Case of the Day: NYKCool v. Pacific International Services

The case of the day is NYKCool A.B. v. Pacific International Services, Inc. (S.D.N.Y. 2015). NYKCool had a arbitration award for $8.7 million against Pacific Fruit Inc. and Kelso Enterprises. More than $6 million of the award was unsatisfied. It brought an action to pierce the corporate veil against Álvaro Fernando Noboa Pontón, the companies’ principal, who was an Ecuadoran national. NYKCool’s first attempt to serve process on Noboa—by email to an email address listed on the website for Noboa’s charitable foundation, Cruzada Nueva Humanidad—was quashed. But the judge authorized NYKCool to serve process by email to the lawyers who appeared on Noboa’s behalf in connection with the motion to quash.

After NYKCool served the summons and complaint on the US lawyers, Noboa “made his displeasure plain” by taking out the following excellent advertisement in the New York Times:

TO WHOM IT MAY CONCERN
I, Alvaro Noboa, inform that I have not hired or authorized this and last year or any other year any person or lawyer to be served by the court in my name.

I ratify that I am an Ecuadorian citizen therefore my jurisdiction is Ecuador. I do not have any other country including The United States of America.

I declare that any authority, person or entity has not personally and properly served me in The United States of America during the last ten years up to date.

I also have not been served, nor authorized anyone to be served in my name via email, website, Twitter, Facebook, social networks, newspapers, etc. or any other means in Ecuador, in the USA or in any other country. I only accept to be served if it is done personally (and you have to consider the jurisdiction), it would have to be done by looking me at the eyes, asking my name and giving me the service in my hands.

Sincerely,
/s/
Alvaro Noboa

Perhaps Noboa also believes that proceedings are improper if the flag displayed in the courtroom has a gold fringe, or that as a sovereign citizen who writes his name in all capital letters he need not pay his taxes.

Noboa moved again to quash the service, and the magistrate judge, bound by the judge’s earlier order, denied the motion. Noboa objected to the denial, and the judge (Judge Lewis Kaplan, by the way, who seems to attract cases involving Ecuador) treated the objection as a motion for reconsideration.

Of course the judge denied the motion. He pointed out that there is no requirement that a plaintiff exhaust the means of service available under FRCP 4(f)(1) and (2) before obtaining leave to make service by alternate means under FRCP 4(f)(3). He also noted that because Ecuador is not a party to the Hague Service Convention, no international agreement prohibits service by email. The service comported with due process because service on Noboa’s own lawyers was reasonably calculated to give Noboa notice of the proceedings and an opportunity to defend. This is so even though the lawyers claimed they had made only a special appearance for purposes of challenging personal jurisdiction and the sufficiency of service. Noboa also argued that the lawyers were not his agents and that the service therefore did not comport with due process. Nonsense, said the judge—the due process analysis doesn’t turn on agency, but only on whether the means chosen are reasonably calculated to provide notice and the opportunity to defend.

In short, this is an easy case. Noboa ran afoul of the rule for lawyers when trying to duck service: run silent, run deep:

The moral of the story: if you intend to duck service, run silent and run deep. Once your lawyer surfaces, the court will likely permit service on the lawyer, particularly if he is intransigent and refuses to provide an address for you or to accept service on your behalf.

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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