Mexican Professionals Offering Services to California Customers May Face Unexpected Legal Risks
By Procopio Partner Adrian Martínez
Can Mexican professionals be sued in the state of California when they provide services to state residents, despite rendering the professional services exclusively in Mexico? It’s an important question to ask, particularly given the not unwarranted belief that the United States is one of the most litigious societies in the world, and we frequently see reports of California professionals being sued by their clients. The legal risks for Mexican entrepreneurs differ, but are still very real.
Lawsuits against professional service providers in California frequently allege negligence, including malpractice. Physicians, lawyers, accountants and architects are among professionals that may be subject to compensating plaintiffs for economic damages (medical expenses, loss of income, etc.) and non-economic damages (pain and suffering, etc.). As a result, many California professionals obtain liability insurance policies that offer coverage against malpractice lawsuits.
It is not uncommon, however, for California residents to receive professional services—such as health care—outside of their state, including in Mexico. If a Mexican practitioner is marketing their services to Californians, do California courts have jurisdiction to allow plaintiffs to sue those practitioners across the international border?
Let’s consider a hypothetical example of a young dental surgeon practicing exclusively in Tijuana, Baja California. She is a Mexican national residing in Tijuana who holds a U.S. nonimmigrant visa (e.g., a tourist visa). She also owns a second home in Chula Vista, California, and has a California checking account.
Our dentist decides to get into the medical tourism business and begins marketing her services in San Diego County, California, through pamphlets distributed by a third party. Many San Diegans take her up on her invitation to visit her in Tijuana for dental services. One patient later accuses her of injuring him during treatment, and sues for malpractice in a San Diego Court. What our dentist will soon find out is that California courts, under certain conditions, may have jurisdiction over out-of-state professionals, even when the alleged malpractice didn’t occur in the state.
In California, a court requires subject matter jurisdiction and personal jurisdiction to: 1) hear and resolve the controversy at hand and 2) exercise control over the parties. Let’s break down those two forms of jurisdiction.
Subject matter jurisdiction
Under California law, subject matter jurisdiction is similar to that established by Mexican laws of procedure (in the case of our hypothetical dentist, the Baja California Code of Civil Procedure). Each California county has a superior court with its own jurisdiction to handle most types of cases.
The rules to establish personal jurisdiction in a California court are more complicated, and may even seem absurd or unjust to someone familiar with Mexican law. As a general rule, a California court may assert jurisdiction over a defendant when:
1. The defendant is physically present in California when served;
2. The defendant is domiciled in California;
3. The defendant “appears” during the process;
4. The defendant agrees to submit to the courts in California; and
5. The defendant has “minimum contacts” in California.
That last point—the theory of minimum contracts—is worthy of additional discussion. California courts can assert personal jurisdiction over individuals or entities who reside outside the state if they have “minimum contacts” with California, if it’s believed that applying jurisdiction over the foreign resident does not offend “traditional notions of fair play and substantial justice” pursuant to due process under the U.S. Constitution’s Fourteenth Amendment. Defining “fair play and substantial justice” isn’t easy, although one factor is if the defendant can reasonably defend herself in a California legal process.
Going back to our example, our dentist sought to obtain a benefit in California by intentionally distributing pamphlets. That could be considered sufficient “minimal contacts” to allow a California court to assert jurisdiction. This would not be the case if our plaintiff had traveled to the dentist’s office based on a friend’s recommendation or a referral from a California dentist, instead of resulting from the dentist’s proactive marketing.
What if, instead of print pamphlets distributed in California, the dentist had marketed her services online? If the website or online advertising targeted patients generally, rather than California residents specifically, that would probably not be enough to allow a California court to assert jurisdiction. If, however, the online content explicitly encouraged Californians to visit, that could be enough to trigger jurisdiction.
Economic impact from the exercise of jurisdiction
So it turns out our pamphlet-distributing dentist is subject to court jurisdiction in California. Once our injury claimant files a civil lawsuit in a California court, he must serve our dentist with the lawsuit, either in California or in Mexico. She can then 1) object to the jurisdiction, 2) object the service of process, 3) object the sufficiency of the lawsuit’s content or 4) answer the lawsuit. If her jurisdiction objection is rejected, she must demonstrate in trial that the alleged injuries suffered by the patient were not a result of her negligence.
Defending herself in this malpractice suit could be very expensive for our hypothetical dentist. It is common for attorney’s fees, court fees, jury fees and expert fees, and other costs and expenses to exceed hundreds of thousands of dollars. In addition, in California the general rule is that each of the parties is responsible for the fees of their lawyers, regardless of the outcome of the trial. Therefore, unlike in Mexico, our dentist will spend thousands of dollars in legal fees knowing she won’t have an opportunity to recoup those costs if she prevails. The financial damage could be far worse if she loses. The judgment against her could include encumbering her property in California, including her home in Chula Vista and her bank account.
It is worth noting that the United States Supreme Court recently heard oral argument in the case of Ford Motor Company v. Montana Eighth Judicial District Court, which involves the issue of personal jurisdiction (more specifically, “specific personal jurisdiction”). The U.S. Supreme Court’s impending decision in that case could impact the analysis in this article.
Many Mexican entrepreneurs wish to capitalize on willing customers in California. In doing so, however, they need to understand the legal risks they face in creating “minimum contacts” in the state and the financial risks they face should they find themselves a defendant in court. As 19th Century English essayist William Hazlitt wrote: “Great deeds are usually wrought at great risks.”
Adrian Martinez is a Partner at Procopio in its U.S.-Latin America Cross-Border practice. He focuses his practice on advising and representing clients in litigation matters, including civil litigation and family law disputes, with an emphasis in cross-border litigation. Adrian represents clients, domestic and foreign, in litigation arising out of manifold business relationships, including partnerships and other fiduciary relationships. He also counsels individuals and companies in disputes involving business torts, contractual disputes, enforcement of foreign money judgments, as well as conducting discovery for cases pending abroad. In family disputes, Adrian represents clients in actions for termination of marital status, custody, support, and enforcement of foreign custody orders. Because of his background as an attorney schooled and licensed in Mexico, he represents clients in disputes related to the enforcement of the separate property regime (in Spanish, “regimen de separación de bienes”). He also represents clients in negotiating and entering into prenuptial agreements.