Yet another one popped up on the old radar (Google news alerts) yesterday… a National Law Review article highlighted Victaulic Company v. Allied Rubber & Gasket Co., Inc. in S.D. Cal., but the author’s conclusion was far too optimistic for plaintiffs seeking a way around the Hague Service Convention. The court there held that service by electronic means on a Chinese defendant was perfectly acceptable under Rule 4(f)(3) because electronic service isn’t prohibited by international agreement. My (internal scream) response to that: WRONG.
Wrong wrong wrong wrong wrong.
(You should sense a rant coming.)
In the case of China (and Mexico and Germany and Switzerland and… I could go on), electronic service is most certainly prohibited by international agreement. Says who? Says Sandra Day O’Connor, who (unless they’ve been living under a rock for four decades) lawyers have heard of.
She doesn’t say it specifically, but the conclusion is crystal clear– I am continually astounded by courts’ complete disregard for the “secondary” holding in Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988). Reading these lower court opinions, it’s as if not a single lawyer in the room has taken a truly thorough read of the Schlunk opinion in determining what is and is not valid service abroad.
Schlunk‘s primary holding: adherence to the Hague Service Convention is mandatory where it applies. 486 U.S. at 699.
Secondarily: the Convention’s list of service methods is exclusive. Id. at 706– and again at 710.
Now, last I checked– and correct me if I’m wrong here— U.S. Supreme Court precedent, especially entirely settled precedent, ranks higher on the hierarchy of authority than the Federal Rules of Civil Procedure. I’m sure I read that somewhere in law school, but that was a while ago.
District courts routinely contend that 4(f)(3) is on equal footing with 4(f)(1), and in the case of the Inter-American Convention on Letters Rogatory (IAC), that’s true. The IAC isn’t a mandatory/exclusive treaty. THE HAGUE SERVICE CONVENTION IS.
The source of all this turmoil? Likely Gurung v. Malhotra, which Ted Folkman ably covers in detail over at Letters Blogatory, and which I won’t rant on any further in this space. Suffice to say that Gurung, and apparently now Victaulic, fail to consider the plain meaning of Justice O’Connor’s words:
(…) the Convention prescribes the exclusive means for service of process emanating from one contracting nation and culminating in another.
Judge Benitez’ Order in Victaulic relies on the seminal case on electronic service, Rio Props., Inc. v. Rio Intern. Interlink, 284 F.3d 1007 (9th Cir. 2002), in placing 4(f)(1) and 4(f)(3) on an equal footing. But missing in the analysis is that Rio Properties didn’t implicate the Hague Service Convention. The defendant there was in Costa Rica… a non-Hague country.* From Rio at 1015…
(…) no language in Rules 4(f)(1) or 4(f)(2) indicates their primacy, and certainly Rule 4(f)(3) includes no qualifiers or limitations which indicate its availability only after attempting service of process by other means.
That’s an accurate statement. Nothing in 4(f) indicates a preference for any of its three subsections. BUT SCHLUNK DOES. AND SO DOES THE SUPREMACY CLAUSE. The mind reels.
To be sure, this doesn’t mean it’s game over for the plaintiff. Article 15 is in force for China, so a default judgment is acceptable under the Convention. Of course, that doesn’t clear the Due Process hurdle, but 4(f)(3) methods can be used to vindicate the defendant’s rights under Mullane. Not to serve in a strict sense– but to provide reasonable notice.
* Accurate as of 2002. The Convention entered into force for Costa Rica some fourteen years later. The 9th Circuit pointed out the non-applicability of Hague strictures in footnote 4!
Another issue worthy of a rant… the Victaulic Order also grants the plaintiff a sixth extension of time to serve. The first extension was wholly unnecessary, because Rule 4(m) specifically exempts service on overseas defendants from its own 90-day deadline. I’ll leave it at that.