sold the maquiladora without management knowing.
The authority granted under a
power of attorney is almost absolute.
If the employee acts in bad faith with a
properly executed power of attorney, it
is next to impossible to set action taken
by the employee aside. This was our
dilemma. We contacted a local general
counsel in the area and were informed
that it is highly unlikely the factory
would prevail. This was not encouraging news. US companies operating in
Mexico should carefully word powers
of attorney and have a system of checks
and balances to prevent dishonest employees from using the powers of attorney to the detriment of the company.
All witnesses employed by the factory were ordered to appear for an
interview conducted by José Antonio
and me. There were approximately 11
employees and one former employee
who agreed to appear. This process
started in the morning and went well
into the evening. The first 11 said that
they had never seen the agreement and
that it was highly unusual for the plant
manager to sign such an agreement
with a vendor.
The factory has an established
vendor management process. The
origination of any contract begins
with a procurement request based
on input from plant supervisors who
knew the workflow and can accurately
forecast the needs for future services.
The request would move up the chain
The contract at issue bypassed all
established company procedures. As
we were waiting for the last witness
to arrive at the plant, José Antonio
indicated that it might be a waste of
time to interview this person because
his signature was on the contract and
he was probably complicit with the
plant manager. I knew it was important
to know what information this person
had, whether good or bad. To our
surprise, the witness stated that he did
sign the agreement but did not actually
witness the agreement. He stated that
he was ordered to sign the agreement
by the plant manager. The vendor and
the other witnesses were not present.
He also stated that the purported date
of the contract was Sunday, January
1 — when the plant was closed. He was
our best witness and extremely cooperative. At the first hearing, the witness
testified that the plant manager and the
vendor attempted to coerce him into
testifying on the plaintiff’s behalf just a
few days prior.
Mexican legal process
There is a sharp distinction between
trials in the United States and Mexico.
Except for pretrial matters and motions, trials in the United States are
conducted before a judge and/or a jury.
Once the trial begins, the parties present the evidence on consecutive days
until the end. In Mexico, hearings are
set in one or two-hour increments.
When a plaintiff files a complaint in
a civil proceeding, the plaintiff must
include all the causes of action against
a defendant. He or she must include
a copy of any documents that will be
submitted as evidence and list all the
testifying witnesses. The court will
exclude as evidence any document not
attached to the complaint as well as the
testimony of any witness not listed. The
plaintiff cannot amend the complaint
after the court files it. The same applies
to the defendant when the answer is
filed. There is an exception for evi-
dence that was not known at the time
the pleadings are filed. If the evidence
is known to a party but cannot be filed
for reasons not within the control of a
party, the court will allow a leave to in-
troduce the evidence later. The party’s
pleading must mention the evidence.
Once the parties are served, it is the
obligation of the plaintiff to move the
case forward. Failure to do so could
result in a dismissal for failure to pros-
ecute and subject the plaintiff to costs.
In most cases, the plaintiff can refile
the petition if the statute of limitations
has not lapsed.
There is a significant contrast between
a trial in the United States and Mexico.
In civil law jurisdictions, there is no
discovery, and pretrial motions are
allowed only in limited circumstances.
Evidence is presented piecemeal in one
or two-hour increments. The Mexican
code requires that all of the evidence
be presented by a certain date. A con-
tinuance is seldom granted. There is
no remedy if a witness fails to appear.
In one of my other cases in Mexico,
the defendant was 20 minutes late. The
judge did not allow him to testify.
Questions to party witnesses are
submitted to the court prior to the hear-
ing in a sealed envelope. The attorney
law clerk opens the envelope and reads
the questions to the witness. A secretary
Retaining Mexican counsel
1. Exercise caution in retaining Mexican counsel. The Mexican bar has no
authority to discipline attorneys for unethical conduct.
2. Obtain references where possible.
3. Have an upfront understanding of the fees.
4. Negotiate in good faith but be aggressive.
5. Interview several attorneys.
6. Include language in the agreement where the attorney agrees not to
violate the FCPA.