Case of the Day: Harris v. NGK North American, Inc.
Posted on April 4, 2011
Revised, with a discussion of the implications of the Volkswagen case.
The case of the day, Harris v. NGK North Am., Inc. (Pa. Super. Ct. 2011), is one of a series of cases that has taken a position, one way or the other, on whether Article 10(a) of the Hague Service Convention permits service by mail or postal channels. I discussed the issue here. But today’s case has a twist: what happens when the defendant returns the mailing unopened? Can alternate means of service, approved by the US court, be an adequate substitute?
Harris lived within a few miles of a beryllium plant in Reading, Pennsylvania for decades, and he worked briefly in the plant. After he was diagnosed with chronic beryllium disease, Harris and his wife sued NGK Insulators, Ltd., the ultimate parent company of the plant’s owner, in the Philadelphia County Court of Common Pleas. After Harris died, the administrator of his estate was substituted as plaintiff, and the complaint was amended to included a wrongful death claim.
NGK Insulators was a Japanese firm with its place of business in Japan. Harris first attempted to serve NGK by registered mail, but the papers were returned, marked “refused.” A second attempt at service by mail, this time ordinary mail not requiring a signature, was also refused. Harris asked the court to permit alternative service, and the court permitted him to serve NGK Insulators by mailing a copy of the papers to an officer of NGK’s American subsidiary. Harris effected service as authorized by the court, but he did not include a Japanese translation of the papers. On appeal, NGK Insulators argued that the service was improper. The Superior Court rejected NGK’s argument.
The first question was whether Article 10(a) permits service of process by mail. Article 10(a) provides:
Provided the State of destination does not object, the present Convention shall not interfere with … the freedom to send judicial documents, by postal channels, directly to persons abroad.
Japan has not made a reservation under Article 10(a). However, Japan made the following “clarification” on the issue to the Special Commission on the Practical Operation of the Hague Apostille, Evidence, and Service Commissions in 2003:
Japan has not declared that it objects to the sending of judicial documents, by postal channels, directly to addressees in Japan. As the representative of Japan made clear at the Special Commission of April 1989 on the practical operation of the Service and Evidence Conventions, Japan does not consider that the use of postal channels for sending judicial documents to persons in Japan constitutes an infringement of its sovereign power.
Nevertheless, as the representative also indicated, the absence of a formal objection does not imply that the sending of judicial documents by postal channels to addressees in Japan is always considered valid service in Japan. In fact, sending documents by such a method would not be deemed valid service in Japan in circumstances where the rights of the addressee were not respected.
The court noted the divergence of opinion on whether the use of the word “send” rather than “serve” in Article 10(a) meant that it was improper to serve a summons and complaint by mail even if it were proper to serve other documents by mail. But the court, following previous cases from the lower courts in Pennsylvania, held that Article 10(a) authorized service by mail. This is the predominant view–it is the view of the Special Commission itself, and only a handful of American courts have disagreed.
The requirement to provide a translation stems from Article 5, which provides:
If the document is to be served under [the first paragraph of Article 5, which provides for service via the Central Authority], the Central Authority may require the document to be written in, or translated into, the official language or one of the official languages of the State addressed.
But that provision is inapplicable on its face, since Harris had not sought to make service via the Japanese central authority. (This is the position of the Special Commission and seems clearly correct as a matter of interpretation of the Convention. One could argue, though, that due process of law or similar principles requires a translation even if the Convention does not. A California appellate court rejected this argument in a case where the Japanese companies sued were able to understand English. Shoei Kako Co. v. Superior Ct., 109 Cal. Rptr. 402 (App. Ct. 1973). But the Austrian Supreme Court has held that service of process in Italy in connection with an Austrian litigation, when unaccompanied by a translation, was contrary to the right to a fair trial guaranteed by Article 6 of the European Convention on Human Rights. See Oberster Gerichtshof [OGH] [Supreme Court] June 16, 1998, docket No. 4 Ob 159/98f. It may be that the reference to the “rights of the addressee” in the 2003 Japanese clarification suggests that Japan would take a similar view, but I’m not sure of that. In any event, it doesn’t seem that NGK raised a constitutional objection to the lack of a translation. It could raise such arguments under Japanese law or public policy, I suppose, if Harris ultimately seeks to enforce a judgment in Japan).
So far, the court’s opinion seems to be right on the money. But the court found that service by mail in Japan was proper only in passing. Its ultimate holding was that because service by mail was proper, and because NGK had twice refused to accept service by mail, the alternate form of service the court had authorized was proper under the Convention. I think the two relevant questions are: (1) whether service by mail is effective even if the defendant refuses to accept the mailing; and (2) whether, if service by mail is not effective if refused, the alternate means of service the court authorized is consistent with the Convention.
It seems to me that the first question is really a question of the law of the forum. What happens, under Pennsylvania law, when service by mail is refused? It appears to me that under Rule 403 of the Pennsylvania Rules of Civil Procedure, Harris failed to effect service, because even his second attempt at service by mail was returned:
If the mail is returned with notation by the postal authorities that the defendant refused to accept the mail, the plaintiff shall have the right of service by mailing a copy to the defendant at the same address by ordinary mail with the return address of the sender appearing thereon. Service by ordinary mail is complete if the mail is not returned to the sender within fifteen days after mailing.
Pennsylvania’s rules permit alternate means of service when service cannot be made under the ordinary rules. But does the Convention?
The starting place is the Supreme Court’s decision in Volkswagenwerk AG v. Schlunk, 486 U.S. 694 (1988). Volkswagen holds that the law of the forum governs the question whether a document has to be transmitted abroad for service, and if the answer to that question is no, then the Convention does not come into play. Thus in Volkswagen, service on the U.S. subsidiary of a foreign parent was effective as to the parent because, under the law of the forum, the subsidiary was the agent of the parent for service of process.
The case of the day is different from Volkswagen in an important respect. There, the law of the forum made service on the subsidiary effective as to the parent as a general matter. Here, it seems Pennsylvania law was not so liberal (else Harris would not have needed special leave of the court); only by virtue of the court’s special permission was service on the subsidiary permissible. But under Volkswagen, as a general rule, if service on the subsidiary is proper under the law of the forum, the Convention does not even come into play. Volkswagen and a similar Dutch case, HR 27 juni 1986, NJ 1987, 764 m.nt. RvdW (Segers & Rufa BV/Mabanaft), have caused some concern, but the 2003 Special Commission report asserts that Schlunk is probably correctly decided. One could, however, imagine cases where the prospect that the defendant would receive actual notice of the proceedings was less clear than in the case of the day, where one can reasonably assume that the subsidiary informed the parent of the lawsuit.
While it is somewhat unclear why Harris did not seek to make use of the main channel provided by the Convention, namely the central authority, it seems to me that under Volkswagen, the case is probably correctly decided. In a more dificult case (e.g., one where the court authorized service by publication, and there was no reason to think that the defendant would receive actual notice), it might be appropriate to discuss the outer limits, if any exist, of the Volkswagen rule. Such cases could also present due process concerns, as we saw in the Luo case.