## Facts

- The Republic of the Philippines and a government-owned power corporation sued Westinghouse and Burns and Roe in federal court over alleged corruption and contract-related misconduct tied to a nuclear power plant project.
- Most claims against Westinghouse were sent to arbitration; remaining bribery-related claims and claims against Burns and Roe proceeded to a jury trial.
- The jury returned a verdict for Westinghouse and Burns and Roe on the claims tried in court.
- After the verdict, Westinghouse alleged the Republic retaliated against witnesses who participated in the U.S. litigation, including through public attacks, threatened legal actions (including tax-related actions), and disciplinary proceedings against an academic whose affidavit was used.
- The district court found the Republic’s actions threatened the integrity of the court’s fact-finding process and issued injunctions prohibiting retaliation or harassment of witnesses and requiring affirmative renunciation of retaliatory measures.
- To preserve its ability to enforce the injunctions, the district court denied entry of partial final judgment under Rule 54(b) and ordered that any settlement must be conditioned on the court’s continuing jurisdiction to enforce the injunctions.
- The Republic appealed, arguing the orders improperly intruded on its internal governmental functions within its own territory and violated international comity.

## Issues

1. Whether a federal district court may, consistent with international comity, enjoin a foreign sovereign’s internal law-enforcement and disciplinary actions in its own territory to prevent retaliation against witnesses in U.S. litigation.
2. Whether the district court abused its discretion by denying Rule 54(b) certification primarily to maintain jurisdiction to enforce the injunction.
3. Whether the district court exceeded its authority by conditioning any settlement on the parties’ acceptance of continuing jurisdiction to enforce the injunction.

## Decision

- The Third Circuit reversed the injunction and related orders and remanded.
- The court held the injunction was an improper exercise of inherent power because it directly regulated the sovereign’s internal executive functions in its own territory, raising substantial comity concerns.
- The court held the Rule 54(b) denial was an abuse of discretion to the extent it was used to retain jurisdiction in support of an improper injunction.
- The court held the settlement-condition order exceeded the district court’s authority, particularly because it attempted to bind the Republic to ongoing judicial supervision of internal governmental conduct.

## Legal Principles

- Federal courts possess inherent authority to protect the integrity of their proceedings and to sanction litigants, including foreign sovereigns that voluntarily litigate in U.S. courts.
- International comity limits remedies that would supervise or restrain a foreign sovereign’s core governmental functions (including law enforcement and internal discipline) carried out within its own territory.
- When addressing alleged witness intimidation or retaliation, courts must consider less intrusive sanctions before imposing extraordinary injunctive relief that intrudes on foreign sovereignty.
- Rule 54(b) discretion may not be used to manipulate appellate timing in order to preserve jurisdiction for enforcement of orders beyond the court’s lawful authority.
- A district court generally may not condition settlement on acceptance of continuing jurisdiction to enforce an invalid or overbroad injunction.

## Conclusion

The Third Circuit held that although federal courts may sanction conduct threatening their fact-finding process, international comity restricts injunctions that control a foreign sovereign’s internal executive actions; it therefore reversed the injunction, the Rule 54(b) denial tied to enforcing it, and the settlement condition, and remanded for consideration of permissible, narrower measures.


Republic of the Phil. v. Westinghouse Elec. Corp., 43 F.3d 65 (3d Cir. 1994)