The case of the day is Ackourley v. Noblehouse Custom Tailors (E.D. Pa. 2013). The plaintiff, Richard Ackourey, sued Noblehouse Custom Tailors, a Hong Kong firm, and its owner, Vijay Wadwahani, for copyright infringement. The court dismissed the action for failure to serve process, and Ackourley moved to reopen the case, stating that he had served the complaint by certified mail, return receipt requested but had not yet received the proof of service because he had not yet received the return receipt. The court correctly recognized that the failure to file the return of service until after the case was dismissed was not fatal, because under FRCP 4(l)(3), “Failure to prove service does not affect the validity of service.” Still, the court considered whether the method of service was valid. The court got this right on all points. First, the Hague Service Convention applies to Hong Kong. Second, Article 10(a) permits service of process by mail. Third, although China has objected to service by mail, Hong Kong has not. The court therefore correctly granted the motion to vacate the dismissal. Easy.
The case of the day is Harper v. W.W. Grainger, Inc. (W.D. Ky. 2013). Larry Harper sued Dayton Electric Manufacturing Co. in the Jefferson Circuit Court in Kentucky, alleging that he was severely injured when using a hand truck that Dayton manufactured or sold. Dayton removed the case to the District Court for the Western District of Kentucky. The parties then stipulated that W.W. Grainger, Inc., Dayton’s parent company, was substituted as a defendant for Dayton. Harper then amended his complaint to allege that Li & Fung (Trading) Ltd., a Hong Kong company, was liable for negligent design or manufacture of the hand truck.
Harper hired APS International, Ltd. to handle the service of process. APS transmitted the documents by Fedex to the Hong Kong central authority. There was no response from the central authority for more than six months, despite two follow-up letters from APS. (I recommend follow-up letters as a way of establishing that you acted with the appropriate diligence when it comes time to seek a default judgment under Article 15).
Harper moved for a default judgment, but Li & Fung, which said it had learned of the lawsuit from W.W. Grainger, submitted an affidavit stating that it had never been served with the documents by the central authority. The judge therefore properly denied entry of a default judgment. The lesson here is that while it’s permissible to enter a default judgment in the event a central authority fails to respond after six months, it’s not mandatory, particularly where, as here, the defendant submits an affidavit denying service.
But of course, by submitting the affidavit, Li & Fung created some pretty easy opportunities for Harper to effect service, and in fact Harper correctly moved for leave to serve process on Li & Fung’s US counsel under FRCP 4(f)(3). The judge granted the motion, as courts generally do in such cases.
There was no great strategy here for Li & Fung. If it refused to appear, it ran the risk of a default judgment under Article 15. If it appeared to deny receipt of service, it ran the risk that the court would authorize service on its attorneys. Parties in Li & Fung’s position might ask themselves whether it’s worth the time and money to fight service of process in such situations.
The case of the day is Shoham v. Islamic Republic of Iran (D.D.C. 2013). Batsheva Shoham alleged that while she was driving in the West Bank with her infant son, she was ambushed by members of the Al-Aqsa Martyrs Brigade, a terrorist group. One of the terrorists threw a stone that struck her son, killing him. In 2011, Mrs. Shoham and victims of similar attacks sued Iran, Syria, and others in the District of Columbia. Judge Collyer severed Mrs. Shoham’s claims from the action and granted her leave to refile with a new caption, noting that the summonses would have to be reissued and that the amended complaint would have to be served.
Mrs. Shoham then filed a new action, with a complaint identical to the complaint in the prior action, but with a new caption. The remaining plaintiffs in the first case managed to serve Iran and its instrumentalities with process via diplomatic channels. After the court ordered Mrs. Shoham to show cause why her new action should not be dismissed for want of prosecution (as she had filed no return of service after six months), Mrs. Shoham moved for entry of default judgment on the theory that despite Judge Collyer’s order, service of the original complaint in the first action sufficed. She cited precedents for the proposition that service of an amended complaint under the FSIA after a default by the foreign state is necesssary only if the amendments are substantial.
Judge Lamberth distinguished these cases on the grounds that they involved the service of an amended complaint in a single action, not, as was the case here, service of a complaint in an entirely new civil action. It hardly matters, from the jurisdictional point of view, whether the complaint in the second action was similar or even identical to the complaint in the first. However, the judge did give her additional time to effect service, and he blasted the government for the high fees it charges to effect service via diplomatic channels under the FSIA.
Mrs. Shoham also sought leave to serve Bank Melli, Bank Saderat, and Iran Air in Austrialia, Canada, France, Italy, Hong Kong, the Netherlands, Sweden, and the UK, by registered mail, return receipt requested. The judge granted the request. All three defendants are agencies or instrumentalities of Iran for purposes of the FSIA. Therefore, service was governed by 28 U.S.C. § 1608(b). Mrs. Shhoam had been unable to make service by registered mail at the defendants’ headquarters in Iran, and therefore her request was proper under § 1608(b)(3)(C), which permits service by delivery of the documents “as directed by order of the court consistent with the law of the place where service is to be made” when other means of service have failed. All of the countries named are parties to the Hague Service Convention, and none has objected to service by postal channels under Article 10(a). 1 The judge held, correctly, that service by mail under Article 10(a) despite the minority view to the contrary.
Note that § 1608(b)(3)(C) asks whether the service is “consistent with the law of the place where service is to be made.” Is there an issue about whether service by postal channels is consistent with the law of the state where service is to be made, particularly if in a particular state the Convention is not self-executing? The decision does not raise this issue, and I simply pose it as a question.