Tag Archives | India

Service by Email and Facebook: FTC v. PCCare247 Inc.

By on March 15, 2013 in Hague Service Convention, MK, Service by email

I’ve got an interesting case for you today!

The case of the day is FTC v. PCCare 247 Inc. (S.D.N.Y. 2013). The FTC alleged that the defendants, Vikas Agrawal, Anuj Agrawal, Parmeshwar Agrawal, PCCare247 Solutions Pvt. Ltd., and Connexxions IT Services Pvt. Ltd., all located in India, “operated a scheme that tricked American consumers into spending money to fix non-existent problems with their computers.” On the FTC’s motion, the judge entered a temporary restraining order enjoining the defendants’ business practices and freezing assets. Two days later, the FTC transmitted the summons and complaint to the Indian central authority for service under Article 5 of the Hague Service Convention. The FTC also delivered the summons and complaint to the defendants by email; by FedEx; and by personal service via a process server. Vikas Agrawal was later personally served while he was in the United States. The Indian central authority never proceeded to serve the defendants under the Convention. 1

At the hearing on the FTC’s motion for a preliminary injunction (which the judge granted), which followed the service of process, the defendants were represented by US counsel. However, US counsel later withdrew, after the defendants failed to pay them. Now that the Indian defendants were unrepresented, the FTC faced the question of how to serve them with additional documents in the action. It sought leave, under FRCP 4(f)(3), to serve the subsequent documents by alternate means, namely by email and via Facebook. 2 Since we are talking about documents other than the summons and complaint, the case does raise the question whether the Hague Service Convention applies at all to such documents. I’ve often expressed the view that the Convention does apply to documents other than the summons and complaint. The judge assumed that the Convention applied but held that service by email or Facebook was not inconsistent with the Convention in any event:

Service by email and Facebook are not among the means listed in Article 10, and India has not specifically objected to them. Numerous courts have held that service by email does not violate any international agreement where the objections of the recipient nation are limited to those means enumerated in Article 10.

The judge cited Gurung v. Malhotra—a case I’ve criticized as wrongly decided—in support of his conclusion. 3 I happen to agree with the judge that commercial email is not within the definition of “postal channels” in Article 10. So India’s Article 10 objection does not bear on the permissibility of service by email. But the Convention is exclusive; a plaintiff must use one of the methods of service authorized or at least permitted by the Convention, if the Convention applies. So which provision of the Convention authorizes service by email, or by Facebook? I think the answer is that no provision of the Convention authorizes service by email, let alone by Facebook. 4

Facebook provides an additional complication. The analogy between e-mail and old-fashioned mail is very strong, and it seems difficult to argue that when I send an email to someone in another country, I am not transmitting the email into that country. 5 Since the Convention applies only when there is occasion to transmit judicial documents to another state, it seems that the Convention applies to cases of service by email. But Facebook could present a closer question. Suppose the FTC simply put a notice on its Facebook “wall”: “Hey, Anuj Agrawal, you’ve been sued! Click this link to read the summons and complaint.” This would, it seems to me, be most analogous to service by publication, and I think it’s common ground that if the FTC had obtained approval to serve process by publishing a legal notice in the New York Times, the method of service would not involve transmission of the documents to India and thus the Convention would not apply. But it seems that that wasn’t the FTC’s plan. According to its papers, the FTC planned to send “Facebook messages” to the defendants, which the defendants will receive when they log on to Facebook. This method of transmission seems much more analogous to an email than to publication on the Internet, and I therefore would apply the same analysis to service by Facebook as to service by email.

So I think the judge was right to say that, since the documents had to be served in India rather than on US counsel, the Convention applied, but wrong to say that the Convention does not forbid service by email or Facebook in the circumstances. In short:

  1. The Convention is exclusive. A party must use one of the methods permitted or authorized by the Convention if it applies.
  2. The only provisions of the Convention that seem even arguably to permit either methods are Article 10(a), which permits service via the postal channel, in the absence of an objection, and Article 19, which permits service under the law of the receiving state but which was not in play in this case.
  3. So if email is within the scope of the term “postal channels,” then the service by email was improper under Article 10 in light of India’s objection; and if email is not within the scope of the term “postal channels,” then the service by email was improper because it is not authorized by any other provision of the Convention. The service by Facebook seems improper in either case.
  4. There are plenty of cases approving service by email, but with exceptions such as Gurung, they are mostly cases where the defendant’s address was unknown and the Convention did not apply, or where the defendant was in a non-Convention country.

Notes:

  1. Although the question in the case was not the validity of the service of the summons and complaint, it’s worth considering whether service was valid as to those defendants served in India. I assume for these purposes that the defendants’ addresses are known. India has objected to service under Article 10 of the Convention, which means, I think, that the service by FedEx was invalid insofar as the majority rule is that private couriers are within the scope of the term “postal channel” in Article 10(a). I also believe that service of a summons and complaint by email to a defendant in India was invalid under the Convention, as I describe later in this post. I would say that service by email was invalid even leaving the Convention aside, as under FRCP 4(f)(3) such service requires leave of court. Service by FedEx may have been valid even leaving the Convention aside, if the FTC met the requirements of FRCP 4(f)(2)(C)(ii), as long as Indian law did not prohibit it. Personal service by process server would also seem to be barred, since it is permissible under Article 10(c) of the Convention, but as already noted India has objected to Article 10 in its entirety. There may be an argument that Article 19 permits this method of service, but that requires more knowledge of Indian law than I have. So my initial view is that the service of the summons and complaint, except as to Vikas Agrawal, was improper. ↩
  2. The obvious difficulty here is that Rule 4 applies only to service of a summons and complaint. All other documents are to be served under FRCP 5. The court and the FTC understood this point, and the FTC claimed it was seeking leave under FRCP 4(f)(3) only out of an abundance of caution. Perhaps the motion should have been cast as a motion for leave to serve documents under FRCP 5 by a means not contemplated by the Rule. ↩
  3. In its brief, the FTC also cites MacLean-Fogg Co. v. Ningbo Fastlink Equip. Co. (N.D. Ill. 2008) and Williams-Sonoma, Inc. v. Friendfinder, Inc. (N.D. Cal. 2007), both of which I distinguish in a prior post. ↩
  4. Article 19 provides a possible exception, as I noted in my prior post. ↩
  5. Suppose the recipient of the email is in India but he uses an email service that has its servers in the United States. Is the email transmitted to India? It seems to me that it is, since the recipient must retrieve the email from the server, and so one way or another, the email makes its way from my computer in Boston to his computer in India. ↩
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US Court Approves International Service of Process by Facebook

By on March 15, 2013 in Hague Service Convention, Service by email

Letters Blogatory welcomes esteemed fellow blogger Chris Neumeyer, who practices law in Taipei. Chris has a new post on today’s case of the day, FTC v. PCCare247 Inc., which will be cross-posted on his blog. Readers may also be interested in my take on the case.

As technologies develop, courts worldwide are increasingly open to allowing service of legal documents by new means, including by FedEx, e-mail, Facebook and Twitter. In line with that general trend, last week a District Court in New York authorized service upon certain defendants located in India by means of e-mail and Facebook.

The case, FTC v. PCCare247 Inc. (S.D.N.Y. 2013), involves allegations that several individuals located in India operated a scheme that tricked American consumers into spending money to fix non-existent problems with their computers. The FTC applied to the court and obtained a temporary restraining order enjoining defendants’ business practices and freezing some of their assets.

Because India is a signatory to the Hague Convention on Service Abroad, the FTC submitted the Summons and Complaint to the Indian Central Authority, requesting service of process pursuant to Federal Rule of Civil Procedure (FRCP) Rule 4(f)(1) and Article 3 of the Hague Convention. The FTC also attempted to serve process on the defendants by e-mail, FedEx and personal service. FedEx confirmed delivery for most of the defendants and a process server personally served all of the defendants.

However, for five months the Indian Central Authority failed to act, failing to formally serve the defendants and failing to respond to the FTC’s inquiries regarding the status of the service, so the FTC filed a motion requesting leave to serve all subsequent documents, other than the Summons and Complaint, on the defendants by e-mail and Facebook, only. On March 7, the Court granted that motion.

As the Court explains, FRCP 4(f)(3) authorizes the Court to “fashion means of service on an individual in a foreign country, so long as the ordered means of service (1) is not prohibited by international agreement; and (2) comports with constitutional notions of due process.” Cases hold that Rule 4(f)(3) is neither a last resort nor extraordinary relief, but merely one of the possible means of service on foreign defendants. Nor is a plaintiff required to first attempt service through other provisions of Rule 4(f), although a Court may require proof that the party first attempted service by other means before requesting the court’s intervention under Rule 4(f)(3).

Ordinarily, service of judicial documents in a member state of the Convention is handled by the Central Authority in the foreign state, as stated at Article 2 of the Convention. However, the Court noted that Article 10 of the Convention also allows for service through certain alternative means, such as “postal channels,” provided the destination state does not object to those means. The Court further noted that India had objected to the methods specified at Article 10, although it had not specifically objected to service by e-mail or Facebook. Consequently, the Court found the Hague Convention did not bar such service.

Ted Folkman makes a convincing argument that the court was mistaken in that respect. First, compliance with the Hague Convention is mandatory in all cases to which it applies. That is, so long as the party to be served is located in a member state and no exception applies (e.g., Article 1 provides an exception where the address of the party to be served is not known), service of judicial and extrajudicial documents must be effected by means authorized under the Convention. Second, no provision of the Convention authorizes service by e-mail or Facebook.

In other words, the Court was wrong to find the Convention doesn’t prohibit service by e-mail and Facebook, so it must be allowed. Instead, service by such means is proper only if the Convention expressly permits it, and the only provision that might be seen as permitting such service is Article 10, which refers to “postal channels” (bear in mind that the Convention was drafted in 1965 and has never been amended, so it’s no surprise it doesn’t expressly refer to electronic communications), but India has formally objected to service under Article 10.

Perhaps the Court was exasperated with the lack of cooperation from the Indian authorities. As the court explained, “This litigation must move forward, and it is not tolerable to wait five months (or more) for every motion in this case to be served by the Central Authority.” However, the Convention doesn’t appear to authorize other means of service in cases where a member state fails to comply with its responsibilities.

Aside from the Hague Convention, it should be noted that the Court also examined whether the proposed means of service would deprive the defendants of due process, and the Court found—based on the facts at issue—that it would not. The service was reasonably calculated to provide the defendants with actual notice, because defendants had used the same e-mail addresses in connection with the accused activities and to send e-mails to the FTC and the Court. There was evidence the Facebook accounts had been set up by the defendants and not by some other party. And, it was already established that the defendants had actual notice of the lawsuit.

So, what can one learn from this case?

First, whether it was decided rightly or wrongly, the question was whether service by e-mail and Facebook may be authorized when the defendant is located in a Hague Convention member state and its address is known (so the Convention is applicable). Many countries are not members, including most of Southeast Asia, South America, Africa and the Middle East. The question was also complicated by the fact that India has objected to Article 10 of the Convention, which refers to service by “postal channels.”

Second, when considering whether to attempt service of process by less orthodox means, once should always keep in mind the nature of the relief being sought and whether foreign assistance may eventually be required. For example, a plaintiff seeking monetary damages from a foreign defendant that lacks assets in the U.S. should recognize the strong likelihood that foreign courts may refuse to enforce a judgment if service of process was made by e-mail or Facebook.

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Case of the Day: Amaprop Ltd. v. Indiabulls Financial Services Ltd.

By on October 25, 2012 in Hague Service Convention

The case of the day is Amaprop Ltd. v. Indiabulls Financial Services Ltd. (S.D.N.Y. 2012). The underlying dispute is probably very complicated and in any case not really relevant for Letters Blogatory purposes. Suffice it to say that Amaprop and Indiabulls had arbitrated a dispute, that the award was in favor of Amaprop in the amount of $48.9 million, and that the New York court had already confirmed the award. Under FRCP 69, the rule governing discovery in aid of execution, Amaprop wanted to serve a subpoena and a restraining notice on Indiabulls. The restraining notice was a post-judgment device peculiar to New York law. Under NY CPLR § 5222(a), the restraining notice had to be served “personally in the same manner as a summons.” The same method of service is apparently required for a subpoena under the New York post-judgment procedure. 1

Amaprop had served the subpoena and the restraining notice on Indiabulls via overnight mail. It had received the court’s permission to do so. When Amaprop sought to compel Indiabulls to comply with the subpoena and the restraining notice, Indiabulls asserted that the service was improper under the Hague Service Convention.

The judge, incorrectly in my view, held that where the service is to be made in a country that is party to the Hague Service Convention, an order for alternative service under FRCP 4(f)(3) is proper only if the plaintiff has first attempted service via the Convention. To be sure, a judge’s decision under FRCP 4(f)(3) is discretionary, and in particular cases the judge may well conclude that a plaintiff should make use of the Convention before seeking leave to use alternate means. But even if such a decision is within the judge’s discretion, nothing in the rule suggests that a court that does not require first resort to the Convention has erred.

I think the judge reached the right outcome but for maybe the wrong reason. He thought the issue was that the request for leave to make alternative service was premature, but where the Hague Service Convention applies, it’s not at all clear that the court could authorize service that violates the Convention even if service via the Convention fails, because the Convention is exclusive. Instead, the court could order alternative service that does not violate the Convention, e.g., service on the party’s lawyer in the United States; but the court did not consider that kind of possibility here under FRCP 4(f)(3). Instead, somewhat bizzrely, the court held that it was proper to serve the documents on Indiabulls’s US lawyers because, under FRCP 5, documents subsequent to the summons and complaint were to be served on a party’s attorney rather than on the party itself. But if that is so, then what was the point of all of the discussion of service in India? 2 All in all, this is a somewhat odd and unusual case.

Notes:

  1. It seems to me that the judge could well have asked whether the service of the subpoena complied with FRCP 45, but he didn’t. If he had, the only permissible conclusion, I think, would have been that service of the subpoena abroad was improper. It seems to me clearly improper to send a subpoena, as distinguished from an ordinary discovery request such as a notice of deposition of a party or requests for production of documents, to India, because under FRCP 45(b)(2), the subpoena may only be served within the court’s territorial jurisdiction (with limited exceptions such as the 100-mile “bulge jurisdiction” rule), and may be served abroad only on a United States national under 28 U.S.C. § 1783. I wrote about this issue in connection with the Lantheus case, where a US party improperly tried to serve a subpoena in Canada. ↩
  2. Also, if we’re in the world of the FRCP rather than quirky New York collections law, a subpoena, under FRCP 45, isn’t served under FRCP 5. I’m just saying. ↩
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