Court: Mexican Medical Supplies Manager’s Bribery Case Belongs in Mexico

A judge has ruled that Instituto Mexicano del Seguro Social’s (IMSS) case against Zimmer Biomet Holdings Inc. must proceed south of the border based on the doctrine of forum non-conveniens. In doing so, the court dismissed IMSS’s allegations that the defendant bribed Mexican government officials to facilitate the sale of its unregistered medical device products in Mexico but did not rule on the defendant’s motion for failure to state a claim.

According to the court’s Tuesday opinion, IMSS contended that from 2008 to 2013, Zimmer Biomet knowingly paid bribes to Mexican government officials to facilitate the import of unregistered medical device products into Mexico through its indirectly owned Mexican subsidiary, Biomet 3i Mexico. IMSS argued that under Mexican law, it was barred from purchasing these unregistered products and that because of the bribery scheme, certain contracts dating from 2008 were void.

IMSS’s complaint explained that the bribes occurred through Biomet 3i Mexico, with Zimmer Biomet personnel traveling to Mexico to support the scheme, and through Mexican agents who “acted as bagmen for passing on bribes to Mexican government officials.” IMSS noted that Zimmer Biomet entered into deferred prosecution agreements with the U.S. Department of Justice and settlement agreements with the Securities and Exchange Commission for the illegal scheme.

The court opened its discussion of forum non-conveniens by stating that dismissal is appropriate where both an alternative forum is available and adequate, and dismissal would serve “the private interests of the parties and the public interests of the forums.” The court found the first requirement satisfied after determining that a Mexican court “would have jurisdiction over this matter and the parties are amenable to process within Mexico following Zimmer Biomet’s consent.”

As to the second conjunctive requirement, the court found that the scale tipped in favor of a Mexican forum because more witnesses reside there. The court also justified this conclusion in light of the difficulty of travel during the COVID-19 pandemic.

Other factors leading the court to dismiss for forum non-conveniens included that “IMSS’s claims are rooted in Mexican law, the contract was between Mexican parties, and the injury took place in Mexico.” The court also recognized that while docket congestion is a reality for both American and Mexican courts, “Mexican courts would face a lesser burden in obtaining U.S. documents and translating them into Spanish than the opposite, particularly because most evidence exists in Mexico.”

Accordingly, the court granted Zimmer Biomet’s motion to dismiss and ordered the defendant to agree to accept service in a Mexican court and not to contest jurisdiction. It further ordered Zimmer Biomet to satisfy any final judgment rendered by a Mexican court.

IMSS is represented by Maney & Gonzalez-Felix, and Zimmer Biomet by Morgan, Lewis & Bockius.