The case of the day is Global Discoveries, Ltd. v. Realtec, Ltd. (N.D. Cal. 2013). Global Discoveries was a Nevada limited liability company. It brought a statutory interpleader action against Realtec Ltd., a British Virgin Islands company, Zahra Gilak, whose nationality was not clear in the decision (perhaps she was Iranian) but who was formerly a resident of California and was, according to the plaintiff, “deported,” Hassan Iran Pouy, an Iranian national who had never lived in California, and the United States.1 The issue was which of the parties Global Discoveries sought to interplead had the right to proceeds from a tax sale that Global Discoveries was holding.
The case presented two questions. First was a question of jurisdiction. Under the statute, the federal court lacks jurisdiction unless there was diversity of citizenship among two or more of the claimants. The judge suggested there was no diversity of citizenship and ordered Global Discoveries to show cause why the case should not be dismissed. It’s not clear how this will come out, but I had two thoughts. First, the judge discounted the possibility that Gilak might have been a legal permanent resident at the time the action was commenced. He held that even if this were so, Gilak would not be deemed a citizen of California for diversity of citizenship purposes. This is correct under the Federal Jurisdiction and Venue Clarification Act, which repealed the provision of the statute that formerly deemed legal permanent residents to be citizens of the state where they resided. Second, the judge discounted the presence of the United States as a claimant. I haven’t looked into this, but it seems to me that under 28 U.S.C. §§ 2410 and 1444, the district courts would have removal jurisdiction but perhaps not original jurisdiction of such actions.
Second was the question of service of process under FRCP 4(f)(3).2 Global Discoveries sought leave to serve the Iranian defendants by publication in a local California newspaper, without making any showing that service by other means would be impracticable; Global Discovery’s assertion that there were no other means was clearly wrong, as the means permissible under FRCP 4(f)(3)—at least in countries that are not parties to the Hague Service Convention‐are limited only by the plaintiff’s lawyer’s imagination. Service by email might be possible, or service on a US lawyer who said that Pouy had authorized him to represent him. And of course, the use of a letter rogatory might be possible, though I don’t know that it is in light of the lack of direct diplomatic relations between the two countries. But in any case, the judge also found that there was a there was no reason to think that the Iranian claimants would receive actual notice. I believe that even in an interpleader case, due process requires an adequate attempt to give actual notice to the claimants.
- I am not sure if interpleader will be familiar to readers from civil law jurisdictions; very briefly, interpleader is an equitable action that allows a party in possession of property in which it claims no interest to require the claimants to the property to litigate their claims against each other.
- There was also a statutory question that I pass by.