Case of the Day: ATN Industries v. Gross
Posted on February 17, 2016
The case of the day is ATN Industries, Inc. v. Gross (S.D. Tex. 2016). ATN alleged that Rafael Schwartz and others wer part of a “massive scheme that defrauded Plaintiffs out of millions of dollars.” It sued him for violations of the RICO statute and on other claims. Schwartz was in Venezuela. ATN sent the documents to an “international process-server to serve Schwartz pursuant to the Hague Convention.” Schwartz was served in August 2015 in Caracas, but according to the plaintiffs, “Schwartz refused to sign the summons.” Apparently under Venezualan law, because Schwartz refused to sign, it was necessary to take steps to confirm that service had been made. The plaintiffs petitioned the Venezuelan court for an order “ratifying” that service had been made. The Venezuelan court obliged, and ATN gave the papers to the Venezuelan central authority, but the central authority never transmitted a certificate of service under Article 6. Schwartz moved to dismiss, asserting insufficient service of process.
There is an odd point here: under Article 5, the Venezuelan central authority is supposed to effect service under Venezuelan law. So if it’s necessary to bring a proceeding in the Venezuelan court to complete the service, the central authority, not the foreign plaintiff, should have the burden to bring it. One other point: you don’t have to hire an “international process-server” to transmit the papers to the foreign central authority: you can do it yourself, and if you’re not sure you can do it yourself, there are lawyers out there who can help you with this sort of thing. I’m just sayin’.
Anyway, the court gave ATN additional time to file a certificate of service, even though it also took judicial notice that Schwartz had been personally served in Caracas.
Schwartz argued that ATN had not exercised due diligence in making service of process and that it was guilty of laches. But the court found that the delay in service was caused by Schwartz’s refusal to sign the summons when he was personally served. This seems obviously correct. I would add that as I understand Article 6, the receipt of an Article 6 certificate is not absolutely necessary to valid service, at least in cases such as this where it apparently was not disputed that service was complete but for the certificate.