Case of the Day: Fraserside IP LLC v. Youngtek Solutions Ltd.
Posted on July 20, 2011
The case of the day is Fraserside IP, LLC v. Youngtek Solutions Ltd. (N.D. Iowa 2011). Who knew that the “adult entertainment” industry on the internet would yield so many cases of the day (e.g., BluMedia v. Sordid Ones and Playboy Enterprises v. Smartitan) ?
In today’s case, Fraserside, an Iowa subsidiary of Fraserside Holdings, Ltd., “one of the world’s leading producers of high quality brand driven adult motion picture films”, sued Youngtek, which, according to the Complaint, had its offices in Cyprus, for copyright and trademark infringement. Fraserside hired a process server in Cyprus, who delivered the summons and complaint, without a translation, on Youngtek’s agent for service of process in Cyprus. (Cyprus, by the way, is a party to the Hague Service Convention). Youngtek did not answer, and the clerk entered its default. Youngtek then retained counsel in Iowa, who moved to set aside the default.
The court looked to Article 10(c) of the Convention, which provides:
Provided the State of destination does not object, the present Convention shall not interfere with … the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.
Cyprus has not made objections under Article 10. However, Youngtek argued that the process server was not authorized to serve process under Cyprus law and thus was not a “judicial officer, official, or other competent person” for purposes of Article 10(c).
The court ultimately refused to set aside the default on the grounds of insufficient service of process (though it did set it aside on other grounds). The decision turned in large part on the court’s allocation of the burden of proof to Youngtek to show the invalidity of the service. On a motion to dismiss for insufficient service of process, “the great weight of the case law is to the effect that the party on whose behalf service has been made has the burden of establishing its validity.” Wright & Miller § 1353 n.32. But on a motion to set aside a default, where the defendant had actual notice of the lawsuit, the burden is on the party challenging the service to show invalidity. See SEC v. Internet Solutions For Bus., Inc., 509 F.3d 1161, 1163 (9th Cir. 2007) (citing cases from the Second and Seventh Circuits). Youngtek offered an email from a Cypriot lawyer stating that under Cyprus law, “a private process server must be authorized by the Supreme Court of Cyprus to serve process,” but not citing any authority, and stating that her search of the registry in Cyprus showed that the process server had not been approved by the court. The court found the email insufficient both because it failed to provide citations to the relevant Cypriot law and because it did not sufficiently detail the search in the registry.