Case of the Day: Wuxi Taihu Tractor Co. v. The York Group, Inc.

The case of the day is Wuxi Taihu Tractor Co. v. The York Group, Inc. (Tex. App. 2014). York, a Delaware firm that manufactured and sold coffins sued Wuxi, a Chinese firm, for unfair competition and other torts. York served process on Wuxi by service on the Texas Secretary of State, who then mailed the summons and complaint directly to Wuxi in China. Wuxi entered a pro se appearance and filed, but did not serve, an answer that asserted, among other things, that Wuxi had not properly been served with process. There was some procedural wrangling. The judge ordered Wuxi to retain a lawyer, but Wuxi didn’t. Eventually the case was called for trial and Wuxi did not appear, so the judge entered a default judgment. Wuxi sought review.

The service was obviously improper under the Convention, since in light of China’s Article 10(a) objection, service by mail in China is improper. Wuxi argued that it was improper to enter a default judgment under Article 15. This argument might seem frivolous, since Wuxi had actually answered the complaint and participated in the litigation to some extent. But in Texas as generally in US procedure, a corporation cannot appear in an aciton pro se. Article 15 forbids entry of a default judgment when certain conditions are not met if the defendant has not “appeared.” Wuxi said that since it had never properly appeared, the default judgment was improper.

The court properly rejected this argument. The court focused on US precedents, which basically say that although a corporation can’t litigate a case without a lawyer, pro se actions are not absolute nullities for all purposes. I think one could also say that the Convention should not be interpreted to incorporate all the technicalities of local law on questions such as what constitutes an “appearance” for purposes of Article 15. The purpose of that article is to protect defendants who could reasonably argue that they had no notice in fact of an action. That plainly was not the case here.

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 2d ed. 2016), 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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