989 F.2d 1002 (8th Cir. 1993), 92-2858, Northwest Airlines, Inc. v. American Airlines, Inc.

Docket Nº:92-2858.
Citation:989 F.2d 1002
Case Date:April 06, 1993
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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989 F.2d 1002 (8th Cir. 1993)




No. 92-2858.

United States Court of Appeals, Eighth Circuit

April 6, 1993

Submitted Oct. 13, 1992.

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Janie S. Mayeron, Minneapolis, MN, argued (Julie M. Friedman and Elaine J. Erickson, on the brief), for appellant.

Thomas W. Tinkham, Minneapolis, MN, argued (Christopher J. Riley and Edward B. Magarian, on the brief), for appellee.

Before BOWMAN, WOLLMAN, and BEAM, Circuit Judges.

BOWMAN, Circuit Judge.

American Airlines appeals the District Court's 1 order granting Northwest Airlines' motion to enjoin American from proceeding with a lawsuit American filed against Northwest in a federal district court in Texas. We affirm.

The actions of the parties relevant to this case begin in May 1991 with the dispatch of a letter from the general counsel of American Airlines to her counterpart at Northwest Airlines, the entire text of which follows:

You may not have seen the Texas Supreme Court decision of Sterner vs. Marathon Oil Company, so I have enclosed a copy. As we read that case, we have a decent chance of prevailing against Northwest should we elect to sue for tortious interference with respect to the nine employees you have hired in the past four months, particularly considering the skills they possess.

I have never much fancied being a plaintiff, but you folks may drive us to it. Although we are flattered by all the attention, we hope you'll look elsewhere for your staffing needs.

Letter from Anne H. McNamara, General Counsel, American Airlines, Inc., to Richard B. Hirst, General Counsel, Northwest Airlines, Inc. (May 15, 1991) (emphasis added).

In the months before this letter was written, Northwest had been recruiting employees--with some success--from the ranks of American's department responsible for financial analysis, forecasting, and strategic planning; and from among American's employees in the department that determined the most profitable fare mix for American flights.

On June 6, 1991, Northwest's general counsel responded that he believed the Sterner case cited in the May 15 letter did not change Texas law regarding the hiring of at-will employees from other companies. The letter concluded, "We are, however, reviewing this conclusion with Texas counsel. I appreciate your informing us of your position and your concerns on this point." Letter from Richard B. Hirst, General Counsel, Northwest Airlines, Inc., to Anne H. McNamara, General Counsel, American Airlines, Inc. (June 6, 1991).

Six weeks later, on July 17, 1991, Northwest filed suit in the United States District Court for the District of Minnesota (hereinafter "the District Court") seeking a declaratory judgment that Northwest had lawfully hired at-will employees of American in the past, and could lawfully continue to hire such employees from American and other competitors in the future. On August 30, after another six weeks had passed, American filed suit against Northwest in the United States District Court for the Northern District of Texas. American's complaint seeks permanent injunctive

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relief and damages for unfair competition and tortious interference with contractual relationships.

On September 6, 1991, American filed a motion in the District Court to dismiss the Minnesota action, or to transfer it to Texas. The court denied the motion on October 30, 1991. Two days before the court's decision, Northwest filed its answer in the Texas suit 2, and the next day, October 29, Northwest filed a motion in Texas to stay the Texas case or transfer venue to Minnesota. It was not until January 28, 1992, that the Texas court denied Northwest's motion in an order that does not mention the October 30, 1991, order of the District Court in the Minnesota action. The denial of Northwest's motion became final when Northwest's February 24, 1992, motion to reconsider was denied May 12, 1992.

While waiting for a final decision on its motion to stay or transfer the Texas case, Northwest filed a motion in the Minnesota action on April 21, 1992, to enjoin American from proceeding with the parallel action in Texas. The District Court granted the motion on June 24, 1992. 792 F.Supp. 655.

In enjoining American from proceeding with its suit in Texas, the District Court found that "American ha[d] not shown that Northwest proceeded in bad faith or 'raced to the courthouse.' " 792 F.Supp. at 659. The court also found there were no compelling circumstances to make inapplicable the general rule that "the district court first obtaining jurisdiction over the parties should proceed to adjudicate the...

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