The case of the day is United States v. Public Warehousing Co. KSC (N.D. Ga. 2017). The government’s claim was that the Public Warehousing Co. and Sultan Center Food Products, two Kuwaiti companies, had overcharged the United States on government contracts. According to the judge, for six years, the government and the relator “have been diligently attempting to serve the Defendants but have been consistently rebuffed by the Kuwaiti government.” The government moved for leave to serve process by alternate means, and the court granted leave to serve process by service on PWC’s US lawyer, by publication, and by international courier. (I’m simplifying a bit because there were several defendants and because both the government and the relator served process).
Continue reading Case of the Day: United States v. Public Warehousing Co.
The case of the day is SEC v. China Intelligent Lighting and Electronics (S.D.N.Y. 2014). The Securities and Exchange Commission sued Xuemei Li, the president and CEO of China Intelligent Lighting and Electronics, and Tianfu Li, the chairman and CEO of NIVS IntelliMedia Technology Group, Inc., for securities fraud. Both resided in China. The SEC sought leave to serve the two by alternate means under FRCP 4(f)(3). Specifically, the SEC sought leave to serve process by publication in the International New York Times and by e-mail.
Continue reading Case of the Day: SEC v. China Intelligent Lighting and Electronics
The case of the day is Braverman Kaskey P.C. v. Toidze (E.D. Pa. 2013). Braverman Kaskey, the law firm that represented Maya Toidze in Cook v. Toidze, the case of the day from July 1, 2013, sued her, asserting that she had failed to pay legal fees. When the firm still represented Toidze, she resided in Markham, Ontario. However, Braverman Kaskey was unable to serve process on her at her last known address, because she had moved. Braverman Kaskey attempted to locate Toidze by “contacting the post office, checking telephone records, and conducting an internet search.” But it was unable to locate her, and so it moved for leave to serve process by publication. The court granted the motion, and Braverman Kaskey published notices in the Markham Economist & Sun and the Philadelphia Legal Intelligencer (the fee suit was pending in Philadelphia). After Toidze failed to answer, the court entered a default judgment. Toidze moved to vacate the default judgment under FRCP 60(b)(4) on the grounds that the judgment was void. She asserted that she had been living in Russia; that Braverman Kaskey could have located her “had it exerted greater effort;” that the service failed to comply with the Hague Convention or with Russian law governing service of process; and that the service did not comport with due process.
The judge rejected the argument that Braverman was insufficiently diligent in seeking to locate Toidze. Toidze says that Braverman Kaskey engaged in “pure speculation” or even bad faith when it acted on the assumption that she was still residing in Canada, but this is a pretty weak argument, as Braverman Kaskey had no reason to know that Toidze had moved to Russia.
Although the court doesn’t deal with the issues in these terms, it’s clear that the Hague Service Convention did not apply, since under Article 1 the Convention does not apply “where the address of the person to be served with the document is not known.” Some courts hold that there is a diligence requirement, but the court found that Braverman Kaskey exercised reasonable diligence. It’s also clear that Russian law was irrelevant. Under FRCP 4(f)(3), a court may authorize a method of service even if it violates foreign law (though not if it violates the Convention—but as we have just seen, the Convention is inapplicable here).
The real question is due process. The constitutional question is whether the method of service chosen was “reasonably calculated” to give actual notice. In the absence of any evidence that Toidze had moved from Markham, publication of the notice in Markham was, the court reasoned, “reasonably calculated” to reach her, even though, on the facts that were unknown to Braverman Kaskey at the time, there was little chance she would see the notice. But do not shed tears for the injustice to Toidze; Braverman Kaskey emailed copies of the relevant papers to Toidze at an email address she had provided earlier, so it seems likely she had actual notice of the proceedings (even though no one asserted that the email constituted service of process).