A slew of cases have come across my desk lately, involving plaintiff attorneys who have ostensibly already served foreign* defendants via statutory agents in the forum state. After plaintiff’s counsel spends several thousand dollars to defeat a motion to quash, most of them conclude that it might have just been cheaper in the first place to serve the defendant in the foreign jurisdiction instead of via the statutory agent. (I make that argument regularly on the few listservs to which I subscribe– why not save yourself the aggravation and just serve the defendant where they are, instead of going the seemingly cheap & easy route?)
The best examples of these “statutory agent” situations are (1) foreign entities doing business in the forum state and (2) non-resident motorists who drive in the forum state. For instance, let’s say a statute says specifically that “any act by a foreign entity to conduct business in this state shall by implication appoint the Secretary of State as its attorney in fact for the purpose of service of process in any action brought in the courts of this state.”
- In short, if you make money here, we can serve you here via the SoS.
- Or, the corollary, if you drive here, we can serve you here, perhaps via the DMV Director.
- Or, in the case of Volkswagen in the 1980s, if you form a subsidiary here, we can serve you here via that subsidiary.
It seems pretty fair and it seems pretty straightforward. But looming large over the analysis is a due process question… which is to say, maybe it’s not so fair after all. In my March 2017 post, “You can’t simply serve a U.S. subsidiary,” and two weeks later in “You Can’t Simply Serve the Secretary of State,” I cautioned against assuming that serving via these statutory agents was compliant with due process and with the Hague Service Convention.
The threshold question: where does lex fori deem service to have been effected?
- If service is deemed to be effected in the forum state, you still have to undertake a due process analysis. Is it reasonable to calculate that the statutory agent will do what’s necessary to ensure that the defendant is actually afforded notice and an opportunity to defend? (See Mullane.)
- If service is deemed to be ultimately effected upon delivery in a foreign country, you have to analyze whether the Convention applies, and then you have to examine what the statutory agent actually does with it.
- Does the statutory agent dig deeper to see if translation is required? (Highly unlikely.)
- Does the agent undertake to translate the documents? (Bet against it.)
- Does the agent properly convey the documents to a foreign power? (Odds are, they don’t read this blog.)
- Does the agent even have the authority to make such a request? (Again, highly unlikely.)
In all probability, the agent simply drops it in a FedEx box and calls it good. In much of the world, that doesn’t get you where you need to be.
Past the threshold, let’s say you do successfully serve the statutory agent. Then what?
- Wait 21 days (the time indicated in a federal summons) and then simply move for a default? Hardly. Any judge worth his or her salt is going to inquire about your methodology. You’re going to have to demonstrate that the defendant is truly aware of the proceedings and is merely blowing off the obligation to appear. Mullane still looms large.
- Or let’s say the defendant actually does show up, but in a limited appearance to quash your service. What then? You could spend far more to win that battle then you would spend to simply serve the defendant directly in the first place.
Yes, you may identify a statutory agent, but that doesn’t mean the agent would be a truly effective conduit for service. In a whole bunch of situations, it still ends up being less costly to serve overseas pursuant to the Convention.
- Defense counsel will spend money to argue, so it’ll actually be cheaper for you to just hire somebody like me.
- In a PI case, outside assistance counts as an expense… your DIY effort to serve by yourself comes out of your contingency.
- You get a default judgment because the statutory agent doesn’t properly forward the summons… then what? Go overseas to enforce the judgment? Your odds on that are pretty slim.
It’s truly not so arduous to jump through some Hague hoops, especially if you have help (wink wink, nudge nudge). And jumping through those hoops can really prevent headaches down the road.
* Foreign can mean different things. There’s foreign in the “you need a passport to go there” sense, and foreign in the “across State Line Road” sense. The former is general in nature, while the latter is a term of art delineated by interstate and international boundaries. In the statutory sense, use the term of art.