236 Cal. App. 4th 1470
Cal. Ct. App.2015Background
- Plaintiffs Hahn (individual) and Nikita II, S.A. (Luxembourg corp.) sued California-resident defendants for tortious interference and related torts arising from efforts to derail a Mexican resort project and the purchase of Mexican-company shares.
- The trial court initially stayed the California action on forum non conveniens grounds after defendants stipulated to submit to Mexican jurisdiction and to waive/toll Mexican statutes of limitation; this court affirmed in Hahn I.
- The trial court retained authority to lift the stay if plaintiffs proved Mexico was not a workable forum, and plaintiffs later moved to lift based on two Mexican courts dismissing complaints they filed there.
- Defendants argued plaintiffs prosecuted the Mexican suits in bad faith (delaying filing, filing defective pleadings to provoke dismissal, failing to appeal or amend) and sought to cross-examine the court-appointed Mexican-law expert.
- The trial court appointed a neutral Mexican-law expert (Dr. Jose Ovalle Favela), who concluded the Mexican courts properly rejected the two complaints and that further proceedings/appeals would have been futile; based on that, the court lifted the stay.
- On writ review, the Court of Appeal denied the petition: it found substantial evidence supporting the trial court’s factual findings (including Favela’s report), rejected the bad-faith claims, and held denial of live cross-examination did not prejudice defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Mexico remained a suitable alternate forum after Mexican courts dismissed plaintiffs’ suits | Mexico is unavailable because two Mexican courts independently dismissed plaintiffs’ actions and appeals/amendments would have been futile | Plaintiffs engineered dismissals (delay, deficient pleadings, failure to amend/appeal) to render Mexico “unavailable” | Court upheld trial court: expert evidence supported that dismissals were proper and Mexico was not a workable forum, so lifting the stay was reasonable |
| Whether plaintiffs prosecuted Mexican proceedings in bad faith | Plaintiffs acted in good faith; dismissals reflected Mexican procedural rules, not gamesmanship | Plaintiffs delayed filing, omitted key allegations/evidence, and filed to provoke rejection | Court found no abuse of discretion; trial court’s implicit finding of good faith supported by substantial evidence |
| Whether plaintiffs should have sought further judicial review in Mexico (amend/appeal/counterclaims) | Further proceedings would have been futile given procedural bars (territorial jurisdiction, improper procedural vehicle) | Failure to amend/appeal shows bad faith and avoidance of Mexican forum | Court credited expert that appeals/amendments likely would not succeed; lack of further proceedings not indicative of bad faith |
| Whether defendants were entitled to cross-examine the court-appointed Mexican-law expert | Cross-examination necessary for fairness and testing expert’s opinions | Court-appointed expert evidence in writing sufficed under Evidence Code and parties waived live testimony by agreeing to written procedure | Denial of live cross-examination not reversible; defendants had full written response opportunity and were not prejudiced |
Key Cases Cited
- Hahn v. Diaz-Barba, 194 Cal.App.4th 1177 (Cal. Ct. App. 2011) (affirming stay on forum non conveniens grounds and explaining trial court may verify foreign forum is available)
- Butler v. Superior Court, 104 Cal.App.4th 979 (Cal. Ct. App. 2002) (appellate directions to trial court are binding and must be followed)
- Abelleira v. District Court of Appeal, 17 Cal.2d 280 (Cal. 1941) (writ of prohibition does not lie to prevent exercise of discretion)
- Robbins v. Superior Court, 38 Cal.3d 199 (Cal. 1985) (mandamus may control judicial discretion when it has been abused)
- State Farm etc. Ins. Co. v. Superior Court, 47 Cal.2d 428 (Cal. 1956) (definition of abuse of discretion in judicial decisions)
- Gutierrez v. Advanced Medical Optics, Inc., 640 F.3d 1025 (9th Cir. 2011) (forum non conveniens: foreign forum availability can justify lifting stay/dismissal)
- Van Keulen v. Cathay Pacific Airways, Ltd., 162 Cal.App.4th 122 (Cal. Ct. App. 2008) (delay and failure to prosecute can lead to dismissal when plaintiff loses California’s interest in providing a forum)
- Dardengo v. Honeywell Int’l, Inc., 792 F.Supp.2d 1090 (N.D. Cal. 2011) (plaintiffs must litigate in the foreign forum in good faith after forum non conveniens dismissal)