The Common Law of Mexican Law in Texas Courts

Beginning of article

I. INTRODUCTION/SCOPE OF ARTICLE

II. TEXAS ABOLISHED THE DISSIMILARITY DOCTRINE IN 1979,
       ALLOWING TEXAS COURTS TO APPLY MEXICAN LAW
       WHEN MEXICO HAS THE "MOST SIGNIFICANT"
       RELATIONSHIP TO THE LITIGATION
       A. Gutierrez Abolished the Dissimilarity Doctrine
       B. Gutierrez Abolished the Lex Loci Delicti Rule and
          Adopted the "Most Significant Relationship" Test
       C. FEDERAL COURTS WITH DIVERSITY JURISDICTION
          APPLY TEXAS LAW
       D. Some Choice of Law Problems for Texas Courts
          Applying Mexican Laws
       E. Arbitration and Alternative Dispute Resolution

III. PROCEDURAL RULES IN APPLYING MEXICAN LAW IN
       TEXAS COURTS
       A. The Primary Rules
       B. The Types of Pleading and Proof
       C. Experts Are Subject to Daubert/Robinson and
          Other Challenges

IV. SUBSTANTIVE MEXICAN LAW AS PART OF THE COMMON
       LAW OF TEXAS
       A. Personal Injury Cases
          1. Mexican Tort Law Is More General Than Texas
             Law
          2. Causation Issues
          3. Particular Non-Negligence Tort Claims
          4. Strict Liability Tort Claims
          5. Damages Issues
       B. Commercial Disputes
          1. Contract Law Generally
          2. Collections, Debts, Notes
          3. Contracts Violating Mexican Law
       C. Estate, Trust, and Family Law Issues
       D. Regulatory Laws, Tax Law, and Issues Including
          Investments and Property, and Intellectual
          Property
       E. Bankruptcy Issues
       F. Labor and Employment Law Issues
       G. Telecommunications Law Issues
       H. Criminal Law Issues

V. CONCLUSION

I. INTRODUCTION/SCOPE OF ARTICLE.

A quarter of a century ago in 1979, the Texas Supreme Court abolished the "Dissimilarity Doctrine" in Texas and the lex loci delicti rule in choice of law determinations in its landmark watershed opinion, Gutierrez v. Collins. (1) Since that time, Texas courts have applied Mexican law to disputes filed in Texas. (2)

Texas adopted the English common law and repealed certain Mexican laws in 1840. (3) As a common law jurisdiction, Texas courts follow precedent under the doctrine of stare decisis. (4) According to the United States Supreme Court, "stare decisis ... is a doctrine that demands respect in a society governed by the rule of law." (5) This article catalogues and summarizes prior cases, primarily--although not exclusively--Texas state law cases and federal cases from Texas, in which courts have determined Mexican law with regards to particular areas. This article does not attempt to judge whether any particular interpretation or application of Mexican law was correct, but only reports what the courts have written and the conclusions they have reached. In addition, this article, designed for use by practitioners, cites many law review articles, books, and other sources generated in the United States but interpreting or related to Mexican law. (6) This paper focuses primarily on Mexican civil, not criminal, laws. However, at least a handful of Texas cases have referenced Mexican criminal laws, and we have included a brief section on cases referencing criminal laws in Mexico. (7)

As courts and many commentators have noted, the evolution of the global economy and the economic integration of North America make Mexican legal issues increasingly more likely to arise in U.S. courts, especially in the Southwest where states share a border with Mexico. (8) As one article notes, with an estimated 12 million U.S. citizens traveling to Mexico, if one in 10,000 suffers a tort, approximately 1,200 claims may be made in the United States. (9) The United States shares 2,000 miles of border with Mexico, of which 1,254 miles are along the Texas border. (10) Texas' geographic location makes Texas a jurisdiction with recurring Mexican law issues. (11)

Practically, and contrary to the recent suggestion that litigation of Mexican law issues will proliferate in Texas courts, (12) in our judgment, many more disputes filed in Texas and governed by Mexican law will not be ultimately resolved in Texas courts because prior to the resolution of disputes on the merits, defendants will cite the applicability of Mexican law as a factor favoring dismissal under the forum non conveniens doctrine. (13) Gonzalez v. Chrysler Corp.'s discussion makes it a significant case, although certainly not the first case, to hold that Mexico is an adequate forum for forum non conveniens purposes. (14) In 2003, the Fifth Circuit followed and reaffirmed Gonzalez by affirming another forum non conveniens dismissal to Mexico. (15) The Fifth Circuit also stated that a "choice of law determination is a necessary part of [a forum non conveniens] dismissal." (16)

Courts are understandably reluctant to engage in analyses of Mexican law that are likely to be complex and time-consuming, as opposed to a more straightforward forum non conveniens inquiry involving "well-established principles and a well-established body of American case law." (17) Even after the abolition of the Dissimilarity Doctrine (18) and notwithstanding the availability of treatises and other translated materials of Mexican law, (19) courts may still be reluctant to apply Mexican law because of the absence of readily available Mexican statutory and case law, problems inherent in a court applying laws the court is unfamiliar with, and the increased costs and length of trials due to the translation requirements. (20) Some opinions have also noted that Mexican courts are likely to understand Mexican law better than courts in the United States. (21) A forum non conveniens dismissal to Mexico (particularly in personal injury cases) may be outcome determinative because the lawsuit may not be economically viable in Mexico. (22)

II. TEXAS ABOLISHED THE DISSIMILARITY DOCTRINE IN 1979, ALLOWING TEXAS COURTS TO APPLY MEXICAN LAW WHEN MEXICO HAS THE "MOST SIGNIFICANT" RELATIONSHIP TO THE LITIGATION

A. Gutierrez Abolished the Dissimilarity Doctrine

For many years, Texas courts refused to apply Mexican laws based on the Dissimilarity Doctrine. The Dissimilarity Doctrine was a defense against the application of Mexican law based on

   notions of practicality, fairness, and public policy
   prevalent [at the time because a] paucity of translated
   material [Mexican statutes and judicial opinions] might
   lead to incorrect interpretations of Mexican law by
   Texas courts, which would be unfair to the parties.
   Finally, several features of the laws of Mexico were
   considered to be so dissimilar to the laws of this state
   that they should not be enforced. (23)

In 1979, the Texas Supreme Court abolished the Dissimilarity Doctrine, and recognized the potential applicability of Mexican law in Texas state courts for torts occurring in Mexico and elsewhere. (24)

The Texas Supreme Court in Gutierrez noted three dissimilarities which "were proven in the record before us and have been noted in most recent cases." (25) The three distinctions between Mexican law and Texas law the Texas Supreme Court cited, all involving damages issues, were: (1) limitation of damages statutes indexing a plaintiffs recovery to the prevailing wage rates set by Mexican labor law; (26) (2) that "Mexican law does not recognize pain and suffering as an element of damages, contrary to the laws of Texas and other jurisdictions in this country;" (27) and (3) that "Mexican law authorizes recovery for moral reparations which include injuries to a plaintiffs reputation, dignity, or honor." (28)

This article analyzes how Texas courts and some other courts have interpreted Mexican law issues since Gutierrez.

B. Gutierrez Abolished the Lex Loci Delicti Rule and Adopted the "Most Significant Relationship" Test

Prior to Gutierrez, Texas followed the rule of lex loci delicti: "The law of the place where the cause of action arose, the lex loci delictus, must determine the nature of the cause of action, and the defenses, if any, available. The case asserted must stand or fall upon that law." (29) This approach was rejected in Gutierrez. (30) Instead, the Texas Supreme Court adopted an interest balancing approach to choice of law issues requiring a judicial determination as to which jurisdiction has the "most significant relationship" to the litigation. (31) This approach followed the national trend, and the methodology for determining the applicable substantive law is based on the Second Restatement of Conflict of Laws. (32) Subsequent cases confirm that, absent contractual agreement by a choice of law clause to the contrary, the Most Significant Relationship test applies in choice of law cases. (33)

The general choice of law considerations under [section] 6 of the Restatement include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability, uniformity of result, and

(g) ease in determination and application of the law to be applied. (34)

The Second Restatement thus creates a rebuttable presumption that lex loci delicti applies, absent a more significant relationship by another (usually the forum) state. In cases involving two or more Texas residents in Mexico, Texas courts have found both Texas law and Mexican law controlling. (35)

It is the quality, not the quantity of contacts, which is determinative. (36) Additionally, the directives of other Restatement provisions are particularly relevant. (37) The threshold point of inquiry in evaluating the contacts is the identification of the policies and governmental interests involved. (38) According to at least one commentator, there is a recent trend where Texas courts interpret the Most Significant Relationship test in ways that result in the application of Texas, not Mexican, law. (39)

C. Federal Courts with Diversity Jurisdiction Apply Texas Law

A federal court in Texas with diversity jurisdiction would apply Mexican law in the same manner as a Texas state court. (40)

D. Some Choice of Law Problems for Texas Courts Applying Mexican Laws

Mexican corporations may argue that imposing Texas tort law is an unfair surprise. (41) According to the Fifth Circuit: "Were we to apply Texas law as a means of righting any perceived inequities of Mexican law, we would be undercutting Mexico's right to create a hospitable climate for investment." (42) Two Texas courts, the Corpus Christi and El Paso Courts of Appeals have similarly stated that "Mexico has a competing interest in protecting its residents from what it may consider to be excessive liability to foreigners for actions occurring on Mexican soil." (43)

"Comity" may also be invoked as a ground for applying Mexican law or abstaining from adjudication or both. (44) Among the factors under a comity analysis is respect for the sovereignty of other countries. (45) The doctrine of comity is based on respect for the sovereignty of other states, like Mexico, and under that doctrine, the forum state will defer to the substantive law of the foreign sovereign to causes of action arising there. (46) However, the comity doctrine is not limitless. (47)

Texas courts traditionally assert their jurisdiction and law vigorously in cases involving Texas residents. In wrongful death cases, "Texas has an interest in protecting the rights of its citizens to recover adequate compensation for the wrongful death of their relatives in foreign lands." (48) As a forum, Texas also has interests in applying its own law. (49) However, a Texas Court may apply Mexican law to some issues and Texas law to others under the doctrine of depecage. (50)

Choice of law clauses, wherein parties have chosen the applicability of Mexican law, may also result in the application of Mexican law to a dispute filed in Texas courts. (51)

E. Arbitration and Alternative Dispute Resolution

Some disputes involving the potential application of Mexican law in Texas courts may also end up in arbitration by agreement of the parties. (52) NAFTA-related disputes are also likely to be resolved by arbitration. (53) Forum selection clauses and prorogation clause are prima facie valid and, like other choices made by the parties, are enforced unless the opposing party shows that enforcement is unreasonable under the circumstances. (54) However, forum selection clauses must apply to the particular document at issue and be clear. (55)

III. PROCEDURAL RULES IN APPLYING MEXICAN LAW IN TEXAS COURTS

Failure to follow the proper procedural and evidentiary rules may be fatal to a party's request that a Texas court apply Mexican law, at least in state court. (56) In the absence of proper proof of the laws of Mexico (or any other country), Texas courts presume that the foreign country's laws are identical to the laws of Texas. (57) Texas courts have subject matter jurisdiction to consider choice of law and choice of forum determinations. (58)

The court, not a jury, determines the laws of foreign countries like Mexico. (59) Choice of law is a mixed question of law and fact for the trial court requiring identification of relevant contacts and a determination of which law applies. (60) "The application of the law to the facts is a question of law." (61) Accordingly, appellate courts defer to a trial court's determinations on questions of fact, and review de novo its determinations of whether Mexican law applies. (62) A trial court's refusal to apply Mexican law is not generally reviewable by mandamus. (63)

A defendant moving for a "traditional" summary judgment under Tex. R. Civ. P. 166a(c) has the burden of proving that a plaintiff has no cause of action under Mexican law. (64)

A. The Primary Rules

Texas Rules of Evidence 203 provides that:

   A party who intends to raise an issue concerning the
   law of a foreign country shall give notice in the
   pleadings or other reasonable written notice, and at
   least 30 days prior to the date of trial such party shall
   furnish all parties copies of any written materials or
   sources that the party intends to use as proof of the
   foreign law. If the materials or sources were originally
   written in a language other than English, the party
   intending to rely upon them shall furnish all parties
   both a copy of the foreign language text and an English
   translation. The court, in determining the law of a
   foreign nation, may consider any material or source,
   whether or not submitted by a party or admissible
   under the rules of evidence, including but not limited to
   affidavits, testimony, briefs, and treatises. If the court
   considers sources other than those submitted by a
   party, it shall give all parties notice and a reasonable
   opportunity to comment on the sources and to submit
   further materials for review by the court. The court,
   and not a jury, shall determine the laws of foreign
   countries. The court's determination shall be subject to
   review as a ruling on a question of law. (65)

Rule 203 is "a hybrid rule by which the presentation of the foreign law to the court resembles the presentment of evidence but which ultimately is decided as a question of law." (66) A party seeking to apply Mexican law must request that the court take judicial notice pursuant to Texas Rules of Evidence 203 at least 30 days prior to trial. (67) The motion requesting judicial notice and application of Mexican law must be verified. (68)

The San Antonio Court of Appeals has found that a party fully complies with the requirements of Rule 203 when the party advocating judicial notice of Mexican law provides the court with:

(1) an attorney's affidavit concerning the grounds for …