Case of the Day: Celgene Corp. v. Gupta

The case of the day is Celgene Corp. v. Gupta (D.N.J. 2018). Celgene sued Sushil K. Gupta, who resided in New Delhi, for trademark infringement and false designation of origin. Celgene sought a default judgment when Gupta didn’t answer the complaint.

Celgene did the right things—it submitted a request via the Indian Central Authority, and it sent requests to the Central Authority for status updates on the request for service. But for more than a year it didn’t hear anything.

Article 15 of the Hague Service Convention permits a US court to enter a default judgment if:

  1. the document was transmitted by one of the methods provided for in this Convention,
  2. a period of time of not less than six months, considered adequate by the judge in the particular case, has elapsed since the date of the transmission of the document, [and]
  3. no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed.

These conditions were satisfied here, as the judge recognized. Nevertheless, the judge refused to grant the default judgment on due process grounds, noting there was no evidence that the Indian Central Authority had done anything to effect service.

Celgene was in a difficult spot. The Indian Central Authority is not among the more responsive or effective central authorities. Celgene was exactly right to seek status updates. (There are more and less effective ways to do this: did Celgene have a local lawyer with connections make inquiries? But that’s not to say that the steps Celgene took weren’t reasonable). On the other hand, India objects to alternate methods of service under Article 10. So there are no great options. In cases where the parties had some relationship before the lawsuit, the best option is probably to deal with the problem prospectively by contract, either through the appointment of an agent for service of process in the United States, or by an agreement to arbitrate, or in some similar way.

That said, was the judge’s decision right? This is a difficult call. Article 15’s provision for a default judgment in the case of a nonresponsive foreign central authority relies on a kind of presumption of regularity. In real life, perhaps there is little reason to think that the Indian Central Authority actually served the papers. On the other hand, the situation is unlike the usual default judgment situation in domestic litigation, because there is no real alternative to service via the foreign central authority.

From a practical perspective, I think a court might well want to grant default judgments in such cases with the thought that the Indian defendant might later come forward and seek to set aside the judgment on due process of lack of notice grounds. But I am not sure this solution is consistent with due process. Courts faced with this problem have sometimes stretched the law in other ways in order to allow litigation to go forward. My favorite example is Gurung v. Malhotra, a case in which the Indian Central Authority affirmatively refused to execute a request for service and the court, erroneously in my view but understandably, authorized service by email. As they say: “Something’s gotta give.”

One response to “Case of the Day: Celgene Corp. v. Gupta”

  1. In an apparently related case, Celgene Corp. v. Distinct Pharma (D.N.J. Sept. 6, 2018), Judge McNulty reached the same result.

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