Case of the Day: Voltage Pictures v. Gussi

The case of the day is Voltage Pictures, LLC v. Gussi, S.A. de C.V. (C.D. Cal. 2022). Voltage is a film production and distribution company in Los Angeles. Gussi was a Mexican company. The parties had a contract for the distribution of the film “Ava” in Latin America. There was a dispute that resulted in an arbitration under the Independent Film & Television Alliance Rules of International Arbitration. Voltage won the award and moved to confirm the award. The fight on confirmation was about service of process. Voltage didn’t serve process on Gussi in accordance with FRCP 4. The IFTA rules provide:

Service of any petition, summons or other process necessary to obtain confirmation of the Arbitrator’s award may be accomplished by any procedure authorized by applicable law, … except that the parties waive application of the Hague Convention for Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters with respect to service of process.

I hate this provision. To make it worse, the court cited the Changzhou Sinotype case, the California case erroneously holding that parties can waive the requirements of the Hague Service Convention. That’s wrong, because it is the states who are parties to the Convention, not the litigants themselves, who have an interest in what methods of service are and aren’t allowed on their territory.

But things aren’t as bad as they look. In the end, Voltage served process on Gussi S.A. de C.V., the Mexican company, by delivering the papers to the registered agent of Gussi, Inc., a US affiliate. That’s precisely what happened in Volkswagen v. Schlunk, the leading Supreme Court case on the Convention. Service on a domestic subsidiary or affiliate of a foreign defendant is okay if it is valid under state law. And because there is, in such cases, no occasion to transmit a document abroad for service, the Convention does not even come into play.

So despite the hint of error in the case, the court may have got this one right. I can’t say, of course, whether its analysis of California law on the service on US subsidiaries or affiliates was right. But if it was right, then there is no Changzhou Sinotype issue in the case.

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