Nuevo Leon will
relative interests of those states in the remain an available forum or that defendants
determination of the particular issue; will submit to its jurisdiction. A return
(d) the protection of justified jurisdiction clause remedies this concern by
expectations; (e) the basic policies permitting parties to return to the dismissing
underlying the particular field of law; (f) court should the lawsuit become impossible in
certainty, predictability and uniformity the foreign forum. The “failure to include a
of result; and (g) ease in the return jurisdiction clause in an f.n.c. dismissal
determination and application of the law constitutes a per se abuse of discretion.” Rob-
to be applied. inson v. TCI/US West Communications, Inc.,
117 F.3d 900, 907-08 (5th Cir. 1997). As we
RESTATEMENT (SECOND) OF CONFLICT OF said in In re Air Crash Disaster, 821 F.2d at
LAWS § 6 (1971). A proper choice-of-law 1166:
“achieve[s] the best possible accommodation”
of both nations’ policies. Id. cmt. f. If the district court decides that the
[public and private interest factors] fa-
We are mindful of the disparate levels of vor in a foreign forum, it must finally en-
wrongful death damages provided under Texas sure that a plaintiff can reinstate his suit
and Mexican law and the incentive for plain- in the alternative forum without undue
tiffs to sue in the United States. Given that all inconvenience or prejudice and that if
decedents and plaintiffs are Mexican, however, the defendant obstructs such
there is little justification for applying Texas reinstatement in the alternative forum
law, which seeks to “protect[] the rights of its that the plaintiff may return to the
citizens to adequate compensation.”13 Were American forum.
we to apply Texas law as a means of righting
any perceived inequities of Mexican law, we The court did not include a return jurisdiction
would be undercutting Mexico’s right to clause in its dismissal order, so we vacate and
create a hospitable climate for investment.14 remand with instructions that one be added.
13
See Trailways, Inc. v. Clark, 794 S.W.2d
14
479, 486 (Tex. App.SSCorpus Christi 1990, writ (...continued)
denied) (emphasis added); see also Baird v. Bell has resolved a trade-off among the competing
Helicopter Textron, 491 F. Supp. 1129, 1150-51 objectives and costs of tort law, involving interests
(N.D. Tex. 1980). of victims, of consumers, of manufacturers, and of
various other economic and cultural values. In
14
See Gonzalez, 301 F.3d at 381-82 (“In resolving this trade-off, the Mexican people,
making this policy choice, the Mexican government through their duly-elected lawmakers, have decided
(continued...) to limit tort damages. . . .”).
8
district court sought to protect its f.n.c. dis-
III. missalSSa judgment SSso we must decide
The district court halted plaintiffs’ “judicial whether it is res judicata for purposes of the
hopscotch” by invoking the All Writs Act, relitigation exception.
which authorizes federal courts “to issue all
writs necessary or appropriate in aid of their The permanent injunction prohibited
respective jurisdictions and agreeable to the plaintiffs and counsel from pursuing “any suit
usages and principles of law.” 28 U.S.C. or cause of action against defendants” in any
§ 1651. This power dovetails with the relitiga- Texas state or federal court.16 The district
tion exception to the Anti-Injunction Act, court determined that an f.n.c. dismissal is en-
which, although generally prohibiting federal titled to claim-preclusive effect as a final judg-
courts from enjoining state proceedings, per- ment on the merits, finding also that Texas
mits a court to enjoin a state court “where nec- state courts would apply the same choice-of-
essary in aid of its jurisdiction, or to protect or law rules and “virtually the same” f.n.c. test as
effectuate its judgments.” 28 U.S.C. § 2283. a federal court. We conclude that an f.n.c. dis-
missal is not a decision on the merits, so we di-
The relitigation exception is grounded in rect the court to modify its injunction to pre-
principles of res judicata and collateral estop- vent plaintiffs from relitigating only the
pel. Chick Kam Choo v. Exxon Corp., 486 choice-of-law determination.
U.S. 140, 147 (1988). The test for the
relitigation exception is the same test used to Plaintiffs contend the injunction is
determine claim preclusion or res judicata: inappropriate because defendants failed to
“(1) the parties in a later action must be
identical to (or at least in privity with) the
15
parties in a prior action; (2) the judgment in (...continued)
the prior action must have been rendered by a prior action; (2) the issue was actually litigated in
court of competent jurisdiction; (3) the prior the prior action; (3) the determination of the issue
action must have concluded with a final in the prior action was a necessary part of the judg-
judgment on the merits; and (4) the same claim ment in that earlier action; and (4) the legal
or cause of action must be involved in both standard used to assess the issue is the same in
suits.” Regions Bank v. Rivet, 224 F.3d 483, both proceedings.” Next Level, 179 F.3d at 250
(citations and internal quotation marks omitted).
488 (5th Cir. 2000) (internal quotation marks
and citation omitted); N.Y. Life Ins. Co. v. 16
The permanent injunction order broadly for-
Gillispie, 203 F.3d 384, 387 (5th Cir. 2000). bids plaintiffs from pursuing “any suit or cause of
In Next Level Communications LP v. DSC action” against defendants; only the memorandum
Communications Corp., 179 F.3d 244, 250 opinion and temporary restraining order limit re-
(5th Cir. 1999), we recognized that the litigation of claims “arising from the August 12,
relitigation exception also applies where issue 1999 accident.” Plaintiffs do not attack the
preclusion, or collateral estoppel, exists.15 The permanent injunction order on this technicality,
however, so neither will we. See Royal Ins. Co. v.
Quinn-L Capital Corp., 960 F.2d 1286, 1294 (5th
15
“Collateral estoppel exists where: (1) the is- Cir. 1992) (“We thus reject appellants’
sue at stake is identical to the one involved in the construction of the declaratory judgment as
(continued...) artificial and unnecessarily formalistic.”).
9
demonstrate imminent harm or the lack of an application of the principle of preclusion.”
adequate remedy. Rondeau v. Mosinee Paper Southwest Airlines, Inc. v. Texas Int’l Airlines,
Corp., 422 U.S. 49, 57 (1975). Plaintiffs ar- Inc., 546 F.2d 84, 95 (5th Cir. 1977) (citation
gue that pleas of res judicata, where ap- omitted). Privity exists where, for example, a
propriate, are sufficient to protect the Vasquez party’s claim is derivative of the original
II court’s dismissal. The court’s finding that party’s claim.17
Vasquez IV was plaintiffs’ second attempt to
relitigate its “final judgment” was sufficient, Ivonne Juarez’s estate representative, Jes-
however, to enjoin further litigation. Quintero sica Juarez, is a party in Vasquez II, but her
v. Klaveness Ship Lines, 914 F.2d 717, 721 parents did not join the litigation until the ad-
(5th Cir. 1990); Next Level, 179 F.3d at 257. vent of Vasquez IV. Given that both seek
wrongful death claims on behalf of Ivonne
In Quintero, 914 F.2d at 720-21, we Juarez and are represented by the same
affirmed a decision to enforce the principles of counsel, they are in privity with one another.
res judicata in the first instance by enjoining
state court relitigation of a choice-of-law de- Our conclusion is bolstered by the fact that
termination. Though we conclude that the in- plaintiffs’ counsel named Juarez’s parents as
junction impermissibly prohibits plaintiffs from parties in two motions filed in Vasquez II; the
suing in state court, the district court did not parents also submitted a list of all companies
err by invoking the relitigation exception, sued previously to the Vasquez II court. The
which seeks to prevent the wasteful and court’s reference to all parties acting “on be-
harassing revisiting of previously decided half of” or “in concert with” plaintiffs means
matters. that Juarez’s parents were among those
properly enjoined.
A.
At least where there is claim preclusion, the The five new defendants, on the other hand,
relitigation exception applies only to the actual are not proper subjects of the injunction. The
parties of the first proceeding and those in court enjoined suit against only the moving
privity with them. Rivet, 224 F.3d at 488. defendants and did not make any findings as to
The permanent injunction designated
“plaintiffs, their attorneys, their agents, and all
persons acting on behalf of plaintiffs, or in
concert with any and all of the plaintiffs or
their attorneys,” as well as the moving
defendants. Vasquez IV contains two new 17
See Terrell v. DeConna, 877 F.2d 1267,
plaintiffsSSthe parents of decedent Ivonne 1270-73 (5th Cir. 1989) (holding that a wife bring-
JuarezSSand five new defendants not named in ing a loss-of-consortium claim cannot relitigate
Vasquez II. issues that had been decided in her husband’s
personal injury suit); Meador v. Oryz Energy Co.,
87 F. Supp. 2d 658, 665 (E.D. Tex. 2000) (finding
Privity has been described as nothing more that where two estate beneficiaries were “in privity
than a “legal conclusion that the relationship with their common ancestor for a claim belonging
between the one who is a party on the record to that ancestor, it follows that they are also in
and the non-party is sufficiently close to afford privity with each other”).
10
privity. Quintero, 914 F.2d at 721.18 Though law claim, noting that the f.n.c. dismissal “did
it is arguable that plaintiffs could have sued not resolve the merits of this claim.” Id. at
these five defendants in the original action, the 148. In other words, instead of the substantive
relitigation exception, as noted, requires that merits, “the only issue decided by the District
the claims actually be litigated in the first pro- Court was that petitioner’s claims should be
ceeding. Hatcher, 152 F.3d at 544. Even if dismissed under the federal forum non con-
the injunction otherwise falls within the re- veniens doctrine.” Id.
litigation exception, its express terms prevent
enjoining litigation against non-Vasquez II Rule 41(b) states that an order of dismissal
defendants. “operates as an adjudication on the merits”
unless the court states otherwise or the dis-
B. missal is for lack of jurisdiction, improper ven-
An f.n.c. dismissal, based on a doctrine “of ue, or failure to join a party under Rule 19.
procedure rather than of substance,” Am. FED. R. CIV. P. 41(b).20 Because an f.n.c.
Dredging Co. v. Miller, 510 U.S. 443, 453 dismissal involves the court’s “declin[ing] to
(1994), does not resolve the substantive merits exercise its jurisdiction, even though the court
and therefore falls outside the relitigation ex- has jurisdiction and venue,” Piper, 454 U.S. at
ception.19 In Chick Kam Choo, 486 U.S. at 250, it does fall under one of the three
142-43, a Singapore resident brought maritime exceptionsSSlack of jurisdiction, lack of
and Texas state law claims in federal court. In venue,21 or failure to join a party. Nor did the
granting defendant’s motion to dismiss on
grounds of f.n.c., the district court found that
Singapore law governed. The court enjoined 20
FED. R. CIV. P. 41(b) states:
the plaintiff after she refiled the Texas state
law claim and brought a new claim under Sing- For failure of the plaintiff to prosecute or
apore law in Texas state court. to comply with these rules or any order of
court, a defendant may move for dismissal
of an action or of any claim against the
The Supreme Court vacated the injunction
defendant. Unless the court in its order for
so far as it prohibited litigating the Singapore dismissal otherwise specifies, a dismissal
under this subdivision and any dismissal not
provided for in this rule, other than a
18
See Hatcher v. Avis Rent-A-Car Sys., Inc., dismissal for lack of jurisdiction, for
152 F.3d 540, 544 (5th Cir. 1998) (“Since these improper venue, or for failure to join a party
individuals were not named in the federal court ac- under Rule 19, operates as an adjudication
tion, no claim against them was actually decided by upon the merits.
the federal court.”).
21
Although the Court has observed that f.n.c. is
19
Baris v. Sulpicio Lines, Inc., 74 F.3d 567, a “supervening venue provision,” Am. Dredging,
572-73 (5th Cir.), vacated, 74 F.3d 575 (1996), 510 U.S. at 453, there is a long-standing distinction
reh’g en banc, 101 F.3d 367 (1996). The panel between a 28 U.S.C. § 1404(a) f.n.c. transfer and
opinion in Baris was vacated; an equally divided en an “improper forum,” Tel-Phonic Servs. v. TBS
banc court affirmed the court’s enjoining of re- Int’l, Inc., 975 F.2d 1134, 1141 (5th Cir. 1992).
litigation following the district court’s f.n.c. dis- This, we feel, warrants a distinction between an
missal. (continued...)
11
district court state that the dismissal was but by the preclusion law of the state in which
involuntary; the court instead stated that by the court sits.
dismissing with prejudice, it sought to
preclude plaintiffs from relitigating their claims The district court, although exercising di-
“elsewhere in this country.” versity jurisdiction, dismissed on federal pro-
cedural grounds, thus distinguishing Semtek.
Previously, rule 41(b)’s effect regarding And despite rule 41(b)’s enabling the court to
claim preclusion was questioned because of prevent relitigation of federal f.n.c. principles
the limited enumerated exceptions to its in a Texas federal court,22 we cannot, after
default rule that judgments generally be Semtek, look to the rule as a guide to the
deemed “on the merits.” 18 CHARLES ALAN judgment’s claim-preclusive effect elsewhere.
WRIGHT ET AL., FEDERAL PRACTICE AND Semtek states that rule 41(b) “would be a high-
PROCEDURE § 4435, at 140 (2d ed. 2002). ly peculiar context in which to announce a fed-
Many types of dismissals “do not seem to fall erally prescribed rule on the complex question
within the categories ‘provided for in this rule’ of claim preclusion, saying in effect, ‘All
and yet clearly should not SSand do federal dismissals (with three specified
notSSoperate as an adjudication that precludes exceptions) preclude suit elsewhere, unless the
a second action on the same claim.” Id. court otherwise specifies.’” Id. at 503. Also,
permitting a rule of civil procedure to control
the effect given a federal judgment by a state
In Semtek Int’l, Inc. v. Lockheed Martin court arguably violates the jurisdictional limi-
Corp., 531 U.S. 497 (2001), the Court reigned tation of the Rules Enabling Act.23 Id.
in rule 41(b) as a determinant of claim-
preclusion, recognizing that the meaning of Instead, we look to the longstanding rule
“judgment on the merits” has changed over that “federal common law governs the claim-
time and “has come to be applied to some preclusive effect of a dismissal by a federal
judgments” (like the instant district court’s court sitting in diversity.” Id. at 508 (citation
f.n.c. dismissal) “that do not pass upon the omitted). Fortunately, Chick Kam Choo,
merits of a claim and hence do not (in many
jurisdictions) entail claim-preclusive effect.”
Id. at 502. The Court determined that rule 22
Our statement in Quintero that an f.n.c. dis-
41(b) primarily “relates to the dismissing court missal may be designated “‘with prejudice,’ so long
itself.” That is, an “adjudication on the merits” as the plaintiff’s ability to reinstate the action is
bars refiling of the same claim in the same otherwise adequately protected,” means only that a
court but does not establish claim preclusion. court may prevent relitigation of the federal f.n.c.
Id. at 505-06. Semtek held that when a issue. 914 F.2d at 722. So far as Quintero may
diversity court dismisses a claim on state be read as permitting an f.n.c. dismissal to be
substantive law grounds, the preclusive effect afforded a broader preclusive effect, that case dealt
of the judgment is measured not by rule 41(b), only with an injunction barring relitigation of a
choice-of-law determination, so it is dictum. Id.
23
The Rules Enabling Act states that the rules
21
(...continued) “shall not abridge, enlarge or modify any
f.n.c. dismissal and an “improper venue” dismissal. substantive right.” 28 U.S.C. § 2072(b).
12
which makes no mention of rule 41, reveals they argue that today Texas would apply the
that an f.n.c. dismissal is not a claim-preclusive same or even a less deferential standard than
judgment. the federal f.n.c. standard, permitting
application of the relitigation exception. In
Chick Kam Choo characterizes a dismissal contrast to the situation in Semtek, where the
based on federal f.n.c. principles as one not re- dismissal’s preclusive effect was dictated by
solving the underlying substantive issues. 486 state preclusion law, defendants seek to have
U.S. at 148. The principle of f.n.c., as “noth- the preclusive effect of the f.n.c. dismissal turn
ing more or less than a supervening venue pro- on differences between federal and state f.n.c.
vision,” Am. Dredging, 510 U.S. at 453, law.
contemplates resolving the merits in another
forum, negating the possibility of claim- This would have the undesirable effect of
preclusion. Although an f.n.c. dismissal desig- varying the preclusive effect accorded a federal
nated on the merits may bar reconsideration of f.n.c. dismissal based on the law of the in-
the claims in another Texas federal court,24 it terpreting state. Instead, the type of federal
cannot forever bar the controversy from all common law applied to a federal procedural
American courts. To conclude otherwise dismissal, unlike a dismissal based on state
would prevent states from deciding the substantive law, does not incorporate state
openness of their courts.25 law. Chick Kam Choo, 531 U.S. at 508. The
threats of “forum-shopping . . . and . . .
Defendants seek to distinguish Chick Kam inequitable administration of the laws” that
Choo because Texas f.n.c. law has changed; Erie seeks to avoid, Hanna v. Plumer, 380
U.S. 460, 468 (1965), are non-existent where
a dismissal is based on federal procedure.
24
Even where a court enters a final f.n.c. dis- Chick Kam Choo’s observation regarding the
missal, it may reconsider the issue if there is a differences between the Texas “open courts”
change in the material facts underlying the policy and federal f.n.c. law serves only to
judgment. Exxon Corp. v. Chick Kam Choo, 817 emphasize the likelihood of a different result in
F.3d 307, 312 (5th Cir. 1987), rev’d on other state court.
grounds, 486 U.S. 140 (1988).
25
Chick Kam Choo, 486 U.S. at 148-49 C.
(“Federal forum non conveniens principles simply Whereas the f.n.c. dismissal did not decide
cannot determine whether Texas courts, which the substantive merits of plaintiffs’ claims, the
operate under a broad “open-courts” mandate, court’s choice of Mexican law did. This is
would consider themselves an appropriate forum somewhat counter-intuitive, given that a
for petitioner’s lawsuit . . . . [W]hether the Texas choice-of-law determination is a necessary part
state courts are an appropriate forum for of an f.n.c. dismissal. Piper, 454 U.S. at 245.
petitioner’s Singapore law claims has not yet been The result is that plaintiffs are not barred from
litigated.”); see also Picco v. Global Marine pursuing their claims in Texas state court so
Drilling Co., 900 F.2d 846, 848 (5th Cir. 1990)
long as they bring only Mexican law claims.
(“[Chick Kam Choo] held that a federal forum non
conveniens dismissal was not per se necessarily
res judicata of the appropriateness of state courts Key to Chick Kam Choo’s reasoning is that
as a forum for the same litigation . . . .”). a choice-of-law determination made in
13
furtherance of an f.n.c. dismissal is a decision of-law issue was “distinctly put in issue,
on the merits. Regarding the Texas law claims litigated, and determined in the former action.”
previously dismissed in federal court on Brister v. A.W.I., Inc., 946 F.2d 350, 354 (5th
grounds of f.n.c., Chick Kam Choo stated that Cir. 1991) (citation omitted). As noted,
the “validity of the claim was adjudicated” federal courts apply the same choice-of-law
once the lower court determined that analysis as the state in which they sit. Klaxon,
Singapore law governed. Chick Kam Choo, 313 U.S. at 497. Also, issue preclusion does
486 U.S. at 150. In other words, the district not require that the accompanying
co urt ’s choice-of-law determination judgmentSSin this case the f.n.c. dismissalSSbe
“necessarily precludes the application of Texas adjudicated on the merits. Acree v. Air Line
law, [so] an injunction preventing relitigation Pilots Ass’n, 390 F.2d 199, 203 (5th Cir.
of that issue in state court is within the scope 1968). Consistent, however, with Chick Kam
of the relitigation exception to the Anti- Choo, our finding that the choice-of-law deter-
Injunction Act.”26 Id.; see also Quintero, 914 mination actually adjudicated the Texas state
F.2d at 722. law claims, thereby triggering claim preclusion,
prevents application of the injunction beyond
Following the reasoning of Chick Kam the plaintiffs and those in privity.27
Choo, the district court’s decision to apply
Mexican law adjudicated plaintiffs’ Texas law For the foregoing reasons, we VACATE
claims. Even if the other f.n.c. factors were the f.n.c. dismissal and permanent injunction
found to favor Texas over Mexico, plaintiffs’ and REMAND with instruction to add a return
Texas law claims would be unsustainable in jurisdiction clause to the judgment and modify
light of the court’s adverse choice-of-law de- the injunction enjoining plaintiffs from reliti-
termination. As the district court observed, it gating the court’s choice-of-law determination.
actually rendered two judgments: (1) Mexican
law governs the controversy; and (2) the f.n.c.
factors favor dismissal and trial in Mexico.
Under Chick Kam Choo, only the former is a
decision on the merits.
Even if a choice-of-law determination were
not considered a judgment separate from the
f.n.c. dismissal, issue preclusion would make it
a proper subject of the relitigation exception.
Next Level, 179 F.3d at 249-50. The choice-
26
In maritime cases, choice-of-law is a
determination on the merits and may be treated as
27
the equivalent of a motion for summary judgment. Unlike claim preclusion, collateral estoppel
Quintero, 914 F.2d at 721; Nunez-Lozano v. does not always require complete identification of
Rederi, 634 F.2d 135, 137 (5th Cir. Unit A 1980). parties. Next Level, 179 F.3d at 255-56; Meza v.
No reason comes to mind for limiting this principle Gen. Battery Corp., 908 F.2d 1262, 1273 (5th Cir.
to maritime cases. 1990).
14