John Paul DeJoria, the tycoon who created Paul Mitchell hair care products, decided to venture into oil exploration. With the blessing of the Moroccan government, he set about doing this, but the reserves never materialized. DeJoria abandoned the project and is now being sued for $100 million by Maghreb Petroleum Exploration, the new manager. Originally filed in Moroccan courts, the case has been brought to Texas, as Maghreb is seeking enforcement of the judgment.
Reversals in the Texas District and Circuit Courts
The Texas district court refused to recognize the decision based on the lack of due process in Moroccan courts. However, the Fifth Circuit reversed the decision, stating that under the Texas UFMJRA, which recognizes the decisions of foreign courts, a lack of due process wasn’t enough to refuse recognition.
Subsequently, DeJoria’s lawyers went before the Texas legislature to amend the UFMJRA. Texas adopted the UFCMJRA, which allows failures of due process to result in non-recognition. Ironically, the new statute had a look-back clause, allowing it to be applied retroactively to pending cases.
On these dubious grounds, DeJoria was able to restate his case. The Texas district court found that DeJoria did not receive due process, stating the defendant couldn’t attend the Moroccan proceedings or obtain representation there. On appeal, the Fifth Circuit stated it would only look at the case again for errors of fact — despite the that there was no presentation of evidence thus far in the Texas portion of the conflict. In other words, the nonrecognition was based solely on affidavits.
What Makes This Case an Anomaly?
Texas law allowed for this finding, despite the fact that a claim must be pleaded and proven. To avoid a trial, DeJoria could have filed a Civil Procedure and brought a motion for summary judgment. This would have prevented a finding of fact.
The Fifth Circuit affirmed that DeJoria had a valid defense to recognition. His inability to present his case in Moroccan court denied his right to due process. Therefore, the Texas courts refused to recognize the decision of the Moroccan courts.
