Case of the Day: Midmark Corp. v. Janak Healthcare

The case of the day is Midmark Corp. v. Janak Healthcare Pvt. Ltd. (S.D. Ohio 2014). Janak was an Indian firm in which several members of the Mehta family, including Apurva J. Mehta, were shareholders. Midmark and the defendants (Janak and the Mehtas) entered into a share purchase agreement. A dispute arose, and Midmark sought a preliminary injunction to preserve the status quo while it moved to compel arbitration.

Under FRCP 65(a), “The court may issue a preliminary injunction only on notice to the adverse party.” The defendants all had actual notice of the action, but the Mehtas refused to waive service of process, thus requiring Midmark to serve process on them via the Hague Service Convention. So the question is, can the court grant an injunction in such a case before service of process is effected? I’ve dealt with this issue before, for example in my post on H-D Michigan v. Hellenic Duty Free Shops and in a post devoted to the issue.

Here, the judge, following the reasoning of H-D Michigan, held that it was proper to grant the preliminary injunction despite the fact that service of process had not yet been effected, in light of the defendants’ actual knowledge of the action.

I want to suggest another solution to the problem that avoids any tension with FRCP 65, at least in cases such as this, where the defendant has appeared in the US court via a US lawyer. Midmark could and maybe should have sought an order under FRCP 4(f)(3) permitting it to serve process on the Mehtas via service on the lawyer. This would solve the service problem very quickly and obviate any tension between FRCP 65’s notice requirement and the Convention.

2 responses to “Case of the Day: Midmark Corp. v. Janak Healthcare”

  1. Dan Donnellon

    A good summary of the case. As trial lawyer for Midmark, I can tell you we certainly did seek alternative service under Rule 4(f). The Court denied that sua sponte, without prejudice, essentially because the Indian nationals were, as the judge put it, “resting on their right” to service under the Hague Convention. The motion was renewed within days due to a change in circumstance and service upon U.S. counsel and by email was authorized.

    1. Thanks, Dan, for the added information. The judge’s rationale is unfortunate: there is no right to be served via the Convention. As they say, the Convention is not mandatory.

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