An interesting story hit the blogosphere a couple of weeks ago (see “MtGox’s US customers try to find Mark Karpeles” over at the FinanceFeeds blog). I won’t pretend to understand the mechanics of the case discussed– the Bitcoin phenomenon and the MtGox security breach lie far outside my expertise, and frankly, the whole concept is pretty complex and I don’t have the time to give it reasonable study. Suffice to say that this case is a classic illustration of just how complex cross-border finance and cross-border litigation have become.
A particular paragraph in the post caught my eye:
Karpeles is a French citizen believed to be living in Japan, so service upon him is governed by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents. In order to effect service under the Hague Convention, a physical address is required.
Well, sort of.
Er, not exactly.
Wait… no. That’s not right at all.
It is correct that in order to effect service under the Convention, you have to have an address. But service on Karpelès is not “governed” by the Hague Service Convention unless and until the plaintiffs know his whereabouts. He is merely believed to be living in Japan. By its own terms (Article 1), the Convention doesn’t apply “where the address of the person to be served with the document is not known.”
In short, if the fellow can’t be found after a diligent search, adherence to the strictures of the Convention is unnecessary. Frankly, adherence is impossible, because the primary bit of information necessary for a service request to a Hague Central Authority– Japanese, French, or otherwise– is where to find the guy.
So what is a litigant to do? Well, do what the DNC did earlier this month: use Rule 4(f)(3) to serve him electronically (see my recent post “Twitter Service Hits the Bigtime“). Or ask the court to appoint his U.S. counsel– if indeed he has counsel here**– as his agent for service, then serve him under 4(e)(2)(C).
The FinanceFeeds post went on to say that…
The Court agreed that the time for Mr Lack to file Proof of Service on Defendant Mark Karpeles should be extended to and through October 31, 2018.
That tells me that none of the lawyers in the room (including the judge) are reading the whole of Rule 4(m), the basis for the standard 90-day deadline to serve a defendant. The last sentence of 4(m) is a beautiful little safe harbor for plaintiffs seeking to serve abroad: “This subdivision (m) does not apply to service in a foreign country…” [Emphasis mine.] *
Now, that doesn’t mean a plaintiff has unlimited time to get the job done– a reasonable diligence standard applies– but it does negate the need to extend anything. The plaintiff merely has to not be dilatory (I had to look that up once) in his efforts to serve. Yes, keep the court updated on your progress. Yes, make sure the judge knows what you’re up against. Don’t give up on the effort. Just know that an ordinary extension of time isn’t necessary.
The takeaway from all this? Not all is lost if a defendant can’t be located, and the Federal Rules of Civil Procedure account for that.
* At that, even assuming the plaintiffs do find an address, they shouldn’t expect a proof of service by the end of October. Serving in Japan has been taking longer than normal lately– and “normal” is four months, at best.
** UPDATE (a day after posting): Within hours of my post, up pops another FinanceFeeds article about this defendant, but in a different suit in N.D. Ill. Apparently, yes, he does have U.S. counsel. And the ability (not to mention, obligation) to waive.
*** ANOTHER UPDATE (February 11, 2019): According to FinanceFeeds, a plaintiff has ascertained the defendant’s address, which would upend the conclusion I made last summer, but the address seems to have failed. So now, the plaintiffs are shooting for alternative service, which should include electronic means!