Service of Process Since 2016: What’s New?

The Peace Palace with flowers in the springtime

The fourth edition of the Practical Handbook on the Operation of the Service Convention was published in 2016. With a meeting of the Special Commission likely to take place next year, it’s a good time to step back and ask: what have been the major American developments in the law of service since then? I think there are three.

  1. “Send” and “Serve” in Article 10. In Water Splash, Inc. v. Menon, 581 U.S. 271 (2017), The US Supreme Court resolved the split in the cases about the correct interpretation of Article 10(a) of the Service Convention, which, in the English version, states that the Convention does not interfere with the freedom to send judicial documents by postal channels (subject to the state of destination’s right to object). Because Article 10(a) uses the word “send” instead of the word “serve,” and because US domestic law distinguishes between merely sending someone a document and serving the document on him, a split of authority had arisen. Some courts had held that because Article 10(a) uses the word “send,” it does not permit service of process via postal channels. This position never made much sense even in the context of US law, since US law requires a party to serve—not send—many documents (pleadings, motions, notices, etc.) on the other parties after formal service of the summons has been made. See Fed. R. Civ. P. 5. In 2017, the US Supreme Court clarified the situation by holding that Article 10(a) does indeed permit the service of a summons via postal channels. The Court was careful to note that Article 10 does not, of its own force, authorize service by post. It is still necessary, in the United States, to find a basis in the law of the forum for serving process by postal channels. US law does indeed authorize service by post on defendants abroad in many situations. See, e.g., Fed. R. Civ. P. 4(f)(2)(C)(ii); Fed. R. Civ. P. 4(f)(3). The law of many US states also allows for service by mail in many situations. Because the US Supreme Court is the final word on the construction of the Convention, the decision governs in all US lawsuits in state and federal courts. Indeed, Water Splash arose out of a lawsuit in the Texas state courts.
  2. Waivers of Article 10 Objections by Private Parties. In Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology Co., 460 P.3d 764 (Cal.), cert. denied, 141 S. Ct. 374 (2020), the California Supreme Court held that where the parties’ contract contained a clause providing that service of process could be made on each other by postal channels (the contract called for service by FedEx, and under US law such private couriers are deemed to be within the postal channel), where the defendant was in a state that had objected to alternate methods of service under Article 10, and where the plaintiff did serve the summons on the defendant by post, the contract sufficed to waive the objection under Article 10, and the service was valid. The decision seems wrong, because the power to object under Article 10 belongs to the foreign state, not the litigant, and it is difficult to see why a litigant should have the power to waive the foreign state’s objection. But the decision was not simple. It’s well-established that a litigant can waive defects in service ex post, e.g., by failing to raise them as defenses in its answer. See Fed. R. 12(h)(1). And a litigant can sometimes waive service altogether ex ante, though the Due Process Clause of the Constitution and sometimes state statutes impose limitations of such waivers). See, e.g., Mass. Gen. Laws c. 231, § 13A (forbidding cognovit notes except in limited circumstances).  So perhaps a litigant who can waive service entirely should be able to waive limitations on the manner of service. Again, that argument seems to disregard the state’s interest in controlling the exercise of judicial sovereignty in its territory. Another argument, perhaps more practically important to the outcome of the case, was that the lawsuit for which the plaintiff sought to serve a summons on a defendant in Chinese was one for recognition and enforcement of an arbitral award. Thus many in the arbitration bar took the position that the California Supreme Court’s decision was consistent with the courts’ “pro-arbitration” policy. Although I had no role in the California case, I did write the petition for cert., which the Supreme Court denied. Several scholars submitted an excellent amicus brief in support. The Chinese government sent a letter to the Department of Justice complaining about the California decision, but it came just days before the Supreme Court denied the petition, and although I filed it, I suspect it did not reach the Court in time to bear on its decision.
  3. The Tide Turns On Service by Email Under the Convention. Many first-instance decisions have held, erroneously in my view, that service by email is permissible even in states that have objected to service under Article 10, usually on the grounds that because the states’ objections did not reference email specifically, they did not forbid its use. These cases are contrary to the Convention’s exclusive character, which the US Supreme Court recognized in Volkswagenwerk AG v. Schlunk, 486 U.S. 694 (1988). They presume that any methods of service that are not expressly forbidden are permitted, when in fact any methods of service that are not expressly authorized or at least expressly permitted are forbidden. Often these cases arose when a foreign state adopted a clearly unreasonable approach to service, either because the foreign central authority does not effect service in a reasonable amount of time or because the central authority refuses to effect service on questionable grounds. See, e.g., Gurung v. Malhotra, 279 F.R.D. 215 (S.D.N.Y. 2011); Sulzer Mixpac AG v. Medenstar Indus. Co., 312 F.R.D. 329 (S.D.N.Y. 2015). But these decisions then came to be cited in more routine cases. Recently, however, the trend has been to reconsider the view expressed in Gurung and similar cases. The newer cases tend to recognize that an objection to service under Article 10 or under Article 10(a), without any qualification, operates to bar service under Article 10 or 10(a) altogether, and that service by email is permissible only if one can identify another provision in the Convention that allows it. There is no such provision. Therefore, these cases reason, the service is impermissible. Some examples include Smart Study Co. v. Acuteye-US, 620 F. Supp. 3d 1382 (S.D.N.Y. 2022); Topstone Communications v. Chenyi Xu, 603 F. Supp. 3d 493 (S.D. Tex. 2022); Anova Applied Electrics, Inc. v. Hong King Group, Ltd., 334 F.R.D. 465 (D. Mass. 2020); Facebook, Inc. v. 9 Xiu Network (Shenzhen) Technology Co., 480 F. Supp. 3d 977 (N.D. Cal. 2020); and Luxottica Group S.p.A. v. Partnerships & Unincorporated Associations, 391 F. Supp. 3d 816 (N.D. Ill. 2019).

The Service Convention isn’t the only show in town, of course. Let me also mention a development in the law of service in the context of foreign sovereign litigation. Under 28 U.S.C. § 1608(a)(1), when a private party and a foreign state have agreed to a “special arrangement for service,” the private party not only may but must try that “special arrangement” first, before seeking to serve process in any other way. Of course there are easy cases, where the parties explicitly agree to a method of service of process. See, e.g., Lovati v. Bolivarian Republic of Venez, 2020 U.S. Dist. LEXIS 211458 (S.D.N.Y. Nov. 11, 2020) (agreement for service of process on consular officials); Architectural Ingenieria Siglo XXI, LLC v. Dominican Republic, 2013 U.S. Dist. LEXIS 199771 (S.D. Fla. Jun. 10, 2013) (agreement for service of process on diplomatic or consular officials). But what happens when the parties have agreed to a general contractual term regarding notices that does not expressly reference service of process? In the last few years, the U.S. District Court for the District of Columbia, one of the centers of foreign sovereign litigation in the United States, has developed a clear and consistent rule. When the agreement is an “all-encompassing” agreement that says something like “all notices one party wishes to send to the other shall be sent” by some particular method, then it is a special arrangement for service. But when the agreement is limited in its scope to notices under the contract or the like, then it is not a special arrangement for service. The leading cases are Berkowitz v. Republic of Costa Rica, 288 F. Supp. 3d 166 (D.D.C. 2018), Hardy Exploration & Production (India) Inc. v. Government of India, 219 F. Supp. 3d 50 (D.D.C. 2016), and Orange Middle East & Africa v. Republic of Equatorial Guinea, 2016 U.S. Dist. LEXIS 65147 (D.D.C. May 18, 2016). The DC Circuit has not yet weighed in, although in the most recent case, Chiejina v. Federal Republic of Nigeria, the judge was sufficiently unimpressed with Nigeria’s argument that a limited notice clause was a “special arrangement for service,” in light of the court’s clear precedents, that (before dismantling the argument in detail), he gave a one-word response: “Please!” The case is on appeal, so the DC Circuit may soon settle the issue.

Image Credit: Iamthestig (CC BY-SA 3.0)

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