Via Wikimedia Commons.

On at least three separate occasions in as many weeks, a client or client’s paralegal has asked me for guidance on the issuance of a summons.  In each case, the clerk of court insisted that (1) a special summons was necessary in order to comply with “Hague Convention requirements”, and that (2) the foreign Central Authority had to be appointed as a special process server.

Ahem, no.  Neither is accurate.

For starters, there’s no such thing as THE Hague Convention.  There are more than three dozen of them.  Now, here, it’s obvious they mean the Service Convention, but still… just naming the proper treaty seems to be a challenge.  [For elaboration, see Überpicky Vocabulary Distinctions, Volume 2: Get the name of the treaty correct.]  More importantly, though, there isn’t a single phrase in the Hague Service Convention that requires a special version of a summons.  Not one.  If you’re suing three defendants in Chattanooga and two in China, the same summons will work for all of them.  You don’t need a different form for the offshore targets, because they do precisely the same thing, which is to command the defendant’s answer and appearance at court.

If the clerk says otherwise, the clerk doesn’t understand the mechanics of the procedure.  The Convention addresses the manner of service [the heart of a 12(b)(5) motion] rather than the substance of the service documents [which falls under 12(b)(4)].  In short, Hague doesn’t care what gets served– just how.* Some Authorities in Asia may ask for “wet ink” summonses (that is, signed and stamped by hand– as if it’s 1987 again), but no special form is necessary.

As to the U.S. court appointing a Central Authority as a special process server, again… no.  The how is not determined by forum rules when a defendant is located outside the United States.  The laws of the country and locality in which they’re served govern the manner of service, and our courts must defer to those foreign laws.  The assertion by a U.S. court that it has the power to appoint a foreign Central Authority to serve in that Authority’s own jurisdiction… borders on insult.  Not only that, but it completely disregards the Supremacy Clause.

Now, the clerk may have a vague understanding that Hague forms must be signed by a court official, an attorney, or someone designated by the court.  That’s another matter entirely, and it misses the point that the lawyer can handle the entire thing.


* One exception: subpoenas.  They aren’t process, but then again, the Service Convention isn’t limited to process.  It covers the service of “Judicial and Extrajudicial Documents.”  To common law lawyers, that necessarily includes subpoenas, but not to the civil law community.  Subpoenas are governed by a different treaty– the Hague Evidence Convention.  A wildly different creature, that one.

Calendrier des Postes 1912 sous les pins Côte d’Azur— via Wikimedia Commons.

Very frequently, I rail in this space about keeping service costs down by reining in the length of documents to be translated.  But even assuming a limited stack of docs to serve, that’s not the only way to limit expenditures.  Timing is critical, too.  The longer you wait, the more it can cost– and I don’t just mean the increase in my fees to handle a project on a rush basis.

Every once in a while, I’ll talk to a client (a lawyer, specifically) who has just filed a suit and has everything ready to go abroad under the cover of a Hague request… the vaunted “USM-94” in common U.S. parlance (though to be fair, it’s not a U.S. government document– it just carries a U.S. Marshals Service document number).  I tell the lawyer it will cost a few hundred dollars in fees, plus a couple of thousand in translation.  I formalize the cost structure, send it off to my colleague, and… crickets.  I don’t hear anything for weeks.  Perhaps that’s because the litigant wants to wait.  Perhaps it’s because the litigant is short on funds.  I get it, really.

But lo and behold, the case gets removed to federal court, and counsel realizes that the clock er– calendar– has already been ticking for weeks.  This thing has to start moving within 90 days of filing* or the foreign defendants will eventually be dismissed for lack of notice.  So counsel calls me and says, okay, let’s go with it.  But when the documents arrive, he’s added twelve pages of additional documents, and the summons has changed from a state form to the federal standard (the AO 440— which is a U.S. government document).

Sure, there are tactical and strategic reasons to wait.  Perhaps counsel knows that it’s going to be removed, and when it it does go up to federal court, he has a mechanism to request a waiver.  Perhaps opposing counsel is not playing nicely with others and is leading him to believe that a waiver is forthcoming– even though it never does come.  Perhaps, again, the litigant just doesn’t send a check.

But waiting can be costly in Hague situations.  Where translation is required, the price tag can grow dramatically with the addition of federal documents on top of the state pleadings.**  That is why I urge a more timely approach to serving overseas.  All courts’ rules require action within a certain time– either by a certain date or within a reasonable diligence standard.  But if that time period is rather long and most of several defendants are stateside, either the foreigners can get missed, or the cost to serve them can increase.


* FRCP 4(m) requires that U.S. defendants be served within 90 days, or the court must dismiss the case against them.  But service on defendants located outside the U.S. are addressed in the last sentence of 4(m); simply put, the deadline doesn’t apply.  That doesn’t mean a plaintiff has all the time he wants– a reasonable diligence standard applies.

** FRCP 4(c)(1) requires service of the summons and complaint.  That’s it (although the complaint necessarily includes exhibits & attachments).  But the list doesn’t end there when the case has been removed from state court.  Add the order/notice of removal.  Add such additional gems as the Civil Cover Sheet, garden variety standing rules, litanies about standards of civility, etc., in the individual districts whose local rules so dictate.  Individual judges may even require service of their own rules of practice– and these can be awfully dense.  For every additional page, the cost to translate can go up by $100 or more per page.

“Since brevity is the soul of wit / And tediousness the limbs and outward flourishes, I will be brief…”
Polonius, Hamlet, Act. 2, Sc. 2.  “Each allegation must be simple, concise, and direct. No technical form is required.”  FRCP 8(d)(1).

In a valiant quest to be a paperless lawyer, I strive to limit the hard copies I produce.  As such, if at all possible, I try to email service documents to my overseas associates– process servers, solicitors, bailiffs, etc. for printing in their offices.  Simply put, even at the end of 2017, physical pages must still be placed into a defendant’s hand (or dropped at a recalcitrant defendant’s feet).  A PDF simply won’t do (although it’s coming).  The number of places in which the person actually serving the documents can print them is significant, and it saves reams of paper, gallons of fuel, and a great many headaches.  But there are still many countries that still require Hague service requests to be submitted in hard copy, with translations, in duplicate.  This delights Georgia Pacific and FedEx for obvious reasons.

But those reams of paper and gallons of fuel and numerous headaches can be saved by simply limiting the volume of pleadings submitted.  I argued earlier this year that the cost to serve an offshore defendant under the Hague Service Convention requires brevity and, where possible, the avoidance of exhibits.  This past weekend, I processed a series of service requests in which the total cost for translation reached into the six-figure range, and the printing run was counted in reams, rather than pages.  The requests were going to Japan and China– two countries where hard copy submissions are still mandatory.*

And they could have been reined in with incorporation by reference instead of “attached hereto as Exhibit Z.”

Litigators, remember– we don’t get paid by the word.  Translators do.

Remember that FRCP 4 requires service of the summons and the complaint (which includes exhibits).  End of list.  If local rules compel you to serve a Cover Sheet or a judge’s standing orders or a brochure on the court’s mandatory ADR program, then they”’ have to be served.  You cannot control that.  But those exhibits– those pesky exhibits– are well within your control, so keep notice pleading in mind.  FRCP 8 requires a short, plain statement of the claim and the relief granted.  No poetry, no scientific treatise, no voluminous recitation of facts.

Keep it short and save the world.


* Fortunately, the Chinese appreciate technology a bit more than their island neighbors to the east.  China submissions need not be duplicated.  Small favors…

On the little island of Murano, the glass-blowing subsidiary of Venice, Inc.

Mille grazie, Italia.

I’m exhausted.  My feet hurt.  My back is killing me.

And better moods are rare in my life.  Peggy and I flew back from UMKC Law’s CLE program in Rome last night, along with two dozen friends, both new and old.  Our operational tempo over the prior ten days was high, we walked everywhere, and on each end of the journey, we crammed ourselves into the euphemistically named “Economy Class” seats of American Airlines.  (This is not a slam on AA, but good grief, folks.  Could you have made that sardine can any tighter?)

During two of the free days of the conference, we headed up to Venice on the Frecciarossa (Red Arrow, high speed train) and got to savor cicchetti, some fantastic wine, and unbeatable scenery.  But while drinking it all in, I couldn’t help but imagine Marco Polo around the turn of the 14th century, in his hometown’s heyday.  As we sailed around the island on a vaporetto, the sea spray and cold wind blowing about, I was reminded that this place was where global trade truly began.  It’s by no coincidence that the world still comes to Venice, if for no other reason than to take a few pictures and buy some souvenirs.  It truly is a wonderful place– Peggy’s favorite in all of Europe.

The lawyer in me wonders how 14th century Venetian commerce would have reacted to a Hague Service Convention request.  Perhaps those merchants of old would have just thrown caution to the wind and relied on their formidable naval strength to ward off the procedural gestures of faraway litigators.

But I’m fairly certain they wouldn’t have closed up shop.  The economic engine would have continued to chug right along.

 

The Basilica (the three-arched building in the upper right corner).  In ancient Rome, “Basilica” meant “courthouse.”  This one was massive.

Ah, Roma.

This morning, I had the distinct pleasure to once again speak on my alma mater’s CLE Abroad Program in the one-time capital of the western world.  To hear my wife describe it, Rome is also the center of the culinary world.*  I cannot argue with this.  It is my third visit to Italy– my second with Peggy– and we intend to avail ourselves of all the gastronomic delights this sunny peninsula has to offer.

While my usual lecture on overseas CLE programs centers on the Hague Service Convention, along with a bit about the Evidence Convention, this seminar’s broader theme is Entrepreneurship and Doing Business in Europe, so I took a different tack with today’s lecture.  Sure, I had to include a bit about service abroad, but the centerpiece was an elaboration on a post from last year, Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts.  We’re in the middle of a series that digs a bit deeper into those five six things (yes, there’s a bonus!).

In addition to speaking, I’ve had a chance already to reconnect with distinguished colleagues in the Italian bar, scholars and practitioners alike.  This is not just a city of ancient relics and tourist attractions.  Rome is also the cradle of what we’ve come to know as “the law” around the world.  Even our fellow common law adherents owe a collective debt of gratitude to those whacky fellows in togas, running around the Forum looking for funny things to happen.  They quite literally created the legal profession as it began in both the common and civil law traditions.  So I’m on a bit of a pilgrimage, as it were.  Going back to pay homage to my our professional roots.

If Peggy says it’s okay, I might even be convinced to wear a toga.


* For some reason (oh, we know the reason– we just can’t say it lest we get sued by the agro-chemical industry), the wheat grown and harvested and milled into flour in Italy doesn’t send Peggy’s immune system into hysterics.  The wheat grown back home in the states?  She can’t touch the stuff without going into a sort of toxic shock.

So the theme for the week: all the food, all the wine, all the art.

Peggy and me in Venice in 2015.  Yes, we’re going back this week.  Too cold for a toga, they tell me.
Croke’s Reports, 1661. On display in the Library of the Supreme Court of the United Kingdom.

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts“, I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point Three…

Choose a governing law.

If you don’t designate what body of law governs your dispute, you leave everything up to the default setting of the court hearing the case.  I wrote last week about the need to choose a venue, but choosing a governing body of law is just as critical.  Its necessity ought to be obvious, but this important factor is frequently omitted, perhaps by design, perhaps by simple forgetfulness.  Just get it in there, because certainty about unfriendly law is better than uncertainty about ostensibly friendly law.  Like the choice of a venue, this is a classic Conflict of Laws issue, and courts hate to wade into those questions if they don’t have to.  This might be the single most esoteric and arbitrary– yet wide-ranging and impactful–  field of law, SO TAKE IT OFF THE TABLE.  Make a decision about what law applies.  But think about a few things as you do…

  1. Be certain the selected law has sufficient applicability to the facts & parties involved. If you’re in California state court to adjudicate a dispute between an California plaintiff and an Illinois defendant, there’s probably not a good reason to choose Texas law, unless Texas is the nexus of the contract.  Likewise, choosing Chinese law to govern a dispute adjudicated by a U.S. court borders on silliness (see Dan Harris’ thoughts on this issue, in tandem with silly choice of court clauses).
  2. The Convention on the International Sale of Goods (CISG) is the default setting for international trade contracts.  Specifically disclaim the CISG if you don’t want it applied.  
  3. Don’t assume the CISG is bad just because you aren’t familiar with it.  Especially if you’ve chosen a foreign venue, the CISG could just be the most beneficial law for your client’s situation.  Take an hour to bone up on the thing– I guarantee that the offshore party’s counsel knows it.
  4. To parallel my suggestion last week, don’t just assume that the other (foreign) party’s hometown law is bad.  The foreign country’s law may align more closely with your client’s needs, and choosing it may go a long way to preventing a breach altogether.
  5. Above all, for crying out loud, make the venue and governing law correspond to the language!  It’s highly impractical to expect a Minnesota court to adjudicate a Swedish-language contract under German law.  Ponder that for just a moment– such an expectation insults Minnesota because you don’t like Minnesota law or the language of Shakespeare, it insults Sweden because you don’t believe in its courts or law, and it insults Germany because you can’t be bothered to adjudicate there in its language.

There is no one-size-fits-all approach to designing a solid agreement– every contract is different, even if the same parties are signing the latest agreement in a decades-long relationship.

 


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.  

 

From his firm bio.

Tom Pickert was an outstanding lawyer, by all accounts around the local bar.  Our paths never crossed, at least as recollection says, but our circles overlap considerably.  Word of his death came via the listserv of the Missouri Association of Trial Attorneys, just as a few of us were walking into the Association’s membership meeting in Kansas City.  When the president announced the tragedy to the group, quite a few gasps came out, from those who hadn’t read the email on their phones, along with a few tears from those who knew him.

Pickert was supposed to have been in that room, having lunch with his colleagues, perhaps at my table or at the one next to it.  Instead, he had been gunned down on his own front porch three hours earlier, while I sipped my morning coffee just a few blocks across our bucolic neighborhood.

We didn’t know each other, except by his reputation, but the profession we both chose was targeted this morning.  Tom was murdered because he was good at his job.  He was gunned down on his own front porch because an arrogant, evil, psychotic defendant refused to accept that a jury of his peers said he was wrong.  Oddly enough, the jury said he was wrong to gun down somebody else, Tom’s client.  [The defendant shot a homeless guy’s leg off with an AK-47, because the homeless guy was stealing from his business, so he said.  The man kept an AK-47 at the office.  Let that seep in for a minute.]  Pickert was assassinated– because he had the courage to stand up and point a finger at a defendant with an itchy finger.

This tragedy is the natural confluence of, on one hand, a sick and twisted attachment to firearms, and on the other an insidious hatred of lawyers.  “The first thing we do, let’s kill all the lawyers” is a popular sentiment among the Tea Party contingent—of which David Jungerman was apparently a part.  They fail to realize that Shakespeare put those words into the mouth of a spiteful antagonist hell bent on the overthrow of society.  They fail to realize that the libertarian ideals they purport to hold so dear were devised by men in the very profession they disdain.

Now, to be sure, the Right Wing will tell you that they don’t hate all lawyers.  Just plaintiffs’ lawyers.  You know, those ambulance chasers who brings frivolous lawsuits against good, god-fearing job creators and needlessly raise the cost of doing business.  Those charlatans who drain billions from the economy each year over such stupidity as a woman spilling hot coffee in her lap.*

But the sad thing is, that’s a specious argument no matter how you slice it.  Set aside criticism of lawyers who are handsomely compensated for bringing suits on behalf of plaintiffs.  Set aside the court-imposed sanctions that we’re subject to if we bring cases without merit.  David Jungerman seemingly hates all lawyers.  So much so that he represented himself in the trial that Tom Pickert won.  So much so that, if he’s not already dead by his own hand, he’ll likely refuse to have one of us defend him at his trial for this.

Our profession was targeted today, and Tom Pickert paid the price, because he was one of us.  The sons he walked to school—just minutes before his death—will cry themselves to sleep, no doubt next to their mother, who will wake up tomorrow for the first time without her husband.  They’re paying an even bigger price.

Now, to be sure, the facts aren’t all in.  As of this writing David Jungerman hasn’t been captured or charged.  He is due a fair and impartial trial, and in all likelihood Tom Pickert would be the first to stand up in his defense before the horde calling for his head.

Because a lawyer’s first and last objective is justice.  We should all share that objective.  Plaintiffs’ lawyers, corporate counsel, prosecutors, public defenders… all of us mourn Tom Pickert tonight.  And we’ll stand up again tomorrow to fight the good fight.

 


* If you still buy into that garbage about the coffee case, watch the documentary film Hot Coffee, which tells the real story behind Stella Libeck’s suit over McDonald’s 200-degree coffee—and those of other tort plaintiffs—in a form that wasn’t written by corporate America.  The part the smartasses leave out when they mock that poor woman:  your coffeepot at home brews at 200 (if it’s good), but it runs about 140 at warming temp.  McDonald’s, prior to the suit?  Maintain that stuff at 200 or better, so we have to throw less of it out.  That’s just a few shy of boiling, y’all.  But that’s how they handed the cup to her, all in the interest of saving thirty-seven cents per wasted cup.  [Yes, I fabricated that number.]

Raja Haji Fisabilillah Monument, Tanjung Pinang, Indonesia… right in the SIJOR Triangle. Achmad Rabin Taim via Wikimedia Commons.

A client emailed me the other day, asking how to serve a foreign defendant.  A pretty common occurrence that prompts either a “take a look at this blog” reply or a short & sweet rundown on what they need to do.  It comes up pretty regularly, and there’s really no good answer for it:  how do you best serve a defendant that isn’t in a Hague country? 

The answer that I quickly dashed off …  “forgive the law school answer here, but it depends“, followed by some brief detail.  One of the double-edged swords of the Hague Service Convention is that (on one hand) it provides certain, specific avenues to service, but it also (on the other hand) frequently limits those avenues.  Sure, a considered analysis is needed for serving defendants in England, France, and Canada.  But Mexico, China, and India… there’s one way to do it—period.

But what of those non-Hague places?  Well, a whole bunch of important questions will determine how to best serve.  For the purpose of illustration, let’s say your defendant is in the SIJORI Growth Triangle—an industrial compact of sorts, between Singapore, Malaysia, and Indonesia.  I pick that area because it’s seen a massive growth rate in recent years, and because all three countries lie outside Hague.  Let’s also say you’re in federal court, just for the sake of a simpler illustration.  Rule 4(f) will govern how you serve regardless of the defendant’s overseas location.

The bunch of questions:

  • Do you have an address for the defendant?  If not, find one.  Seriously—that is the ultimate threshold question.  I can’t help you if you don’t have this critical piece of information—although, I can help you find it.
  • (For rhetorical purposes…) Is the destination country a Hague Service Convention member?  Not in our illustration here, but if it were, the next question would be “do they object to Article 10?”  Set that aside for this discussion.
  • Where are the defendants’ assets?  The absolutely critical point, because if you have to go offshore to enforce a judgment, one of the very first things a foreign court will look at is the manner in which the defendant was served, and if they find it inappropriate, you’re done.  This makes perfect sense—because if they can reject an enforcement action on procedural grounds, they can avoid the tall weeds of substantive law.  [If the defendant has U.S. assets—or even Canadian or British assets—you can rest a bit easier.]
  • Does the defendant speak English?  If it’s an entity doing business in the U.S., it will be presumed competent in English.  But an individual… not so fast.  You may have to translate into Malay or Bahasa or any of a number of different dialects, to ensure that the defendant’s due process rights are respected—regardless of how you serve.  If the defendant isn’t in an English-speaking country, you may have to translate whether it’s an entity or not.  So be sure to keep things brief; federal court is a notice pleading venue, after all.  You don’t get paid by the word, but translators do.
  • How much is this defendant’s involvement really worth?  That will determine whether a more costly method (Letter Rogatory, local counsel…) is warranted, rather than simple mail service, or if the whole analysis is a waste of resources.
  • Is service by mail actually viable?  I’m not a big fan of mail service except in the rarest of circumstances.  It’s usually a bad idea.  But if the defendant has a history of actually allowing its employees to sign for FedEx or UPS deliveries, you’re probably going to be okay.
  • Does the law of the destination state prohibit service by mail?  This one’s doubtful outside the Hague list—but if the other country has a statute or caselaw that forbids mail service, it violates 4(f)(2)(C) [“unless prohibited by the foreign country’s law”].
  • Does the destination state prohibit personal delivery?  This one is also doubtful outside the Hague list, but again– if the other country has a statute or caselaw that forbids mail service, it violates 4(f)(2)(C).  In most civil law jurisdictions (essentially, everywhere that wasn’t once a British colony), service is a sovereign function or reserved to a guild monopoly.  You can’t necessarily just hire a guy to walk up to the defendant and hand him the documents.

It should be apparent that there isn’t an easy answer to the question, so the SIJORI defendant– whether in Singapore or Malaysia or Indonesia– necessitates some anaylsis.  To be sure, this isn’t an exhaustive list—but the ultimate point is that if the defendant doesn’t have accessible assets, you will have to enforce the judgment abroad, so that procedure should always be foremost in your mind when deciding how to serve.

“Just mail it” could be the worst thing you can do.  [Oh, and if you do decide to mail it, do it the right way!]

 

Supreme People’s Court, Beijing (Reuters)

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts,“ I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point Two…

Include a choice of venue.

Even if that venue is overseas (and in many cases, it’s actually smarter to choose a foreign venue than a U.S. venue), agreeing on the appropriate place for a suit prevents a number of headaches—and can even prevent a dispute from arising in the first place.  Globally, this is referred to as a “choice of court clause” but has similar binding effect in most industrialized countries.

If no venue is selected, then any venue might end up taking up a dispute, and you don’t want that.  Don’t simply assume that the locus of performance will be the proper venue for a dispute.  Why not the locus of execution?  Why not the plaintiff’s hometown?  Why not the defendant’s hometown?  Why not the locus of the widget’s manufacture or export or import?

This is a classic Conflict of Laws issue, and courts hate to wade into those questions if they don’t have to.  This might be the single most esoteric and arbitrary– yet wide-ranging and impactful–  field of law, SO TAKE IT OFF THE TABLE.  Make a decision about where the parties want disputes to be heard.  But think about a few things as you do…

  1. Don’t be too certain that your hometown is the best place to go.  A rural Kansas state court may not have sufficient expertise to adjudicate an international trade case.  Sure, you’re more likely to have a sympathetic ear in a local judge & jury, but how competent are those folks to determine wrongdoing if everything about the contract (execution, performance, payment, etc.) takes place in Spain?
  2. Don’t be too certain that the other fellow’s hometown isn’t the best place to go.  In some cases, particularly in China (as highlighted frequently by Dan Harris’ excellent China Law Blog), choosing the other guy’s home venue can be a nice hedge against his breaching the contract!  If you have the guts to challenge him in his own backyard, he’ll think twice about trying to welch on you.  Sure, you may not win there, but Sun Tzu would tell you that the greater victory is to not have to fight in the first place.
  3. Be certain the selected venue has sufficient connection to the facts & parties involved.  Sure, the Delaware Chancery Court might have the most expertise applicable to a particular set of facts & law, but if there’s no Delaware party involved in the contract, why would it even want to deal with it?  Courts don’t take up cases just because someone asks them to.  
  4. Don’t be so sure the venue that seems smartest actually is the smartest.  Again, I shamelessly extrapolate Dan Harris’ thoughts on choosing Hong Kong as a litigation venue.  Yes, you know the rules and you know the law in a particular court.  You know that it’s a nice, neutral setting, so neither party is going to get hometowned (sp?).  You know it has a reputation for fairness and expertise in the particular area of law.  You know both sides are familiar with its unwritten rules and you know that language isn’t a problematic issue.  But how are you going to enforce a judgment from that court unless the other party has assets under its control?  It could be a massive waste of everybody’s time to litigate– and res judicata could destroy your chances of ever collecting.
  5. Ponder an arbitration clause. It serves the same purpose as a choice of court clause, and often designates specific rules and the governing law.  Thanks to the New York Arbitration Convention, arbitral awards are far easier to enforce abroad than litigated judgments and, despite their political unpopularity, provide significant cost savings in dispute resolution.  (Dan would also tell you that Chinese courts aren’t keen on enforcing arbitral awards, so don’t do it unadvisedly. If you’re drafting a China contract, call Dan.  Just do it.)  Sure, they’re de rigeur in consumer contracts, but they may not be the best way to go in commercial contracts– especially across borders.  Still, if the circumstances are right, arbitration could be a bright idea.
  6. Recognize that the choice of venue clause can be an outstanding negotiating concession.  If you’ve concluded that litigating in the other fellow’s back yard wouldn’t be a tragedy, give that fellow what he wants in exchange for something you truly need.
  7. Don’t get cute.  See Dan Harris’ “… Too Clever by Half” post.
  8. Above all, for crying out loud, make the venue and governing law correspond to the language!  It’s awfully impractical to expect a Minnesota court to adjudicate a Spanish contract under German law.  Ponder that for just a moment– it insults Minnesota because you don’t believe in English or Minnesota law, in insults Spain (or Mexico or Argentina, etc.) because you don’t believe in its courts or law, and it insults Germany because you can’t be bothered to adjudicate there in its language.

Seriously.  This stuff is crucial, and there is no standard form to fill out– every contract is different, even if the same parties are signing the latest agreement in a decades-long relationship.


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.  

Taos County, New Mexico. Sheriff Montoya discusses business with a process server, 1941. NARA photo.

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts,“ I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point One…

Designate an agent for service in the United States.

All U.S. entities must designate an agent for service when they incorporate, organize, or register with their respective Secretary of State.  Foreign (that is, non-U.S.) entities usually bear no such responsibility.  If a lawsuit against one of those entities becomes necessary, you probably won’t be able to just hire a process server in the foreign country. You will need someone like me to handle it for you or, worse, you’ll spend hours just researching how it’s done (and then bill you for that time).  With a U.S. agent, regular U.S. practice is perfectly fine.  (And to go one better, have the contract stipulate that the agent can be served by email!)

When you hire me, I’m going to charge you at least a few hundred bucks per defendant.  And although your client is going to save money if you hire me instead of doing it yourself (I elaborate here), I’m not cheap, and neither are my competitors if you’re doing it right.

Now, who should that agent for service be?  Well, that’s a tough one, especially if the foreign party isn’t registered with a particular Secretary of State (very few are– and don’t just assume you can serve a Secretary of State by default, because the Secretary is usually just a link in a chain of service, and Hague restrictions still must be observed).  The foreign party may have counsel, they may have a U.S. subsidiary, or they may have some other U.S. presence that can be specifically designated and authorized to accept service on their behalf.  Just be careful about who is selected.  Some pitfalls:

  • Designated counsel:  imagine that in the contract, the foreign party has designated its Boston attorneys– Crane, Poole, and Schmidt— to accept service on its behalf.  A year into the contract, the foreign party fires the firm because the principal partner has mad cow disease.  Then what?  
  • Designated U.S. subsidiary:  imagine a similar scenario, but instead of firing its lawyers, the foreign party dissolves its subsidiary or moves it offshore.  Then what?
  • Designated U.S. presence:  perhaps the foreign party has a storefront location in Peoria, or a satellite office in Kansas City, and they designate that U.S. presence as their agent for service.  Maybe the storefront is destroyed by fire, or maybe the KC office can’t hold onto its staff because the labor market is so vibrant.  Then what?

Your best course of action might be an established agency in the capital of the state that you expect to be the locus of performance.  A simple Google search pulls up dozens of agents who can be hired for fifty bucks a year.  Prepay the agent for the life of the contract, et voilà.  When a dispute arises, you don’t have to pay me a thousand dollars (and pay a translator six thousand dollars!) just to get the defendant into court.

It’ll cost you $37.00 in courier fees to overnight the summons & complaint to an agency in Dover.


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.