Letter to Solicitor General of the United States, Paul D. Clement

Letter

Gregg and Sununu Urge Solicitor General to Support Goss International's Supreme Court Petition

U.S. Senators Judd Gregg and John Sununu (R-NH) today announced that they have asked the Solicitor General of the United States, Paul D. Clement, to file a brief in support of Goss International's petition to the U.S. Supreme Court. Earlier this week, Goss, which has over 1,000 employees at its Dover and Durham facilities, filed its petition requesting that the Supreme Court review a ruling by the Eighth Circuit Court of Appeals. This ruling reversed a lower court's injunction against TKS, a competitor of Goss, which would have prevented the Japanese company from recouping a $31.6 million judgment that Goss had successfully won in an antidumping lawsuit against TKS. In a letter to Clement sent yesterday, Gregg and Sununu argued that the Eighth Circuit's ruling could pose a significant threat to our trade laws and the sovereignty of our nation's judicial system. The letter requested that the Solicitor General file a legal brief in support of Goss's petition and urge the Court to review the Eighth Circuit's ruling. Text of the letter is included below.

Senator Judd Gregg stated, "It is critical for Goss International, its workers in New Hampshire, and for anyone who believes in fair trade, that foreign companies which have broken our trade laws be brought to justice. If such a company is found guilty in our courts and is required to pay millions in damages, a foreign government should not be allowed to nullify this judgment through retaliatory acts that are solely intended to subvert our rule of law. This is an affront to our judicial system and our sensibilities of fair play among trading partners. I hope that the Administration will actively support Goss's efforts to overturn the Eighth Circuit's ruling so we can protect not only our trade laws, but also the hundreds of manufacturing jobs at Goss."

Senator John Sununu stated, "Goss International is justified in seeking Supreme Court review of its legal case, and the Solicitor General's involvement would increase the likelihood that the Court will consider the case. TKS should not be allowed to circumvent U.S. legal and regulatory processes. Moreover, this case brings to light the retaliatory trade law enacted by the Japanese government to protect TKS from legitimate enforcement actions. Goss has 1,000 employees in New Hampshire and their jobs should not be jeopardized by foreign efforts to undermine U.S. trade law."

The text of the letter follows:

Dear Solicitor General Clement,

We write to request your support for Goss International's petition for a writ of certiorari. We believe that this case presents a compelling federal interest: to protect U.S. laws and judgments from being invalidated by foreign governments.

In 2003, a Federal District Court in Cedar Rapids, Iowa, entered a $31.6 million jury award in Goss International's favor. The jury found that TKS, a Japanese competitor of Goss International, had violated the Antidumping Act of 1916 ("1916 Act") by dumping printing presses in the U.S. market with the express intent of destroying the U.S. industry. The District Court also found that "TKS attempted to cover up its dumping" by agreeing to a fraudulent price increase, providing a secret rebate, and destroying documents to conceal its fraudulent conduct. In a separate investigation, the Department of Commerce found that TKS' actions constituted fraud against the U.S. government and that TKS' behavior was "a uniquely egregious display of misconduct by a respondent in an antidumping proceeding."

After unsuccessfully appealing the District Court's judgment to the Eighth Circuit Court of Appeals and seeking Supreme Court review, which was denied, TKS paid approximately $38 million in damages to Goss International. However, in December 2004, the Japanese Diet passed "clawback" legislation specifically designed to invalidate the District Court's judgment by allowing TKS to file suit in Japan and collect from Goss International or a wholly-owned subsidiary the full amount of the U.S. judgment, plus interest, costs, and attorneys' fees.

When TKS announced its plan to use the Japanese law to clawback the final judgment, the U.S. District Court ordered TKS not to proceed. The court found that TKS' intention to exercise the clawback law was "a direct attack on this court's judgment … and a frontal assault on the jurisdiction of this court and the federal judiciary as a whole" and was "‘for the sole purpose of terminating' this court's judgment." On June 18, 2007, the Eighth Circuit reversed the District Court's injunction, finding that it lacked jurisdiction to protect Goss International's final judgment. While the court acknowledged that TKS would "effectively nullify the remedy Goss legitimately procured in the United States courts" after seven years of litigation, it reasoned that the court's interest in the matter ended once TKS paid the judgment to Goss International. On August 10, 2007, TKS initiated proceedings in Japan against Goss International and its Japanese affiliate to claw back the judgment that was legitimately awarded to Goss following due process in U.S. federal courts.

We believe that Goss's petition for writ of certiorari is worthy of your attention and support for several reasons. First, we understand that this decision represents the first time a federal court has held that a litigant is free to use a foreign clawback statute to nullify a final federal court judgment. Under the decision's reasoning, foreign firms and governments may use clawback legislation to effectively evade any U.S. law they find objectionable. Such a result would impair the federal judiciary's power to enforce a wide range of U.S. laws against foreign firms doing business in the United States. More recently, the Second Circuit has adopted a more aggressive use of its jurisdiction to prevent parties from relitigating in foreign courts issues that were already decided in a federal court.

Second, this decision will undoubtedly embolden foreign nations to pass clawback legislation aimed at important but internationally unpopular aspects of our judicial system. These include treble damage statutes, such as the antitrust and RICO laws, punitive damage awards, and enhanced damages in patent infringements and other intellectual property suits. Federal judgments based on these and other laws and procedures are now vulnerable to nullification under the holding in this case, essentially giving foreign litigants immunity from U.S. laws and undermining our ability to legislate in areas that other nations deem unpopular. Even the Eighth Circuit recognized that clawback statutes like that enacted by Japan "can be regarded as an affront to the laws and judicial rules of the United States." Indeed, such retaliatory clawback legislation is an attack on the jurisdiction of U.S. courts and the integrity of U.S. law.

Third, we understand that the Eighth Circuit's decision rejects the proposition that a federal court may exercise ancillary jurisdiction after satisfaction of a money judgment. Specifically, the Eighth Circuit found that a federal court's jurisdiction to protect a judgment ends when the judgment is paid. If left standing, such a ruling would tie the hands of the federal courts where a losing defendant seeks to invalidate a judgment through subsequent actions and it would strip federal courts of the ability to protect their judgments.

The impact of the Eighth Circuit's decision presents an issue of exceptional importance for Supreme Court review. The United States should take appropriate action to prevent Japan from nullifying a final U.S. judgment and, more generally, to prevent U.S. laws from being thwarted by foreign governments. Federal courts need to have ongoing jurisdiction to protect their judgments, even after the judgment is paid or satisfied. We therefore respectfully request that you consider filing an amicus curiae brief in support of Goss International's petition for writ of certiorari.

Thank you for your attention to this important matter.

Sincerely,

U.S. Senators Judd Gregg and John Sununu

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