In re Bridgestone/Firestone, Inc. Tires Products

• Decision Date: 14 November 2006
• Docket Number: No. IP 00-9374-C B/S.,No. IP 03-5790-C-B/S.,MDL No. 1373.,IP 00-9374-C B/S.,IP 03-5790-C-B/S.
• Parties: In re: BRIDGESTONE/FIRESTONE, INC. TIRES PRODUCTS LIABILITY LITIGATION Sofia de Manez Lopez et al., Plaintiffs, v. Ford Motor Company et al., Defendants.
• Court: U.S. District Court — Southern District of Indiana

470 F.Supp.2d 917

In re: BRIDGESTONE/FIRESTONE, INC. TIRES PRODUCTS LIABILITY LITIGATION Sofia de Manez Lopez et al., Plaintiffs, v. Ford Motor Company et al., Defendants.

No. IP 00-9374-C B/S.

No. IP 03-5790-C-B/S.

MDL No. 1373.

United States District Court, S.D. Indiana, Indianapolis Division.

November 14, 2006.

Kevin Dubose, Alexander Dubose Jones & Townsend, Houston, TX, Roger H. Reed, Reed Carrera & McLain LLP, Edinburg, TX, Gordon E. Tabor, Tabor Law Firm, Indianapolis, IN, Robert B. Waltman, Waltman & Grisham, College Station, TX, for plaintiff.

Evan N. Kramer, Thompson Coe Cousins & Irons LLP, Houston, TX, Randall Riggs, Locke Reynolds LLP, Indianapolis, IN, for defendant (Ford).

Mark Merkle, Krieg Devault LLP, Indianapolis, IN, Knox D. Nunnally, Phillip B. Dye, Jr., and Jennifer H. Davidow, Vinson & Elkins, Houston, TX, for defendant (Bridgestone).

ENTRY REGARDING ISSUES ON REMAND FROM THE SEVENTH CIRCUIT RELATING TO FORUM NON CONVENIENS

BARKER, District Judge.

In an Order dated, February 27, 2004, this court granted Defendants Bridgestone/Firestone's and Ford Motor Company's forum non conveniens motion dismissing the Plaintiffs' complaint stemming from the 2002 death of their husband and father, Jose Samuel Mañez-Reyes ("Mr.Mañez-Reyes"), as a result of the roll-over of the Ford Explorer he was driving in Veracruz, Mexico. At the time the complaint was dismissed, the Plaintiff, Sofia Lopez de Mañez ("Ms.Lopez"), who sued on behalf of herself and her children, was a Mexican resident, and the parties had stipulated that Mexico was an adequate and available alternative forum. The Mañez-Reyes family appealed the dismissal of their complaint, and, during the pendency of the appeal, Plaintiffs' counsel submitted new "facts" to the Seventh Circuit which created wrinkles in a case that had otherwise "look[ed] like an easy candidate for a straightforward affirmance." In re Bridgestone/Firestone, Inc., Tires Product Liability Action, 420 F.3d 702 (7th Cir.2005). Specifically, six months after the appeal was argued,¹ Plaintiffs informed the Seventh Circuit that:

[T]he Mañez-Reyes family sued Bridgestone/Firestone and Ford in the Fourth Court of First Instance for Civil Cases of the First Judicial District in Morelos, Mexico. That court determined that it did not have jurisdiction to hear the case, a ruling "confirmed" by the Auxiliary Chamber of the Supreme Court of Justice of the State of Morelos.

In re Bridgestone/Firestone, Inc., 420 F.3d 702, 705 (7th Cir.2005). From this information, the Seventh Circuit stated that "it appears that the very first forum non conveniens requirement — an available alternative forum — is no longer satisfied. Mexico, apparently, has refused to hear the case." Id.

Despite the Seventh Circuit's "substantial misgivings about the plaintiffs' actions" related to the lawsuit filed in Mexico,² the Court of Appeals determined that it did "not have an adequate record to assess whether the plaintiffs' actions were taken in good faith" and therefore thought it "prudent to vacate the district court's dismissal and order a remand so that the district court can thoroughly explore the circumstances surrounding the Morelos decisions." Id. at 706. The Seventh Circuit directed that, if the district court determines:

that the Morelos decisions are not entitled to recognition or that the plaintiffs did not act in good faith and manipulated the dismissal of their case in Mexico, the district court should regard itself as free once again to dismiss this complaint. Although it is possible that as a matter of Mexican law, a court in Veracruz might honor the Morelos decisions no matter what, for purposes of U.S. law a forum may not become unavailable by way of fraud.

Id. at 707.

In accordance with the Seventh Circuit's mandate, on September 5 and 6, 2006, we conducted an evidentiary hearing³ to thoroughly explore the circumstances surrounding the Morelos courts' decisions and to specifically answer the questions referred to us by the Seventh Circuit, to wit: 1) were the plaintiffs' actions taken in good faith?; and 2) are the Mexican court decisions entitled to recognition here?⁴ This remand did not require an outright "do over" of our determination of the general availability of Mexico as an alternative forum.⁵ Our inquiry was to be limited to whether the Morelos orders were obtained in good faith, and, if so, if they are entitled to recognition in this court.

We have carefully considered the evidence presented at the hearing and the parties' pre- and post-hearing filings in reaching the following conclusions: The evidence establishes that in filing the case in Morelos, Mexico, the attorneys for Plaintiffs acted with the clear purpose of having the case dismissed; and, in seeking that result, manipulated the process to insure that the dismissal would be based on a particular reason that was calculated to improve the chances of the dismissal being sustained on appeal. In addition, the Morelos court's conclusion that it lacked territorial competency⁶ over the defendants and therefore could not try the matter pending before it⁷ was obtained in bad faith and therefore is not subject to recognition by courts in the United States.

I. Background of Morelos Court Proceedings

A. Mexican Lawyers are Hired

Plaintiffs' U.S. lawyers, Alberto Guerrero and Roger Reed,⁸ retained Dr. Leonel Pereznieto ("Dr.Pereznieto") as Mexican counsel to pursue their claims in the Mexican courts. They learned of Dr. Pereznieto from an expert declaration Dr. Pereznieto prepared in support of other plaintiffs' claims in the Firestone/Ford litigation. Defs.' Brief at 6; citing Defs' Exh. 22; Tr-I,⁹ p. 190, lines 15-25; p. 191, lines 1-8; p. 192, lines 3-7; p. 203, lines 14-25, p. 204, lines 1-3. Dr. Pereznieto hired to assist in this litigation Juan Carlos Guerrero Valle and Rosa Maria Avila Fernandez, both of whom are attorneys specializing in litigation as well as former students of Dr. Pereznieto. Defs.' Brief at 7; citing Tr-I, p. 208, lines 1-19; Tr-II, p. 272, lines 13-21.

Dr. Pereznieto, Juan Carlos Guerrero Valle, and Rosa Maria Avila Fernandez (hereinafter "the Mexican lawyers") were given two tasks by the U.S. lawyers: First, they were to establish Ms. Lopez's right to bring suit on behalf of her children and her husband's estate.¹⁰ Defs.' Exh. 1 (Kevin Dubose's notes from July 6, 2004 meeting); Defs.' Findings at 4. Second, they were to file suit in Cuernavaca, the capital city of Morelos, seeking damages for the death of Mr. Mañez-Reyes. Id.

B. Territorial Competency

Based on expert testimony presented at the evidentiary hearing, we are informed that, under Mexican law, Mexican courts cannot exercise jurisdiction over a particular case if they lack "competence." While there are several types of jurisdictional competence, the form of competence at issue here is "territorial" competence. Territorial competence in a "personal action" requires that the defendant (or at least one of the defendants, if there are more than one) be domiciled within the court's jurisdictional territory. (G. de Castilla, Tr-I, p. 55, lines 1-18 — p. 64, line 4; p. 145, lines 22 — p. 146, lines 5; J Santos-Coy, Tr-II, p. 333, lines 20-p. 335, lines 10, p. 338, lines 4-17.) Gonzalez de Castilla del Valle, an expert on Mexican law, testified that territorial competency in Mexico is similar to personal jurisdiction in the United States. Defs. Brief at 9-10; citing Tr-I, p. 60, lines 4-p. 61 lines 1-25; Tr-I, p. 71, lines 22-25 — p. 72, lines 1-13. By statute, the territorial competency of a court may be waived or extended — thereby avoiding the requirement of domicile — under certain circumstances. Defs.' Exh. 41 (Morelos Civil Procedure Code arts. 24, 25, and 26 § II); Tr-I, p. 70, lines 13-25 — p. 71, lines 1-15). Such a circumstance may arise when the defendants are outside the court's territorial competency but there is nonetheless a point of contact within the forum.

C. Complaint Filed in Morelos

Plaintiffs, through the Mexican lawyers, chose to file their complaint in the State of Morelos. Morelos had no point of contact with this case because neither Defendants nor Plaintiffs were domiciled in Morelos and the accident did not occur in Morelos.¹¹ Defs.' Brief at 9; citing Tr-I, p. 47, lines 20-25 — p 48, lines 1-2. The Plaintiffs' U.S. lawyers maintain that Morelos was chosen as the forum because a Firestone affiliate, Bridgestone Firestone de Mexico, S.A. de C.V., had located a factory in Cuernavaca, Morelos. Defs.' Brief at 10; citing Tr-II, p. 278, lines 24-25 — p. 279, lines 1-16. Although Bridgestone Firestone de Mexico was not sued by Plaintiffs, Plaintiffs' U.S. lawyers stated that they believed that the presence of Bridgestone Firestone de Mexico in the town of Cuernavaca might suffice in establishing territorial competence in Morelos under a veil-piercing theory.¹²

When Plaintiffs filed the complaint in Morelos, the Defendants were not within the court's territorial competency, which is to say, they were not domiciled in Morelos and thus the court could not immediately admit the case. Defs.' Brief at 3. Emilio Gonzalez de Castilla del Valle testified that according to usual procedures, a court should admit a case that has a point of contact in the forum, even if the case does not appear to fall within the court's territorial competency, and give the defendant his or her right to consent to the competency of the court. Tr-I, p. 72, lines 5-13; see also Defs.' Brief at 10. Because the Fourth Court of First Instance for Civil Cases of the First District in Morelos lacked a point of contact with the case, and thus territorial competency, it refused to accept the case, a ruling "confirmed" by the Supreme Court of Justice of the State of Morelos. Plaintiffs appear to have contrived this "adverse" ruling by intentionally filing the case in a court lacking jurisdiction, and when the dismissal came, those orders by...