Reported / Citable
Background
CFE International LLC, a Delaware LLC headquartered in Houston and wholly owned by Mexico’s state-owned electric utility, sued its former CEO, Guillermo Turrent Schnaas, and former COO, Javier Gutiérrez Becerril. CFEi alleged that the defendants breached contractual and Delaware-law fiduciary duties by steering major natural-gas supply and pipeline agreements to WhiteWater Midstream LLC and related parties without fair, arm’s-length bidding.
The defendants removed the suit from Texas state court and moved to dismiss on forum non conveniens grounds, contending that Mexico was the better forum. They also, along with JG Energy, resisted discovery under Mexican protections against self-incrimination, citing pending criminal proceedings in Mexico.
The Court’s Holding
Judge Lee H. Rosenthal denied the forum non conveniens motion. Although Mexico was an available and adequate alternative forum because the defendants agreed to submit to Mexican jurisdiction, the private and public interest factors did not strongly favor dismissal. Key alleged misconduct, witnesses, entities, and contracts had substantial Texas connections, while the defendants had not specifically shown that critical Mexican witnesses would be unavailable through compulsory process in Texas.
The court also held that Mexican law did not excuse the requested document production in this federal case. The parties’ relationship and the disputed communications were substantially connected to the United States, and the requested materials were important to the litigation. In any event, the court concluded that a protective order could accommodate asserted self-incrimination concerns: responsive documents could be designated confidential and attorney’s eyes only. The court ordered the parties to submit a joint protective order by October 26, 2023.
Key Takeaways
- An available and adequate foreign forum is not enough; defendants must show that the balance of private and public interests strongly favors dismissal.
- Texas connections to the alleged conduct, relevant entities, and key third-party witnesses weighed against sending the case to Mexico.
- Asserted Mexican self-incrimination protections did not bar discovery; confidentiality protections were an adequate accommodation.
Why It Matters
The decision illustrates the demanding Fifth Circuit standard for forum non conveniens dismissal when a U.S.-based plaintiff alleges misconduct tied to Texas transactions and witnesses, even if the dispute also implicates Mexican interests and related criminal proceedings.
It also confirms that foreign-law discovery privileges do not automatically displace federal discovery obligations. Courts may address comity and criminal-exposure concerns through tailored protective orders rather than withholding relevant documents altogether.