Capable of Repetition But Evading Review: The Second Circuit Dismisses Appeal on Email Service

The White Whale
Gurung v. Malhotra is Wrongly Decided

The Second Circuit has dismissed the appeal in the Smart Study case for lack of jurisdiction. I wrote about the district court’s decision back in August 2022. The case was a trademark and copyright infringement case involving “Baby Shark.” You’re welcome. The plaintiff had obtained a preliminary injunction, but when it moved for a default judgment, the court decided, correctly, that the service was faulty because service by email on the defendants who had not appeared in the case was impermissible under the Hague Service Convention. It issued an order to show cause why the case should not be dismissed for lack of jurisdiction. But instead of responding, the plaintiff brought an interlocutory appeal on the theory that the courts had effectively denied its request for entry of a permanent injunction. (There was another pathway, interlocutory appeal by permission, which the plaintiff did not seek to follow). In today’s decision, the Second Circuit held that there was no final decision sufficient to give it jurisdiction and dismissed the appeal. I worry that it may never really be possible to get this issue up on appeal, because the stars really do have to align just so. The best procedural posture would be a defendant who is willing to take a default and who then moves for leave to set aside the judgment on the grounds that it is void. A decision on that point could be cleanly appealed. But the incentives for doing this are not great, because all the defendant gets, if he wins, is a chance to litigate the case (assuming that the lower court merely quashes the serve and does not dismiss the case altogether).

Bill Dodge and Maggie Gardner have a very good post on this at the Transnational Litigation Blog. They point to what they call the “ex parte feedback loop” (although I disagree with them that that is much of a problem in Section 1782 litigation, because those opposing the application have a full opportunity to raise their arguments after the subpoena issues). I think this is a good insight in the service of process context, since most motions for leave to serve process by alternate means are decided before the defendant makes any appearance, and many cases involve defaults. So the courts are often only getting one side of the story. Bill and Maggie took the initiative to submit an amicus brief, which was excellent but also, given the jurisdictional issue, won’t settle the problem.

But the root of the problem isn’t the ex parte feedback loop. The first case, Gurung v. Malhotra, started out ex parte, but the Indian government argued the issue in the district court as amicus curiae, so the court did have the benefit of adversary argument when it flubbed the issue. Once there is a published decision out there, those proceeding ex parte can cite it again and again, and it takes on a life of its own. A lot of the decisions simply cite Gurung or later cases without much analysis. Only recently have courts started really to engage with the arguments on the other side. I’ve devoted a lot of attention to Gurung on the theory that maybe we should try to cut off the head of the snake. But in our system of precedents and given the number of district court decisions, both published and unpublished, maybe the snake is really a hydra.

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