Case of the Day: In re Subpoena Duces Tecum to Dunhuang Group

The case of the day is In re Subpoena Duces Tecum to Dunhuang Group (E.D. Mich. 2019). The facts of the underlying case are not really clear form the decision, but suffice it to say that North Atlantic Operating Co. had attempted to serve a subpoena duces tecum on Dunhuang Group, a Chinese company, and when Dunhuang did not produce the documents, it moved to compel and ultimately for contempt. The subpoena was served by delivery to the registered agent for Dunhuang Group’s payment processor, DHPay, Inc., and also by email to Dunhuang itself apparently in China. You can already see where this is going.

There is a lot wrong with the decision. First, can a court authorize service of a subpoena under FRCP 45 by email? I don’t think so. I am not going to flesh that out here—read Wright & Miller § 2454, which states the majority rule but also notes some contrary decisions.

But the main point on service is this: suppose it were proper to serve a subpoena by email as a general matter. Is it proper to serve a subpoena by email in China? The answer to that, I think, has to be no, for the reasons that Judge Gwin gave in yesterday’s case of the day. Service in China must comport with the Service Convention, which in China means serving through the central authority. You may say that under Water Splash and similar cases the Convention can apply only to service of process in the strict sense and not to service of other judicial documents. I think Water Splash is wrong on this point, but in any case a subpoena is process in the strict sense.

But that’s not all. There is a statute allowing service of subpoenas on US nationals outside the United States, 28 U.S.C. § 1783. But leaving that statute aside, service must be made “within the United States.” FRCP 45(b)(2). And the recipient of the subpoena can be required to produce documents only “at a place within 100 miles of where the person resides, is employed, or regularly transacts business in person.” FRCP 45(c)(2).

The subpoena was served in December 2017. I know the Hague Evidence Convention can be slow and cumbersome, especially in China, but perhaps resort to the Convention might have yielded better results than what North Atlantic has obtained so far?

All of this said, once the court granted a motion to compel compliance with the subpoena, Dunhuang was acting at its peril, and in light of its earlier rulings, the court’s contempt finding was not inappropriate. And it could be (although it seems unlikely given the what the decision has to say) that service on the Delaware payment processor was sufficient. But Dunhuang has a good appeal. The proceedings here were really off-base.

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