Case of the Day: Passport Special Opportunities Master Fund v. Ary Communications

The case of the day is Passport Special Opportunities Master Fund, L.P. v. Ary Communications, Ltd. (N.Y. Sup. Ct. 2015). The action was for recognition and enforcement of a judgment of the Singapore High Court. Passport served process by registered mail. It sought an order deeming service effected, or in the alternative, an order permitting service by alternate means.

I understand why lawyers for plaintiffs seek orders deeming service effected, and I’ve done them myself. If service is improper and the defendant never appears, then you may never know there was a defect in the service until you get the default judgment and the defendant moves to set the judgment aside on the grounds that in the absence of valid service the judgment is void. It’s great to have an advisory opinion on an issue like this—it can save you a ton of time.

My main problem with motions to deem service effectuated is just that: they ask for advisory opinions. Insufficient service of process is a waivable affirmative defense, and I don’t see why a federal court should be asked to decide the issue unless presented in an adversary context, which is almost never the case with this kind of motion; usually the plaintiff seeks such an order when the defendant has failed to appear.

But federal courts are courts of limited jurisdiction, and Article III of the Constitution forbids the federal courts from issuing advisory decisions. But in many states, there is no such constitutional limitation. I don’t know the situation in New York, but assuming there is no constitutional bar to advisory opinions in New York, then this seems like a smart move. A court might still, I think, refuse to rule in the absence of the defendant’s position, but the grounds for refusing such a motion seem to me much weaker.

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