Representing Latin American Clients
in U.S. Courts
and
Coordinating the Defense of U.S.
Clients in Latin America
George R. Diaz-Arrastia
Service of process on foreign defendants
Service of process under domestic U.S. law:
● Federal Rules
▪ FRCP 4(f)(1) -- “by any internationally agreed means
reasonably calculated to give notice”
▪ FRCP 4(f)(2) -- applies only if there is no internationally
agreed means of service of process
*
allows “any form of mail requiring a
signed receipt” but it must be “dispatched
by the clerk of the court”
▪ FRCP 4(f)(3) -- “by any other means not prohibited by
international agreement as may be directed by the court”
Service of process on foreign defendants
Service of process under domestic U.S. law:
● State Rules
▪ Designated agents for service of process
Tex. Civ. Prac. & Rem. Code § 17.044
▪ Many state rules permit service in foreign countries in the
same manner as permitted for domestic service of process
Tex. R. Civ. P. 108a(1)(c)
Service of process on foreign defendants
Service of process under domestic U.S. law:
● Will service of process only under U.S. domestic law support
entry of a default judgment?
-- Probably yes
● Will this default judgment be enforceable in the country of
the defendant’s residence?
-- Probably not
Service of process on foreign defendants
Service of process under an international convention:
● The Hague Convention on the Service Abroad of Judicial and
Extrajudicial Documents in civil or Commercial Matters
(1965)
● The Inter-American Convention on Letters Rogatory (1988)
Service of process on foreign defendants
Service of process under the law of the country of the
defendant’s residence:
● Domestic practice on letters rogatory
● Service of process in the manner directed by the domestic law
of the country of the defendant’s residence
-- See Fed. R. Civ. P. 4(f)(2)(A)
Service of process on U.S. clients
in Latin America
Service of process may be made:
● Under the law of the country where the suit is pending
● Under U.S. law
● Under an international convention
Service of process on U.S. clients
in Latin American Litigation
Service of process under U.S. law may be achieved
under low levels of formality
● Service by any non-party -- Fed. R. Civ. P. 4(c)(2)
● Service by mail-- Tex. R. Civ. P. 103
● Service by any means reasonably effective to give actual
notice -- Tex. R. Civ. P. 106(b)
Generally, service of a summons is required
Cf. waiver of service under Fed. R. Civ. P. 4(d)
Assets Subject to Execution
Consider non-traditional assets that may be present or
subject to the jurisdiction of the country of suit:
● Debts owed and accounts receivable may be subject to
garnishment or similar process
● Goods in transit
● Intellectual property
● Shares of subsidiary companies
Federal and State Jurisdiction/Removal
Removal:
● Most Latin American clients sued in the U.S. should be
able to remove under 28 U.S.C. § 1332(a)(2) or (3)
● Latin American clients suing as plaintiffs in the U.S. will
probably have to sue in state court, unless a federal
question exists
● Do not remove just because you can. Consider
▪ the forum
▪ the judge
Personal Jurisdiction
U.S.:
● Minimum contacts
International Shoe Co. v. Washington, 326 U.S. 310 (1945)
Latin American Countries:
● The Most Latin American countries have a territorial
conception of personal jurisdiction
● Developing concept that national courts have jurisdiction
over foreign actors who cause effects within the national
territory
Forum Non Conveniens and
Anti-Forum Non Conveniens Legislation
Forum Non Conveniens:
●
●
●
●
Adequate alternative forum
Private interest factors
Public interest factors
The court may set terms and conditions on dismissal
Several Latin American countries have adopted anti-forum non
conveniens legislation:
●
Legislation depriving local courts of jurisdiction
Ecuador, Guatemala (found unconstitutional)
●
“Defendant loses” legislation
Nicaragua, Panama, Honduras
Assessing the Quality of the Local Courts
Sources:
●
●
●
●
State Department Country Reports
USAID Country Reports
U.S. Commercial Service Country Commercial Guides
NGOs
• e.g., Transparency International’s Corruption
Perception Index
● Local counsel
Selecting Local Counsel
You have to go there
● Interview candidates in person
● Don’t expect U.S.-type trial lawyers in many countries
-- many are transactional lawyers
● Get fee arrangement straight ahead of time
-- they will work hourly or on contingent fee
-- be clear on the “dos” and “don'ts” of billing
● Plan on meeting with them frequently
● Plan on spending a lot of time understanding the local law
Discovery
U.S. style discovery does not exist in Latin America
Latin American clients have no familiarity with U.S.
discovery
● Requests for production
-- “give me everything”
● Depositions
-- a good interpreter is critical
Discovery under 28 U.S.C. § 1782
The statute:
The district court in which a person resides or is found may order him to give
his testimony or to produce a document or other thing for use in a proceeding
in a foreign or international tribunal, including criminal investigations
conducted before formal accusation. The order may be made pursuant to a
letter rogatory issued, or request made, by a foreign or international tribunal or
upon application of any interested person and may direct that the testimony or
statement be given, or the document or other thing be produced, before a
person appointed by the court. By virtue of his appointment, the person
appointed has power to administer any necessary oath and take the testimony
or statement. The order may prescribe the practice and procedure, which may
be in whole or part the practice and procedure of the foreign country or the
international tribunal, for taking the testimony or statement or producing the
document or other thing. To the extent that the order does not prescribe
otherwise, the testimony or statement shall be taken, and the document or other
thing produced, in accordance with the Federal Rules of Civil Procedure.
Discovery Under 28 U.S.C. § 1782
Intel Corp. v. Advanced Micro Devices, 542 U.S. 241
(2004)
Applicant need only show three elements:
1. The person from whom discovery is sought resides or is
found in the district.
2. The discovery is for use in a proceeding before a foreign
or international tribunal.
3. Application is made by the tribunal or any interested
person.
Discovery Under 28 U.S.C. § 1782
Will discovery be permitted under 28 U.S.C. § 1782?
Two basic approaches:
1. The statute does not apply.
-- de novo review
2.
The court should exercise its discretion to deny or limit
the application.
“…a district court is not required to grant a § 1782 discovery
application simply because it has the authority to do so.” Intel at
264
-- abuse of discretion
Enforcement of Foreign Judgments in
the U.S.
US not a party to any treaty
No federal law on enforcement
Most states have adopted an Uniform Act
▪
Uniform Foreign Money Judgment Recognition Act
▪
Adopted by 29 states
Enforcement of Foreign Judgments in
the U.S.
Mandatory grounds for non-enforcement:
● The foreign system fails to provide for
▪ impartial tribunals
▪ procedures compatible with due process
▪ this is a high hurdle
Bank Melli Iran v. Pahlavi, 58 F.3d 1406 (9th Cir. 1995) cert.
denied 516 U.S. 989
Bridgeway Corp. v. Citibank, 201 F.3d 134 (2nd Cir. 2000)
Enforcement of Foreign Judgments in
the U.S.
Mandatory grounds for non-enforcement (cont’d):
● The foreign court lacked subject matter jurisdiction
-- the foreign court’s determination is usually conclusive
-- judgments affecting U.S. land or U.S. intellectual property rights
● The foreign court lacked personal jurisdiction
▪ Two bites at the apple
-- under foreign law in the foreign court
-- under U.S. law in the enforcement action
Enforcement of Foreign Judgments in
the U.S.
Discretionary grounds for non-enforcement:
● Lack of timely notice
● Judgment was obtained by fraud
-- extrinsic vs. intrinsic fraud
● The cause of action on which judgment is based is repugnant
to public policy
-- e.g., UK libel laws
Enforcement of Foreign Judgments in
the U.S.
Discretionary grounds for non-enforcement (cont’d):
● Judgment conflicts with another final judgment
● Judgment violates forum selection agreements
•
arbitration agreement
•
contractual forum selection clause
● The foreign country court was “a seriously inconvenient
forum for the trial of the action”
● No reciprocity