DeJoria v. Maghreb Petroleum Exploration, S.A.
2015 U.S. App. LEXIS 17221
| 5th Cir. | 2015Background
- DeJoria (major investor in Skidmore) was sued in Morocco by MFM and MPE alleging fraudulent inducement related to investments in Moroccan corporation Lone Star; Moroccan court entered judgment against DeJoria (~$122.9M) after seven years, absolving some co-defendants.
- DeJoria sued in Texas to avoid recognition under the Texas Uniform Foreign Country Money-Judgment Recognition Act, asserting mandatory grounds: lack of due process in Moroccan system and lack of personal jurisdiction; also argued discretionary non-reciprocity.
- District court granted DeJoria’s motion for non-recognition under §36.005(a)(1) (system lacks impartial tribunals/procedures compatible with due process); defendants (MPE/MFM) appealed.
- Fifth Circuit reviewed de novo whether statutory non-recognition grounds were established and considered alternative grounds (reciprocity and personal jurisdiction) because the record supported them.
- On the record (reports noting judicial influence vs. Moroccan experts and statutory provisions showing reforms and recognition mechanisms), the Fifth Circuit held DeJoria failed to meet the high burden to show Morocco’s judicial system is fundamentally unfair; also rejected his reciprocity and personal-jurisdiction arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Moroccan judicial system lacks impartial tribunals / procedures compatible with due process under Tex. Civ. Prac. & Rem. Code §36.005(a)(1) | Moroccan judiciary is beholden to the King, permeable to political influence, and lacks independence; thus whole system is fundamentally unfair | Morocco has statutory protections, reforms, expert testimony that procedures and appellate review meet basic fairness; not a collapsed or hostile system | Reversed district court: DeJoria failed to prove the Moroccan system is so lacking as to deny due process; recognition required |
| Whether Morocco would refuse to recognize Texas judgments (reciprocity) under §36.005(b)(7) | Morocco has not recognized Texas judgments historically and may deny U.S. judgments for reasons tied to venue (i.e., being rendered in Texas) | Moroccan law (Article 430) permits recognition subject to genuineness, jurisdiction, and public policy; experts testify Morocco recognizes foreign judgments | DeJoria did not meet burden to show Morocco would refuse to recognize an otherwise enforceable Texas judgment solely because it was rendered in Texas |
| Whether Moroccan court had personal jurisdiction over DeJoria under §36.005(a)(2) (service and amenability) | Service allegedly defective (diplomatic-channel rule) and procedural failures (no curator) deprived Moroccan court of jurisdiction | DeJoria received actual notice; curator unnecessary because domicile known; Moroccan law and Texas-analog standards support jurisdiction | Personal jurisdiction proper: notice satisfied; amenability and forum contacts adequate; non-recognition not warranted |
| Standard of review for recognition decisions | (argued below) District-court factual-style review | Appellate court: question of law whether statutory grounds established; review de novo | De novo review applied to whether statutory grounds exist (discretionary secondary decisions reviewed for abuse of discretion if reached) |
Key Cases Cited
- Banque Libanaise Pour Le Commerce v. Khreich, 915 F.2d 1000 (5th Cir.) (evidence required to show non-reciprocity under Texas law)
- Soc’y of Lloyd’s v. Turner, 303 F.3d 325 (5th Cir. 2002) (foreign system must be only fundamentally fair; high bar for non-recognition)
- Bank Melli Iran v. Pahlavi, 58 F.3d 1406 (9th Cir.) (Iranian judicial system found so politicized and hostile to Americans that judgments could not be enforced)
- Bridgeway Corp. v. Citibank, 201 F.3d 134 (2d Cir.) (declining to recognize judgments from a collapsed judicial system during civil war)
- Int’l Transactions, Ltd. v. Embotelladora Agral Regiomontana, SA de CV, 347 F.3d 589 (5th Cir.) (minimum notice requirement: reasonably calculated notice suffices)
- Mullane v. Central Hanover Bank & Tr. Co., 339 U.S. 306 (U.S. 1950) (due-process baseline: notice reasonably calculated to apprise interested parties)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (U.S.) (actual notice satisfies due-process concerns in enforcing judgments)
- Koster v. Automark Indus., Inc., 640 F.2d 77 (7th Cir.) (criticized service rules that leave method of foreign service to executive discretion as potentially violating due process)