Civil defendants in federal court are obliged to waive service. All of them, with the notable exception of various governments. I give you Rule 4(d)(1):
An individual, corporation, or association that is subject to service under Rule 4(e), (f), or (h) has a duty to avoid unnecessary expenses of serving the summons.*
(Emphasis added.) Seems pretty simple to me. Unless the defendant is something like the National Weather Service or the Warwickshire branch of the Ministry of Housinge, a waiver is required, no matter where the defendant happens to be sitting– in Berlin, Germany or Berlin, North Dakota. [It must be noted here that the rules don’t even get into the massive waste of time involved. For most offshore defendants, getting proof of service takes several months. For others, a year or two. I give you China, India, Mexico… where the time factor can be even more frustrating than the cost.]
Rule 4(d)(2) goes on to say:
If a defendant located within the United States fails, without good cause, to sign and return a waiver requested by a plaintiff located within the United States, the court must impose on the defendant:
(A) the expenses later incurred in making service; and
(B) the reasonable expenses, including attorney’s fees, of any motion required to collect those service expenses.
Aha! Magic words to the lawyerly ear: FEE SHIFTING.
But what’s missing in the rule? Foreign defendants.
Okay, they’re missing, but take another look at the framing of the rule. It says the court MUST fee shift if a domestic defendant doesn’t waive and can’t make a decent argument as to why. Offshore defendants are left out of the equation entirely (more on why that is a minute). Does that mean, then, that their obligation goes away? On the contrary– the obligation still arises when the defendant is properly asked to waive. They still have an affirmative duty to avoid unnecessary expenses of serving– and having billed some clients in the low six-figures (in advance!) for service on a defendant or two, I can tell you that it just isn’t necessary. But some defendants just won’t play nice. The 1993 Advisory Committee’s notes are illustrative on this point:
The aims of the provision are to eliminate the costs of service of a summons on many parties and to foster cooperation among adversaries and counsel. The rule operates to impose upon the defendant those costs that could have been avoided if the defendant had cooperated reasonably in the manner prescribed. This device is useful in dealing with defendants who are furtive, who reside in places not easily reached by process servers, or who are outside the United States and can be served only at substantial and unnecessary expense. Illustratively, there is no useful purpose achieved by requiring a plaintiff to comply with all the formalities of service in a foreign country, including costs of translation, when suing a defendant manufacturer, fluent in English, whose products are widely distributed in the United States.
(Emphasis added.) They were talking about Toyota there. Yep, a Japanese company that makes a bunch of money in these United States.
But that begs the question: why are offshore defendants left out of the fee-shifting provision?
Well, in the 1993 re-vamping of the rules on serving a summons, the original text didn’t make a distinction between U.S. and non-U.S. defendants. The British diplomatic legation made known its displeasure, and the drafters just didn’t want to have to fight about it, so they punted.**
Now, there’s some logic in the British displeasure. Why, after all, should a blue-collar guy from Dorchester, who saves up for years and takes his family to Disney World but gets in a car accident, be expected to understand the waiver obligation? He shouldn’t.
But what about a lawsuit involving a Rolls-Royce jet engine? I’m pretty confident that Rolls-Royce has a capable bunch of lawyers on staff. I’m fairly certain they understand the costs involved in serving them. And I am straight-up positive that they know they get an extra 69 days to answer the summons if they fulfill their duty.*** [To be sure, I’ve never had to serve Rolls-Royce, so I have to conclude that they waive service as a routine practice.]
And what about the Swiss company that my client sued last year for infringing a dozen patents, all of which had to be translated into German? Sure, the plaintiff’s complaint might have been significantly shorter (see here for a tip on that). But even a modest complaint, combined with my fees and printing and shipping… you’re looking at a couple thousand bucks. Substantial and unnecessary expense, which the defendant has a duty to avoid. The avoidance of which provides them four times the normal number of days in which they must answer the complaint.
The duty arises, but the court does not have a “thou shalt shift fees” mandate for anyone but U.S. defendants. What’s the foundation for the fee-shifting argument?
The inherent authority of the court to manage its own docket, assess costs, and sanction recalcitrant parties.
In short, it’s discretionary, and to my mind, naturally within the court’s authority. The discretion allows the court to give Dorchester Disney Dad a break, but hold Rolls-Royce and Toyota and Lufthansa to a patently reasonable standard: you want to do big business here, plan on being sued here, and plan on playing nice with others. That’s at the heart of the 4(d) obligation in the first place.
To be sure, for all the crowing the Advisory Committee did about the benefit of requiring waivers from foreigners, they also say in the notes that “(n)or are there any adverse consequences to a foreign defendant, since the provisions for shifting the expense of service to a defendant that declines to waive service apply only if the plaintiff and defendant are both located in the United States.” Well, then what’s the point of raising the obligation in the first place? And since when did committee notes constitute law that overrides plain text? I contend that the plain language of the rule is crystal clear– shift fees absent good cause.
Unfortunately, there is no positive on-point case law on the 4(d) fee-shifting issue– at least not that I can find. There is case law against fee-shifting, but it’s based on woefully inadequate and superficial logic (O’Rourke Bros., I’m looking at you… and your progeny).
Hint: I’m looking for a test case.
* For the record, 4(e) covers individuals served in the U.S., 4(f) covers individuals served abroad, and 4(h) covers entities everywhere.
** See Brockmeyer v. May, 383 F.3d 798, 808 (9th Cir. 2004). Oh, and I mean punted in the NFL sense, not the “gently plying the waters of the Thames on a pole-driven pleasure boat” sense.
*** Rule 4(d)(3).
Author’s note: on its face, a post like this might seem self-defeating. After all, my practice depends entirely on other lawyers who need to serve defendants located abroad. Pretty straightforward stuff– if you sue Toyota or Lufthansa in a U.S. court, you either need help from somebody like me, or you have to do a whole bunch of research to make sure you’re doing it right. Bottom line… outsourcing it is better for your client. This little blog is not going to lead overseas defendants to waive… but it could lead to the plaintiffs getting their costs back.
Another note: If you lose the 4(d) motion, why not tee it up again in your Rule 54(d) motion after you win?