Case of the Day: SEC v. Cluff
Posted on February 9, 2018
The case of the day is SEC v. Cluff (S.D.N.Y. 2018). The SEC moved for leave under FRCP 4(f)(3) to serve process on James Shaoul by email. Shaoul was in Israel. Israel is a party to the Hague Service Convention and has not objected to service by postal channels under Article 10(a).
This case is harder than similar cases in countries such as China or India that have objected to service under Article 10(a). In those cases, the correct answer is clear (though it hasn’t been clear to most district courts that have considered it):
- The Convention is exclusive, which means you have to use a method of service that the Convention authorizes or permits.
- If any provision of the Convention authorizes or permits service by email, it’s Article 10(a), assuming that it’s proper to analogize email to postal mail.
- But in states that have objected to service by mail, Article 10(a) isn’t available.
So in a state like Israel, what’s the answer? Here’s an excerpt from my chapter on service in the new ABA treatise (without footnotes):
It is apparent that with the exception of Article 19, and leaving aside cases in which the foreign central authority serves process by e-mail when authorized by the law of the requested state, the only potential provision of the convention under which service of process by e-mail might be permissible is Article 10(a). The question is whether e-mail passes through the postal channel.
In principle, e-mail could be a postal service: Article 14 of the Universal Postal Convention (UPC) defines “electronic mail” as “a postal service involving the electronic transmission of messages.” Member countries of the Universal Postal Union or their “designated operators” “may agree with each other to participate in” electronic mail service. But the United States does not now offer an “e-post” service, and ordinary commercially available e-mail does not fit within the definition of electronic mail service in the UPC. Thus there are strong grounds for asserting that ordinary e-mail is not part of the postal channel and that Article 10(a) does not make service by e-mail permissible.
If this analysis is right, then service by email is improper even in Israel. In fact, the judge denied the motion for leave, though not for this reason: the judge noted the lack of evidence that use of the Central Authority in Israel would cause undue delay and on doubts about the sufficiency of Shaoul’s email address from the due process perspective.
The court did make one point that is 100% right but that I’m not sure I’ve ever seen before:
The plaintiff’s contention that “Israel does not oppose Article 10(a)” of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters is irrelevant, since Article 10(a) deals with “the freedom to send judicial documents, by postal channels, directly to persons abroad,” and the plaintiff is not seeking leave to serve James Shaoul “by postal channels, directly to persons abroad.”
This is refreshing because often a district court will say that the an objection to Article 10(a) that does not expressly object to service by email (no country’s objection does) is, in effect, consent to service by email. This is the fundamental mistake in the ur-case, Gurung v. Malhotra.