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 processTex. 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 jurisdictionEcuador, Guatemala (found unconstitutional)

● “Defendant loses” legislationNicaragua, 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