Case of the Day: EGI-VSR v. Coderch
Posted on August 25, 2020
The case of the day is EGI-VSR, LLC v. Coderch (11th Cir. 2020). EGI-VSR had a $28 million arbitral award against Juan Carlos Celestino Coderch Mitjans, who lived in Brazil. EGI-VSR sought confirmation in Miami, and the court confirmed the award. On appeal, Coderch argued that he had not properly been served with process in Brazil, because the method of service did not comply with Brazilian law.
Although today Brazil is a party to the Hague Service Convention, at the relevant times, the only convention in force between the US and Brazil on service in civil cases was the Inter-American Convention. EGI-VSR sought to serve process via a letter rogatory transmitted to the Brazilian central authority under that Convention. The Brazilian central authority made several unsuccessful attempts at service, and it ultimately obtained permission from a Brazilian court to make service via the method known as citação por hora certa, a form of service in which the server leaves the summons and complaint at the defendant’s home with a family member, neighbor, or doorman who is notified in advance that the server will attempt to make service at a designated time. (Before you get the idea that this is a crazy and fictional form of service, recall that FRCP 4(e)(2)(B) allows service by leaving copies of the summons and complaint at the defendant’s “dwelling or usual place of abode with someone of suitable age and discretion who resides there,” which is not that different). The Brazilian central authority’s certificate stated that service had been validly made under Brazilian law. Coderch then moved to quash the service, claiming that it was insufficient under Brazilian law. The court denied the motion and ultimately confirmed the award.
On appeal, the Eleventh Circuit affirmed. The district court had “determined that it would be improper … to review a decision by the Brazilian court that service of process was carried out in accordance with Brazilian law.” The Eleventh Circuit agreed for reasons of comity. “Principles of comity counsel against reviewing a foreign court’s determination regarding the interpretation and application of the foreign country’s own laws—especially here, where the operative treaty confers jurisdiction over the issue to the foreign court.” In past posts, I have not written about this issue in terms of comity, but in terms of the effect of the foreign central authority’s certificate of service. Perhaps a certificate should be conclusive, or perhaps it should only have very strong prima facie force, but either way, it should not be subject to relitigation willy-nilly.
Coderch argued that it was unfair to adopt the Brazilian court’s decision to allow service by hora certa, since if he had appeared to challenge it in the Brazilian court, his appearance would have caused him to be deemed to have been served. The court rejected the argument on the grounds that under Brazilian law, a special guardian was appointed to represent his interest in the proceeding. That seems right, but I think it’s unfortunate that the US court really considered the argument. What is the point of saying that comity forbids the US court to revisit the decision if you then go ahead and revisit it? Of course, there will be cases where the foreign proceedings were corrupt or irregular or otherwise fell below the minimum required before a US court should give them credit, but that plainly wasn’t the case here.