It's possible to get an NC state court to enjoin a party from pursuing parallel litigation in another American state. But what about enjoining a party before an NC court from pursuing a parallel case in another country?
The NC Business Court grappled with that international issue late last month in O'Brien v. TCG Consulting Partners, LLC, 2016 NCBC 25. It turns out that there is no NC appellate decision regarding this issue, so Judge Bledsoe was in somewhat uncharted waters.
O'Brien, the Plaintiff, was seeking to enjoin Defendant TCG from proceeding with a lawsuit against him in the London Mercantile Court to collect on a Promissory Note. In the North Carolina lawsuit (filed a month before the London action), O'Brien was seeking a declaratory judgment that he owed nothing on the Note.
One Hundred Years Ago, O'Brien Might Have Gotten An Injunction
Judge Bledsoe, looking to a case cited by O'Brien in support of his position, observed that a North Carolina federal district court decision affirmed by the Fourth Circuit more than a hundred years ago, United Cigarette Machine Co v. Wright, 156 F. 244 (C.C.E.D.N.C. 1907), aff'd, 193 F. 1023 (4th Cir. 1912) had held that:
[I]]t appears to be well established that courts of equity can, and in a proper case ought to and will, restrain litigants in a foreign court. . . . [It is] a duty of a court of equity to restrain litigants in a foreign state or country. . . where the matter is fully litigated in the court to which the application for injunctive relief is made.
That venerable case did not guide the Court's decision. Its old age did it in. Judge Bledsoe said that the hundred year old decision had been issued "when North Carolina's international commerce was limited and considerations of international comity had not yet gained widespread judicial support." Op. ¶17.
Today, Federal Courts Apply Two Different Approaches To This Issue
More modern federal decisions relied on by the Business Court -- from other Circuits -- have applied different legal standards in deciding whether a court should enjoin an international proceeding. One is the "liberal approach," which gives only "modest weight" to the interest of the foreign court. Op. ¶21.
The other approach -- the "conservative approach," says that "injunctions restraining litigants from proceeding in courts of independent countries are rarely issued" and gives substantial deference to the principle of international comity. Op. ¶22.
The Plaintiff Will Have To Fight The Same Issue In Two Courts
The Fourth Circuit hasn't decided which approach to follow (Op. ¶22 & n.3) and Judge Bledsoe didn't need to choose between them. He ruled that an injunction wouldn't be appropriate under either the liberal approach or the conservative approach. Op. ¶24.
If you are thinking that it is unfair to make Mr. O'Brien to fight about the validity of the Note on two continents, it's really not. O'Brien is a British citizen and a resident of England. Op. ¶27. His assets are located there, Id. Moreover, there was nothing in TCG's British lawsuit which could be considered harassment, even though it was filed after the Business Court lawsuit had begun. TCG had warned O'Brien that it intended to file its London lawsuit before O'Brien sued it in North Carolina. Op. ¶26.
As for the additional expense that O'Brien will face in being involved in two lawsuits involving the same issue, Judge Bledsoe said:
Although the Court is sympathetic that O'Brien may incur additional expense in litigating these two actions simultaneously, the Court does not find that the additional expense should cause the Court to deviate from the general rule of international comity that, absent some 'irreparable miscarriage of justice,' courts should be hesitant to enjoin a party from proceeding in an international forum.
It's worth noting that the Rule in the London Mercantile Court regarding attorneys' fees and costs is that they are paid by the losing party. Mercantile Court Guide Rule 15. So if Mr. O'Brien is confident that he can prove that the Note he signed is invalid, he may actually be better off in that Court. The "Promissory Note" (which is contained in an email), has no provision regarding the payment of attorneys' fees.