Cert. Watch: Changzhou SinoType v. Rockefeller
Posted on August 20, 2020
Readers, here is the petition for cert. in Changzhou Sinotype Technology Co. v. Rockefeller Investments (Asia) VII, a case from the California Supreme Court that you’ll remember from this spring. Here are the facts in a nutshell. A US company wins a big arbitral award against a Chinese company in a US-based arbitration. Rather than going to China to enforce the award, it sought a California judgment confirming the award. It brought an action in Los Angeles and served the summons and petition on the Chinese company, in China, via FedEx.
China, as we know, has objected to service by postal channels. So it seems obvious that the service was improper under the Hague Service Convention. But it wasn’t obvious to the California Supreme Court. The court noted that the parties had agreed to service of process by Fedex in their written memorandum of understanding. This raises the first big question in the case: can parties waive an Article 10(a) objection by contract?
Leaving the waiver issue aside, the court found that the parties had agreed to serve process by a means less formal than “formal” service of process, in other words, that sending the summons and petition to the Chinese company was just a way of providing notice, not formal service of process (even though everyone seems to agree that delivery of the documents was necessary to the California court’s jurisdiction). This raises the second big question: can a state court define the delivery of a summons and complaint to be something less than “formal service of process” as a way of escaping from the exclusive character of the Convention?
What’s at issue here, as a matter of US law, is the Supremacy Clause. A treaty is the law of the land, and contrary state law is preempted. What’s at issue more practically is the risk of friction in foreign affairs and the risk of prejudice to US litigants. Just look at the case of Russia, which has refused for years to execute requests for service emanating from the US on account of the Russian view that the US is misconstruing the Convention’s provisions on costs. And in that case, the American position is correct! Here, California’s position, for which the United States bears international responsibility, is clearly wrong, and the Supreme Court, the one federal court with the power to ensure state courts comply with treaties, should step in.
Or at least that’s what the petition says!