The Second Circuit is poised to decide Smart Study Co. v. Acuteye-US, a case in which a district judge correctly held that the Hague Service Convention does not permit service by email in cases where it applies, at least where the state of destination has objected to service by alternate means under Article 10. I have been following the case for a while but haven’t written about the appeal, because I was hoping to get to submit an amicus brief, given that the Chinese defendants are not likely to appear and brief the issue, and given that the plaintiff has attracted some amicus support. But the timing is not good—I just don’t have the time to do it at present. Perhaps someone else will take up the torch!
I won’t repeat at length the argument I’ve made many times, which shows that the lower court decision was correct. In simple terms, it goes like this.
- The Convention is exclusive, i.e., you have to use one of the methods it authorizes, or at least permits, in every case where the Convention applies. That’s the holding of Volkswagen v. Schlunk.
- The Convention permits service by alternate means under Article 10. But it gives states the power to forbid the use of alternate methods by objecting to them.
- The only arguable basis for saying that the Convention permits service by email is saying that service by email comes within Article 10(a), which permits service by postal channels.
- But even if email is within the postal channel—a doubtful proposition—China has objected to service by postal channels.
- Therefore, service by email is impermissible under the Convention. And since FRCP 4(f)(3) does not allow courts to authorize methods of service that violate the Convention, service by email in China is impermissible under US law.
As Maggie Gardner points out in her excellent overview at the Transnational Litigation Blog, there’s a potential jurisdictional problem with the case, which is before the court on interlocutory appeal, and which I won’t address here: read Maggie’s post. This is a theme in the cases, and the reason why this question has remained open until now: it is not so easy to get appellate review of service issues for various reasons, some legal and some practical.
I would add to Maggie’s post the following observations. First, the Convention does not apply, and the prohibition on service by email does not apply, in cases where the Chinese defendant’s address is unknown. That’s Article 1 of the Convention. But if you know the defendant’s address, why not give the Chinese Central Authority a try? Here is what I wrote about the practicality of that course in the cert. petition in the Changzhou Sinotype case from a couple of years ago:
It is undoubtedly true that service of process via the Chinese central authority takes longer than service of process in US domestic litigation typically takes. But China is hardly unique. According to the latest data available from the Hague Conference on Private International Law, of the twenty states that provided information, the state with the highest percentage of service requests that took more than a year to execute was Ireland, followed distantly by China, Bulgaria, Canada, and Portugal. About forty-seven percent of the requests China executed were executed within four months, and about seventy-seven percent were executed within six months.
Second, okay, these plaintiffs say they need injunctive relief. But Volkswagen suggests that only a summons and complaint need to be served via the Convention. If you can simply email notice of a TRO to the Chinese defendant, then what’s the problem?
Third, in many cases what the plaintiff really wants is to exclude the infringing products from the US market. It doesn’t seriously contemplate chasing the Chinese company for damages. But if you want to chase a Chinese company for damages, and you anticipate having to take a US judgment to China for enforcement, the worst way you can start is by serving process in a way that violates Chinese law. Why would the Chinese court grant recognition to such a judgment?
Finally, the use of email or postal mail to serve summonses is a real source of friction between the US and other countries. In one of my cases, the Chinese government sent a diplomatic note on the matter! US trade groups have real grounds for complaint about the speed of the Chinese central authority, but the answer is not to cause the US to violate its treaty obligations.