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O’Melveny Wins Dismissal of Multi-Billion Dollar Claim Against Mexican Government Subsidiary

LOS ANGELES ─ MARCH 10, 2016 ─ O’Melveny & Myers LLP secured a victory on behalf of Mexican salt mining company, Exportadora de Sal, S.A. de C.V. (ESSA), a majority-owned subsidiary of the Mexican government. On March 9, 2016, a Los Angeles federal court dismissed the alleged multi-billion dollar lawsuit against ESSA brought by Mexican manufacturing corporation Packsys, S.A. de C.V., concluding that ESSA was a “foreign state” under the Foreign Sovereign Immunities Act (FSIA) and immune from jurisdiction under the FSIA.

Packsys’ claim was allegedly that ESSA breached a contract for the sale of residual brine, a byproduct of salt mining; however, the court concluded that the contract had not been approved by ESSA’s Board of Directors, as required by Mexican law, and that ESSA's former General Director “was required to, but did not, obtain Board approval” to enter the agreement. The court further found that Packsys’ claim was allegedly “based on conduct occurring outside of the United States.” For both of these reasons, the court found ESSA immune to the lawsuit filed in the United States.

The bilingual O’Melveny team, brought in a week before the deadline for motion filing, was gratified by the court’s ruling. “This decision is an enormous vindication for our client,” said Steve Olson, Co-Chair of O’Melveny’s White Collar Defense and Corporate Investigations Practice.

O'Melveny was assisted in Mexico by Fernando Perez-Correa from the law firm of Solórzano, Carvajal, González y Pérez Correa, S.C. (Solcargo).