Case of the Day: SEC v. Craven

The case of the day is SEC v. Craven (W.D. Ky. 2015). The SEC had a judgment for $5.3 million against Anna Craven in the Southern District of New York. Craven resided in Switzerland but had property in Kentucky. Under FRCP 69, Kentucky law governed the procedure for execution of a money judgment, and Kentucky law required the judgment creditor to “send to the last known address of the judgment debtor — by regular first class mail — a copy of the notice of judgment lien.” The SEC sought leave to serve the notice by email under FRCP 4(f)(3).

There are two points of interest. First, the decision is yet another in the long line of cases allowing service by email when the Convention applies, even if the destination state has made an Article 10(a) objection. At some point, I am going to write to the publisher of the forthcoming ABA treatise on International Aspects of US Civil Litigation—I wrote the chapter on service of process—and ask for a chance to revise the chapter before publication. At the time I wrote it, which was a long time ago now, there was still an argument to be made that despite Gurung v. Malhotra and a couple of other cases, the Convention should be construed to forbid service by email, at least in states with Article 10(a) objections. But as the long string-cite in today’s case shows, it seems that for the US district courts, at least, the ship has sailed. We dearly need an appellate decision on this in order to set things right.

There is, though, another point of interest. The SEC, and the court, apparently took the view that the notice had to be served under the Convention even though it is not process in the strict sense. I have gone back and forth on this issue. I wonder, though, whether the SEC needed to bring a motion at all: could it not just have mailed the documents directly to Craven?

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.

2 thoughts on “Case of the Day: SEC v. Craven

  1. The Convention applies “in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad” (Art 1).

    This covers any document required to be served in civil proceedings, although normally at stages subsequent to the initial summons a defendant making an appearance will have supplied an address for service within the court’s jurisdiction or agreed to methods of service which don’t require transmission of documents abroad.

    Thus the Convention does apply to the notice of judgment lien required to be served here, and direct mail is sadly not an option in view of Switzerland’s objection to use of the methods listed in Article 10.

    I would question whether FRCP 4 is relevant here, since either the “state practice or procedure” which requires service of a document in the course of enforcing a judgment permits a method of service, either as of right or with the court’s permission which the federal court can give by virtue of FRCP 69 itself; or it does not permit a method of service, in which case FRCP 69 prevents the federal court from authorising it under FRCP 4.

    1. P Smith, I think this is a little more complicated. There is no question that the notice is a “judicial document,” but what does the Convention mean when it says “for service abroad?” As I stated, my view generally has been the same as yours, namely, that service abroad means delivery abroad, and in general, I agree that this poses no problems, since usually documents after the initial process are not required to be served abroad. But it is not easy to find good authority on this point, and in practice courts sometimes do not apply the Convention as you suggest they should. This is the motivation for wondering whether “for service abroad” should be read to mean “for formal service abroad,” or “for service of process abroad.”

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