Case of the Day: Rose v. Deer Consumer Products
Posted on January 17, 2012
The case of the day is Rose v. Deer Consumer Products, Inc. (C.D. Cal. 2011). According to the complaint, Deer was a small appliance manufacturer in China. Deer was a public company. Because it was in financial difficulty, it sought new investment from the United States. But according to the plaintiffs, Deer “lied about its finances” in order to induce investors to invest, claiming to be ten times more profitable than it really was to the US markets while reporting the true figures to Chinese regulators. The defendants were Deer (a Nevada corporation) and its officers and directors, Ying He, Yuehua Xia, Zongshu Nie, Edward Hua, Qi Hua Xu, Yongmei Wang, and Man Wai James Chiu.
The plaintiffs sought leave to serve the individual defendants by alternate means under Rule 4(f)(3). In particular, they wanted to serve them by serving Deer’s registered agent for service of process or its lawyer. In the alternative, they sought leave from the PSLRA stay on discovery in order to take discovery on the whereabouts of the defendants. Sound familiar? This is exactly what happened in the China Education Alliance case, the case of the day from January 11.
As in China Education Alliance, the defendants argued that because China had objected to service by postal channels under the Convention, alternative service was unavailable, and as in China Education Alliance, the court rejected that argument. Easy case.