Case of the Day: Grupo Mexico v. SAS Asset Recovery

The case of the day is Grupo Mexico SAB de CV v. SAS Asset Recovery, Ltd. (5th Cir. 2016). This was a § 1782 case with an unusual twist. Grupo Mexico was involved in litigation in Mexico and sought discovery from SAS, which had offices in Dallas. After the district court granted the ex parte application (which included, as a necessary finding, that SAS was “found” in the Northern District of Texas), SAS evaded service of process in Dallas, leading Grupo Mexico ultimately to serve the subpoena on its registered agent in the Cayman Islands, via the Hague Service Convention. Grupo Mexico then moved to quash, arguing that the service was improper because it failed to comply with Cayman law, and also that the court lacked personal jurisdiction. The judge denied the motion, in part on the grounds that SAS had waived objections to service and the jurisdiction by failing to object timely to the subpoena. SAS appealed.

On appeal, SAS’s only argument was lack of subject-matter jurisdiction. It argued that “Congress had not enacted any statute or rule that gave the District Court the jurisdiction to issue a Rule 45 subpoena for service on SAS, a Cayman Islands citizen, in the Cayman Islands or the jurisdiction to enforce the subpoena against SAS after SAS failed to respond.” The idea was to avoid waiver by casting the argument in terms of subject-matter jurisdiction, which is non-waivable. “Good try, SAS,” wrote Judge Jones for the court, “but this is an untenable re-characterization of objections previously made and waived or overruled.”

It’s unfortunate that SAS, in the court’s words, “squandered” the opportunity to raise interesting arguments. It’s not clear, really, that a foreign litigant can use § 1782 to obtain discovery abroad, or that it is proper to serve a subpoena abroad on a non-U.S. citizen (contrast 28 U.S.C. § 1783, which expressly permits such service). I would say that in this case SAS’s lawyers were too clever by half.

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 2012), 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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