## Facts

- Lee K. Wong, a California produce grower, moved farming operations to Mexico in 1969, despite Mexican restrictions on foreign ownership or control of agricultural operations.
- To evade Mexican law, Wong used Mexican citizens as nominal owners and titleholders, while Wong supplied capital, equipment, and exercised effective control; produce was marketed under Wong’s name.
- Wong and a Mexican citizen, Mario Cota, formed a Mexican corporation whose shares were held by Mexican citizens on Wong’s behalf to continue the operation.
- Wong entered agreements with Heggblade-Marguleas-Tenneco, Inc. (H-M-T), a California produce broker and Tenneco subsidiary, giving H-M-T exclusive marketing rights in exchange for management and financing; H-M-T deducted commissions and expenses and remitted net proceeds.
- H-M-T allegedly knew from the outset that Wong’s interest in the Mexican enterprise violated Mexican law.
- As Mexico increased enforcement against foreign-controlled “front-man” farms, H-M-T ended the relationship and began paying the Mexican growers directly (January 1975).
- Wong sued in California for damages tied to diverted proceeds and the value of the Mexican enterprise; Tenneco cross-complained for unpaid indebtedness.
- A jury awarded damages to both sides, but the trial court vacated both verdicts and denied relief to both parties on the ground that the agreements’ performance was illegal under Mexican law.
- The Court of Appeal reversed; the California Supreme Court granted review.

## Issues

1. Whether California courts should provide a remedy for losses tied to a farming operation in Mexico that was structured and operated in violation of Mexican law and policy.
2. Whether, under international comity, California should decline to adjudicate or award damages where relief would undermine a foreign sovereign’s actively enforced regulatory scheme.

## Decision

- The California Supreme Court reversed the Court of Appeal.
- The court held that, as a matter of international comity, California courts should not award Wong damages for the loss of an agricultural enterprise that existed and operated through evasion of Mexican law.
- The effect was to deny Wong recovery on claims grounded in the illegal Mexican venture.

## Legal Principles

- International comity permits (and may require) a domestic court to decline relief when enforcement would impair a foreign sovereign’s clearly stated and actively enforced public policy.
- A court may refuse to award damages where the plaintiff’s asserted property or economic interest depends on an enterprise illegal under the foreign state’s core regulatory regime.
- Comity analysis may extend beyond ordinary conflict-of-laws or contract-validity inquiries when the requested relief would effectively validate circumvention of another nation’s sovereign land-use and ownership restrictions.
- A defendant’s knowledge or participation in the foreign-law evasion does not necessarily justify judicial relief to the plaintiff when the remedy would conflict with comity-based limits.

## Conclusion

California courts would not assist a California plaintiff in recovering the value or proceeds of an agricultural operation in Mexico that was intentionally structured to evade Mexican restrictions on foreign control, because awarding such relief would conflict with Mexico’s sovereign policy choices and enforcement efforts under principles of international comity.


Wong v. Tenneco, Inc., 39 Cal. 3d 126, 702 P.2d 570 (Cal. 1985)