Case of the Day: United States v. Public Warehousing Co.
Posted on March 6, 2017
The case of the day is United States v. Public Warehousing Co. KSC (N.D. Ga. 2017). The government’s claim was that the Public Warehousing Co. and Sultan Center Food Products, two Kuwaiti companies, had overcharged the United States on government contracts. According to the judge, for six years, the government and the relator “have been diligently attempting to serve the Defendants but have been consistently rebuffed by the Kuwaiti government.” The government moved for leave to serve process by alternate means, and the court granted leave to serve process by service on PWC’s US lawyer, by publication, and by international courier. (I’m simplifying a bit because there were several defendants and because both the government and the relator served process).
The government served PWC by sending email and certified mail to its lawyer and by publication in the Kuwait Times. The relator served PWC by those methods and also by email and certified mail to PWC at its offices in Kuwait. PWC moved to dismiss. The court denied the motion.
Because Kuwait is a party to the Hague Service Convention and because it has objected to service by mail, it was a mistake for the Court to authorize service by international courier. Leave to serve process on the Kuwaiti defendants’ US lawyer is conventionally proper, unless you worry about cases like Drew Technologies v. Robert Bosch, which have thrown some cold water on the idea of serving process on a foreign defendant via service on US counsel. Service by publication also seems proper under the Convention, as there is no occasion to transmit the summons and complaint abroad for service, and the Convention therefore does not apply.
It appears from the government’s papers that the Kuwaiti government did indeed take an obstructionist stance here. Interestingly, the Kuwaiti courts decided that the qui tam action was not civil or commercial—ignoring the rule that the civil or commercial nature of the case is to be determined liberally, and autonomously (i.e., without being governed by the law of the forum or the law of the receiving state). My own experience with the Kuwaiti central authority (n=2) is that it is not speedy but it gets the job done. Perhaps there were some politics that led it to take an incorrect stance here. Note, however, that other foreign courts have sometimes taken a similar view of US qui tam litigation, as noted in ¶ 70, n.112 of the new edition of the Practical Handbook.