Big in the news of late: Huawei and the Trump Administration’s ban.
- From CNN: US bans Huawei from selling telecom gear and threatens its supply chain
- CNN again: With a stroke of his pen, Trump worsens Europe’s Huawei dilemma
- CNBC: China says any further action against companies like Huawei could escalate tensions
- The Independent: Trump declares national emergency ‘over Huawei’ amid accusations he is risking ‘devastating’ conflict with Iran
- And a cautionary view from the folks at Bloomberg: Trump Hands Huawei a Stick to Beat the U.S. With
And from late last month, in the South China Morning Post: Who controls Huawei? Chinese telecoms leader’s ownership structure explained in more detail. To hear the SCMP tell it, Huawei is owned and, at least partially, controlled, by the Chinese government. This control comes by way of a labor union committee’s direct ownership, but that committee is itself state-controlled. By the transitive property… you get the picture.
So what if Huawei (or any other ostensibly state-owned entity in China) is sued in the United States? Obviously, jurisdictional questions must be addressed, but before they can be reached, service of process must be effected. That can only happen pursuant to the Hague Service Convention. And that can take a looooong time. But the Foreign Sovereign Immunities Act (FSIA, 28 U.S.C. §§1330, 1602 et seq.) is also implicated. And that causes more than a few ulcers in the plaintiffs’ bar.
In its press statements this week, Huawei’s leadership has responded to criticism that it is a state-controlled entity, which would give the PRC unrivaled power to snoop on companies and governments worldwide if Huawei equipment provides the backbone of the world’s 5G* rollout. In short, says the company: we’re independent.
Okay, let’s take them at their word and assume that to be the case. An American lawyer sues them in, say, the U.S. District Court in San Francisco. Said lawyer hires me to submit the Hague request (yes, I do that, dear reader), and we get the documents translated and off to Beijing. Eighteen months later (yes, it takes that long– or longer), we get a response from China’s Hague Central Authority. Congratulations, the documents have been served.
Except Huawei’s counsel files a 12(b)(4) motion, claiming that we didn’t follow the Foreign Sovereign Immunities Act (FSIA). “We’re an instrumentality of the People’s Republic of China, so proper service on us must comport with 28 U.S.C. §1608, the service of process provision of the FSIA.” And that’s an accurate statement– if indeed the defendant is state-owned. They might go on to say that we omitted the “Notice of Suit” required by §1608. A tough one to overcome?
Not really. Their press claims could be used to directly refute the cite to §1608. You can’t say on one hand that “oh, no, we’re not state-owned” and then argue on the other that “oh, yeah, we’re state-owned.”
But here’s the kicker: it doesn’t matter whether they’re state-owned or not. As long as the plaintiff follows China’s declarations to the Hague Service Convention, FSIA requirements are met naturally.
The Notice of Suit requirement? Don’t worry about it– and don’t worry about translating the entire Act– because the Notice of Suit is a requirement of §1608(a). It only applies where the foreign state (or political subdivision) is itself a defendant, and you’re serving that state by mail or diplomatic note. Instrumentalities (ie: state-owned companies) are covered by §1608(b), which makes no mention of the Notice of Suit requirement.
Hague adherence is, by definition, adherence to §1608(b)(2):
(b) Service in the courts of the United States and of the States shall be made upon an agency or instrumentality of a foreign state:
(2) if no special arrangement exists, by delivery of a copy of the summons and complaint either to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process in the United States; or in accordance with an applicable international convention on service of judicial documents;
In short, don’t fret over FSIA… it’s really not that difficult.
* If you’re not familiar with 5G, bone up on it, because it’s going to have a direct effect on everything you do in very short order.
** Be sure to amend the summons to reflect a 60-day answer deadline, rather than the standard 21-day (federal) or other (state) deadline. 28 U.S.C. §1608(d).