Case of the Day: CPI Card Group v. Smart Packaging Solutions SA

The case of the day is CPI Card Group v. Smart Packaging Solutions SA (N.D. Ind. 2022). CPI sued Smart Packaging, a French company, in Indiana state court for breach of contract. It served process by serving the summons on the Indiana Secretary of State. Apparently, Indiana law provides that persons who cannot be served with process are deemed to have appointed the Secretary of State as their agent for service. Smart Packaging removed the case to federal court and moved to dismiss for insufficient service of process.

There is some irony in the case, since notification au parquet, which is quite similar to the method of service used here, was a French procedure. Although it’s obviously not a great method of service, there’s nothing about notification au parquet or fictitious notice by service on the Secretary of State that violates the Service Convention, because if the service really is complete upon delivery of the papers to the Secretary, then there is no occasion to transmit a judicial document abroad for service, and the Convention does not apply. But the judge’s decision is surprising in that it doesn’t address the elephant in the room: under Indiana law, is service complete upon delivery to the Secretary? I don’t know the answer, but I do know that the relevant rule requires the Secretary to send the papers to the defendant and file the return receipt with the court. If in fact service is not complete until the foreign defendant receives the papers, or at least if service is not complete until the Secretary mails the papers, then the Convention clearly applies, and the decision is wrong.

The judge also had an unfortunate, and, I suggest, inappropriate attitude towards the defendant’s argument. The judge wrote that if the defendant were right, the correct remedy would be to quash the service rather than to dismiss the case, which is very sensible, although the matter is within the judge’s discretion. But she also suggested that there is something wrong in seeking to quash improper service:

If Defendant is correct, then, the appropriate remedy is to order Plaintiff to go through the Hague Convention process. At the end of that process, Defendant would appear, probably by the same counsel, and we would be in the exact place we are now. Defendant may enjoy chasing its tail, but the Court does not

I understand the judge’s point, but I don’t think judges should be in the business of ignoring Supreme Court precedent (the Service Convention is exclusive, see Volkswagen) when they are inconvenient. The Convention is a self-executing treaty of the United States, and judges should treat it that way.

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