Opinion ID: 770056
Heading Depth: 3
Heading Rank: 1

Heading: Do the Laws of Mexico and New York Differ?

Text: 11 The parties agree that the laws of New York and Mexico differ. Specifically, New York recognizes a claim for tortious interference, whereas Mexico does not. 12 B. True Conflict Analysis: Do Both New York and Mexico have an Interest in Applying Their Laws in this Case?
13 Relying primarily on Hurtado, Coufal argues that Mexico has no interest in applying its law to limit recovery by its citizens. Hurtado involved a wrongful death action filed by Mexican plaintiffs against a California defendant regarding an automobile accident that occurred in California. 522 P.2d at 668. Mexico placed a monetary limit on recovery in wrongful death cases, whereas California limited recovery solely by the concept of just compensation. Id. at 669. The court held that [t]he interest of a state in a tort rule limiting damages for wrongful death is to protect defendants from excessive financial burdens or exaggerated claims. Id. at 670. Because the plaintiffs and not the defendants were the Mexican citizens, the court held that Mexico had no interest in applying its law: Mexico has no defendant residents to protect and has no interest in denying full recovery to its residents injured by non-Mexican defendants. Id. 14 Unlike Hurtado, the complained-of conduct in this case took place primarily, if not entirely, in the foreign jurisdiction, Mexico. While some decisions may have been made in the United States, they were carried out in Mexico. A Mexican notary public revoked Coufal's power of attorney in Mexico. The legal services contract with which appellees allegedly interfered was a Mexican contract, governed by Mexican law, to be performed completely in Mexico. Although the situs of the injury is no longer the sole consideration in California choice-of-law analysis, California courts have held that, with respect to regulating or affecting conduct within its borders, the place of the wrong has the predominant interest.  Hernandez v. Burger, 102 Cal. App. 3d 795, 802 (1980); see also McGhee, 871 F.2d at 1425 ([I]t seems certain that Saudi Arabia has some legitimate interest in seeing that Saudi law determines the consequences of actions within its borders causing injury to people who reside there.). It is nonsensical to suggest that Mexico has no interest in regulating conduct that affects contracts made in Mexico. 15 One federal district court has applied Hurtado 's rule regarding damages limitation laws to cases where the tortious conduct occurred in the foreign jurisdiction. See Marsh v. Burrell, 805 F. Supp. 1493 (N.D. Cal. 1992). In Marsh, Dutch plaintiffs sued California defendants in California for an assault and battery that occurred in the Netherlands, and negligent hiring that occurred in California. The court in Marsh held that all of the claims were governed by California's more liberal damages rules, because none of the defendants were Dutch, and the Netherlands' only interest in having its damages rules applied is in protecting its own resident defendants. Id. at 1499. 16 Unlike Marsh, or even Hurtado, though, this case does not involve a damages limitation rule, which courts have recognized is intended to protect defendants from large verdicts. It is not an attempt to limit the compensation of plaintiffs. In re Aircrash in Bali, Indonesia, 684 F.2d 1301, 1307 (9th Cir. 1982) (citation omitted). Instead, this case involves Mexico's determination of the scope of its substantive law: the point at which it will attach tort liabilityto conduct occurring within its borders. This decision is designed both to protect potential defendants -including foreign defendants who might otherwise avoid doing business in Mexico 1 -from liability for conduct that Mexico does not consider wrongful, and to limit plaintiffs from recovering even if such conduct damages them. 17 By choosing to regulate such conduct solely under its general illicit behavior statute, Mexico apparently has determined that it does not wish to punish conduct within its borders that does not rise to the level of illicit conduct. Indeed, there may even be some circumstances in which a third-party's interference with a Mexican contract might result in a net societal benefit -e.g., when the interference  enables a contracting party to find a better deal. In this case, for example, AT&T's alleged interference enabled Products to extract itself from a bad situation with Avanti-a situation that was disruptive enough to involve high level government officials in both the United States and Mexico. The damaged party might still have a breach of contract remedy against the other contracting party but will have no cause of action against the third party. 18 Accordingly, Mexico has a significant interest in applying its law to this action.
19 Coufal has not pointed to any activities that occurred in New York. Instead, he points to decisions made from offices in New Jersey and meetings that occurred in Atlanta. 2 The only reason behind Coufal's assertion that New York law should apply appears to be that AT&T's state of incorporation is New York. He argues that New York has an interest in regulating its resident corporations' conduct. However, a company's contacts with a state that are not significantly related to the cause of action at issue are an insufficient basis for the application of that state's law. Cf. McGhee, 871 F.2d at 1424 (California courts have rejected arguments that a party's contacts with California, unrelated to the cause of action at hand, create a basis for extending the reach of California's law.); id. at 1425 (California, despite its interest in securing recovery for its residents, will not apply its law to conduct in other jurisdictions resulting in injury in those jurisdictions.). 20 Because New York does not have a significant interest in applying its law, there is a false conflict  situation, and thus the district court correctly determined that the law of the interested jurisdiction, Mexico, should govern. McGhee, 871 F.2d at 1422. 21