Kaepa, Inc. v. Achilles Corporation

76 F.3d 624 (5th Cir. 1996)

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Nature of the Case

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Facts

P, an American company, manufactures athletic shoes. D is a Japanese business enterprise, with annual sales that approximate one billion dollars. In April 1993, the two companies entered into a distributorship agreement whereby D obtained exclusive rights to market P's footwear in Japan. The distributorship agreement expressly provided that Texas law and the English language would govern its interpretation, that it would be enforceable in San Antonio, Texas, and that D consented to the jurisdiction of the Texas courts. In July of 1994, P filed suit in Texas state court, alleging (1) fraud and negligent misrepresentation by D to induce P to enter into the distributorship agreement, and (2) breach of contract by D. D removed the action to federal district court, and the parties began a laborious discovery process which to date has resulted in the production of tens of thousands of documents. In February 1995, after appearing in the Texas action, removing the case to federal court, and engaging in comprehensive discovery, D brought its own action in Japan, alleging mirror-image claims: (1) fraud by P to induce D to enter into the distributorship agreement and (2) breach of contract by P. P promptly filed a motion asking the district court to enjoin D from prosecuting its suit in Japan (motion for an antisuit injunction). D moved to dismiss the federal court action on the ground of forum non conveniens. It granted P's motion to enjoin, ordering D to refrain from litigating the Japanese action and to file all of its counterclaims with the district court. D appealed.