John DeJoria v. Maghreb Petroleum Expl, S.A., et a

Case: 18-50348 Document: 00515078514 Page: 1 Date Filed: 08/15/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 18-50348
Fifth Circuit
FILED
August 15, 2019
JOHN PAUL DEJORIA, Lyle W. Cayce
Clerk
Plaintiff - Appellee
v.
MAGHREB PETROLEUM EXPLORATION, S.A.; MIDEAST FUND FOR
MOROCCO, LIMITED,
Defendants - Appellants
Appeal from the United States District Court
for the Western District of Texas
Before JOLLY, COSTA, and ENGELHARDT, Circuit Judges.
GREGG COSTA, Circuit Judge:
In 1999, philanthropist, environmental activist, and haircare and liquor
tycoon John Paul DeJoria was attempting to achieve yet another title: oil
magnate. It did not go well. What started as a project that promised to provide
Morocco with decades of energy independence ended with a Moroccan court’s
levying a judgment north of $100 million against DeJoria and his business
partner. Whether Texas should recognize that foreign judgment is now the
centerpiece of this decades-long dispute. In fact, proving that it is often harder
to collect a judgment than win one, this is the second time the question of the
judgment’s validity has come before us. This time around we decide whether
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an interim change in the Texas recognition law violates the state’s
constitutional ban on retroactive laws. If not, we must determine whether the
district court properly followed this court’s 2015 mandate and whether it
properly applied the new law.
I.
The facts of this case are littered across the pages of the Federal
Reporter. See DeJoria v. Maghreb Petroleum Expl., S.A., 804 F.3d 373 (5th
Cir. 2015); Skidmore Energy, Inc. v. Maghreb Petroleum Expl., S.A., 337 F.
App’x 706 (9th Cir. 2009); Skidmore Energy, Inc. v. KPMG, 455 F.3d 564 (5th
Cir. 2006). Because this court has already described the background of this
corner of the dispute, we will do our best not to spill unnecessary ink. See
DeJoria, 804 F.3d at 377–78. The winding path the case followed after our
court’s 2015 remand will spill enough as it is. For now, suffice it to say that in
1999 DeJoria and his business partners started Lone Star Energy Corporation
in Morocco with the help of King Mohammed VI’s first cousin. The enterprise
hoped to discover oil reserves in Northeastern Morocco. The prospects looked
good—so good that the King took to Moroccan airwaves to announce that the
country would soon be in possession of “copious and high-quality” oil that
would allow Morocco to be self-sufficient for 30 years. The King’s
announcement made the Moroccan stock market jump more than five percent
in anticipation of the expected riches.
But when the promised reserves did not materialize, the project quickly
soured. DeJoria and his business partner were forced off Lone Star’s board,
and, fearing for their lives because of an alleged death threat, fled Morocco,
never to return.
Not long after their ouster, DeJoria and his associates were sued in
Moroccan commercial court by Lone Star’s new management (now called
Maghreb Petroleum Exploration, S.A.) and its major investor, Mideast Fund
2
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for Morocco. Maghreb, the term we will use to collectively refer to those two
entities, alleged that DeJoria and his partners mismanaged Lone Star and
fraudulently induced investment in the doomed oil project. Seven years later,
the Moroccan court returned a large judgment for Maghreb. It dismissed
claims against five of the seven defendants, placing the blame—and the bill for
969,832,062.22 Moroccan dirhams 1—squarely on DeJoria and his partner.
Before going further, a little bit about the legal backdrop is helpful. In
order to collect its winnings from DeJoria’s assets in the United States,
Maghreb must convince an American court to recognize and enforce the
Moroccan judgement. 2 Recognition of foreign-country judgments is a matter
of state law and was once mostly governed by principles of comity. See Hilton
v. Guyot, 159 U.S. 113, 163–64, 180–81 (1895). In some jurisdictions, comity
is still the rule. See, e.g., Kwongyuen Hangkee Co., Ltd. v. Starr Fireworks,
Inc., 634 N.W.2d 95, 96 (S.D. 2001). But most states have codified their
recognition standards and procedures by enacting the 1962 Uniform Foreign
Money Judgments Recognition Act 3 or its 2005 successor, the Uniform Foreign-
Country Money Judgments Recognition Act. 4 Both acts make foreign
1 Because Maghreb has yet to secure recognition of its judgment, the district court has
not calculated how much it is worth in U.S. dollars. But the parties put the value at around
$123 million.
2 Recognition is different from enforcement, but the former is necessary for the latter.
See Yuliya Zeynalova, The Law on Recognition and Enforcement of Foreign Judgments: Is It
Broken and How Do We Fix It?, 31 BERKELEY J. INT’L L. 150, 155 (2013) (describing
recognition as akin to domesticating the judgement and enforcement as enlisting the courts
and law enforcement to aid in collection). Only recognition is at issue in this case.
3 For a list of the 34 jurisdictions that have enacted the 1962 version, see Foreign
Money Judgments Act, Uniform Law Commission, https://www.uniformlaws.org/
committees/community-home?CommunityKey=9c11b007-83b2-4bf2-a08e-74f642c840bc (last
visited August 6, 2019).
4 For a list of the 25 jurisdictions that have enacted the 2005 version (for some,
repealing the 1962 version in the process), see Foreign-Country Money Judgments
Recognition Act, Uniform Law Commission, https://www.uniformlaws.org/
committees/community-home?CommunityKey=ae280c30-094a-4d8f-b722-8dcd614a8f3e
(last visited August 6, 2019).
3
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judgments that are final and conclusive where rendered “enforceable” in the
relevant state court just like another state’s judgment would be. Unif. Foreign-
Country Money Judgments Recognition Act § 7(2), U.L.A. (2005) (West); Unif.
Foreign Money Judgment Act § 3, U.L.A. (1962) (West). Although these acts
presumptively treat properly filed foreign judgments as enforceable,
exceptional circumstances can rebut that presumption. Some of those
exceptions are mandatory, others discretionary. If the rendering court did not
have personal jurisdiction over the judgment debtor, for instance, the state
court (or federal court sitting in diversity) cannot recognize the foreign
judgment. 2005 Unif. Act § 4(b)(2); 1962 Unif. Act § 4(a)(2). Other grounds for
nonrecognition, like fraud in obtaining the judgment, instead give the
American court the option of not recognizing the foreign judgment. 2005 Unif.
Act § 4(c)(2); 1962 Unif. Act § 4(b)(2).
So, in 2013, Maghreb came to the United States seeking recognition of
the Moroccan judgment. 5 DeJoria resisted in several ways. At the time, Texas
had adopted (with slight modification) the 1962 Uniform Recognition Act. See
TEX. CIV. PRAC. & REM. CODE § 36.001–08 (Vernon’s 2015). That law included
ten nonrecognition grounds. DeJoria pressed seven of them. The district court
focused on only one avenue to nonrecognition. It determined that the Moroccan
judgment was “rendered under a system that does not provide impartial
tribunals or procedures compatible with the requirements of due process of
law.” Id. § 36.005(a)(1). Because this was a mandatory nonrecognition ground,
5 The procedural history is a bit more complicated. DeJoria, perhaps believing the
best defense is a good offense, went to Texas court first, seeking preemptive nonrecognition
of the Moroccan judgment and an antisuit injunction. Maghreb removed to federal court and
counterclaimed for recognition. But DeJoria eventually dismissed his affirmative claims,
conforming this action to the more typical posture—judgment creditor seeking recognition,
judgment debtor resisting.
4
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the district court refused to recognize the Moroccan judgment and dismissed
the case.
We reversed. DeJoria, 804 F.3d at 389. The panel held that, under
Texas’s version of the 1962 Uniform Recognition Act, DeJoria could not obtain
nonrecognition by showing he was denied due process or impartial tribunals in
his case, but instead had the much greater burden of showing that Morocco’s
legal “system as a whole” was so deficient that no Texas court should ever
recognize a Moroccan judgment. Id. at 381. 6 And although the prior panel’s
inquiry focused on whether the Moroccan judicial system could provide
Americans fair proceedings, it remarked that “the record does not establish
that the King actually exerted any improper influence on the Moroccan court
in this case.” Id. at 382 n.9. The case was remanded.
Back before the district court, and in front of the magistrate judge to
whom the matter was referred, the parties immediately began to squabble over
the scope of that court’s power on remand. 7 DeJoria was adamant that he
should still be allowed to push for nonrecognition on grounds not addressed by
the Fifth Circuit. Maghreb disagreed and moved for entry of judgment. The
district court denied Maghreb’s motion, agreeing with DeJoria that he could
still attempt to establish other grounds for nonrecognition.
While the sound and fury continued apace in the trial court, a second
front in this dispute opened, this time in the Texas legislature. With the
testimonial aid of one of DeJoria’s lawyers, the 2017 legislative session was
considering updating the Recognition Act to the 2005 uniform act. Among
other changes, the new law would add two discretionary grounds for
6 That panel also rejected another two of DeJoria’s arguments for nonrecognition—
that Morocco would not reciprocally recognize a Texas judgment and that the Moroccan court
did not have personal jurisdiction over DeJoria. DeJoria, 804 F.3d at 384–89.
7 Because the district court adopted the magistrate’s recommendations in all relevant
respects, we will describe the postremand rulings as district court rulings.
5
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nonrecognition: a court would be able to deny recognition if “the judgment was
rendered in circumstances that raise substantial doubt about the integrity of
the rendering court with respect to the judgment” or, more importantly in this
case, if “the specific proceeding in the foreign court leading to the judgment
was not compatible with the requirements of due process of law.” 2005 Unif.
Act § 4(c)(7)–(8).
These substantive differences between the old and new law were not the
focus of hearings on the bill. Instead, a change not found in the new Uniform
Law nor in the versions of that law passed by other states drew the most
attention. The drafters had made the law retroactive to pending cases. The
only pending case the legislators were told about was this one. Despite the
concern of at least one legislator that the law was going to change the outcome
of this case midstream, the law was adopted with the retroactivity provision.
2017 Tex. Sess. Law Serv. Ch. 390 (S.B. 944) (Vernon’s), codified at TEX. CIV.
PRAC. & REM. CODE § 36A.001–11.
With his legislative victory in hand, DeJoria returned to the district
court to inform it of the change in Texas law. Although he argued that
nonrecognition was warranted on multiple grounds, the district court again
focused on only one. Finding the new law did not run afoul of the Texas
Constitution’s prohibition of retroactive laws, this time the court granted
DeJoria’s motion for nonrecognition after determining that the specific
proceedings leading to the judgment against him were incompatible with the
requirements of due process. 8 To reach that decision, the district court
readopted many of the case-specific findings underlying the order this court
8 The court declined to reach DeJoria’s other arguments for nonrecognition: that 1) the
Moroccan judgment was rendered under circumstances that raise substantial doubt about
the integrity of the rendering court, 2) the Moroccan judgment was repugnant to Texas public
policy, and 3) recognition of the judgment would violate the Due Process Clause of the
Fourteenth Amendment.
6
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had reversed. But it also made new findings: that DeJoria was unable to
attend the Moroccan proceedings, that he was unable to obtain counsel to
represent him in those proceedings, and that, although the Moroccan court
relied on an expert’s opinion to determine damages, that expert lacked
independence. The court again dismissed the case. Maghreb again appealed.
II.
We have jurisdiction over this case owing to the diversity of the parties,
so we apply Texas substantive law. Erie R. Co. v. Tompkins, 304 U.S. 64, 78
(1938). In doing so, we are bound by the decisions of the Supreme Court of
Texas. Comm’r v. Bosch’s Estate, 387 U.S. 456, 465 (1967). But when no
decision of that court directly addresses the case before us, we are forced to
make an Erie guess, doing our best to write the opinion the Texas high court
would if it had the chance. 9 Meador v. Apple, Inc., 911 F.3d 260, 264 (5th Cir.
2018).
We must make such a guess to determine which of the Uniform
Recognition Acts applies. The Texas Constitution provides that “[n]o bill of
attainder, ex post facto law, retroactive law, or any law impairing the
obligation of contracts, shall be made.” Tex. Const. art. I, § 16. Although
phrased as an absolute prohibition, “[m]ere retroactivity is not sufficient to
9 Although neither party asks us to certify this question to the state court, in an
amicus brief the State of Texas suggests we should consider it, especially if we are inclined
to overturn the statute. We decline to do so because we do not think application of the
Supreme Court of Texas’s many retroactivity precedents to this statute leaves us with a close
call. Williamson v. Elf Aquitaine, Inc., 138 F.3d 546, 549 (5th Cir. 1998) (noting that the
“closeness of the question” and “the existence of sufficient sources of state law” are the most
important factors in deciding to certify (quotation omitted)). Moreover, a case in which a
foreign corporation is attempting to argue that a state legislature has passed a law as a favor
to one of its wealthiest citizens seems like the quintessential case for the exercise of diversity
jurisdiction. Cf. 13E Charles Alan Wright et. al, FED. PRAC. & PROC. § 3601 (3d ed. 2019)
(describing the most common justification for federal diversity jurisdiction as “the fear that
state courts would be prejudiced against out-of-state litigants, particularly when opposed by
an in-stater”).
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invalidate a statute.” Robinson v. Crown Cork & Seal Co., Inc., 335 S.W.3d
126, 139 (Tex. 2010) (quotation omitted). Texas courts have tailored the scope
of the prohibition to “protect[] settled expectations and prevent[] abuse of
legislative power.” Id. Three factors determinine whether a law runs afoul of
those objectives: “the nature and strength of the public interest served by the
statute as evidenced by the Legislature’s factual findings; the nature of the
prior right impaired by the statute; and the extent of the impairment.” Id. at
145. The nature and extent of the interference with a party’s rights loom
particularly large. For that reason, “changes in the law that merely affect
remedies or procedure, or that otherwise have little impact on prior rights, are
usually not unconstitutionally retroactive.” Id. at 146; see also Univ. of Tex.
Sw. Med. Ctr. at Dallas v. Estate of Arancibia, 324 S.W.3d 544, 548 (Tex. 2010)
(“Statutes . . . that do not deprive the parties of a substantive right . . . may be
applied to cases pending at the time of enactment.”).
The new law’s limited interference with Maghreb’s legitimate rights
resolves the question before us. Unlike Robinson—the seminal Texas case on
retroactivity—this is not a case in which a law that allowed a party’s recovery
was changed to “abrogate their claim.” Robinson, 335 S.W.3d at 148. It is not
even certain that the law as it stood before the adoption of the updated act
would have led to recognition of the Moroccan judgment. As we mentioned,
the district court agreed to allow DeJoria to press several arguments for
nonrecognition after this court returned the case to its hands. 10 Because the
passage of the new act made it unnecessary to address those claims, we do not
10 In particular, prior to the update of the law, DeJoria retained the ability to argue
that two additional nonrecognition factors applied: that the “cause of action on which the
judgment is based is repugnant to the public policy” of Texas and that Morocco was a
“seriously inconvenient forum.” TEX. CIV. PRAC. & REM. CODE §§ 36.005(b)(3) and (6)
(Vernon’s 2015). Beyond the Recognition Act’s domain, DeJoria was also raising a federal
due process challenge to recognition of the Moroccan judgment.
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know how likely they were to succeed. Maghreb’s expectation that it would
prevail was, in other words, not yet settled. See Union Carbide Corp. v.
Synatzske, 438 S.W.3d 39, 58 (Tex. 2014) (upholding retroactive application of
a law because the plaintiff’s “recovery was not yet predictable” at the time the
law went into effect).
The bigger point, though, is that the retroactive law does not abrogate
Maghreb’s claim. It does not strip Maghreb of the ability to seek recognition
of the Moroccan judgment. It just gives a district court the ability to deny
recognition if it finds the judgment was obtained in proceedings that were
incompatible with the requirements of due process. So the only right that has
been impinged is the right to automatic recognition of a judgment obtained in
proceedings that denied the judgment debtor fundamental fairness. To state
that “right” is to show why we cannot recognize it, let alone allow its protection
to sink a state statute. Robinson, 335 S.W.3d at 146 (“[C]ourts must be mindful
that statutes are not to be set aside lightly.”). Indeed, the absurdity of lending
a court’s power to the vindication of fundamentally unfair proceedings is why
the 2005 Uniform Act recognizes an absence of due process as one of the rare
situations when an American court may not recognize a foreign judgment. It
is also noteworthy that the Supreme Court of Texas has only upheld challenges
to the retroactive application of a law on four occasions, all of which dealt with
laws that revived expired claims or fully extinguished vested rights. Tenet
Hospitals Ltd. v. Rivera, 445 S.W.3d 698, 708 (Tex. 2014) (collecting cases).
The updated recognition act does neither.
We are mindful that the whiff of home cooking also pervades the Texas
side of this case. There is a deep irony in allowing DeJoria to contend he was
denied due process in Morocco when it was his lobbying efforts that changed
the rules of the game midway through the proceedings in the United States.
Indeed, the Supreme Court of Texas has been suspicious of retroactive laws
9
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that inure to the benefit of only one company or individual. 11 Robinson, 335
S.W.3d at 149. But in the retroactivity context as in others, “unfair does not
always equal unconstitutional.” Id. at 160 (Willett, J. concurring). And it
cannot be said that a state’s desire to provide immediate protection to the due
process rights of its citizens is not compelling. When balanced against the
slight imposition on a right of dubious provenance, retroactive application of
the updated Recognition Act does not violate the Texas Constitution.
III.
A.
Having decided that Texas’s choice to apply its new Recognition Act to
pending cases was proper, we now must review the district court’s application
of that law. And to do that we must determine how closely we should scrutinize
that court’s work.
Reciting the standard of review in an appellate opinion is often a rote
exercise. Not here. Recognizing that the appeal’s outcome largely turns on
this question, the parties have spent considerable energy contesting whether
we owe deference to certain district court rulings. Maghreb insists that we
should review all aspects of the district court’s denial of recognition de novo,
likening the inquiry to a review for legal sufficiency. DeJoria counters that we
should review the court’s factual findings only for clear error.
Much of the confusion surrounding the standard of review arises from
this case’s odd posture. The district court did not rule on a motion for summary
judgment or conduct a bench trial, but instead resolved a “motion for
11 DeJoria points to one other recognition case that was pending at the time the law
was passed, In re Carmona, 580 B.R. 690 (Bankr. S.D. Tex. 2018). But the Texas legislature
was only made aware of one case that would be affected by the retroactivity provision—this
one.
10
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nonrecognition.” That motion is a creature of state law. 12 Regardless of the
styling of the motion on which the district court ruled, however, our appellate
standard of review is governed by federal law, even in this diversity case. See
Goodner v. Hyundai Motor Co., Ltd., 650 F.3d 1034, 1040 (5th Cir. 2011); Tax
Track Sys. Corp. v. New Investor World, Inc., 478 F.3d 783, 789 (7th Cir. 2007);
Hershon v. Gibraltar Bldg. & Loan Ass’n, Inc., 864 F.2d 848, 852 (D.C. Cir.
1989). 13
The prior panel explained that “[w]hether the judgment debtor
established that [a] non-recognition provision[] applies is a question of law
reviewed de novo.” DeJoria, 804 F.3d at 379. We agree. But the panel had no
cause to determine the proper standard of review for the factual findings that
underpin the district court’s legal decision. After all, the issues in that
appeal—whether the Moroccan system provides procedures compatible with
due process, whether Moroccan law provides a mechanism to reciprocate
recognition of Texas judgments, and whether the Moroccan court had personal
jurisdiction over DeJoria—were all legal determinations. See FED. R. CIV. P.
44.1 (“The court’s determination [of foreign law] must be treated as a ruling on
a question of law.”); In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant
Product Liability Litig., 888 F.3d 753, 778 (5th Cir. 2018) (“This court reviews
[the] district court’s exercise of personal jurisdiction de novo.” (quotation
omitted)).
12 It is not clear, then, how this type of motion found its way to federal court. In federal
court, the Federal Rules of Civil Procedure should govern how the parties seek and resist
recognition of the judgment. See, e.g., Sw. Livestock and Trucking Co., Inc. v. Ramon, 169
F.3d 317, 321 & n.3 (5th Cir. 1999) (disposing of the recognition issue on a federal motion for
summary judgment). Neither party, however, has objected to the use of state procedure in
this federal action, leaving this panel in somewhat uncharted territory.
13 If the Recognition Act demanded a particular standard of review for “manifestly
substantive” ends, that might be a different story. See Gasperini v. Ctr. for Humanities, Inc.,
518 U.S. 415, 429 (1996) (holding that state law governs the trial court standard for
determining whether a verdict is excessive). It does not.
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But it is a venerable principle that a district court’s factual findings are
reversed only if clearly erroneous. FED. R. CIV. P. 52(a)(6) (standard for bench
trials); see also Steven Alan Childress & Martha S. Davis, 1 FEDERAL
STANDARDS OF REVIEW § 2.03[8] 2-32–33 (4th ed. 2010) (explaining that
“[m]any courts . . . have assumed that [the] clearly erroneous rule applies to
findings made on motions in addition to trial findings”). Even when an
appellate court considers a legal question de novo, that plenary power of review
does not extend to subsidiary factual findings. See Allstate Ins. Co. v. Abbott,
495 F.3d 151, 160 (5th Cir. 2007) (“[S]ubsidiary facts are reviewed for clear
error.”) (citing Maine v. Taylor, 477 U.S. 131, 144–45 (1986)). To take just one
example, jurisdiction is a legal question. But the facts that underlie a
jurisdictional determination are still reviewed only for clear error. See, e.g.,
id.; DePuy Orthopaedics, 888 F.3d at 778 (applying clear error review to
“underlying jurisdictional findings of fact” and de novo review to ultimate
personal jurisdiction holding (quotation omitted)); Pederson v. La. State Univ.,
213 F.3d 858, 869 (5th Cir. 2000) (“If the district court resolves any factual
disputes in making its jurisdictional findings,” those resolutions are
overturned only if “clearly erroneous.” (quotation omitted)). The same must be
true for factfinding that underpins the legal conclusion of nonrecognition.
Appellate court deference to district court factfinding is grounded in
concerns of both expertise and efficiency. Maghreb points out that one of the
strongest justifications for deference—the trial court’s ability to assess the
credibility of live testimony, Anderson v. City of Bessemer City, 470 U.S. 564,
575 (1985)—is not present because the testimony of the foreign witnesses was
presented on paper. But we defer even when the trial court’s findings are
“based . . . on physical or documentary evidence or inferences from other facts.”
Id. at 574. That is because “[t]he trial judge’s major role is the determination
of fact, and with experience in fulfilling that role comes expertise.” Id. Clear
12
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error review also promotes judicial efficiency. Id. at 574–75 (“Duplication of
the trial judge’s efforts in the court of appeals would very likely contribute only
negligibly to the accuracy of fact determination at a huge cost in diversion of
judicial resources.”). District court judges, who do the lion’s share of the work
in our federal system, do not dig through voluminous records only to have
courts like this one restart the factfinding from scratch. Instead of redoing
their work, we defer to their findings so long as they take a permissible view
of the evidence. Id. at 574.
Although the standard of review is a federal issue, like the prior panel
we “look to Texas law” governing recognition to see if anything counsels in a
different direction. 14 DeJoria, 804 F.3d at 379. Nothing does. We see no Texas
recognition case that conflicts with the principles of federal appellate review
outlined above. When a trial court is presented with conflicting evidence in
recognition proceedings, Texas courts “defer to the trial court’s . . . resolution
of those conflicts.” Mariles v. Hector, No. 05-16-00814-CV, 2018 WL 3723104
*6 (Tex. App.—Dallas Aug. 6, 2018, pet. denied). Maghreb cites some Texas
cases that explain what we have acknowledged: that review of the district
court’s ultimate determination of the application of a nonrecognition factor
14 As we have explained, the proper standard of appellate review is a question of
federal law. We do not read this court’s 2015 opinion as out of step with that conclusion. It
may be that the prior panel looked to Texas law only to ascertain whether recognition was a
legal or factual question. See Childress & Davis, supra § 2.03[7] 2-32 n.158 (noting that,
despite application of federal standards of review in diversity cases, “[u]se of state law-fact
characterization may be more defensible” as that question borders on the substantive). But
to the extent the prior panel’s opinion could be read to suggest that state law controls the
applicable standard of review in federal court, it announced principles with respect to “the
district court’s recognition decision.” DeJoria, 804 F.3d at 379. Again, we answer a different
question—what level of scrutiny should we apply to the findings of fact subsidiary to that
ultimate legal conclusion? That question, at least, is controlled by federal law.
In any event, we have perused Texas caselaw only out of an abundance of caution. It
is less useful this time around—no Texas case has yet analyzed the new factbound
nonrecognition factors added by the updated act.
13
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should be de novo. See, e.g., Sanchez v. Palau, 317 S.W.3d 780, 785 (Tex.
App.—Houston [1st Dist.] 2010, pet. denied) (“[W]e review de novo a trial
court’s ruling on recognition of a foreign country judgment.”); The Courage Co.,
L.L.C. v. The Chemshare Corp., 93 S.W.3d 323, 331 (Tex. App.—Houston [14th
Dist.] 2002, no pet.) (same). 15 But they have pointed to no case that instructs
a court of appeals to start on a blank slate in determining the facts. That is
not surprising. Consistent with the standard practice, Texas courts also
generally defer to trial court factfinding. In re I.I.G.T., 412 S.W.3d 803, 806
(Tex. App.—Dallas 2013, no pet.) (explaining that an appellate court should
not normally “disturb the [trial] court’s resolution of evidentiary conflicts that
turn on . . . the weight of the evidence”). We thus can disturb the district
court’s findings only if they are not “plausible in light of the record viewed in
its entirety.” Anderson, 470 U.S. at 574.
B.
Maghreb’s primary argument on appeal—that DeJoria lost his
opportunity to complain about the Moroccan proceedings because he failed to
participate in them—must overcome this deference to the district court’s
factfinding. Maghreb notes that we have “flatly reject[ed]” the due process
objections of judgment debtors who were “given, and waived, the opportunity
of making [an] adequate presentation” in the foreign tribunal. Society of
Lloyd’s v. Turner, 303 F.3d 325, 331 n.20 (5th Cir. 2002) (quotation omitted);
15 Varying procedural postures and a lack of clarity with respect to whether the
standard of review depends on the nonrecognition factor at issue further frustrate the search
for coherence on this question. See Ramon, 169 F.3d at 318 (analyzing recognition decision
on summary judgment, which is always reviewed de novo); Banque Libanaise Pour Le
Commerce v. Khreich, 915 F.2d 1000, 1004 (5th Cir. 1990) (reviewing for abuse of discretion
a trial court’s choice to apply a discretionary nonrecognition ground, like the ground at issue
in this case); Dart v. Balaam, 953 S.W.2d 478, 482–83 (Tex. App.—Fort Worth 1997, no pet.)
(reviewing for abuse of discretion the trial court’s determination whether Australia was an
inconvenient forum). The important point for this appeal is that we have seen no appellate
court in a recognition dispute engage in de novo factfinding.
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see also Dart, 953 S.W.2d at 480 (“Grounds for nonrecognition may be waived
if a party had the right to assert that ground as an objection or defense in the
foreign country but failed to do so.”).
But our limited authority when it comes to facts makes short work of
that argument. The district court made three major findings to support
nonrecognition: 1) DeJoria’s fear for his safety should he return to Morocco to
litigate was credible and arose directly from his involvement in the Moroccan
lawsuit because DeJoria’s position in the Moroccan lawsuit was directly
adverse to the interests of the royal family, he was unable to retain a lawyer
to appear for him in the initial proceedings or to bring an appeal although the
determination of damages was based on expert opinion, the Moroccan court
manipulated that process when it went through four experts before finding one
that would deliver its preferred recommendation. Taken together, the first and
second findings mean that DeJoria was never “given . . . the opportunity of
making [an] adequate presentation” in Moroccan court and the third means
his case did not otherwise receive fair treatment. Turner, 303 F.3d at 331 n.20.
So unless those findings were clearly erroneous, Maghreb’s “waiver” argument
fails.
To be sure, Maghreb points to substantial evidence that could support
contrary findings. Its problem is that there is evidence on both sides of these
disputes. Even if Maghreb can convince us that its evidence is stronger, that
is not enough to establish that the district court’s crediting of DeJoria’s
evidence is implausible. Theriot v. Par. of Jefferson, 185 F.3d 477, 490 (5th
Cir. 1999) (“Where the evidence can support findings either way, a choice by
the trial judge between two permissible views of the weight of the evidence is
not clearly erroneous.”)
Take for instance the finding that DeJoria credibly feared for his life and
so was unable to attend the Moroccan proceedings in person. Michael Gustin,
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DeJoria’s business partner, described receiving a death threat and explained
that it was directed at both him and DeJoria. DeJoria himself declared that
Gustin communicated that threat to him and that he believed it was credible.
And the record contains evidence that their unsuccessful attempts to obtain
representation in Morocco may have only heightened their fear. A French
attorney with some Moroccan experience told them that it was not only unsafe
for DeJoria and Gustin to return to Morocco, but it would be “unsafe and
unwise for any lawyer” or “any sane person,” for that matter, to participate in
a case that so closely touched the royal family’s interests. Nearly a decade
later, that attorney repeated his concerns. The general counsel for Skidmore,
DeJoria’s company that spearheaded the Moroccan project, also says he was
told to stay out of the country by a Moroccan attorney who had been hired to
handle various clerical tasks as the Moroccan lawsuit proceeded. She warned
that “any appearance by Skidmore or any personal representative of Skidmore
in the Moroccan lawsuit would be dangerous.”
Of course, these assertions all come from individuals who may have an
axe to grind in this case. And we are not told much about the circumstances
or content of the death threat because Gustin maintains that he “cannot reveal
[the] details . . . without compromising the safety of innocent people still in
Morocco.” Bias and lack of detail are classic impeachment evidence. But
impeachment usually goes to the weight of the evidence. Arguing about the
weight of the evidence is not the terrain an appellant wants to be on. See La
Day v. Catalyst Tech., Inc., 302 F.3d 474, 480 (5th Cir. 2002) (noting that it is
the factfinder who “ultimately . . . decide[s] which side has the greater weight
of the evidence”).
Nor does Maghreb get over the clearly-erroneous hurdle because it
presented testimony that DeJoria could have appeared and obtained counsel
in the Moroccan litigation. Choosing between conflicting testimony is the
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province of the factfinder. See Anderson, 470 U.S. at 575 (concluding it “can
virtually never be clear error” when a trial court “credit[s] the testimony of one
of two or more witnesses, each of whom has told a coherent and facially
plausible story that is not contradicted by extrinsic evidence”). And while
Maghreb emphasizes the testimony of its expert on Moroccan law, expert
testimony does not automatically trump lay testimony. Breland v. United
States, 372 F.2d 629, 633 (5th Cir. 1967) (“[L]ay testimony can be sufficient to
satisfy [a party’s] burden even though there is expert testimony to the
contrary.”); see also FIFTH CIRCUIT PATTERN JURY INSTRUCTIONS 3.5 (Civil)
(2014) (explaining that, for expert witness testimony, “[a]s with any other
witness, it is up to [the factfinder] to decide whether to rely on it”).
To undo factual determinations on appeal, Maghreb must convince us
not that it has the more compelling evidence, but that the other side’s
testimony is not “plausible.” Anderson, 470 U.S. at 574. Maghreb’s expert
witness, a Moroccan attorney, contends that DeJoria’s worries were “baseless
and reflect[] his poor understanding of Morocco.” And they also point to several
instances in which Moroccan courts have ruled against royal interests. But
that a trier of fact could plausibly infer that the death threat was fabricated
does not mean it is implausible to find that the threat was real. Id. at 574.
The same may be said for the other two key findings. For instance,
although DeJoria was able to retain Moroccan attorneys as experts in
proceedings stateside after the Moroccan trial court handed down its
judgment, there was evidence that two of his attempts to obtain representation
in the Moroccan proceedings were rebuffed. And though there was no smoking
gun, it was not clear error for the district court to conclude that the Moroccan
court went fishing for an expert who would determine DeJoria and his partner
had caused Maghreb substantial damages. After all, the expert who found
those damages was the fifth appointed by the Moroccan court—the first three
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“concluded that they could not provide any firm opinion on the matter” and the
fourth was replaced for reasons that remain unclear.
Although the district court’s assessment of the evidence may be subject
to vigorous debate, it is the district court’s job to resolve evidentiary disputes,
not ours. Guzman v. Hacienda Records & Recording Studio, Inc., 808 F.3d
1031, 1036 (5th Cir. 2015) (explaining that, even when “there are two
permissible views of the evidence,” the trial court’s choice between them is
typically owed “great deference”). Maghreb has not shown clear error. 16
C.
Perhaps realizing that its argument founders on the district court’s
difficult-to-undo findings, Maghreb’s primary challenge to those findings is
that they should not have been made in the first place. Each of the pertinent
findings, it argues, was precluded by the prior panel’s opinion.
Under the law-of-the-case doctrine—and its corollary, the mandate
rule—when a district court receives a case on remand, it may not reexamine
the legal or factual determinations of this court or otherwise disobey our
mandate. See Tollett v. City of Kemah, 285 F.3d 357, 363–64 (5th Cir. 2002).
The reach of those related doctrines extends only to matters decided expressly
or by necessary implication. In re Felt, 255 F.3d 220, 225 (5th Cir. 2001). And
an issue is tacitly decided only when its disposition is a “necessary predicate[]
to the ability to address the issue or issues specifically discussed” in the
appellate court’s opinion. Id.
16It is worth noting that the three trial judges who handled aspects of this case all
generally found DeJoria’s evidence about what happened in Morocco more persuasive than
Maghreb’s. Three trial judges have reviewed the case because this appeal comes from
findings of a magistrate judge, adopted by the district judge, and the earlier appeal came
from findings of a different district judge. Although some of the findings in this phase of the
case are new, they rely on much of the same testimony the district court relied on the first
time around.
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The prior panel’s opinion did not preclude the findings the district court
made on remand. First and foremost, the prior appeal was decided under a
different law. United States v. Matthews, 312 F.3d 652, 657 (5th Cir. 2002)
(describing an exception to the law-of-the-case doctrine when “there has been
an intervening change of law by a controlling authority”). That law did not
require the prior panel to determine whether DeJoria’s “specific proceeding[s]”
were “compatible with the requirements of due process of law.” TEX. CIV. PRAC.
& REM. CODE § 36A.004(c)(8). So that panel had no cause to determine
whether DeJoria could in fact safely return to Morocco or whether DeJoria
could in fact retain representation. In determining whether the Moroccan legal
system made fair proceedings impossible, whether Moroccan courts would
reciprocate recognition, and whether the Moroccan commercial court had
personal jurisdiction over DeJoria, the prior panel’s analysis was focused on
legal questions. The fact-intensive inquiry demanded by Texas’s updated
Recognition Act put the case on a new playing field.
But even if the district court were operating in the same legal landscape,
nothing in the prior panel’s opinion forecloses the district court’s findings. The
panel held that the Moroccan court’s exercise of jurisdiction over DeJoria did
not violate traditional notions of “fair play and substantial justice” because,
despite any burden litigating in Morocco might place on DeJoria, “Moroccan
courts do not require that the defendant appear personally, and DeJoria could
have litigated entirely through counsel without returning to Morocco.”
DeJoria, 804 F.3d at 389. And, relying on testimony from a Moroccan attorney
acting as Maghreb’s expert, the court pointed out that “it is ‘not at all
uncommon’ for Moroccan attorneys to represent unpopular figures in Moroccan
courts.” Id. at 383. But these general statements about usual Moroccan
practices did not address whether DeJoria could have found a willing attorney
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in Morocco in his high-profile case. 17 Nor does it avail Maghreb to draw our
attention to the previous panel’s aside that, “[a]lthough our inquiry focuses on
Morocco’s judicial system, we also observe that the record does not establish
that the King actually exerted any improper influence on the Moroccan court
in this case.” Id. at 382 n.9 (emphasis in original). For one, the comment is
admittedly dicta—the footnote could have been erased from the opinion
without disrupting its systemwide holding in the slightest. Pegues v.
Morehouse Parish Sch. Bd., 706 F.2d 735, 738 (5th Cir. 1983) (explaining that
law of the case does not apply to dicta). And in any case, the question under
the Texas statute is not whether the King actively undermined the
proceedings, but whether DeJoria was afforded a fundamentally fair hearing.
The prior panel’s general observations did not foreclose the more searching
factual inquiry now required under Texas law. 18
D.
Our holding that the district court did not clearly err in its factfinding
nor adopt those findings in the face of a contrary mandate from this court
leaves us little left to do. Maghreb does not dispute the nonrecognition
conclusion if we uphold the findings that DeJoria could neither appear
personally nor find a lawyer to appear for him. That is a sensible stance.
17 And nothing in the prior panel’s opinion foreclosed the district court’s finding that
DeJoria could not safely return to Morocco. Indeed, the prior panel did not even mention the
alleged threat on DeJoria’s life, let alone determine its credibility.
18 Maghreb also argues at some length about the propriety of a host of other findings
that the magistrate made by readopting the findings made before the first appeal. For
reasons similar to those discussed above, we doubt there is much to Maghreb’s argument that
those readopted findings were barred by the law of the case. Nor do we believe its argument
that this court’s 2015 reversal rendered those factual findings “null and void” holds much
water. In many other contexts, a district court will readopt its findings without fanfare when
an appeals court returns the case after locating a legal error. See, e.g., Chemtech Royalty
Assocs., L.P. v. United States, 823 F.3d 282, 287–88 (5th Cir. 2016); United States v. Ellis,
201 F. App’x 170 (4th Cir. 2006) (per curiam). But because we believe the new findings made
by the district court are sufficient to justify its nonrecognition decision, we see no need to
explore this issue further.
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Recognition of a foreign-country judgment does not require the foreign court to
“comply with the traditional rigors of American due process.” Turner, 303 F.3d
at 330. But the opportunity to present one’s case is no minor twist or turn of
modern due process jurisprudence: “The fundamental requirement of due
process is the opportunity to be heard at a meaningful time and in a
meaningful manner.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976)
(quotation omitted). In light of the facts as found by the district court, it
properly determined that DeJoria was denied due process in Morocco. The
district court thus had and properly exercised discretion to deny recognition to
the Moroccan judgment. 19
* * *
So despite the seeming complexity of this case—royal intrigue, a foreign
proceeding, almost a billion dirhams at stake—it ends up being resolved on one
of the most basic principles of appellate law: deference to the factfinder. The
judgment is AFFIRMED.
19The parties also contest whether recognition should be denied because the Moroccan
judgment is repugnant to public policy or because failing to do so would violate the
Fourteenth Amendment’s due process guarantee. Because we affirm the district court’s
nonrecognition decision on another ground, there is no need to discuss those disputes.
21