The case of the day is Smart Study Co., Ltd. v. Acuteye-US (S.D.N.Y. 2022). It’s too soon to declare victory, but this is yet another case correctly holding that when the Service Convention applies and the state of destination has objected to service by postal channels, service by email is forbidden.

The case involved a claim to trademark and copyright infringement concerning the Baby Shark song, which no doubt will be running through your head for hours now that you have read the words “Baby Shark.” The defendants were Chinese companies selling alleged knockoffs on the internet. The plaintiff sought and received a temporary restraining order and a preliminary injunction, and received leave to serve process by email.

Somewhat unusually for these cases, two of the defendants, Li Teng and Xie Youli, actually appeared! They argued that the injunction had to be dissolved because the service was improper. Although they both acted pro se, it seems clear that Li Teng’s papers were drafted by a US lawyer. This issue usually passes without any adversarial litigation. Not this time.

But the case was before the court on a motion for default judgment regarding the non-appearing defendants. Here is the key passage from the judge’s position:

Some courts have concluded that service “by postal channels” encompasses service by email, such that service by email is permissible under the Convention. If that is the case, however, it must be true that China’s objection to service via “postal channels” would necessarily encompass an objection to service via email.

I could not have said it better myself. The judge responded as follows to the view that Article 10 permits service by email unless the state of destination specifically objects to it, using the Sulzer Mixpac decision as its foil:

The Court disagrees with Sulzer and its progeny. Notably, Sulzer was decided before Water Splash was issued. And, as is the case here, the motion for alternative service in Sulzer was wholly unopposed, such that the court did not have the benefit of briefing that took an alternative position to that advanced by the plaintiff in that case. In this Court’s view … Water Splash and Schlunk clarify that the Convention is meant to set forth simple and certain methods of service that can be used to serve foreign litigants. To infer that the Convention’s silence as to a particular method equates to an implied permission to use virtually any method of service not proscribed by the Convention contravenes that purpose.

Moreover, the effect of a country’s objections under Article 10 would be significantly diminished under Sulzer’s rationale. If the Convention lays out specific means of service, countries can make specific objections to those means of service—just as a country can object to service by postal channels by objecting to Article 10(a). But if the Convention’s silence as to a method of service implicitly authorizes that service, there would be no ready way to object to that method of service. Indeed, there would be nothing affirmative to object to. Simply put, the current force of an objection to a method of service in the Convention would be far less effective.

The decision also makes a good point about whether the plaintiff is entitled to a default judgment against the non-appearing defendants. Under Article 15 of the Convention, a default judgment can’t enter unless the document “was transmitted by one of the methods provided for in this Convention.” Service by email in a state that has objected to postal service doesn’t qualify, so no default judgment is possible. This is right on the money.

But the judge goes on to make a point that is probably wrong. He points out that Article 15(2) also provides that when a state has made an Article 15 declaration (as China has), a default judgment should not enter if:

no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed

The judge seems to treat this as a reference to the certificate mentioned in Article 6, which a central authority transmits to the applicant after effecting service. But in cases where service is made under Article 10, or under one of the other alternate or derogatory channels (Articles 8, 9, 11, 19), there will be no certificate from the central authority. Does the Convention mean to say that you can’t ever get a default judgment if you effect service through a method other than the central authority mechanism? That seems incorrect. Paragraph 318 of the Practical Handbook (2016 ed.) provides that “If an alternative channel is used, the ‘certificate’ might be any proof of service.” This has to be correct, I think. If service by email is permissible in a given case, then a declaration setting out the facts should be sufficient.

The judge also, I think, imposes too great a burden on a plaintiff to try to find these defendants’ physical addresses, which is important because if the addresses are unknown, then under Article 1, the Convention does not apply. In the case of a Chinese internet company with no known physical presence and no information about the address on the website, there is little a US plaintiff could reasonably be expected to do to identify the defendant’s proper name, let alone its address. This is particularly so in the past few years, since registrants’ contact information is mostly not published in the WHOIS database anymore.

Finally, I think we can distinguish preliminary injunctions and TROs from default judgments in an important sense. Of course you can’t have a default judgment without service of process (leaving aside cognovit notes where those are permissible). But while due process requires a notice and opportunity to be heard before a preliminary injunction issues, I tend to think that the plaintiff need not formally serve process before a PI issues. Certainly that is so in the case of a temporary restraining order. I question, therefore, whether the failure to serve process is necessarily a good basis for dissolving the preliminary injunction, though I haven’t looked into it. Perhaps the plaintiff must serve process within some reasonable time after the preliminary injunction enters?

This case has a better-than-average chance of getting appellate review. In a typical case, when a court dismisses a case because a method of service is improper, the plaintiff uses another method of service rather than taking an appeal, or else abandons the case. Or when a court allows a particular method of service, the defendant defaults, or else the issue falls by the wayside by the time the case is finished. Not here. The plaintiff had a preliminary injunction, has seen the preliminary injunction dissolved, and now has an immediate right of appeal.