The case of the day is Professional Investigating & Consulting Agency, Inc. v. Suzuki (S.D. Ohio 2014). The plaintiff, David Suzuki and Suzuki Reconnaissance Advisors, Ltd., were located in Hong Kong. The plaintiff, Professional Investigating & Consulting, was an Ohio private investigation firm. The claims were for breach of contract. The action was filed in November 2011.
PIC hired a process serving firm to attempt to serve the defendants through the Chinese central authority, but their attempt failed because they had given incorrect addresses for the defendants. PIC then corrected the addresses and tried again, but for more than a year the Chinese central authority had not returned a certificate concerning service.
In September 2013, PIC effected service by personal delivery via a private process server. Suzuki (personally, not through his lawyers) sent a letter to the Court objecting to that mode of service. I’m not going to delve into the question whether Suzuki’s objection was sound—the judge found that personal service was improper and ordered PIC to try again.
PIC then moved for leave to serve the defendants by email. The court, continuing a sad trend, granted the motion. It held that PIC had shown that the Hague Service Convention does not prohibit service by email.
As Plaintiff contends, the Hague Convention is silent on email service. Various courts have agreed that service by email is not prohibited by the Hague Convention. Email service has been approved even where, as here, the country objects to Article 10 of the Hague Convention.
(citations and internal quotation marks omitted).
I’m not going to go over all this again. I’ll simply make a few points:
- Hong Kong has not objected to service under Article 10, contrary to the judge’s suggestion.
- Because the Convention is exclusive, it’s not enough to note that the Convention is silent on email. Indeed, the Convention’s silence on email should be fatal to the case for service by email, since the only permissible methods of service are those authorized or at least permitted by the Convention.
- The decision could be right despite the poor reasoning if you think email comes within the definition of postal channels. But for reasons I give in my recent paper, I don’t think that’s right.
At what point do I have to stop saying that the courts keep getting this wrong and start saying that the law is what the courts say it is? I’m sticking with this—all of the bad decisions so far are at the trial court level.
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.