• Fifth Circuit Grants Mandamus Relief To Car Company, Clarifying That Forum Non Conveniens Doctrine Does Apply In Antitrust Cases
   

  12/13/2023
  On November 21, 2023, the United States Circuit Court for the Fifth Circuit vacated a district court ruling denying a motion to dismiss on the basis of forum non conveniens in a suit brought by an auto parts supplier against a global car company.  The Fifth Circuit panel, responding to a writ of mandamus, found that the lower court had erroneously relied on outdated precedent in its determination that antitrust cases are barred from dismissal on the basis of forum non conveniens.  Prevent U.S.A. Corporation v. Volkswagen AG, et al., No. 23040487 (5th. Cir. Nov. 21, 2023).
  
  Plaintiff filed lawsuits in Germany, the Eastern District of Michigan, and the Eastern District of Texas against defendant alleging, among other things, violations of Sections 1 and 2 of the Sherman Act.  Defendant moved to dismiss the Texas case on the basis of forum non conveniens, arguing that the suit should proceed in Germany.  The District Court for the Eastern District of Texas declined to dismiss the case, adopting over defendant’s objections a Report and Recommendation by the Magistrate Judge which cited to a Fifth Circuit case from 1982 to conclude that the common law doctrine of forum non conveniens is inapplicable to antitrust suits.  See Indus. Inv. Dev. Corp. v. Mitsui & Co., 671 F.2d 876, 890-91 (5th Cir. 1982).
  
  The Fifth Circuit granted a writ of mandamus to defendant, disagreeing with the district court’s interpretation that Fifth Circuit precedent had “effectively established a per se rule that antitrust cases cannot be dismissed on the basis of forum non conveniens.”  The Court explained that its prior holding in Mitsui had been based, in error, on a Supreme Court decision in United States v. National City Lines, Inc., 334 U.S. 573 (1948) (“National City Lines I”) that had in fact been superseded the following year by United States v. National City Lines, Inc., 337 U.S. 78 (1949) (“National City Lines II”).  National City Lines I had held that forum non conveniens should not apply to antitrust cases because the uncertainty of the outcome of an effort to apply the doctrine might impede effective application of the Sherman Act in complex cases.  However, the following year the Supreme Court revised its prior ruling in National City Lines II in response to intervening legislation by Congress making clear that any civil action can be transferred in the interests of convenience and justice.  See 28 U.S.C. §1404(a).
  
  The Fifth Circuit also pointed out that it had previously revised its own precedent in 1987 to be in line with National City Lines II , holding in In re Air Crash Disaster Near New Orleans, La, 821 F.2d 1147, 1163 (5th Cir. 1987) that the forum non conveniens doctrine “applies in all cases regardless of their jurisdictional bases or subject matter.”  The Court determined that the district court’s error in relying on overturned precedent to deny defendant’s motion to dismiss was serious enough to warrant mandamus relief.  It then remanded the case so that the district court could conduct a forum non conveniens analysis, as required by controlling Fifth Circuit precedent.
  
  Because the district court erroneously dismissed the case without conducting a forum non conveniens analysis, it did not reach plaintiff’s arguments that the factual record does not compel dismissal in this case.  Plaintiff’s lawsuit may yet proceed in Texas, but this opinion made clear that a motion to dismiss on the basis of forum non conveniens should not be denied in any case without first conducting the proper analysis.
  CATEGORIES: Sherman Act § 1, Sherman Act § 2
  

LINKS & DOWNLOADS

• Prevent U.S.A. Corporation v. Volkswagen AG, et al.