Quaak v. Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren

United States Court of Appeals
For the First Circuit

No. 03-2704

HANS A. QUAAK ET AL.,
Plaintiffs, Appellees,

v.

KLYNVELD PEAT MARWICK GOERDELER BEDRIJFSREVISOREN,
Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Patti B. Saris, U.S. District Judge]
[Hon. Robert B. Collings, U.S. Magistrate Judge]

Before
Selya and Lipez, Circuit Judges,
and DiClerico,* District Judge.

Ira M. Feinberg, with whom George A. Salter, John A. Redmon,
Nicholas W.C. Corson, Hogan & Hartson LLP, Michael J. Stone, and
Posternak Blankstein & Lund LLP were on brief, for appellant.
Glen DeValerio, with whom Jeffrey C. Block, Berman DeValerio
Pease Tabacco Burt & Pucillo, Steven E. Cauley, Curtis L. Bowman,
Cauley Geller Bowman Coates & Rudman, LLP, Lee S. Shalov, James
Bonner, Patrick L. Rocco, Shalov Stone & Bonner LLP, Gregory P.
Joseph, Gregory P. Joseph Law Offices LLC, Steven Singer, Erik
Sandstedt, Bernstein Litowitz Berger & Grossmann LLP, Jack R.
Pirozzolo Professional Corporation, Willcox, Pirozzolo & McCarthy,
Terrence K. Ankner, Partridge Ankner & Horstmann LLP, Karen C.
Dyer, and Boies Schiller & Flexner were on brief, for appellees.

March 8, 2004

___________
*Of the District of New Hampshire, sitting by designation.
 SELYA, Circuit Judge. It is widely thought that "[n]o

aspect of the extension of the American legal system beyond the

territorial frontier of the United States has given rise to so much

friction as the requests for documents in investigation and

litigation in the United States." Restatement (Third) of Foreign

Relations Law of the United States § 442, reporters' note 1 (1987).

As the imperatives of transnational business shrink the size of the

globe, the task of devising an effective yet respectful paradigm

for easing this friction becomes more and more urgent. The instant

appeal brings the titration into full focus.

The genesis of the problem in this case lies with an

auditing engagement accepted by Klynveld Peat Marwick Goerdeler

Bedrijfsrevisoren (KPMG-B), a Belgian firm that served as the

auditor for a publicly-traded company, Lernout & Hauspie Speech

Products, N.V. (L&H). L&H's collapse precipitated a flood of

actions against KPMG-B and others in the courts of this country,

alleging massive securities fraud. KPMG-B refused to produce

relevant auditing records and associated work papers, asserting

that to do so would violate Belgian law. A magistrate judge

rejected this assertion and ordered production. See In re Lernout

& Hauspie Sec. Litig., 218 F.R.D. 348 (D. Mass. 2003) (L&H III).

In response, KPMG-B repaired to a Belgian court

requesting that substantial penalties be imposed on those who might

"take any step of a procedural or other nature in order to proceed

-2-
with the discovery-procedure." The plaintiffs in the pending

American litigation (who had obtained the turnover order in the

first instance) implored the district court to enjoin KPMG-B from

pursuing the Belgian action. The district court obliged. See In

re Lernout & Hauspie Sec. Litig., 2003 WL 22964378, at *2 (D. Mass.

Dec. 12, 2003) (L&H IV).1 KPMG-B immediately appealed. We issued

a partial stay of the antisuit injunction and expedited the appeal.

We now affirm the district court's order.

I. BACKGROUND

As said, this appeal arises out of a welter of cases

having a common theme: the allegation that KPMG-B and others

perpetrated large-scale securities fraud leading to L&H's collapse.

Those cases include several class actions. Some of them were

commenced in the United States District Court for the District of

Massachusetts and others were transferred to that district. See,

e.g., Filler v. Lernout, 2002 WL 227079 (D. Del. Feb. 8, 2002).

The district court has consolidated all the cases. It would serve

no useful purpose to dissect the plaintiffs' allegations, and we

urge the reader who thirsts for more detailed background knowledge

to consult the district court's published opinions. See, e.g., In

re Lernout & Hauspie Sec. Litig., 230 F. Supp. 2d 152 (D. Mass.

1
The district court accepted, adopted, and elaborated upon the
report and recommendation of the magistrate judge. For
simplicity's sake, we do not distinguish between the two judicial
officers, but, rather, take an institutional view and refer to the
determinations below as those of the district court.

-3-
2002) (L&H II); In re Lernout & Hauspie Sec. Litig., 214 F. Supp.

2d 100 (D. Mass. 2002) (L&H I). We rehearse here only those

developments needed to frame the issues on appeal.

KPMG-B is a target of an ongoing criminal investigation

in Belgium, which arises out of the L&H fiasco. It is also a

principal defendant in the aforedescribed securities fraud

litigation. KPMG-B has not disputed the district court's in

personam jurisdiction. It did seek to secure dismissal of the

securities fraud litigation on forum non conveniens grounds, but

failed in that effort. See L&H II, 230 F. Supp. 2d at 176. At the

same time, the district court determined that the consolidated

complaint against KPMG-B satisfied the stringent pleading

requirements of the Private Securities Litigation Reform Act of

1995 (PSLRA), 15 U.S.C. § 78u-4(b)(2), and Federal Rule of Civil

Procedure 9(b). L&H II, 230 F. Supp. 2d at 165-66.

Once past these threshold issues, the securities fraud

plaintiffs embarked on pretrial discovery. In September of 2002,

they served document requests for KPMG-B's work papers. See Fed.

R. Civ. P. 34. The plaintiffs did not get very far; KPMG-B refused

to comply with the requests, asseverating that Belgian law

prohibited it from divulging the information sought. While this

game of cat and mouse was taking place, the plaintiffs, acting on

KPMG-B's advice, became civil co-prosecutors in the ongoing Belgian

criminal investigation. Through this participation, they were able

-4-
to examine all the documents that were not deemed confidential by

the Belgian prosecutor, but they were not permitted to copy

documents for use in the securities fraud litigation.

Tantalized by their glimpse of the work papers, the

securities fraud plaintiffs moved to compel their production. A

magistrate judge took briefing and heard argument on the

applicability of and exceptions to the Belgian secrecy law.2 On

November 13, 2003, he rejected KPMG-B's arguments and ordered

production of the work papers on or before the close of business on

December 1, 2003.

On November 27, 2003 — Thanksgiving day — KPMG-B filed an

ex parte petition with a court in Brussels, seeking to enjoin the

securities fraud plaintiffs from "taking any step" to proceed with

the requested discovery. To ensure compliance, they asked the

Belgian court to impose a fine of one million Euros for each

violation of the proposed injunction.3 The Belgian court

2
The parties agree that, as a general matter, Article 458 of
the Belgian Criminal Code prohibits auditors from disclosing
confidential client information. There are, however, numerous
exceptions to that general proscription. The parties have
differing views as to whether KPMG-B's disclosure of its work
papers pursuant to the district court's turnover order would (or
would not) fall within any one of these exceptions.
3
In pertinent part, KPMG-B's petition asked the Belgian court
for the following:

To prohibit defendants, upon forfeitment of a
penalty of 1.000.000 EUR per infraction by
each defendant, to take any step of a
procedural or other nature in order to proceed

-5-
refused to act ex parte; instead, it directed that notice be

provided to the securities fraud plaintiffs and scheduled a hearing

for December 16, 2003. On December 1, KPMG-B gave notice of the

institution of the Belgian action to the securities fraud

plaintiffs. It also filed an objection to the magistrate judge's

recommended decision. That objection is still pending in the

district court (there is, among other things, a disagreement as to

its timeliness). Finally, KPMG-B moved to stay the turnover order.

Faced with the threat of extravagant fines, the

securities fraud plaintiffs sought the district court's protection.

On December 9, the magistrate judge issued a report and

recommendation urging the entry of an order enjoining KPMG-B from

proceeding with its Belgian action. The district judge held a

hearing two days later and issued an antisuit injunction, the full

text of which is reproduced below:

with the discovery-procedure, initiated by
them in the framework of the aforementioned
American procedures, including but not limited
to:
1. taking any step of a procedural or
other nature in order to execute or rely on
the decision of the District Court of
Massachusetts dated 13 November 2003 to
produce the audit working papers;
2. taking any step of a procedural or
other nature in the framework of the order of
the American judge in its decision of 13
November 2003 to meet and confer with
Petitioner concerning the production of the
requested documents . . . .

-6-
 The Court preliminarily enjoins KPMG-Belgium
from proceeding with its writ, orders KPMG-
Belgium to withdraw forthwith its writ in the
Court of First Instance of Brussels and orders
it not to proceed with the hearing scheduled
on December 16, 2003. KPMG-Belgium shall file
proof of compliance with this order.

L&H IV, 2003 WL 22964378, at *2. Hot on the heels of this order,

the magistrate judge denied KPMG-B's motion to stay the turnover

order, branding that motion untimely. In re Lernout & Hauspie Sec.

Litig., 219 F.R.D. 28, 30-31 (D. Mass. 2003) (L&H V). KPMG-B

immediately appealed the entry of the antisuit injunction. We

granted a limited stay of the injunction, permitting KPMG-B to

appear at the December 16 hearing in Brussels for the sole purpose

of requesting a continuance. The Belgian court has been fully

cooperative, and the foreign action has been continued periodically

during the pendency of this expedited appeal. There has been no

further action with regard to the turnover order itself.

II. STANDARD OF REVIEW

A grant of a preliminary injunction typically receives

deferential review. McGuire v. Reilly, 260 F.3d 36, 42 (1st Cir.

2001). The trial court's order will stand unless it "mistook the

law, clearly erred in its factual assessments, or otherwise abused

its discretion in granting the interim relief." Id. In our view,

however, international antisuit injunctions — which involve

important considerations of comity — warrant a heightened level of

appellate review. Cf. United States v. O'Brien, 895 F.2d 810, 814

-7-
(1st Cir. 1990) (considering the importance of the interest at

stake when ascertaining the appropriate standard of review).

Consequently, we deem it appropriate to conduct an independent

review of the justification for the issuance of an international

antisuit injunction. This is an "intermediate level of scrutiny,

more rigorous than the abuse-of-discretion or clear-error

standards, but stopping short of plenary or de novo review."

United States v. Tortora, 922 F.2d 880, 883 (1st Cir. 1990). Given

our chosen standard of review, we cede a modest degree of deference

to the trier's exercise of discretion, but "we will not hesitate to

act upon our independent judgment if it appears that a mistake has

been made." El Dia, Inc. v. Hernandez Colon, 963 F.2d 488, 492

(1st Cir. 1992).

III. ANALYSIS

Determining the appropriateness of an international

antisuit injunction is a highly nuanced exercise. An inquiring

court must find a way to accommodate conflicting, mutually

inconsistent national policies without unduly interfering with the

judicial processes of a foreign sovereign. See Laker Airways Ltd.

v. Sabena, Belgian World Airlines, 731 F.2d 909, 916 (D.C. Cir.

1984). This task is particularly formidable given the absence of

guidance from the Supreme Court and the paucity of precedent in

this circuit; the Justices have not spoken to the criteria for

granting an international antisuit injunction and this court has

-8-
passed on that question only once (and then, glancingly). See

Canadian Filters (Harwich) Ltd. v. Lear-Siegler, Inc., 412 F.2d 577

(1st Cir. 1969). We begin our analysis by articulating the

standards that ought to govern the question. We then apply those

standards to the case at hand.

A. Articulating the Standards.

It is common ground that federal courts have the power to

enjoin those subject to their personal jurisdiction from pursuing

litigation before foreign tribunals. See, e.g., Kaepa, Inc. v.

Achilles Corp., 76 F.3d 624, 626 (5th Cir. 1996); China Trade &

Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35 (2d Cir. 1987).

The exercise of that power must be tempered, however, by the

accepted proposition that parallel proceedings on the same in

personam claim generally should be allowed to proceed

simultaneously. Laker Airways, 731 F.2d at 926. The decisional

calculus must take account of this presumption in favor of

concurrent jurisdiction. It also must take account of

considerations of international comity. After all, even though an

international antisuit injunction operates only against the

parties, it effectively restricts the jurisdiction of a foreign

sovereign's courts. See, e.g., China Trade, 837 F.2d at 35-36.

Federal courts have been consentient in endorsing these

principles. Beyond that point, however, the waters grow murky.

The courts of appeals have differed as to the legal standards to be

-9-
employed in determining whether the power to enjoin an

international proceeding should be exercised. Two basic views have

emerged. For ease in reference, we shall call the more permissive

of these views the liberal approach and the more restrictive of

them the conservative approach. See Note, Antisuit Injunctions and

International Comity, 71 Va. L. Rev. 1039, 1049-51 (1985) (using

this nomenclature).

The liberal approach has been championed by two courts of

appeals: the Fifth Circuit, Kaepa, 76 F.3d at 627, and the Ninth

Circuit, Seattle Totems Hockey Club, Inc. v. Nat'l Hockey League,

652 F.2d 852, 855-56 (9th Cir. 1981). In addition, the Seventh

Circuit has pronounced itself "incline[d] toward" the liberal view.

Philips Med. Sys. Int'l v. Bruetman, 8 F.3d 600, 605 (7th Cir.

1993). Under this approach, an international antisuit injunction

is appropriate whenever there is a duplication of parties and

issues and the court determines that the prosecution of

simultaneous proceedings would frustrate the speedy and efficient

determination of the case. Kaepa, 76 F.3d at 627; Seattle Totems,

652 F.2d at 856. We do not mean to suggest that courts employing

the liberal approach do not give weight to considerations of

international comity. For the most part, they do — but they tend

to define that interest in a relatively narrow manner and to assign

it only modest weight. See, e.g., Kaepa, 76 F.3d at 627 (noting

-10-
that an international antisuit injunction does not "actually

threaten relations" between the two involved nations).

Four courts of appeals have espoused the conservative

approach for gauging the propriety of international antisuit

injunctions. See Stonington Partners, Inc. v. Lernout & Hauspie

Speech Prods., 310 F.3d 118, 126 (3d Cir. 2002); Gau Shan Co. v.

Bankers Trust Co., 956 F.2d 1349, 1355 (6th Cir. 1992); China

Trade, 837 F.2d at 36 (2d Cir.); Laker Airways, 731 F.2d at 927

(D.C. Cir.). Under this approach, the critical questions anent the

issuance of an international antisuit injunction are whether the

foreign action either imperils the jurisdiction of the forum court

or threatens some strong national policy. See, e.g., Stonington

Partners, 310 F.3d at 127; China Trade, 837 F.2d at 36. This

approach accords appreciably greater weight to considerations of

international comity.

We reject the liberal approach. We deem international

comity an important integer in the decisional calculus — and the

liberal approach assigns too low a priority to that interest. In

the bargain, it undermines the age-old presumption in favor of

concurrent parallel proceedings — a value judgment that leaves us

uneasy — and presumes that public policy always favors allowing a

suit pending in an American court to go forward without any

substantial impediment. To cinch matters, this approach gives far

too easy passage to international antisuit injunctions. We

-11-
understand that the judicial process is a cornerstone of the

American way of life — but in an area that raises significant

separation of powers concerns and implicates international

relations, we believe that the law calls for a more cautious and

measured approach.

The conservative approach has more to commend it. First,

it recognizes the rebuttable presumption against issuing

international antisuit injunctions (and, thus, honors the

presumption favoring the maintenance of parallel proceedings).

Second, it is more respectful of principles of international

comity. Third, it compels an inquiring court to balance competing

policy considerations. Last — but far from least — it fits snugly

with the logic of Canadian Filters, in which we said that issuing

an international antisuit injunction is a step that should "be

taken only with care and great restraint" and with the recognition

that international comity is a fundamental principle deserving of

substantial deference. 412 F.2d at 578.

We stop short, however, of an uncritical acceptance of

the conservative approach. The recent expositions of that approach

have come to regard the two main rationales upon which

international antisuit injunctions may be grounded — preservation

of jurisdiction and protection of important national policies — as

exclusive. See, e.g., Gen. Elec. Co. v. Deutz AG, 270 F.3d 144,

160-61 (3d Cir. 2001) (describing these as the "only"

-12-
justifications that can support the issuance of such an

injunction); Gau Shan, 956 F.2d at 1355 (similar). We are

uncomfortable with this gloss, for it evinces a certain woodenness.

In our view, the sensitive and fact-specific nature of the inquiry

counsels against the use of inflexible rules.

We therefore reject this reworking of the conservative

approach and instead endorse its traditional version. That version

is not only more flexible but also more consistent with Laker

Airways — which we regard as the seminal opinion in this field of

law. The Laker Airways court did not suggest that its two stated

rationales were the only ones that could justify issuing an

international antisuit injunction. 731 F.2d at 927 (noting that

"[i]njunctions are most often necessary" to protect the court's

jurisdiction or to prevent evasion of the nation's important

policies). Rather, the court indicated that it was prudent to use

a wider-angled lens, making clear that the equitable considerations

surrounding each request for an injunction should be examined

carefully. Id.

In order to provide guidance for the district courts, we

spell out the manner in which our preferred approach operates. The

gatekeeping inquiry is, of course, whether parallel suits involve

the same parties and issues. Unless that condition is met, a court

ordinarily should go no further and refuse the issuance of an

international antisuit injunction. See, e.g., China Trade, 837

-13-
F.2d at 36; Laker Airways, 731 F.2d at 928; see also George A.

Bermann, The Use of Anti-Suit Injunctions in International

Litigation, 28 Colum. J. Transnat'l L. 589, 626 (1990) (stating

that courts generally "will not consider issuing anti-suit

injunctions" unless there are "parallel local and foreign actions

between the same parties over the same claim"). If — and only if

— this threshold condition is satisfied should the court proceed to

consider all the facts and circumstances in order to decide whether

an injunction is proper. In this analysis, considerations of

international comity must be given substantial weight — and those

considerations ordinarily establish a rebuttable presumption

against the issuance of an order that has the effect of halting

foreign judicial proceedings.

We acknowledge that the task of determining when a

litigant has overcome this presumption is a difficult one. That is

partly because comity is an elusive concept. The Supreme Court has

defined it as "the recognition which one nation allows within its

territory to the legislative, executive or judicial acts of another

nation, having due regard both to international duty and

convenience, and to the rights of its own citizens or of other

persons who are under the protection of its laws." Hilton v.

Guyot, 159 U.S. 113, 164 (1895). Judge Aldrich trenchantly

described it as "a blend of courtesy and expedience." Canadian

Filters, 412 F.2d at 578. Whatever definition is employed, it is

-14-
pellucid that comity is not a matter of rigid obligation, but,

rather, a protean concept of jurisdictional respect. And to

complicate matters, comity, like beauty, sometimes is in the eye of

the beholder.

We hasten to add that although the definition of comity

may be tenebrous, its importance could not be more clear. In an

increasingly global economy, commercial transactions involving

participants from many lands have become common fare. This world

economic interdependence has highlighted the importance of comity,

as international commerce depends to a large extent on "the ability

of merchants to predict the likely consequences of their conduct in

overseas markets." Gau Shan, 956 F.2d at 1355. This

predictability, in turn, depends on cooperation, reciprocity, and

respect among nations. That helps to explain the enduring need for

a presumption — albeit a rebuttable one — against the issuance of

international antisuit injunctions.

In the final analysis, rebutting this presumption

involves a continual give and take. In the course of that give and

take, the presumption may be counterbalanced by other facts and

factors particular to a specific case. These include (but are by

no means limited to) such things as: the nature of the two actions

(i.e., whether they are merely parallel or whether the foreign

action is more properly classified as interdictory); the posture of

the proceedings in the two countries; the conduct of the parties

-15-
(including their good faith or lack thereof); the importance of the

policies at stake in the litigation; and, finally, the extent to

which the foreign action has the potential to undermine the forum

court's ability to reach a just and speedy result.

Seen in this light, we agree that either the preservation

of jurisdiction or the safeguarding of important national policies

may afford a sufficient basis for the issuance of an international

antisuit injunction. We do not, however, attach talismanic

significance to concepts such as jurisdiction-stripping and insults

to public policy. Instead, we hold that in every case a district

court should examine the totality of the circumstances in deciding

whether a particular case warrants the issuance of an international

antisuit injunction. See Laker Airways, 731 F.2d at 927 ("There

are no precise rules governing the appropriateness of antisuit

injunctions."). If, after giving due regard to the circumstances

(including the salient interest in international comity), a court

supportably finds that equitable considerations preponderate in

favor of relief, it may issue an international antisuit injunction.

B. Applying the Standards.

Against this backdrop, we ponder whether the district

court acted within the realm of its discretion when it enjoined

KPMG-B from pursuing the Belgian litigation. We conclude that it

did.

-16-
 The lower court applied the traditional four-part test

for preliminary injunctions. See, e.g., Ross-Simons of Warwick,

Inc. v. Baccarat, Inc., 102 F.3d 12, 15 (1st Cir. 1996) (describing

the four-part test). Because this generic algorithm provides an

awkward fit in cases involving international antisuit injunctions,

district courts have no obligation to employ it in that context.

See Stonington Partners, 310 F.3d at 129. Here, however, any

methodological error was harmless: the district court, as part of

its inquiry, carefully considered all of the critical factors.

We need not belabor the obvious. The parties and issues

are substantially similar, thus satisfying the gatekeeping inquiry.

The district judge acknowledged the importance of comity concerns

in her published opinion. See L&H IV, 2003 WL 22964378, at *2. A

reading of the hearing transcript leaves no doubt that she was

fully aware of the potential ramifications with respect to

international comity and that she gave heavy weight to those

concerns. However, she placed on the opposite pan of the scale the

character of the foreign action, the public policy favoring the

safeguarding of investors from securities fraud, the need to

protect the court's own processes, and the balance of the equities.

Id. at *1-*2. In the end, the court determined that those factors

counterbalanced comity concerns in the peculiar circumstances of

this case. Id. at *2. Having conducted an independent review, we

find that determination fully supportable.

-17-
 The essential character of the Belgian action is easily

discerned. In it, KPMG-B seeks to impose huge financial penalties

on the securities fraud plaintiffs should they take any steps to

enforce the district court's turnover order. This attempt to chill

legitimate discovery by in terrorem tactics can scarcely be viewed

as anything but an effort to "quash the practical power of the

United States courts." Laker Airways, 731 F.2d at 938; see United

States v. Davis, 767 F.2d 1025, 1029 (2d Cir. 1985) (upholding

injunction of foreign proceeding where the "sole purpose" of

instituting that proceeding "was to block compliance with a

legitimate trial subpoena"). Thus, the foreign action is plainly

interdictory in nature.

Where, as here, a party institutes a foreign action in a

blatant attempt to evade the rightful authority of the forum court,

the need for an antisuit injunction crests. See Laker Airways, 731

F.2d at 929-30. Fairly read, KPMG-B's petition to the Belgian

tribunal seeks to arrest the progress of the securities fraud

action by thwarting the very discovery that the district court,

which is intimately familiar with the exigencies of the underlying

case, has deemed essential to the continued prosecution of the

action against any of the defendants. In technical terms, this may

not constitute a frontal assault on the district court's

jurisdiction, but the practical effect is the same. That is a

matter of considerable import: a court has a right — indeed, a

-18-
duty — to preserve its ability to do justice between the parties in

cases that are legitimately before it. See id. at 930; see also

Davis, 767 F.2d at 1039 (upholding an antisuit injunction as

"necessary to ensure a complete adjudication of the matter before

it").

The equities also counsel in favor of affirming the

district court's order. This is not a case in which a trial court

is enabling a fishing expedition. The securities fraud plaintiffs

have survived the PSLRA's heightened pleading requirements and,

moreover, they have actually seen the documents that they seek.

Consequently, they know that they are not fishing in an empty

stream.

In weighing the equities, we also think it noteworthy

that KPMG-B, not the securities fraud plaintiffs or the district

court, set the stage for a crisis of comity. If KPMG-B had not

filed a foreign petition calculated to generate interference with

an ongoing American case, the district court would have had no need

to issue a defensive injunction that sought only to preserve the

court's ability to adjudicate the claims before it according to the

law of the United States. And, finally, KPMG-B's actions are

harder to accept because it had available to it other options for

seeking resolution of its client confidentiality concerns. The

most obvious choice was to pursue and exhaust its position in the

federal judicial system before attempting to sidetrack that system.

-19-
Alternatively, it could have sought clarification from the Belgian

courts without raising the stakes to a level that necessarily

precipitated a direct conflict with the pending securities fraud

action. It eschewed these options. Having called the tune, it

hardly seems inequitable that KPMG-B must now pay the piper.

KPMG-B's remaining arguments need not occupy us for long.

First, it posits that the district court erred when it entered the

antisuit injunction prior to reviewing the magistrate judge's

turnover order (including his assessment of the Belgian law issue).

This argument is hopeless.

District courts have broad discretion in determining the

sequence of their rulings. Cf. Dynamic Image Techs., Inc. v.

United States, 221 F.3d 34, 38 (1st Cir. 2000) (noting trial

court's substantial discretion in deciding when to rule upon

particular motions). Here, moreover, KPMG-B left the district

court no practical alternative. By electing to file its petition

in Belgium before it lodged an objection to the magistrate judge's

recommended decision, KPMG-B effectively dictated the sequence of

subsequent events.

KPMG-B next contends that the lower court erred as a

matter of law by failing to give due regard to the possible use of

letters rogatory as a means of securing the requested documents.

This contention lacks force.

-20-
 While letters rogatory are among the discovery devices

available in a federal court, parties are not required to resort to

them come what may. See Société Nationale Industrielle

Aérospatiale v. United States Dist. Court, 482 U.S. 522, 543-44

(1987). The transcripts of the relevant hearings make it crystal

clear that, in this instance, the district court fully considered,

and flatly rejected, the argument that letters rogatory would serve

as a satisfactory substitute for a turnover order. Bearing in mind

the district court's superior coign of vantage, we are loath to

second-guess its pragmatic judgment. Under the best of

circumstances, letters rogatory are burdensome, costly, and time-

consuming. Id. at 542. For various reasons — including the fact

that Belgium is not a signatory to the Hague Convention4 — the

circumstances here are far from ideal.

Nor can we accept KPMG-B's related contention that, as a

matter of law, no international antisuit injunction can issue if

the forum court's goal can be achieved in some other way. While we

encourage trial courts to search out alternatives that might avoid

the need to issue antisuit injunctions, we will not force them to

4
The Hague Convention provides a set of minimum standards for
securing evidence across national borders. See Société Nationale,
482 U.S. at 532. American courts know that signatory nations are
committed to comply with those standards (and, thus, with requests
made in conformity therewith). Because Belgium is not a signatory
to the Hague Convention, there is an added element of uncertainty
as to whether (and if so, to what extent) the Belgian courts will
honor requests via letters rogatory.

-21-
exhaust remote possibilities. Here, there is no compelling

justification for overriding the district court's considered

judgment that letters rogatory are not a reasonably equivalent

alternative to the turnover order.

Finally, KPMG-B asserts that because the securities fraud

plaintiffs will eventually gain access to the requested documents

even in the absence of a turnover order, the injunction was

improvidently issued. This assertion elevates hope over

likelihood.

KPMG-B's thesis is, in substance, that the work papers

will be made available by the Belgian prosecutor at the conclusion

of the criminal investigation. But there is a rub: we have no

reliable way of knowing when that investigation will end and, in

all events, the record is unclear as to whether the outcome of the

investigation will (or will not) affect the availability of the

work papers. We do not think that a district court must bring the

resolution of a case within its jurisdiction to a dead halt in the

hope that the resolution of a foreign criminal proceeding at an

uncertain future date may alleviate the need for a discovery order.

IV. CONCLUSION

We do not mean to minimize the potential difficulty of

the situation that KPMG-B faces. To some extent, however, that

situation is the natural consequence of its decision to ply its

wares in the lucrative American marketplace. Having elected to

-22-
establish a major presence in the United States, KPMG-B must have

anticipated that it would be subject to suit in this country (and,

thus, subject to pretrial discovery rules that are pandemic to the

American justice system). See Restatement (Third) of Foreign

Relations Law § 442, reporters' note 1 (1987) (noting "that persons

who do business in the United States . . . are subject to the

burdens as well as the benefits of United States law, including the

laws on discovery"). While courts should "take care to demonstrate

due respect for any special problem confronted by [a] foreign

litigant on account of its nationality," Société Nationale, 482

U.S. at 546, a foreign national that chooses to engage in business

in the United States likewise must demonstrate due respect for the

operation of the American judicial system.

We need go no further. For the foregoing reasons, we

hold that the district court acted within the encincture of its

discretion in enjoining KPMG-B from pursuing its Belgian

litigation. In the last analysis, an international antisuit

injunction, like any other injunction, is an equitable remedy

designed "to bring the scales into balance." Rosario-Torres v.

Hernandez-Colon, 889 F.2d 314, 323 (1st Cir. 1989) (en banc). In

this case, the district court acted defensively to protect its own

authority from an interdictory strike and we are confident that, in

doing so, the court kept the balance steady and true.

-23-
 We affirm the district court's injunction order and

vacate the partial stay of that order previously issued by this

court. Costs shall be taxed against the appellant.

-24-