Easterbrook J on Issue Estoppel Based on Foreign Proceedings

In Apotex v AstraZeneca / omeprazole 2012 FCA 68 Stratas JA: Dawson, Trudel JJA aff’g 2011 FC 598 Mosley J, aff’g 95 CPR(4th) 414 Lafrenière Pr (blogged here), the FCA refused to strike a pleading raising issue estoppel based on foreign litigation. In catching up on my law review reading, I came across the decision of Easterbrook J (sitting by designation) in Vas-Cath Inc. v. Mahurkar 745 F Supp 517 (ND Ill 1990), rev'd in part on other grounds, 935 F 2d 1555 (Fed Cir 1991), which actually applied issue estoppel based on the Canadian decision by Strayer J in Mahurkar v Vas-Cath of Canada Ltd(1988), 18 CPR(3d) 417 as determinative of some issues in the US litigation between the same parties involving the corresponding patent. In light of the recent FCA decision, I thought Easterbrook J’s decision was worth raising, as I do not believe it has been cited in the previous Canadian cases on this point.

In deciding to apply issue estoppel (or issue preclusion, the US terminology), Easterbrook J remarked

I do not read the Federal Circuit's cases as compelling courts of the United States to ignore informed decisions rendered abroad; the judges of that distinguished court are not xenophobes. Decisions from the Federal Circuit instead reflect the legitimate concern that, when considering what the first case settled, courts not disregard differences in law. If a foreign court renders judgment on a question of fact with significance in each system of law, there is no reason not to take over that decision. Despite Judge Weinstein's omens, I propose to do just that: to examine the Canadian judgments, to learn what has been decided, and to apply those decisions to this litigation to the extent-and only to the extent-they are legally relevant, and the findings are free of the influence of legal differences.

            . . .

I do not think it important that Canada does not afford parties the same discovery rights as the Federal Rules of Civil Procedure. Preclusion survives substantial differences in the rules of procedure (provided the differences are not so great that the original judgment was obtained without due process of law, as we understand that phrase). Even within the United States, some states are more stingy with discovery than are federal courts, yet their judgments are honored. Vas-Cath does not contend that the system of litigation in Canada is uncivilized or unlikely to produce sound judgments. Most nations of the world view our system of discovery as uncivilized. No case I could find declined to give force to a Canadian judgment on the ground that Canadian procedural rules differ from ours. Vas-Cath has not pointed to any fact that it wanted to bring to the Canadian court's attention but could not because of procedural rules. Even after extensive discovery in this case, Vas-Cath has not identified any fact that could have made a difference, if only it had been found in time for presentation to the Canadian court.

Easterbrook J’s analysis seems to be consistent with the approach adopted in prior Canadian cases refusing to strike pleading based on foreign issue estoppel, such as those reviewed by Layden-Stevenson J inJohnson & Johnson Inc v Boston Scientific Ltd, 2008 FC 552 at [260]-[268] (and see also my post here discussing a variant of this issue.) The difference is that Easterbrook J went so far as to actually apply the doctrine.

I came across Easterbrook J’s decision in Kyle Grimshaw, International Upheaval: Patent Independence Protections and the Hague Conference, 2001 Duke L. & Tech. Rev. 20. Grimshaw argues that Easterbrook J was wrong, and issue estoppel based on foreign decisions should not be allowed, on the basis that foreign substantive and procedural rules may be different. While that is true, both of these concerns were acknowledged by Easterbrook J, who held, in effect, that this would not preclude the application of issue estoppel if these differences were not significant in the context of the case at hand.