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MWK Recruiting Inc v. Jowers

United States District Court, W.D. Texas, Austin Division

November 12, 2019

MWK RECRUITING, INC., Plaintiff,
v.
EVAN P. JOWERS, YULIYA VINOKUROVA, LEGIS VENTURES HK COMPANY LIMITED, and ALEJANDRO VARGAS, Defendants. EVAN P. JOWERS, Counterplaintiff,
v.
MWK RECRUITING, INC., ROBERT E. KINNEY, MICHELLE W. KINNEY, RECRUITING PARTNERS GP, INC., KINNEY RECRUITING LLC, COUNSEL UNLIMITED LLC, and KINNEY RECRUITING LIMITED, Counterdefendants.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiff/Counterdefendant MWK Recruiting, Inc. (“MWK”) and Counterdefendants Robert E. Kinney (“Kinney”), Michelle W. Kinney, Recruiting Partners GP, Inc., Kinney Recruiting LLC, Counsel Unlimited LLC, and Kinney Recruiting Limited's (collectively, the “MWK entities”) Opposed Expedited Motion for Issuance of a Preliminary and a Permanent Injunction, (Dkt. 102), and associated briefing, (Resp., Dkt. 107; Reply, Dkt. 111; Suppl. Decl., Dkt. 112). The Court held a hearing on this motion on October 30, 2019.[1] (See Dkt. 115). After considering the parties' written and oral arguments, the facts in the record, and the relevant law, the Court grants the MWK entities' motion. (Dkt. 102).

         I. BACKGROUND

         This case involves Defendant/Counterplaintiff Evan P. Jowers's (“Jowers”) departure from MWK, a legal recruiting firm. (Mot., Dkt. 102, at 6; see also 2d Am. Compl., Dkt. 80). Jowers worked for MWK for several years; now, MWK and its component entities accuse Jowers of appropriating MWK's confidential information and breaching contracts. (2d Am. Compl., Dkt. 80, at 31-45).

         The injunction at issue here concerns a defamation suit Jowers and his business partner Alejandro Vargas (“Vargas”) filed in Hong Kong. (Mot., Dkt. 102, at 7-8). The MWK entities were first served with the papers beginning the Hong Kong suit on May 9, 2019, and June 21, 2019, and filed their request for a preliminary and permanent injunction barring Jowers from continuing the Hong Kong suit on October 9, 2019. (Id. at 7).

         The MWK entities request that a “preliminary and a permanent injunction be issued against Jowers ordering him to dismiss his new Hong Kong litigation and to take no further action with respect to that litigation or any other litigation against MWK in Hong Kong or any other forum that would undermine or attack this Court's jurisdiction in this matter.” (Id. at 6). They argue that allowing Jowers to continue his Hong Kong suit would frustrate a forum selection clause already in place, (id. at 11), be “vexatious and oppressive, ” (id. at 11-13), and be generally prejudicial to the MWK entities, (id. at 13-14). They also stress that concerns of international comity are not at issue in this case. (Id. at 14).

         II. LEGAL STANDARD

         Foreign antisuit injunctions, like the one at issue here, are “a particular subspecies of preliminary injunction.” Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 364 (5th Cir. 2003). The overarching concern is “whether the foreign proceeding threatens the U.S. proceeding” or “challenges the U.S. court's jurisdiction or fundamental U.S. policies, ” as opposed to a foreign proceeding that is “merely interposed as a tactic and poses no real threat beyond inefficiency and additional cost.” 3 Ved P. Nanda, et al., Litigation of International Disputes in U.S. Courts § 16.15 (2d ed. 2008, updated 2019).

         Like typical preliminary injunctions, though, foreign antisuit injunctions are “extraordinary remed[ies], ” and the party seeking one must “clearly carr[y] the burden of persuasion.” Karaha Bodas, 335 F.3d at 364 (quoting Mississippi Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985)). But the decision whether to issue a foreign antisuit injunction “ultimately depends on considerations unique to antisuit injunctions, ” rather than the traditional four-factor preliminary injunction test: “[t]o the extent the traditional preliminary injunction test is appropriate, ” the Court “only need address whether [the injunction-seeking party] shows a significant likelihood of success on the merits.” Id.; id at 364 n.19. Specifically, “the merits” of the injunction request in this context “are not about whether [the foreign country] is an appropriate forum . . . but instead whether [the injunction-seeking party] has demonstrated that the factors specific to an antisuit injunction weigh in favor of granting that injunction.” Id. at 364 n.19.

         In the Fifth Circuit, those factors have historically involved whether the foreign suit would “(1) frustrate a policy of the forum issuing the injunction; (2) be vexatious or oppressive; (3) threaten the issuing court's in rem or quasi in rem jurisdiction; or (4) prejudice other equitable considerations.” Kaepa, Inc. v. Achilles Corp., 76 F.3d 624, 627 n.9 (5th Cir. 1996) (quoting In re Unterweser Reederei, Gmbh, 428 F.2d 888, 890 (5th Cir. 1970) (subsequent history omitted)). In their briefing and oral arguments, the parties dispute whether the factors may be considered disjunctively or whether, instead, the Court must balance each of them in a holistic analysis. (See, e.g., Reply, Dkt. 111, at 5).

         The Fifth Circuit has not clearly answered this question. In Unterweser, it stated the multifactor test using the word “or.” 428 F.3d at 896. The Ninth Circuit characterized this diction as suggesting that “if any of the four elements is present, an anti-suit injunction may be proper.” E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 990 (9th Cir. 2006). Thirty-three years after Unterweser, in Karaha Bodas, the Fifth Circuit reframed the considerations specific to foreign antisuit injunctions: “[i]n assessing whether an injunction is necessary, we weigh the need to ‘prevent vexatious or oppressive litigation' and to ‘protect the court's jurisdiction' against the need to defer to principles of international comity.” 335 F.3d at 366 (quoting Kaepa, 76 F.3d at 627; MacPhail v. Oceaneering Int'l, Inc., 302 F.3d 274, 277 (5th Cir. 2002)). In this analysis, the factors are assessed together, not disjunctively.[2] The Court's evaluation of the factors in this case will therefore proceed holistically, weighing the considerations against each other in the manner the Fifth Circuit has most recently specified. See id.

         “[V]exatious or oppressive litigation” generally involves “(1) ‘inequitable hardship' resulting from the foreign suit; (2) the foreign suit's ability to ‘frustrate and delay the speedy and efficient determination of the cause'; and (3) the extent to which the foreign suit is duplicitous [sic] of the litigation in the United States.” Karaha Bodas, 335 F.3d at 364 (quoting Kaepa, 76 F.3d at 627) (citing MacPhail, 302 F.3d at 277). Traditionally, the Fifth Circuit has often relied “primarily upon considerations of vexatiousness or oppressiveness in a race to judgment in the foreign forum as sufficient grounds for an [antisuit] injunction.” Kaepa, 76 F.3d at 627 n.9 (quoting Gau Shan Co. v. Bankers Tr. Co., 956 F.2d 1349, 1353 (6th Cir. 1992)). Again, however, the precise weight of this factor in the analysis is indefinite, though Karaha Bodas indicates it is crucial to (albeit not dispositive of) the injunction determination. 335 F.3d at 364.

         Moreover, there is a circuit split concerning how much weight to give to the value of international comity in this context. The Fifth Circuit has adopted the “liberal approach, ” which deemphasizes concerns of comity. It often discusses comity when determining whether foreign litigation is vexatious and oppressive-and considers it a “not-insubstantial interest”-but comity is not the crux of the analysis. Id. at 371. Compare Id. at 366 (“[N]otions of comity do not wholly dominate our analysis to the exclusion of these other concerns.”), with Goss Int'l Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 491 F.3d 355, 359 (8th Cir. 2007) (explaining the “conservative approach, ” for which “a foreign antisuit injunction will issue only if the movant demonstrates (1) an action in a foreign jurisdiction would prevent United States jurisdiction or threaten a vital United States policy, and (2) the domestic interests outweigh concerns of international comity.”).

         III. ...


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