Case of the Day: G2A v. United States
Posted on October 23, 2019
The case of the day is G2A.com Sp. z.o.o. v. United States (3d Cir. 2019). I previously wrote about the case in September 2018. The Polish authorities were conducting a tax investigation of G2a, a Polish video game company. The Polish government made a request under the US/Poland tax treaty for help obtaining evidence from Gate Arena, a Delaware limited liability company. The IRS served a summons on the Corporation Trust Co., which was listed as Gate Arena’s registered agent, and the next day, it sent notice of service of the subpoena to G2A in Poland via registered mail. Before G2A received the notice, CTC informed the IRS that although it was listed as the registered agent, it had no record showing that it actually was the registered agent, and that it had no responsive documents. The IRS therefore withdrew its summons. The IRS nevertheless intends to make a report to the Polish tax authorities, which G2A says will make it appear that Gate Arena is a “shell company” and which will therefore be bad for G2A’s position in the Polish tax investigation. The judge refused to quash the summons. On appeal the interesting issue was whether the notice, sent by registered mail, violated the Hague Service Convention.
My inclination would have been to find ways to say the question was not a good question. The Convention applies in to transmission of “judicial documents.” Here the IRS, pursuant to the treaty, issued a summons, which is perhaps an administrative rather than a judicial document—it was neither issued nor approved by any court. On the other hand, there is at least one case where the government has conceded or at least not disputed that the Hague Service Convention applies to such summonses. Lestrade v. United States, 945 F. Supp. 1557 (S.D. Fla. 1996). Maybe the Polish tax investigation was not a “civil or commercial” case, or maybe the US proceeding in aid of it was not “civil or commercial.” Maybe the whole case was moot, insofar as the government had withdrawn the subpoena (the court considered but rejected this view). But this is all just warm-up. Let’s take the question that the court thought it had to face.
The court held that the Convention did not apply, because while the notice had to be served in Poland under a federal statute requiring notice to the subject of the foreign tax investigation, it did not have to be served in the sense the Convention uses that word. According to the judge, the Convention applies only to service of process in the strict sense. And there is support for that view in cases including Volkswagen and Water Splash, the Supreme Court’s two looks at the Convention. I have previously criticized this view (in my prior post on the case and in my chapter in the ABA Treatise on international litigation, which I discussed in February 2017), mainly on the grounds that the Convention applies to transmission of judicial and extrajudicial documents, and it’s difficult to understand what this could mean if the Convention relates only to service of process in the strict sense. I also note that lexical distinction between “sending,” “serving,” “notifying,” etc., are not as strong in our law as they may be, for example, in the civil law, which we can see simply by reading FRCP 4 and FRCP 5 together. One refers to service of process, the other to service of other documents in a civil case, but they both use the word “service.”
I’ve previously criticized this view