Case of the Day: Bravetti v. Liu
Posted on December 19, 2013
The case of the day is Bravetti v. Liu (D.N.J. 2013). The case was a shareholder derivative action brought by David Bravetti, a shareholder of American Oriental Bioengineering, Inc., against Tony Liu, Yanchun Li, Binsheng Li, Jun Min, Lawrence Wizel, Cosimo Patti, Xianmin Wang, Baiquing Zhang, Eileen Brody, who were officers or directors of the corporation. Several of them resided in China.
Bravetti moved for leave under FRCP 4(f)(3) to serve process on the Chinese defendants by service on American Oriental Bioengineering’s US lawyer. The court correctly determined that the Hague Service Convention did not apply, since the proposed method of service did not require transmission of a judicial document to China and that there is no requirement of exhaustion of other methods before seeking to serve process under FRCP 4(f)(3). On the facts, it held that the method of service comported with due process, though I note that service on the corporation’s lawyer is one step removed from the corporation itself.
May a court require first resort to the Convention, or reject alternative service for other reasons? Sure. Must a court do so? No—it’s a matter within the court’s discretion. So the case was correctly decided.
I got a call from a reporter asking for comment on this decision. My sense is that the reporter thought it was exceptional to serve a defendant in China by alternate means. I provided a bunch of cites where courts permitted alternate service, which led the reporter to ask: why would anyone ever bother with the Convention? One reason is trying to maximize the enforceability of the eventual judgment in the foreign country’s courts. There may be others. So I’m not saying that it’s always wise to seek leave to serve process by alternate means. Like anything else, you need to think it through.