Case of the Day: Ritter Disposables v. Protner Nuevas Tecnicas

The case of the day is Ritter Disposables v. Protner Nuevas Tecnicas (E.D. Ark. 2012). Ritter was a Flordia corporation with its principal office in Arkansas. Protner was a Spanish corporation; 1 the other defendant, Javier Masiá, was a Spaniard acting on behalf of Protner. The claim was that Protner and Ritter had a contract under which Protner agreed to manufacture and sell machinery to Ritter. According to Ritter, Protner knew that Ritter needed the machinery by December 2010 in order to meet customer requirements. Ritter made a down payment of nearly $150,000 but never signed or delivered the written contract Protner sent to Ritter for its signature. Protner nevertheless began manufacturing the machinery, but it was unable to ship the goods by the date Ritter needed it. So Ritter purchased the machinery from another manufacturer.

Protner demanded arbitration in Spain purusant to an arbitration clause in the (unsigned) contract. Ritter sued Protner in the Crittenden County Circuit Court, seeking an injunction enjoining the Spanish arbitration, a delcaration that the contraact was void, a return of its deposit, and damages, including lost profits. The Circuit Court issued a temporary restraining order enjoining Protner from proceeding with the arbitration. Ritter filed a return of service indicating that a Spanish procurador had served the summons and complaint on an employee of Protner and that he had served the summons and complaint on Masiá by delivering them to a Protner employee at Masiá’s domicile.

Protner and Masiá removed the case to the federal court and moved to dismiss on grounds of insufficient service of process. Ritter asserted that the service was proper under Article 10(c) of the Hague Service 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.

The case devolved into a battle of experts. On the one hand, Protner and Masiá offered the affidavit of a Spanish lawyer who testified that under Spanish law, a procurador can serve process only when authorized by a court in a particular case. On the other hand, Ritter offered the affidavit of a Spanish lawyer who testified that under Spanish law, a party’s own procurador can serve process by personal delivery in cases where the party has already appeared before the court. The real issue seemed to be that Spanish law contemplated service by a procurador only when Spanish proceedings were pending and was silent about whether a procurador, acting for a party to foreign proceedings, could likewise serve a summons.

The judge held that the service was valid, but her reasoning was scanty:

Article 10(c) permits service of judicial documents directly through judicial officers or officials or “other competent persons of the State of destination.” Although Spain has a specific procedure for service by personal delivery by a judicial officer in cases pending in local courts, the Court finds no evidence that the Spanish law expressly or impliedly prohibits private individuals from serving process arising out of foreign litigation. Dabrowski testifies that he is an adult resident and citizen of Spain and an official procurador under Spanish law, and the Court finds that he qualifies as a competent person for purposes of Article 10(c).

Hmm. By that reasoning any person not specifically prohibited from serving process in Spain is competent, under Spanish law, to serve process. That reasoning may make sense in an American context, where, in general, any adult other than a party is competent to serve process, but I think the judge was too quick on this one. First, it’s a stretch to say that “competent” means “not expressly declared incompetent.” Second, the arguments on Spanish law presented by the parties seem not to point clearly in one direction or the other.

This kind of difficulty is a reason why Article 5—the central authority mechanism of the Convention—is a safer bet, at least where there is no special need for speed. Because there was a temporary restraining order in this case, Ritter may indeed have felt a need to effect service pretty quickly. While Spain has not objected to service by postal channels under Article 10(a), Arkansas is in the Eighth Circuit, and the federal courts there are bound by the Bankston decision, which held, erroneously in my view, that Article 10(a) did not permit service of process by postal channels. So this may be one of those cases where there was no perfect answer.

Notes:

  1. There was an issue about the timing of Protner’s incorporation that is not really material.

About Ted Folkman

Ted Folkman is a shareholder with Murphy & King, a Boston law firm, where he has a complex business litigation practice. He is the author of International Judicial Assistance (MCLE 2012), a nuts-and-bolts guide to international judicial assistance issues, and of the chapter on service of process in the ABA's forthcoming treatise on International Aspects of US Litigation, and he is the publisher of Letters Blogatory, the Web's first blog devoted to international judicial assistance, which the ABA recognized as one of the best 100 legal blogs in 2012, 2014, and 2015.

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