Case of the Day: IDS Property Casualty v. Gree USA
Posted on December 18, 2018
The case of the day is IDS Property Casualty Insurance Co. v. Gree USA, Inc. (D. Minn. 2018). IDS insured Chad and Andrea Murphy and was subrogee in their claim against Gree Electric Appliances, Inc. of Zhuhai, which manufactured an allegedly defective dehumidifier. After IDS paid a claim to the Murphys following a fire they claimed was caused by a defect in the dehumidifier, IDS brought suit against Gree and related companies. IDS attempted service by delivering the summons and complaint to “Richard, the person in charge of 4195 Chino Hills Avenue #1026, Chino Hills, CA to be given to Ming Chu Dong President of [Gree] … business and mailing address 4195 Chino Hills Avenue #1026, Chino Hills, CA.” It also “mailed first-class copies of the summons and complaint to Ms. Dong on Gree China’s and Gree Hong Kong’s behalf to Gree USA’s Chino Hills, California, business location.”
IDS obtained entry of default, and Gree moved to vacate the default and to dismiss, arguing that IDS should have made service under the Hague Service Convention. The judge correctly recognized that the key question was whether the law of the forum permitted the service to be made without transmitting a document to China, because the Convention applies only when there is occasion under the law of the forum to transmit a document abroad for service.
For this reason I would have expected to see a discussion of whether, under FRCP 4(h)(1)(B), the service on the officer was sufficient. Instead, the judge got into a discussion of the possibility, under Minnesota law, of serving process on a foreign corporation by service on the secretary of state. Since the case is in federal court, I point out that this method of service is authorized by FRCP 4(h)(1)(B), though it doesn’t seem the plaintiff tried to use it. The court pointed out, apparently correctly, that under state law such service would not be complete until mailed to the foreign corporation, and the permissibility of imposing such a requirement is expressly recognized in Rule 4(h)(1)(B). Thus one can’t use the method of service to avoid the Convention, because it is necessary for the secretary to transmit the documents abroad for service. In light of this discussion, the court vacated the default and quashed the service.
The odd thing about the case is that the court spends its time discussing a method of service that the plaintiff didn’t seek to use. The question whether, in the abstract, there is a method of service under the law of the forum that allows the plaintiff to serve process without transmitting the documents abroad. The question is whether the method the plaintiff actually attempted is one that allows service without transmitting the documents abroad. It is really unclear what the method of service on the secretary had to do with the case, and the court’s discussion is therefore confused.