Case of the Day: Mutual Benefits Offshore Fund v. Zeltser

The case of the day is Mutual Benefits Offshore Fund v. Zeltser (N.Y. App. Div. 2016). Eagle-eyed reader Ira Matetsky of Ganfer & Shore in New York sent it along. The facts of the case were not reported. The holding: the First Department of the Appellate Division, which hears cases from Manhattan, reversed its earlier precedent and held, correctly, that Article 10(a) of the Hague Service Convention permits service of process by mail in the absence of an objection from the state of destination. This decision resolves a split in the Appellate Division cases. So go to it, New York lawyers!

This is, of course, a welcome development, but it highlights the difficulty of getting mistakes about the meaning of Article 10(a) corrected or even heard on appeal. My own state, Massachusetts, is a good example. A district court decision here from the ’90s holds that because Article 10(a) uses the word “send” instead of “serve,” service by mail is never permissible under the Convention. Ugh. The problem: why would anyone ever serve by mail and run the risk of obtaining a judgment that is subject to a motion to dismiss, or a default judgment that is subject to a motion to vacate? Why would anyone spend his or her client’s money to tee up a service of process issue for appeal? And so lawyers in the District of Massachusetts, and even in the Massachusetts Superior Court in cases subject to removal, have a problem. My standard advice is not to serve process by mail here if there is another means available. (That’s not to say I’ve never done it, for one reason or another!) Unfortunately, I do not think this is an issue that can be resolved by rulemaking, either. This situation imposes real costs. For example, in the UK I end up serving process via solicitor, which is much more expensive than sending documents in the mail.

What we really need is some kind of collusive test case that could get the issue before the Court of Appeals, or maybe the Supreme Court, in a clean way, but of course in light of standing doctrines, there’s no good way to make that happen. (I don’t know enough about the background to the Mutual Benefits case to know how it made sense to press the issue there). I’m stumped.

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