Case of the Day: Folex Golf v. O-TA Precision Industries

The case of the day is Folex Golf Industries, Inc. v. O-TA Precision Industries Co. (9th Cir. 2015). Folex broght an action against O-TA in the Cenral District of California. O-TA argued that a Chinese default judgment against Folex, in an action against Folex brought by the Luoyang Ship Material Research Institute, would have collateral estoppel effect in California and would bar Folex’s California action. The district court agreed, recognized the Chinese judgment, and granted O-TA summary judgment. Folex appealed.

Folex argued that the Chinese court had lacked personal jurisdiction over it because it had not been properly served with process. The court agreed. LSMRI had tried to serve Folex in China, but “the papers were not even left,” and its attempt at service in California under the Hague Service Convention failed, too. LSMRI attempted service by publication, but according to the court the service failed because it didn’t comply with Chinese law insofar as the information was only published in China (not abroad) and because there was no showing that personal service was impossible, as Chinese law apparently required. Moreover, according to the expert testimony about Chinese law, Chinese law does not recognize nonmutual collateral estoppel. Therefore, the Chinese judgment would not bar Folex’s claim even if the Chinese court had jurisdiction and the California court had been entitled to recognize the judgment.

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