In Re Automotive

• Court: Court of Appeals for the Third Circuit
• Decided: February 13, 2004
• Docket: 02-4272
• Status: Published

Opinion

Opinions of the United 2004 Decisions States Court of Appeals for the Third Circuit

2-13-2004

In Re Automotive Precedential or Non-Precedential: Precedential

Docket No. 02-4272

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Recommended Citation "In Re Automotive " (2004). 2004 Decisions. Paper 954. http://digitalcommons.law.villanova.edu/thirdcircuit_2004/954

This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu. PRECEDENTIAL Raymond A. Just Shearman & Sterling 55 California Street IN THE UNITED STATES COURT OF 20 th Floor APPEALS San Francisco, CA 94104 FOR THE THIRD CIRCUIT ____________ Counsel for Appellant

No. 02-4272 Geoffrey C. Hazard, Jr. (Argued) ____________ University of Pennsylvania The Law School IN RE: AUTOMOTIVE REFINISHING 3400 Chestnut Street PAINT ANTITRUST LITIGATION Philadelphia, PA 19104-6204

BASF AG and BASF COATINGS AG, Gerald J. Rodos Appellants Barrack, Rodos & Bacine ____________ 2001 Market Street 3300 Two Commerce Square Appeal from the United States District Philadelphia, PA 19103 Court For the Eastern District of Pennsylvania Warren Rubin D.C. No.: MDL 1426 Law Offices of Bernard M. Gross District Judge: Honorable R. Barclay 1515 Locust Street, Suite 200 Surrick Philadelphia, PA 19102 ____________ Joseph C. Kohn Argued: December 15, 2003 Robert J. LaRocca Kohn, Swift & Graf Before: ROTH, McKEE, and ROSENN, One South Broad Street, Suite 2100 Circuit Judges Philadelphia, PA 19107

(Filed February 13, 2004 ) Howard I. Langer Columb, Honik & Langer 121 South Broad Street, 9 th Floor Stephen Fishbein (Argued) Philadelphia, PA 19107 Shearman & Sterling 599 Lexington Avenue Counsel for Appellees New York, NY 10022 William T. Hangley Edward W. Madeira, Jr. Hangley, Aronchick, Segal & Pudlin Matthew J. Hamilton One Logan Square, 27th Floor Pepper Hamilton Philadelphia, PA 19103 18 th & Arch Streets 3000 Two Logan Square Counsel for Amicus-Appellant Philadelphia, PA 19103 Fedr. German Ind. James J. Rodgers The District Court denied the Dilworth Paxson motions to dismiss for lack of personal 1735 Market Street jurisdiction and the joint motion for a 3200 The Mellon Bank Center protective order filed by two German Philadelphia, PA 19103 corporations, BASF Aktiengesellschaft (BASF AG) and BASF Coatings Counsel for Amicus-Appellant Aktiengesellschaft (BASF Coatings) Fed. Republic Germany (collectively “appellants”), defendants in the underlying antitrust litigation. The ____________ District Court construed Section 12 of the Clayton Act as authorizing OPINION OF THE COURT worldwide service of process ____________ independently of the specific venue provision contained in that statute. The ROSENN, Circuit Judge. Court also held that personal jurisdiction over the foreign corporations would be measured on their contacts with the This certified interlocutory United States as a whole, rather than with appeal, arising out of alleged unlawful the forum state. The Court finally price-fixing by both domestic and rejected a rule favoring first resort to foreign corporations, raises questions of Hague Convention procedures for considerable importance in antitrust jurisdictional discovery of foreign litigation involving foreign nationals. defendants. BASF AG and BASF Three of the issues are of first impression Coatings timely appealed. We affirm. to this Court. The first issue is whether worldwide service of process authorized I. under Section 12 of the Clayton Act, 15 U.S.C. § 22, upon foreign corporations is The underlying federal antitrust independent of the specific venue class litigation involves sixty-three provision contained in that statute. The actions filed in five states, Pennsylvania, second issue is whether a federal court’s New Jersey, Ohio, Kentucky, and personal jurisdiction over a foreign Delaware, by private parties. Those corporation in antitrust litigation may be actions were transferred to, and predicated on the foreign corporation’s consolidated in, the United States District contacts with the United States as a Court for the Eastern District of whole (national contacts analysis), rather Pennsylvania for pre-trial purposes by than with the specific forum in which the the Judicial Panel on Multidistrict court sits (local contacts analysis). The Litigation.1 The class action complaint final issue is whether jurisdictional discovery from foreign nationals may proceed under the Federal Rules of Civil 1 The defendants, in addition to the two Procedure without first resorting to the appellants here, are: PPG Industries, Inc.; Hague Convention on the Taking of E.I. DuPont de Nemours and Company; Evidence Abroad in Civil or Commercial DuPont Performance Coatings, Inc.; Matters (Hague Convention or Sherwin-William, Co.; Sherwin-William Convention). 23 U.S.T. 2555, reprinted Automotive Finishes Corporation; Akzo in 28 U.S.C. § 1781 Note. Nobel Car Refinishers B.V., a Dutch company; Akzo Nobel Coatings, Inc., a

2 alleges that from 1993 to at least jurisdictional discovery.2 In response to December 31, 2000, the foreign and the plaintiffs’ request for jurisdictional domestic defendants conspired to raise discovery, the appellants filed a joint and maintain the prices of automotive motion for a protective order, contending refinish paint throughout the United that the plaintiffs’ discovery request was States. All defendants, except the overly broad and burdensome. They appellants, have stipulated to argued also that any jurisdictional certification of a national class consisting discovery should proceed first under the of all direct purchasers of automotive Hague Convention, of which the United refinishes from the defendants. States and Germany are signatories.

The appellants filed motions to The reasons proffered by the dismiss pursuant to Federal Rule of Civil appellants’ expert, Martin Reufels, were Procedure 12(b)(2) for lack of personal that Germany, unlike the United States, jurisdiction. In support of their motions viewed the gathering of evidence as a to dismiss, the appellants submitted judicial, rather than private, function. affidavits stating that they did not have Therefore, Germany had a sovereign presence in the state of Pennsylvania and never sold any automotive refinish paint to any customers in Pennsylvania. The 2 The District Court noted the following plaintiffs replied that the appropriate facts submitted by the plaintiffs: the forum for measuring the appellants’ appellants are the holders of numerous contacts for purposes of personal patents in the United States; in its jurisdiction is the United States as a publicly released documents, such as the whole, rather than the forum state of forms filed with the Securities and Pennsylvania. The plaintiffs opposed the Exchange Commission and annual motions to dismiss and also served reports, and its web site, BASF AG jurisdictional discovery requests pursuant presents itself as part of a globally to the Federal Rules of Civil Procedure, integrated group, BASF or BASF Group, seeking production of documents consisting of BASF AG, the parent concerning the appellants’ contacts with corporation in the group and its 153 the United States as a whole. consolidated subsidiaries; BASF AG owns 100 percent of the shares of BASF The plaintiffs submitted publicly Corporation, a domestic corporation available information to show a threshold located in New Jersey; BASF AG’s case of personal jurisdiction based on the publicly released documents show that it appellants’ contacts with the United sold approximately $1.5 billion in goods States and support their request for to its wholly owned subsidiary, BASF Corporation, in 2000; according to BASF’s website, BASF Coatings has a “significant market position[ ] in North U.S. corporation; and BASF America”; BASF Coatings maintains an Corporation, a U.S. corporation based in office in Michigan; and according to New Jersey, which is part of the BASF BASF AG’s 2001 annual report, the Group, a global network of corporations BASF Group explicitly endorses the that include the two German “exchange of staff among BASF Group corporations, which are the only companies” as being “critical” in appellants in this interlocutory appeal. achieving its worldwide corporate goals.

3 interest in keeping discovery conducted Court denied the appellants’ joint motion within its borders in conformity with its for a protective order requiring the laws. According to Reufels, compelling plaintiffs to conduct their jurisdictional the appellants to produce documents discovery first under the Hague pursuant to the Federal Rules of Civil Convention procedures, rather than the Procedures would offend Germany’s Federal Rules of Civil Procedure. sovereign interests. Both the District Court and this In its order and careful Court granted the appellants’ petition for accompanying opinion, the District interlocutory appeal pursuant to 28 Court, Surrick, J., denied without U.S.C. § 1292(b). The appellants raise prejudice the appellants’ motions to two issues for review on this dismiss. Rejecting the appellants’ interlocutory appeal. The first issue is contrary arguments, the Court construed whether a plaintiff may invoke the Section 12 of the Clayton Act as worldwide service of process provision authorizing worldwide service of process contained in Section 12 of the Clayton independently of the specific venue Act and, thus, national contacts analysis, provision contained in that statute. The without satisfying the specific venue Court held that the relevant forum for provision also contained in that statute. purposes of proof of personal jurisdiction The second issue is whether a plaintiff was the United States as a whole, rather may be permitted to seek jurisdictional than the forum state of Pennsylvania. discovery from foreign defendants under The Court concluded that the plaintiffs the Federal Rules of Civil Procedure had made a threshold showing of without first resorting to the Hague personal jurisdiction that warranted Convention. We agree with the District jurisdictional discovery.3 In a separate Court and answer both in the order and accompanying opinion, the affirmative.4

II. 3 The appellants have not appealed from the Court’s ruling that the plaintiffs have The first issue raised by the shown a prima facie case of personal jurisdiction. Accordingly, we do not review that ruling. “Prior to discovery, a 4 The District Court has original federal plaintiff may defeat a motion to dismiss question subject matter jurisdiction under based on legally sufficient allegations of 28 U.S.C. § 1331 over this class action jurisdiction.” In re Magnetic Audiotape brought under 15 U.S.C. § 1 (section 1 of Antitrust Litig., 334 F.3d 204, 206 (2d the Sherman Act) and 15 U.S.C. §§ 15 Cir. 2003). The District Court rejected and 26 (sections 4 and 16 of the Clayton the plaintiffs’ arguments that the Act). We have appellate jurisdiction jurisdictional contacts of BASF under 28 U.S.C. § 1292(b) over this Corporation, the wholly owned domestic interlocutory appeal. Because the subsidiary of BASF AG, should be certified issues on appeal involve pure imputed to BASF AG and that the questions of law, we review the District jurisdictional contacts of the appellants’ Court’s rulings de novo. Bowers v. alleged co-conspirators should be National Collegiate Athletic Ass’n, 346 imputed to the appellants. F.3d 402, 410 (3d Cir. 2003).

4 appellants involves two conceptually only in the judicial district distinct, though intertwined, sub-issues. whereof it is an inhabitant, but One is whether the District Court erred in also in any district wherein it may ruling that the service of process be found or transacts business; provision contained in Section 12 of the and all process in such cases may Clayton Act is independent of the venue be served in the district of which provision also contained in that statute. it is an inhabitant, or wherever it Two is whether the Court erred in ruling may be found. that in federal antitrust litigation, personal jurisdiction should be assessed 15 U.S.C. § 22 (emphasis added). 6 on the basis of the appellants’ contacts with the United States as a whole (national contacts analysis), rather than 6 Section 12 permits venue in any federal with the forum state (local contacts district in which a corporation is an analysis). The two sub-issues are “inhabitant,” may be “found,” or intertwined because if there is no specific “transacts business.” Those terms are venue limitation in federal antitrust defined as follows: litigation involving a foreign corporate defendant, the defendant can be sued in Being an “inhabitant” is held to any federal district court based on its mean incorporated under the laws aggregate contacts with the United States of that jurisdiction. E.g., Aro as a whole. Because they are intertwined Manufacturing Co. v. Automobile and because the appellants present them Body Research Corp., 352 F.2d as a single integrated issue, we discuss 400, 404 (1st Cir. 1965), cert. them together. 5 denied, 383 U.S. 947, 86 S. Ct. 1199, 16 L. Ed. 2d 210 (1966). A. Being “found” in a district is generally equated with “doing Section 12 of the Clayton Act business” there, and requires provides: greater contacts than does “transacting business.” E.g., Any suit, action, or proceeding Wood v. Santa Barbara Chamber under the antitrust laws against a of Commerce, Inc., 507 F. Supp. corporation may be brought not 1128 (D. Nev. 1980); Grappone, Inc. v. Subaru of America, Inc., 403 F. Supp. 123 (D.N.H. 1975); 5 The Committee to Support the Antitrust Friends of Animals Inc. v. Laws, a nonprofit corporation based in American Veterinary Medical the District of Columbia, has submitted Ass’n, 310 F. Supp. 620 an amicus curiae brief in support of the (S.D.N.Y. 1970). plaintiffs’ position on the two certified issues. The amicus curiae briefs in Gen. Elec. Co. v. Bucyrus-Erie Co., 550 support of the appellants’ position, F. Supp. 1037, 1041 n.5 (S.D.N.Y. submitted by the Federal Republic of 1982). A corporation is “found” where it Germany and the Federation of German has “presence” and “continuous local Industries, do not address the first activities” in the district. Caribe Trailer certified issue. Systems, Inc. v. Puerto Rico Maritime Shipping Auth., 475 F. Supp. 711. 716

5 Section 12, a long sentence, consists of interpretation is adopted, plaintiffs two separate clauses, the first relating to can rely on 28 U.S.C. § 1391(d) venue and the second concerning service [the Alien Venue Statute] which of process and, therefore, personal provides for venue in antitrust jurisdiction. It is undisputed that the actions against foreign second clause authorizes nationwide, corporations “in any district” and indeed worldwide, service of process on on the second clause of Section 12 a defendant corporation in federal for personal jurisdiction over antitrust litigation. The clause provides defendants based on a minimum that the defendant may be served contacts analysis considering their “wherever it may be found,” that is, contacts with the United States as wherever it is “doing business.” See, a whole. If the second e.g., Go-Video, Inc. v. Akai Elec. Co., interpretation prevails the service Ltd., 885 F.2d 1406, 1413 (9th Cir. 1989) provision is only effective when, (Section 12 “authorizes worldwide pursuant to Section 12’s first service of process”). clause, the action is brought in a district where the defendant The parties dispute whether the resides, is found or transacts two clauses of Section 12 should be read business. as an integrated whole or independently of each other. Specifically, they dispute In re Magnetic Audiotape Antitrust whether the venue provision contained in Litig., 171 F. Supp. 2d 179, 184 the first clause of Section 12 must be (S.D.N.Y. 2001), vacated sub nom. on satisfied before the plaintiffs could avail other grounds, Texas Int’l Magnetics, themselves of the authorization of Inc. v. BASF Aktiengesellschaft, 31 Fed. worldwide service of process contained Appx. 738, 2002 WL 385569 (2d Cir. in the second clause. As explained by March 12, 2002). The plaintiffs dispute one court: whether the present litigation can only be brought in a federal district where the [t]he dispute centers on whether appellants are “residents,” may be the jurisdiction provision “found,” or “transact[ ] business” based operates independently from the on their contacts with the forum district venue provision, specifically, or state. They contend that it may be whether “in such cases” in the brought in any federal district based on second clause refers to “any suit, the appellant’s “minimum contacts” with action, or proceeding under the the United States as a whole. antitrust laws against a corporation” or only to antitrust Currently, two sister Courts of actions against corporations Appeals differ as to the construction of brought in a judicial district in Section 12. The plaintiff-appellees rely which the corporation is either an on the decision in Go-Video, Inc. v. Akai “inhabitant,” “may be found” or Elec. Co., Ltd., 885 F.2d 1406 (9th Cir. “transacts business.” If the first 1989), and a majority of recent District Courts’ opinions to support their argument that the service or process (D.D.C. 1979) (quoting Fox-Keller, Inc. provision is independent of the specific v. Toyota Motor Sales, U. S. A., Inc., venue provision. On the other hand, 338 F. Supp. 812, 815 (E.D. Pa. 1972)). appellants rely on the decision in GTE

6 New M edia Services Inc. v. Bellsouth claimed that its construction of Section Corp., 199 F.3d 1343 (D.C. Cir. 2000), 12 of the Clayton Act was the result of a where the Court wrote: “plain” or “unadorned” reading of the language of the statute, and implied that The language of the statute is the Go-Video court’s construction was plain, and its meaning seems the result of “literal convolutions.” GTE, clear: The clause before the semi- at 1351. colon relates to a supplemental basis for venue in actions under The Go-Video court did not find the Clayton Act; the clause after the language of Section 12 to be clear or the semi-colon relates to unambiguous. Go-Video, 885 F.2d at nationwide service of process in 1412 (quoting Judge Stewart’s linguistic antitrust cases; and invocation of analysis of the syntactic structure of the nationwide service clause Section 12 in Gen. Elec. Co. v. Bucyrus- rests on satisfying the venue Erie Co., 550 F. Supp. 1037, 1042, 1042 provision. n.7 (S.D.N.Y. 1982), without necessarily endorsing his analysis).8 Instead of Id. at 1350.

The GTE court “aligned” itself which it (the corporation) is an with the position taken by the Second inhabitant, or wherever it may be Circuit forty years ago in Goldlawr, Inc. found.” Thus, ‘in such cases,’ v. Heiman, 288 F.2d 579, 581 (2d Cir. Congress has seen fit to enlarge 1961) (holding in dicta that the expansive the limits of the otherwise service of process provisions was restricted territorial areas of contingent on satisfaction of the specific process. In other words, the venue provision), rev’d on other grounds, extraterritorial service privilege is 369 U.S. 463 (1962).7 The GTE court given only when the other requirements are satisfied. 7 The Goldlawr court concluded that Goldlawr, 288 F.2d at 581. Section 12 8 Judge Stewart wrote that “the usual specifies where suit against a rules of syntax” would favor the corporation under the antitrust construction of Section 12 that the laws may be brought, namely, in a service of process clause is independent district where it is an inhabitant of the venue clause: and also where “it may be found or transacts business.” The word “such” means “the Conversely, it should follow that aforementioned,” Webster’s Third if a corporation is not an International Dictionary (unabr. inhabitant of, is not found in, and ed. 1963). Thus, when “such” does not transact business in, the precedes a noun it is assumed to district, suit may not be so refer to a particular antecedent brought. By statutory grant if suit noun and any dependent adjective is brought as prescribed in this or adjectival clauses modifying section ‘all process in such cases that noun, but not to any other part may be served in the district of of the preceding clause or

7 relying on its own way of reading of the Systems, Inc. v. Mitsubishi Corp., 967 F. language of Section 12, as the GTE court Supp. 364, 368 (E.D. Wis. 1997) (“In the did, the Go-Video court found it case of the antitrust laws, it makes no necessary to “interpret a passage in sense to tie a district court’s jurisdiction which antecedents and consequents are to the state in which it sits; it neither unclear by reference to the context and promotes the enforcement of the antitrust purpose of the statute as a whole.” Id. laws nor the management of litigation.”); The Go-Video court did not find the Prof’l Adjusting Systems of America, sparse legislative history of the Clayton Inc. v. Gen. Adjustment Bureau, Inc., Act conclusive on the issue. 885 F.2d at 352 F. Supp. 648, 651 (E.D. Pa. 1972) 1410. There was evidence, however, that (“The reason for the broad scope of the “Congress viewed the questions of venue Clayton Act venue provisions was to and service of process separately, with give plaintiff the widest possible the latter issue of subsidiary importance.” selection of venue for his benefit, to Id. promote a ‘private attorney general’ type policy for exposing and policing The Go-Video court found it combinations in restraint of trade.”). In more helpful to rely on the general light of the above authority and interpretation that courts have given comment, the Go-Video court found Section 12. Id. “[C]ourts have viewed itself “reluctant to adopt a construction the section’s main contribution to be its of section 12 which would, by limiting expansion of the bounds of venue.” Id. the availability of the valued tool of (citing United States v. Scophony Corp. worldwide service of process, recast its of Am., 333 U.S. 795, 806-808 (1948) ( venue provision as a restrictive, rather Section 12 substituted broad, practically- than a broadening, provision and might founded venue tests for the older, “hair- prevent plaintiffs from pursuing splitting legal technicalities” of the Sherman Act); 15 Wright & M iller, Federal Practice and Procedure, § 3818, was enacted by Congress with the at 109-10 (1976) (venue provisions of remedial purpose of enlarging the venue Clayton Act were “clearly broadening in jurisdiction of the federal courts by [their] effect”)). 9 See also Paper substituting “practical, business conceptions for the previous hairsplitting legal technicalities encrusted on the sentence. Applying this ‘found’-‘present’-‘carrying-on-business’ rule to section 12, “in such sequence. . . .” Id. The Court noted that cases” would refer to “any the Congressional enactment “relieve[s] suit, action, or proceeding persons injured through corporate under the antitrust laws violations of the antitrust laws from the against a corporation,” and ‘often insuperable obstacle’ of resorting not to anything else in to distant forums for redress of wrongs section 12’s first clause. done in the places of their business residence. A foreign corporation no Bucyrus-Erie, 550 F. Supp. at 1042 n.7. longer could come to a district, 9 As the Supreme Court noted in United perpetuate there the injuries outlawed, States v. Scophony Corp., 333 U. S. 795, and then by retreating or even without 808 (1948), the third and final prong of retreating to its headquarters defeat or “transact[ing] business” in Section 12 delay the retribution due.” Id.

8 legitimate claims under the antitrust Section 1391(d) is not like other laws.” 885 F.2d at 1410-11. general venue provisions. Brunette held that “Section 1391(d) is not derived from The Go-Video court also relied the general venue statutes that [a special on the Supreme Court’s case law venue provision might otherwise be read regarding the relationship between as] intended to replace.” Id. at 713. federal venue statutes of general Rather, Section 1391(d) derives from a application and specific venue provisions tradition going “back to the beginning of contained in individual statutes to the Republic” under which “suits against support its holding that the provision for aliens were left unrestricted, and could worldwide service of process is be tried in any district, subject only to the independent of the specific venue requirement of service of process.” Id. at provision in Section 12 of the Clayton 708. “The Brunette court interpreted § Act. “[A]s a general matter, courts have 1391(d) to state ‘a principle of broad and interpreted special venue provisions to overriding application’ which prevented supplement, rather than preempt, general an alien defendant from using a narrower venue statutes.” Id. at 1409 (citing 15 venue provision in another statute as a Wright & Miller, supra, at 108-109) ‘shield against suit.’” Go-Video,885 (“Supreme Court has held that special F.2d at 1409-10 (citing Brunette, at 714). venue statutes are supplemented by, and “Absent some express congressional are to be read in light of, liberalizing intent to the contrary, a special venue provisions of the general venue statutes”) provision should not, under the clear (citing Pure Oil v. Suarez, 384 U.S. 202 language of Brunette be deemed (1966)). exclusively controlling when the defendant involved is an alien. The Of particular relevance to the Go- principle that an alien may be sued in any Video court was the Supreme Court’s district is simply too deeply rooted to discussion of the relationship between assume otherwise.” Bucyrus-Erie, 550 F. the Alien Venue Statute, 28 U.S.C. § Supp. at 1040 (citing Brunette, at 714); 1391(d), a venue provision of general see also Go-Video, at 1410. applicability, and the specific venue provision, 28 U.S.C. § 1400(b), The approach of the Go-Video concerning actions for patent and Bucyrus-Erie courts is convincing infringement, in Brunette Mach. Works, and well reasoned in their construction of Ltd. v. Kockum Indus., Inc., 406 U.S. Section 12 of the Clayton Act.10 We, 706 (1972). The Supreme Court held that the specific venue provision did not bar the suit under which venue had been 10 We are not persuaded by the satisfied under Section 1391(d), the conclusions drawn by the GTE and Alien Venue Statute, even though the Goldlawr courts for the reasons Court had previously held that the same discussed by the Go-Video and Bucyrus- patent venue statute did preclude the Erie courts. First, because we do not application of the general corporate find the language of Section 12 to be venue provision of § 1391(c). Brunette, clear and unambiguous, we are not at 713-14 (distinguishing Fourco Glass persuaded by the “plain” or “unadorned” Co. v. Transmirra Prods. Corp., 353 U.S. reading of the statutory language by the 222 (1957)). GTE court. We, therefore, believe that it is necessary to consider the overall

9 therefore, hold that the service of process provision on foreign corporations is purpose of the statute in construing the independent of, and does not require statutory language. Second, we agree satisfaction of, the specific venue with the analysis made in several District provision under Section 12 of the Courts’ decisions that the conclusions of Clayton Act. GTE and Goldlawr are not persuasive because the defendant corporations in B. those two cases were not alien corporations and were, instead, out-of- We also reject the appellants’ state corporations. The distinction is argument that the District Court does not crucial. “The general venue provision of have personal jurisdiction over them [28 U.S.C. § 1391(c)] governing such because they do not have contacts with domestic corporations is, in contrast to [§ the State of Pennsylvania. In this 1391(d)] governing alien corporations, instance, Pennsylvania is the forum state more difficult to satisfy than the because the underlying class actions have [S]ection 12 venue requirements.” been transferred and consolidated for Bucyrus-Erie, 550 F. Supp. at 1041 (first pretrial purposes.11 At least two sister two emphases added, the last emphasis in Courts of Appeals have held that when original). That is because the added prong of “transacting business” in Section 12 is easier to satisfy than the involved only out-of-state domestic traditional prongs of being an corporations, is unpersuasive. “inhabitant” or “doing business.” Id. at 11 Underlying the appellants’ argument 1041 n.5 (“‘doing business’ . . . requires for the local contacts analysis is an greater contacts then does ‘transacting assumption that the court’s personal business’”). Because Goldlawr did not jurisdiction is limited to the state to involve an alien corporation, the which the class action has been Goldlawr court, not surprisingly, did not transferred. That assumption is need to consider the impact of the unwarranted. Consolidation of the general venue provision of § 1391(d). underlying class action in Pennsylvania As the Go-Video court observed, the is only for pretrial purposes pursuant to Goldlawr court’s conclusion is 28 U.S.C. § 1407. As correctly unpersuasive regarding the relationship concluded by the District Court, the of venue and jurisdiction under Section transferee court can exercise personal 12 for two reasons. “First, [Goldlawr’s jurisdiction to the same extent that the conclusion in this regard] is dictum, transferor court could. See In re Agent unrelated to the actual holdings of the Orange Prod. Liability Litig., 818 F.2d case. Second, and more important, 145, 163 (2d Cir. 1987); In re Goldlawr was decided before the Telectronics Pacing Systems Inc., 953 F. Supreme Court’s decisions in Pure Oil Supp. 909 (S.D. Ohio 1997). Even under and Brunette, decisions in which the the local contacts analysis, personal Supreme Court clarified the relationship jurisdiction should be assessed at least between specific statutory venue based on the appellants’ contacts with the provisions and the general federal venue five states where the individual actions statutes [for alien corporations]. . . .” were brought, New Jersey, Ohio, Go-Video, 885 F.2d at 1411. For the Delaware, Kentucky, and Pennsylvania. same reasons, the GTE holding, which

10 personal jurisdiction is invoked under the process.12 Clayton Act, jurisdiction is based on the defendants’ contacts with the United In the context of construing States as a whole. Access Telecom, Inc. Section 27, this Court has held broadly v. MCI Telecomm. Corp., 197 F.3d 694, that “a federal court’s personal 718 (5th Cir. 1999), cert. denied, 531 jurisdiction may be assessed on the basis U.S. 917 (2000) (“When jurisdiction is of the defendant’s national contacts when invoked under the Clayton Act, the court the plaintiff’s claim rests on a federal examines the defendant’s contacts with statute authorizing nationwide service of the United States as a whole to determine process.” Pinker v. Roche Holdings Ltd., whether the requirements of due process 292 F.3d 361, 369 (3d Cir. 2002). Then have been met.”) (citing Go-Video); Go- Chief Judge Becker wrote in Pinker: Video, 885 F.2d at 1415 (affirming the District Court’s holding that “worldwide Where Congress has spoken by service provision of § 12 justifies its authorizing nationwide service of conclusion that personal jurisdiction may process, . . . as it has in the be established in any district, given the Securities Act, the jurisdiction of existence of sufficient national a federal court need not be contacts”). confined by the defendant’s contacts with the state in which We find support for our the federal court sits. See construction of Section 12 of the Clayton DeJames v. Magnificence Act in the courts’ construction of Section Carriers, Inc., 654 F.2d 280, 284 27 of the Securities Exchange Act of (3d Cir. 1981). Following this 1934. This section, modeled after reasoning, the district courts Section 12 of the Clayton Act, provides within this Circuit have repeatedly in relevant part: held that a “national contacts analysis” is appropriate “when Any suit or action to enforce any appraising personal jurisdiction in liability or duty created by this a case arising under a federal chapter or rules and regulations statute that contains a nationwide thereunder, or to enjoin any service of process provision.” violation of such chapter or rules and regulations, may be brought in any such district or in the 12 See, e.g., Go Video, 855 F.2d at 1414; district wherein the defendant is Leasco Data Processing Equip. Corp. v. found or is an inhabitant or Maxwell, 468 F.2d 1326, 1340 n.10 (2d transacts business, and process in Cir. 1972); Bucyrus-Erie, 550 F. Supp. at such cases may be served in any 1043. Construing Section 27 of the other district of which the Securities Exchange Act, Judge Friendly, defendant is an inhabitant or writing for the court, concluded that the wherever the defendant may be phrase “in such cases” in that statute is found. independent of the venue provision and “speaks expressly only to service of 15 U.S.C. § 78aa (emphasis added). The process.” Leasco, at 1340 (citing United two sections are remarkably similar in States v. Scophony Corp., 333 U.S. 795 their provisions for venue and service of (1948)).

11 AlliedSignal, Inc. v. Blue Cross A.O. Yuganskneftegaz, 317 F.3d 202, of Calif., 924 F. Supp. 34, 36 207 (2d Cir. 2003) (when personal (D.N.J. 1996); see also Green v. jurisdiction over a foreign corporation is William Mason & Co., 996 F. based in essence on the federal long-arm Supp. 394, 396 (D.N.J.1998) statute, due process analysis involves (“[A]n assessment of personal contacts with the United States as a jurisdiction under [a statutory whole); United States v. Swiss Am. provision authorizing nationwide Bank, Ltd., 191 F.3d 30, 36 (1st Cir. service of process] necessitates 1999) (same); Fitzsimmons v. Barton, an inquiry into the defendant’s 589 F.2d 330, 333 n.4 (7th Cir. 1979); contacts with the national Mariash v. Morrill, 496 F.2d 1138, 1142- forum.”). We too are persuaded 43 (2d Cir. 1974) (service of process by the reasoning of our prior under § 27 of Securities Exchange Act opinions on the subject, and, requires examination of defendant’s consistent with several of our contacts with the United States as a sister courts of appeals, hold that whole). a federal court’s personal jurisdiction may be assessed on We agree with the holdings of our the basis of the defendant’s foregoing sister Courts of Appeals and national contacts when the the rationale of our decision in Pinker plaintiff’s claim rests on a federal that have construed the similarly worded statute authorizing nationwide Section 27 of the Securities Exchange service of process. Act. We hold that personal jurisdiction in federal antitrust litigation is assessed Pinker, at 369-70 (emphasis in on the basis of a defendant’s aggregate original).13 See also Dardana Ltd. v. contacts with the United States as a whole. Our holding in Pinker and on this appeal is consistent with the Federal Rule 13 Pinker, 292 F.3d at 369-70 (citing of Civil Procedure 4(k)(2).14 Personal Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 946- 47 (11th Cir. 1997); Busch v. Buchman, Buchman & O’Brien Law Firm, 11 F.3d 14 Federal Rule of Civil Procedure 4(k)(2) 1255, 1258 (5th Cir. 1994); United provides: Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1330 (6th Cir. 1993); United Elec., If the exercise of jurisdiction is Radio & Mach. Workers of Am. v. 163 consistent with the Constitution Pleasant St. Corp., 960 F.2d 1080, 1085 and laws of the United States, (1st Cir. 1992); Sec. Investor Protection serving a summons or filing a Corp. v. Vigman, 764 F.2d 1309, 1316 waiver of service is also effective, (9th Cir. 1985), rev’d on other grounds, with respect to claims arising Holmes v. Sec. Investor Protection under federal law, to establish Corp., 503 U.S. 258 (1992); Autoscribe personal jurisdiction over the Corp. v. Goldman & Steinberg, Inc., person of any defendant who is 1995 WL 56662, at *3 (4th Cir. Feb. 3, not subject to the jurisdiction of 1995) (per curiam) (not precedential) the courts of general jurisdiction (citing Hogue v. Milodon Engineering, of any state. Inc., 736 F.2d 989, 991 (4th Cir. 1984)).

12 jurisdiction therein is not limited to the III. defendant’s contacts with a particular federal judicial district or the forum state. The second issue certified in this We hold further that personal jurisdiction appeal is whether we should adopt a first under Section 12 of the Clayton Act is as resort rule in favor of the procedures broad as the limits of due process under under the Hague Convention, rather than the Fifth Amendment. See Go-Video, the Federal Rules of Civil Procedure, for 885 F.2d at 1415 (“Under the due jurisdictional discovery from foreign process component of the Fifth defendants in foreign signatory “host” Amendment, a court must consider nations. The appellants argue that whether the maintenance of the suit (i.e. jurisdictional discovery in Germany, a the exercise of personal jurisdiction over Convention signatory nation, should first the defendants to the suit) offends proceed under the Convention traditional notions of fair play and procedures, rather than the Federal substantial justice.”) (citing Omni Rules. The Convention prescribes Capital Int’l v. Rudolf Wolff & Co., Ltd., certain procedures by which a judicial 484 U.S. 97, 102-103 (1987); Int’l Shoe authority in one contracting nation may Corp. v. Washington, 326 U.S. 310, 316 request evidence located in another (1945)). 15 nation. Our Supreme Court rejected a first resort rule in favor of the Convention in a case where personal jurisdiction was not contested and the “Under this provision, a defendant sued discovery sought involved only the under federal law may be subject to merits of the case. Societe Nationale jurisdiction based on its contacts with the Industrielle Aerospatiale v. United States United States as a whole, when the Dist. Court for the S. Dist. of Iowa, 482 defendant is not subject to personal U.S. 522 (1987). The appellants argue jurisdiction in any state. Rule 4(k)(2) specifically that we should carve out a confers personal jurisdiction over a narrow exception to the Aerospatiale defendant so long as the exercise of decision where, as here, personal jurisdiction comports with the Due jurisdiction has yet to be established and Process Clause of the Fifth Amendment.” the discovery sought is limited to proof Dardana, 317 F.3d at 207 (citing 4 of jurisdiction.16 Wright & Miller, Federal Practice and Procedure § 1068.1, at 612, 616 (2002); A. Chew v. Dietrich, 143 F.3d 24, 27-28 (2d Cir.), cert. denied, 525 U.S. 948 (1998)). 15 We note, as did the Go-Video court, that the Supreme Court has on two 16 The Federal Republic of Germany and occasions explicitly declined to decide the Federation of German Industries have the constitutionality of national contacts submitted briefs as amicus curiae in analysis. See 885 F.2d at 1414 n.8 support of the appellants’ position for (citing Omni Capital Int’l v. Rudolf Wolff this second issue on appeal, urging & Co., Ltd., 484 U.S. 97, 102-103 n.5 reversal of the District Court. The brief (1987); Asahi Metal Indus. v. Superior of amicus curiae submitted by the Court, 480 U.S. 102, 113 n.* (1987) Committee to Support the Antitrust Laws (plurality opinion)). supports the plaintiffs’ position, urging affirmation of the District Court .

13 Aerospatiale holds that the Hague our Federal Rules. Id. at 542-44. The Convention does not provide exclusive concept of comity requires in this context procedures for obtaining documents and “a more particularized analysis” of the information located in a foreign respective interests of the foreign host signatory nation’s territory. Aerospatiale nation and the requesting nation than a first rejects a rule of exclusive use or a blanket first resort rule would generate. rule of first use as a matter of law in Id. at 543-44. Aerospatiale notes that in favor of the Convention on the ground many situations, the Convention that neither the language nor the procedures would be unduly time- negotiating history of the Convention consuming and expensive, and less likely support such rules. Aerospatiale, 482 to produce needed evidence than direct U.S. at 533-36. Specifically, use of the Federal Rules. Id. at 542-43. Aerospatiale holds that the Convention’s However, the Convention’s procedures, plain language, as well as the history of although not mandatory, are available its proposal and ratification by the United whenever they will facilitate the States, unambiguously supports the gathering of evidence, and apply in the conclusion that it was “intended as a sense that they are one method of seeking permissive supplement, not a preemptive evidence that a court may elect. Id. at replacement, for other means of 541. Aerospatiale declines to hold “as a obtaining evidence located abroad.” Id. blanket matter that comity requires resort at 536 (emphasis added). The to Hague evidence convention Convention’s preamble speaks in non- procedure.” Id. at 544. Therefore, the mandatory terms, specifying its purpose determination of whether to resort to the to “facilitate” discovery and to “improve Convention requires “prior scrutiny in mutual judicial co-operation.” Id. at 534. each case of the particular facts, Similarly, its text uses permissive sovereign interests, and likelihood that language, and does not expressly modify such resort will prove effective.” Id. the law of contracting states or require (establishing the three-prong test for them to use the specified procedures or determining whether to resort to the change their own procedures. Id. Convention). Accordingly, the Convention does not deprive the District Court of its Aerospatiale acknowledges that jurisdiction to order, under the Federal “both the discovery rules set forth in the Rules of Civil Procedure, a foreign Federal Rules of Civil Procedure and the national party to the proceeding to Hague Convention are the law of the produce evidence physically located United States.” Id. at 533. However, the within its territory. Id. at 539-40. Federal Rules are “the normal methods” for federal litigation involving foreign Aerospatiale rejects next a rule of national parties unless the “optional” or first resort favoring the Convention on “supplemental” Convention procedures grounds of international comity and prove to be conducive to discovery under respect for the “judicial sovereignty” of some circumstances. Id. at 536 (“the the signatory nation in which evidence Convention was intended as a permissive sought is located. Id. at 542-43. supplement, not a pre-emptive International comity does not require in replacement, for other means of all instances that American litigants first obtaining evidence located abroad”) resort to the Convention procedures (emphasis added), 538 (both the text and before initiating discovery pursuant to negotiating history of the Convention

14 show that “it was intended to establish Aerospatiale holding to the underlying optional procedures that would facilitate litigation where they have contested the taking of evidence abroad”) jurisdiction and the discovery sought is (emphasis added), 541 (“the optional limited to proof of jurisdiction. The Convention procedures are available appellants seek our review of only the whenever they will facilitate the District Court’s legal conclusion that the gathering of evidence by the means Aerospatiale holding applies equally to authorized in the Convention”) jurisdictional discovery. This certified (emphasis added), 542 (“the normal issue involves a pure question of law, methods of the Federal Rules of Civil subject to our plenary and de novo Procedure”) (emphasis added). review.

Notwithstanding its rejection of Specifically, the appellants argue the first resort rule, Aerospatiale instructs that Aerospatiale is not applicable to the American courts to “exercise special jurisdictional discovery and that this vigilance to protect foreign litigants from Court should adopt a first resort rule in the danger that unnecessary, or unduly favor of the Hague Convention burdensome, discovery may place them procedures based on considerations of in a disadvantageous position.” Id. at international comity and respect for the 546. “Judicial supervision of discovery German sovereignty, the host signatory should always seek to minimize its costs nation where discovery is to be and inconvenience and to prevent conducted. They argue that the improper uses of discovery requests. Aerospatiale balancing approach is When it is necessary to seek evidence premised expressly on the existence of abroad, however, the district court must personal jurisdiction in that case. Where supervise pretrial proceedings jurisdiction is disputed and not yet particularly closely to prevent discovery established, they assert the balancing abuses.” Id. approach must yield to a rule of first resort. Aerospatiale has not explicitly addressed, however, the issue of which The appellants stress the split of party bears the burden of convincing the authorities among federal district courts court of an “optional” and and state courts regarding the extension “supplemental” use of the Convention of Aerospatiale to jurisdictional procedures in a particular case. Nor has discovery. They cite for support Geo- Aerospatiale, involving foreign Culture, Inc. v. Siam Inv. Mgmt. S.A., defendants over whom the trial court had 936 P.2d 1063, 1067 (Or. Ct. App. 1997) undisputed personal jurisdiction, (requiring plaintiff to conduct addressed the issue of what procedures to jurisdictional discovery, at least initially, follow in a case, as here, where only through the Hague Convention, jurisdiction is contested and discovery noting that plaintiff had failed to allege a sought is limited only to proof of prima facie basis for asserting jurisdiction. jurisdiction over the defendant); Jenco v. Martech Int’l, Inc., No. Civ. A. 86-4229, B. 1988 WL 54733 at *1 (E.D. La. May 19, 1988) (holding, with almost no The appellants argue that the meaningful analysis, that certain District Court erred in extending the jurisdictional discovery requests must be

15 made under the Hague Convention the Convention should be entitled to because “[w]hile judicial economy may substantial deference. dictate that the Federal Rules of Civil Procedure should be used, the interests of The appellants are correct that protecting a foreign litigant in light of the Aerospatiale makes numerous references jurisdictional problems are to the existence of personal jurisdiction paramount”)17 ; and Knight v. Ford Motor in that case. We disagree, however, that Co., 615 A.2d 297, 301 n.11 (N.J. Super. the Aerospatiale holding is dependent on Ct. Law Div. 1992) (noting, in dicta, that personal jurisdiction. As concluded by “[i]f jurisdiction does not exist over a the District Court here and the District foreign party . . . the Convention may Court for the District of Columbia, which provide the only recourse for obtaining considered the same argument raised by evidence”). the same defendant, BASF AG, in In re Vitamins Antitrust Litig., 120 F. Supp. The appellants rely also on a 2d 45, 49 (D.D.C. 2000), a trial court has report by the Special Commission of the authority to determine its jurisdiction. Hague Conference attended, among See Ins. Corp. of Ireland, Ltd. v. others, by delegations from the United Compagnie des Bauxites de Guinee, 456 States and Germany. See Hague U.S. 694, 706 (1982) (“By submitting to Conference on Private International Law: the jurisdiction of the Court for the Special Commission Report on the limited purpose of challenging Operation of the Hague Service jurisdiction, the defendant agrees to Convention and the Hague Evidence abide by that court’s determination on Convention, April 1989, reprinted in 28 the issue of jurisdiction”). Because the Int’l Law Materials 1556 (1989). The District Court has jurisdiction over these report stated that while views varied as to foreign defendants to the extent whether the Hague Convention necessary to determine whether they are “occupied the field and therefore subject to personal jurisdiction, we see excluded application of domestic no legal barrier to exercising the procedural rules,” “the Commission discretion given to trial courts by thought that in all Contracting States, Aerospatiale in cases of jurisdictional whatever their views as to its exclusive discovery. See In re Vitamins, at 49. application, priority should be given to the procedures offered by the Convention We agree with the majority of trial when evidence located abroad is being courts’ decisions that there should be no sought.” Id. at 1564, 1569. The exception to the Aerospatiale holding for appellants argue that the statement in the jurisdictional discovery. See In re report that “priority” should be given to Vitamins, at 49; Rich v. KIS California, Inc., 121 F.R.D. 254, 260 (M.D.N.C. 1988) (Aerospatiale “did not carve out 17 Jenco left undisturbed a portion of the any exception for disputes involving magistrate’s opinion allowing personal jurisdiction”); Fishel v. BASF interrogatories and document requests Group, 175 F.R.D. 525, 529 (S.D. Iowa directed at a foreign party to proceed 1997) (Aerospatiale provides that the under the Federal Rules and overturned Hague Convention procedures are only the magistrate’s ruling allowing optional and do not divest federal district depositions to be taken under the Federal courts of authority to order discovery Rules. under the Federal Rules); In re Bedford

16 Computer Corp., 114 B.R. 2, 5-6 (Bankr. raised in their motion.” See Fishel, 175 D.N.H. 1990) (citing Rich and allowing F.R.D. at 529. discovery limited to jurisdictional issues to proceed under the Federal Rules). Accordingly, the distinction drawn by the appellants between Unlike Geo-Culture, relied on by “merits” discovery and “jurisdictional” the appellants, where the plaintiff failed discovery, predicated on a false to allege even a prima facie case of dichotomy of having and not having personal jurisdiction, the District Court jurisdiction, amounts to no real found that the plaintiffs here had difference because the court has established a prima facie case of personal jurisdiction for either type of discovery.18 jurisdiction, a conclusion not challenged The undisputed presence of personal by the appellants. The plaintiffs’ jurisdiction in Aerospatiale is, therefore, allegations amounted, therefore, to more tangential to its holding and irrelevant to than “mere blanket fishing expeditions” the issue of whether Aerospatiale applies and were “not the type of bare-boned also to jurisdictional discovery. allegations that potentially could lead to the fishing expeditions of obvious There are other reasons supporting concern to the signatory countries.” In re our conclusion that the Aerospatiale Vitamins, 120 F. Supp. 2d at 50. balancing approach applies equally to the determination of whether the Hague The appellants also relied on the Convention procedures should be used Federal Rules to challenge the District initially for jurisdictional discovery. Court’s personal jurisdiction. As we First, where Aerospatiale has have stated above, it is well established categorically rejected a first resort rule that the trial court has inherent power for “merits” discovery, which we can and jurisdiction to decide whether it has expect to be more comprehensive or jurisdiction. Ins. Corp. of Ireland, 456 burdensome than jurisdictional U.S. at 706. The appellants’ arguments discovery, there is more justification to are also premised on the assumption that reject a first resort rule for the more there is no personal jurisdiction in this limited and less intrusive jurisdictional case. Such an assumption is premature discovery. See Fishel, 175 F.R.D. at 529 and unwarranted unless the result of the (“The ascertainment of facts bearing on pending jurisdictional discovery shows personal jurisdiction normally involves otherwise. At this stage, where the the least intrusive type of inquiries.”). appellants have voluntarily appeared in the court to challenge jurisdiction and Second, where Aerospatiale has jurisdictional discovery is pending, the rejected the first resort rule even though District Court indisputably has the French defendants there may have jurisdiction to determine whether there is personal jurisdiction upon completion of jurisdictional discovery. Moreover, the 18 No one would dispute that if denial of resort to Hague convention jurisdiction discovery yields no evidence procedures for jurisdictional discovery is sufficient to establish personal not unfair to the appellants because they jurisdiction, the court must dismiss the “[had] taken advantage of the [Federal] underlying action against the appellants, [R]ule allowing them a preliminary rather than deciding which set of hearing and determination of the issues procedural rules to apply.

17 faced possible penal sanction under from a United States judicial or France’s “blocking statute,” there is less administrative proceeding pursuant to the justification for us to adopt a first resort Federal Rules. rule where the appellants here face no such sanction because Germany has no Third, where Aerospatiale has “blocking statute.” 19 Aerospatiale rejected the adoption of a blanket first reiterates the well-settled view that resort rule based on the proffered reasons “[blocking] statutes do not deprive an of respecting the “judicial sovereignty” American court of the power to order a of the signatory host nation and party subject to its jurisdiction to produce preventing discovery abuse, the same evidence even though the act of reasons proffered by the appellants here production may violate that statute.” 482 must fail as well. 482 U.S. at 543-44 U.S. at 544-45 n.29 (concluding that “the (finding no textual support in the Hague enactment of such a statute by a foreign Convention for a first resort rule and nation” cannot be allowed to “graft a rule opting for a three-prong balancing of first resort onto the Hague approach), 545-46 (suggesting that Convention, or otherwise to provide the burdensome or intrusive discovery nationals of such a country with a practice is not a sufficient ground for preferred status in our courts”). Neither adopting the first resort rule because the the appellants nor their supporters, trial court has an inherent duty to Germany or the Federation of German supervise discovery and prevent Industries, have disputed the plaintiffs’ discovery abuse). statement that Germany, unlike France, does not have a “blocking statute,” The appellants and their criminal or civil, that specifically supporters argue generally that Germany prohibits production of documents in is a civil law country where the gathering connection with foreign judicial or of evidence is a judicial function and that administrative proceedings. Nor have pursuing discovery without resort to the they identified a single instance where a Convention may be deemed an affront to German national has been prosecuted, Germany’s sovereignty. The penalized, or sanctioned under German Aerospatiale Court, as well as other law for complying with discovery orders courts, has found such argument “unpersuasive.” Id. at 543; see also Great Lakes Dredge & Dock Co. v. 19 Aerospatiale, 482 U.S. at 526 n.6 Harnischfeger Corp., 1990 WL 147066, (quoting Article 1A of the French at *2 (N.D. Ill. Sept. 25, 1990); “blocking statute,” French Penal Code Scarminach v. Goldwell GmbH, 531 Law No. 80-538) (“Subject to treaties or N.Y.S. 2d 188, 191 (N.Y. Sup. Ct. 1988). international agreements and applicable As observed by the court in In re laws and regulations, it is prohibited for Vitamins, 120 F. Supp. 2d at 50, there is any party to request, seek or disclose, in no reason to assume that discovery under writing, orally or otherwise, economic, the Federal Rules would inevitably commercial, industrial, financial or offend Germany’s sovereign interest technical documents or information because presumably Germany, like the leading to the constitution of evidence United States, would prohibit the alleged with a view to foreign judicial or price-fixing conspiracy and would administrative proceedings or in welcome investigation of such antitrust connection therewith.”). violation to the fullest extent. See

18 Germany’s Act Against Restraints of the District Court to restrict discovery Competition § 1; Treaty Establishing the abuse. We expect that the District Court European Economic Community, Art. will follow Aerospatiale’s instruction 81(1). There is also no reason to and “exercise special vigilance” to “believe that the sovereign interests of . . protect appellants from unduly . foreign signatory nations would be any burdensome or abusive discovery. more offended by [the] narrower Aerospatiale, at 546. jurisdictional discovery than they would be by the broader, merits-related We agree with the District Court’s discovery allowed by Aerospatiale.” In legal conclusion that the Aerospatiale re Vitamins, 120 F. Supp. 2d at 51. We balancing test applies equally to likewise conclude that the appellants’ jurisdictional discovery and that there is general argument is unpersuasive.20 no first resort rule in favor of the Hague Convention procedures for jurisdictional Similarly, following the discovery. Aerospatiale holding, we also find unpersuasive the appellants’ argument C. that a first resort to the Hague Convention is required to avoid possible The appellants also argue burdensome or intrusive discovery alternatively that even if the Aerospatiale practice under United States law. balancing approach applies to Aerospatiale, 482 U.S. at 545-46; see jurisdictional discovery, the three-prong also Great Lakes, 1990 WL 147066, at test would favor first use of the *2, and Scarminach, 531 N.Y.S. 2d at Convention procedures in this case. The 191. Discovery abuse is an insufficient District Court rejected that argument, reason to avoid the Federal Rules ruling that the appellants bore the burden because the appellants have remedies in of persuasion under the balancing test and that they failed to satisfy the burden. The court concluded alternatively that even if the plaintiffs bore the burden of 20 Appellants and especially their persuasion, they had submitted adequate supporters, Germany and the Federation evidence to show that the balancing test of German Industries, stress the disfavored first use of the Convention controversial character of the “narrow procedures for jurisdictional discovery in majority” decision in Aerospatiale and this case. profess their strong disagreement with the Aerospatiale holding that the Hague We agree first with the District Convention procedures are merely an Court’s conclusion of law that the optional supplement to the Federal Rules. appellants bear the burden of persuasion We must reject their invitation to deviate as to the optional use of the Convention from Aerospatiale based on the same procedures. See Aerospatiale, 482 U.S. proffered reasons, found insufficient by at 547 (stating that the court should give the Aerospatiale Court, of respecting “the foreign litigant a full and fair international comity and preventing opportunity to demonstrate appropriate discovery abuse. As a subordinate court, reasons for employing Convention we are bound by the Supreme Court’s procedures in the first instance, for some precedent. aspects of the discovery process”) (emphasis added). This language seems

19 to imply that the proposing party bears Court’s decision in Société Nationale the burden of persuasion. See also In re Industrielle Aerospatiale v. United States Vitamins, 120 F. Supp. 2d at 51-52 District Court for the Southern District of (holding that proposing party bears the Iowa, 482 U.S. 522 (1987). The service burden);Valois of Am., Inc. v. Risdon provisions of the Hague Convention were Corp., 183 F.R.D. 344, 346 (D. Conn. adopted by the President and approved by 1997) (same); Doster v. Schenk A.G., a unanimous vote of the Senate in 1972. 141 F.R.D. 50, 51-52 (M.D.N.C. 1991) Id. at 530. The provisions then became the (“[I]t is more practical, if not logical, to “law of the land,” coexisting with other place the burden of persuasion on the federal law such as the Federal Rules of proponent of using the Hague Civil Procedure. U.S. Const. art. VI, cl. 2. Convention.”); Rich, 121 F.R.D. at 257- In Aerospatiale, the Hague Convention 58 (same); Benton Graphics v. was referred to as a “permissive Uddeholm Corp., 118 F.R.D. 386, 389 supplement” and an “optional procedure.” (D.N.J. 1987) (same); but see Hudson v. Id. at 536. However the Hague Hermann Pfauter GmbH & Co., 117 Convention is only as “optional” as F.R.D. 33, 38 (N.D.N.Y. 1987); Knight, deciding to use the Federal Rules is 615 A.2d at 300. “optional” in such a case. The Convention does not overwrite the Federal Rules of We also agree with the District Civil Procedure, but it is in no way inferior Court’s conclusions that the appellants to them. have failed to satisfy their burden of persuasion under the Aerospatiale Unfortunately, I believe the balancing test and that the evidence on language used in Aerospatiale has record disfavors the first use of the unintentionally compounded the problem Convention procedures for jurisdictional inherent with the Convention: that discovery. The court’s conclusions in “relatively few judges are experienced in these two instances are reviewed only for the area [of international law] and the abuse of discretion, and we find none. procedures of foreign legal systems are often poorly understood.” Aerospatiale, IV. 482 US. at 552 (Blackmun, J., dissenting). Many times, rather than wade through the For the foregoing reasons, the mire of a complex set of foreign statutes orders of the District Court certified for and case law, judges marginalize the review on this interlocutory appeal will Convention as an unnecessary “option.” I be affirmed. Costs are taxed against the believe the Aerospatiale decision should appellants. be reexamined to ensure that lower courts are in fact exercising “special vigilance to ROTH, Circuit Judge, concurring21 : p r o t e c t f o r e i g n l it i g a n ts ” a n d demonstrating respect “for any sovereign I write separately to express my interest expressed by the foreign state.” concern that the Hague Convention has Id. at 485. Currently, I fear that many been given short shrift since the Supreme courts are simply discarding the treaty as an unnecessary hassle. 21 Judge McKee shares the concerns Our sage colleague, Judge Joseph F. expressed herein and joins this Weis, Jr., has opined that first resort to the concurring opinion. Hague Convention is in fact appropriate:

20 The arguments mustered Convention and the Hague Evidence against giving priority to Convention, April 1989, reprinted in 28 Convention procedures are Int’l Law Materials 1556, 1569 (1989). n ot persu asiv e w he n Among the delegates at the 1989 meeting balanced with the of the Special Commission was one from overriding interests , the United States. national and international, in mo re eff ective I recognize that we are bound by implementation of the Aerospatiale but I believe that it is time for Evidence Convention. It the Supreme Court to revisit that decision should be remembered, – particularly because I perceive that many after all, that the treaty of our courts have not exercised the negotiated by the United “special vigilance to protect foreign States and the other litigants” that the Supreme Court signatories is for the anticipated. benefit of private litigants as a whole – some Finally, under the precedent of inconvenience or expense Aerospatiale, I do not oppose the panel’s to an individual litigant conclusion that the burden of persuasion should not suffice to lies with the party advocating the use of jeopardize an arrangement the Hague Convention. In an ideal which bene fits many. world, however, if the treaty were to be Moreover, through given the priority to which its status as a ratification, the United ratified treaty entitles it, I do not believe States has agreed to honor that the burden of persuasion should lie the commitments which with the proponent of the Hague the treaty contains. The Convention procedures. judiciary should not lightly permit a private litigant to undermine express national policy.

Joseph F. Weis, Jr., The Federal Rules and the Hague Conventions: Concerns of Conformity and Comity, 50 U. Pitt. L. Rev. 903, 931 (Spring, 1989).

Judge Weis’s view mirrors the conclusions of the Special Commission of the Hague Conference of April 1989, that, whatever the views of the delegates as to application of domestic procedural rules, “priority should be given to the procedures offered by the Convention when evidence located abroad is being sought.” Hague Conference of Private International Law: Special Commission Report on the Operation of th e Hague Servic e