Coufal Abogados v. AT&T, Inc.

AT&T Productos de Consumo de Mexico S.A. de C.V. (Productos) was an affiliate of AT&T, Inc. (AT&T) (defendant). AT&T was incorporated in New York and headquartered in New Jersey. Productos retained the law firm Coufal Abogados and Eric Coufal (collectively, Coufal) (defendants) to sue Avanti Constructora (Avanti) regarding Avanti’s alleged deficiencies in constructing a factory for Productos in Mexico. Coufal won a large arbitration award for Productos. Per the parties’ revised fee agreement, Coufal would receive approximately half of any money ultimately collected from Avanti, and Productos agreed not to unilaterally revoke Coufal’s ability to collect on the award or settle with Avanti without Coufal’s consent. In the meantime, Avanti launched a public-relations attack against Productos, and high-level government officials in Mexico and the United States became involved in the dispute. This led an AT&T attorney in New Jersey to order an investigation, which occurred exclusively in Mexico. Ultimately, AT&T concluded that the Productos-Avanti dispute was bad for AT&T’s overall business in Mexico, leading Productos to revoke Coufal’s power of attorney and AT&T to decide against collecting on the arbitration award, leaving Coufal with no fee. Coufal sued AT&T and Lucent Technologies, Inc. (Lucent) (defendant), a company that AT&T spun off, in California state court for tortiously interfering with Coufal’s revised agreement with Productos. After removing the case to federal district court on diversity grounds, AT&T and Lucent moved for summary judgment on the basis that Mexican law governed; Mexican law did not recognize a claim for tortious interference. Coufal responded that New York law applied because AT&T was incorporated in New York, which did recognize tortious interference. The district court ruled that Mexican law applied and granted summary judgment to AT&T and Lucent. Coufal appealed.