Case of the Day: IDS Property Casualty Insurance Co. v. Gree USA

The case of the day is IDS Property Casualty Insurance Co. v. Gree USA, Inc. (D. Minn. 2018). It’s another example of bad, clearly wrong decisions on the Hague Service Convention. Chad and Andrea Murphy, who lived in Minnesota, owned a dehumidifier manufactured by Gree Electric Appliances, Inc. of Zuhai, a Chinese firm. It allegedly caused a fire. The Murphys’ insurer, IDS, paid their claim and brought a product liability claim against Gree as their subrogee. They served process by serving the documents on a person physically present in the California, and their claim was that under California law, that service was sufficient to effect service on the Chinese firm.

The judge noted that Volkswagen holds that “where service on a domestic agent is valid and complete under state law and the Due Process Clause … the Hague Convention has no further implications.” But he was “not persuaded that [Volkswagen] stands for the question of whether the Hague Convention applies is resolved by looking to state law in the abstract or the state law where service was purportedly perfected.” The court went on to hold that service was improper under Minnesota law and therefore improper.

This is wrong in every way. First, FRCP 4(h)(1) incorporates FRCP 4(e), which allows service either in accordance with the law of the forum or in accordance of the law of the state where the service is made. So it’s not clear why the court thought it right to look exclusively to Minnesota law. But more fundamentally, the judge failed to apply the holding of Volkswagen, which does indeed mean that the question whether there is an occasion to transmit a document for service abroad is a question for the law of the forum.

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