Macneil Automotive Products Limited v. Cannon Automotive Limited

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued September 18, 2013
Decided September 20, 2013
Before
WILLIAM J. BAUER, Circuit Judge
RICHARD A. POSNER, Circuit Judge
JOHN DANIEL TINDER Circuit Judge
No. 13‐1432
MACNEIL A UTOMOTIVE P RODUCTS
LIMITED,
Plaintiff‐Appellee,
v.
C ANNON A UTOMOTIVE LIMITED, et al.,
Defendants‐Appellants.
Appeal from the United States
District Court for the Northern
District of Illinois, Eastern Division.
No. 08 C 139
Joan B. Gottschall, Judge.
O R D E R
The plaintiff sued the defendants, affiliated U.K. companies that we’ll call
Cannon, under the alienage branch of diversity jurisdiction, in 2008, charging breach of
contract and related wrongs. The primary defendant is Cannon Automotive Limited,
the company with which MacNeil had its contract; but the plaintiffs contend that the
two Cannon affiliates that are the other defendants will, if MacNeil obtains a judgment
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1

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that Cannon Automotive can’t pay, be liable under veil‐piercing or related doctrines of
derivative liability of affiliates of a primary defendant.
Recently the defendants brought suit against MacNeil in a U.K. court, seeking a
declaration that the affiliates will not be liable for any judgment that MacNeil may
obtain against Cannon Automotive in the present suit. The district court issued a
preliminary injunction against proceedings in the U.K. suit, and the three Cannon
companies have appealed.
At argument we suggested to counsel that proceedings, whether in the U.K. or in
the federal district court in Chicago, concerned with the potential liability of the
affiliates, were premature. If MacNeil obtains no judgment, the liability of the affiliates
will be moot. So too if MacNeil obtains a judgment that Cannon Automotive can pay. If
MacNeil obtains a judgment and Cannon Automotive cannot pay it, MacNeil will
doubtless commence collection proceedings of some sort against the affiliates. To
commence those proceedings, whether in the U.K. or in the United States, before the
district court renders a judgment on the merits would therefore be premature, and
should be postponed until such a judgment is rendered.
Counsel for both parties agreed with our suggestion. We therefore affirm the
district court, emphasizing however that the injunction it issued is merely preliminary,
and will have to be reexamined when and if the case moves into the collection stage.
But in accordance with the parties’ agreement, we direct the district judge to postpone
proceedings in its court against the Cannon affiliates until final judgment is rendered on
the claims against Cannon Automotive. Whether discovery relating to collection should
be allowed before then we leave to the discretion of the district court. We also urge the
court to expedite the litigation, which has made little progress in the five years since it
was commenced.
A FFIRMED.

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