A bit of 4L stuff here– the stuff they never mentioned in Civ Pro class* because it was so basic as to be assumed [ahem, we all know what assumptions do].  Your assigned readings today are limited (mercifully) to Fed. R. Civ. P. 12, with particular focus on 12(b).  Be prepared to discuss the rule in a sadistic Socratic “rolling boulder” scenario.

The topic: motions to dismiss, both (1) generally speaking and (2) more specifically as they relate to defendants located abroad.

To distill the issue… when a plaintiff files a lawsuit, defense counsel is duty-bound to find a way to get that thing kicked out of court in the most expeditious way possible, without fanfare, and at a minimized cost to the client(s).  In federal court, the “Magic Seven Defenses” of Rule 12(b) can be asserted by motion prior to a responsive pleading, and they usually appear in a motion to dismiss.  My favorite of the seven is 12(b)(6), affectionately known as the Rolling Stones Rule: failure to state a claim upon which relief can be granted, or, if you’re a fan of Sir Michael Jagger and his merry band of minstrels, “I can’t get no satisfaction.”  It’s my favorite because when I write blog posts, I tend to fall down very enjoyable YouTube holes with classic rock playlists.  But I digress.

A 12(b)(6) motion really doesn’t relate to many transnational issues, unfortunately.  It really boils down to whether the plaintiff has made a prima facie case that, yes judge, you’ll have something to go on here.

Really, two 12(b) defenses loom large in matters involving foreign** defendants: 

  • 12(b)(4), insufficient process; and
  • 12(b)(5), insufficient service of process.  

I delved into 12(b)(4) issues earlier this month in “Removal and the Timing of Hague Service Convention Requests, Real World,” and it touches on the subject of last week’s rant, so I won’t belabor the point here.  Essentially, the wheels fall of a case when you don’t serve the right documents– in the removal case discussed earlier, the plaintiff initiated Hague service of a state summons & complaint long after the case had been removed to federal court.  The judge wasn’t happy, because Hague service takes a while, and when you fail to include a federal summons and removal order, it unnecessarily delays the proceedings.

But 12(b)(5) is the big one in transnational practice, and it smacks plaintiffs’ attorneys pretty hard when they try to circumvent Hague doctrine.  In short, if a defendant (1) is located in a country that is party to the Hague Service Convention, and (2) you have to serve them in that country, rather than here in the U.S., the plaintiff MUST adhere to Hague strictures.  No exceptions.  See Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988).

Now, this means different things in different countries– under certain circumstances, you can use private process servers in most common law jurisdictions.  In most civil law systems, you’re limited to a specific request to a designated Central Authority.  But let’s say you desperately want to get things done within the ordinary 90 days*** and you hire a guy to serve a Chinese corporation.  Service in China takes prit’ near forever, so you cut to the chase by having your guy walk into the defendant’s office in Shanghai and drop the documents on the corporate secretary’s desk.  Allowable under Article 10(c) of the Hague Service Convention, right?

This is Boromir, from the Fellowship of the Ring. It is not Ned Stark.

Wrong.  Not only is the guy you hired now subject to criminal charges and likely to serve a lengthy stint as a guest of the Chinese penal system, you’ve also failed to recognize China’s objection to Article 10.  It simply ain’t so.

But now the defendant is aware of the claim, and has some very appealing strategies before it.  In all likelihood, the Chinese defendant will simply ignore your notice, content in the knowledge that it wasn’t properly served.  There’s not a chance in hell that an offshore court will ever enforce a default judgment, given your complete disregard of China’s exclusive sovereign authority in serving process.  But only slightly less effective a strategy: they can 12(b)(5) the hell out of your complaint.  [Yes, a rule citation is now a verb.]

The ultimate effect of a 12(b) dismissal varies, of course.  It may just mean you get to tee up the ball again and do it properly, if the judge dismisses sans prejudice, but your client probably isn’t too impressed with your performance.  Far worse, though, is dismissal with prejudice or expiration of a statute of limitation.  This is not the best outcome.

The bottom line:  the time to be wary of 12(b) motions is when you draft the complaint.  Be sure cross-border issues inform that wariness.


* Truth be told, we actually did spend an entire day on 12(b) motions in Civ Pro way back in the day.  Context was key, though– I really didn’t grasp the concept until a friend connected the dots to the Rolling Stones.

** Foreign in the “you need a passport to go there” sense.  Not in the “cross State Line Road to get there” sense.  It’s a term of art with two meanings– oddly enough, I mean the more colloquial of the two!

*** A related issue:  Rule 4(m), which governs deadlines for service.  I discuss the time issue pretty frequently, but this post delves into it specifically.  In short, 4(m)’s 90-day service deadline isn’t applicable to service on defendants outside the U.S.  This doesn’t grant unlimited time, of course.  Rather, a reasonable diligence standard applies.  As long as a plaintiff gets a request submitted to a foreign Central Authority within 90 days, it’s all okay.  If not…

This is Ned Stark


Rum Point Beach, Grand Cayman. Lhb1239 via Wikimedia Commons.
Rum Point Beach, Grand Cayman. Lhb1239 via Wikimedia Commons.

We ain’t building rockets here.  But we are building a ship of sorts, and a leaky hull means the cruise ship might not get you to that cabana sheltered rum drink you’ve been craving.  Serving process in the Cayman Islands is subject to the strictures of the Hague Service Convention, regardless of which U.S. or Canadian venue is hearing the matter– in exactly the same way as service in England and Wales.  Still an overseas territory, the United Kingdom has extended the Convention’s coverage to the Caymans.

Some background is in order, if you’re so inclined, before we cut to the chase.

Now for the nuts & bolts aspect of our show, in case you need to serve a resort or one of the thousands of corporations that have set up a figurative (ie: legal) home in the Caymans:

Article 5 Service

  • Translate the documents. The UK’s declaration to Article 5(3) requires that documents be in English.  Game over, right?  Pack up and go home?  Not so fast, counsel… make sure your individual defendant speaks English, because his U.S. Due Process rights follow him, in a sense.  Anybody sued in a U.S. court must be served in a language they understand, so if they don’t speak English, translation is still necessary.
  • Fill out a USM-94. Be very careful about ensuring that it is complete and concise, and make sure that it is signed by a court official or an attorney.  If it is not, make sure that the person signing is commissioned by the court.
  • Send to the Central Authority.
  • Sit tight. It may take a while—likely three or four months from submission to return of proof.

Article 10 alternative methods

  • Mail service is available, depending on where you are, but it’s a bad idea anyway.
  • Service via private agent (process server) is available to U.S. litigants under Article 10(c). This is absolutely criticalmake sure to have the process server instructed by a solicitor, or the attempt to serve is ineffective, as it violates the UK’s position on Article 10.

The UK’s declarations and Central Authority information—as well as those of all the other countries in the treaty—can be found here.

Bonus practice tip… if you’re defense counsel, always question the validity of service effected on your overseas client.  The plaintiff may not have done it correctly.

Sydney Opera House and Harbour Bridge. Jacques Grießmayer, via Wikimedia Commons.
Sydney Opera House and Harbour Bridge. Jacques Grießmayer*, via Wikimedia Commons.

Many of us have a certain image of Australia pressed into our minds because of Hollywood.  It’s either Crocodile Dundee or The Crocodile Hunter or… hang on, is there just something about crocodile guys with Down Under accents that make Americans part willingly with cash?  There’s so much more to this curious country continent that it’s, well, too much for Hollywood to accurately portray, even though Mel Gibson (who is American) grew up there.  For others among us, it’s the formidable structures surrounding Sydney Harbour– the Opera House, the Harbour Bridge, the dentist’s office where Dory found Nemo.  (Sorry, I couldn’t resist talking about that adorable little fish and his forgetful protector.)

Despite so many differences and curiosities and cinematic stereotypes, Australia is strikingly similar to the U.S. and Canada in terms of legal structure.  All are former British colonies, all have deep-rooted common law systems in place at the national and state/provincial level, and all have a fairly liberal attitude to serving process in civil lawsuits.  But that liberality doesn’t mean that certain procedures don’t have to be followed.

Service in Australia is governed by the Hague Service Convention, which means some background is in order before we get to the “how to” portion of our show.

  • The roadmap to the overall process—the recipe to our Secret Sauce.
  • The structure of the Convention itself is discussed in this four-part series.
  • And an absolutely critical note: the Hague Service Convention does not pertain to subpoenas.  Repeat after me—you can’t just SERVE a subpoena abroad.  In Australia, you have to file a Hague Evidence Request, governed by the Hague Evidence Convention.  Three Cardinal Rules apply—this is dramatically different from serving a summons or notice.

Now for the “how to” of serving Down Under:

Article 5 Service

  • Translate the documents? Logically, if service is effected in an English-speaking country, documents must be in English.  So, game over, right?  [Yay!  Pack up and go home!]  Not so fast, counsel… make sure your defendant speaks English, because his U.S. Due Process rights follow him to Australia.  Anybody sued in a U.S. court must be served in a language they understand, so if they don’t speak English, translation is still necessary.
  • Fill out a USM-94. Be very careful about ensuring that it is complete and concise, and make sure that it is signed by a court official or an attorney.  If it is not, make sure that the person signing is commissioned by the court.
  • Send to the appropriate Central Authority, in this case the Attorney-General.  Be sure to remit the proper fee for service, even though service fees seem to violate Article 12 of the Convention.
  • Sit tight. It may take three or four months from submission to return of proof.

Article 10 alternative methods

  • Mail service, under Article 10(a), is available.  But it’s a bad idea.  And it’s only available in Australia if it’s valid in the locality where it’s served.  Good luck determining that for sure.
  • Service via private agent (process server) seems to be available to U.S. litigants under Article 10(b).  Australia’s declarations do not articulate precisely who is and who is not authorized to serve process, and the issue has not ripened in Australia’s courts (at the state or federal level) to provide a jurisprudential conclusion.  However, the Attorney-General has indicated that foreign litigants may avail themselves of private process servers just as they did prior to Australia’s accession to the Convention in 2010.

Again, awfully straightforward stuff, much like serving U.S. documents in Canada.

Bonus practice tip… if you’re defense counsel, always question the validity of service effected on your overseas client.  The plaintiff may not have done it correctly.

** Commonwealth procedures may govern the manner in which Canadian process should be served in Australia.  The author is not admitted to practice in any non-U.S. jurisdiction, so although the information presented here may be accurate, Hague channels may not be the only way to properly serve in Canadian causes of action.

Singapore's Merlion, Bjørn Christian Tørrissen via Wikimedia Commons
Singapore’s Merlion, Bjørn Christian Tørrissen via Wikimedia Commons

At the far south end of the Malay Peninsula lies a tiny city state that occasionally makes the news for seemingly odd reasons.  Caning and imprisonment as a punishment for vandalism.  A ban on chewing gum (seriously).  A ban on spitting (well, let’s face it… it’s rude).  But rather than a center of arguably harsh rules on public behavior, the nation is more rightfully known as an economic juggernaut.  Anchoring the SIJORI Growth Triangle, Singapore’s manufacturing sector is huge, but financial services take an even bigger share of GDP.  North America’s commercial interconnection with Singapore is massive, and this inevitably leads to a fair amount of litigation against Singaporean companies and nationals by plaintiffs on this side of the Pacific.

Singapore is not party to the Hague Service Convention (HSC), although it has acceded to the Hague Evidence* and Child Abduction Conventions (it is also party to the Choice of Court Convention, which is not effective in either the U.S. or Canada).  Notwithstanding its absence from the HSC, serving documents in Singapore is relatively straightforward, owing to its status as a former British colony and current member of the Commonwealth of Nations.  It maintains a healthy common law system, so it should not be unfamiliar to American or Canadian** lawyers.

Service of U.S. process can be effected (1) by mail, if permissible under forum court rules, (2) by Letter Rogatory, or (3) via local counsel.  In all cases, enforcement of a judgment must be kept in mind– and it is in that light that I recommend Door #3 for just about all cases.  Addressing each in turn:

  1. Mail:  Most U.S. courts, where service is allowable by mail to begin with, allow mail service on foreign defendants only where it is not prohibited by the rules of the foreign jurisdiction.  Singapore’s Rules of Court do not specifically prohibit mail service, but they really don’t contemplate the issue.  Order 10, Rule 1(1) states that “a writ must be served personally on each defendant” (emphasis added), which opens up the question to far more argument than mail service ostensibly prevents (in short, does mail ever constitute personal service?).  I recommend against mail service except in very limited circumstances anyway– even if it stands on solid legal ground, it’s a bad idea from a factual perspective.  Moreover, if you ever seek to enforce your judgment in Singapore (or anywhere else overseas), the foreign court will undoubtedly question why you didn’t adhere strictly to Order 10.
  2. Letter Rogatory:  an official request from the forum court for judicial assistance from a Singaporean court.  Costly and time consuming, this instrument really isn’t all it’s cracked up to be (see here for elaboration on what it is).  For starters, budget a $2,275 fee to the Department of State just to convey the thing.  Then anticipate several months of waiting before a response comes back through diplomatic channels.  A Letter Rogatory simply isn’t necessary to ensure that service is effected according to Singaporean law.
  3. Local Counsel:  Potentially costly, but no more so than a Letter Rogatory, and certainly on a more solid legal footing than mail.  A Singapore solicitor can ensure that local rules are followed, thus ensuring that the manner of service will not give a court cause to reject an enforcement action later.  Just make sure that the proof of service demonstrates compliance with both bodies of law (Singapore and the forum court).

Some non-Hague jurisdictions present significant problems with service.  Singapore is definitely not one of them— indeed, it is among the simplest places to serve, either within or outside the Hague community.

* Recall that subpoenas are not viewed as “service” documents in most of the world.  Compulsion of evidence in Singapore for use in U.S. courts must be sought via a Hague Evidence Request.

** Commonwealth procedures may govern the manner in which Canadian process should be served in Singapore.  The author is not admitted to practice in any non-U.S. jurisdiction, so although the information presented here may be accurate, it should not be presumed to be applicable in Canadian causes of action.

South Harbor, Helsinki. Pöllö via Wikimedia Commons.
South Harbor, Helsinki. Pöllö via Wikimedia Commons.

I say all the time that we ain’t building rockets here.  But we are communicating.  And if your phone doesn’t work correctly, you have problems.  The sturdiest cellphone I ever owned was a decade ago– in the pre-smartphone days.  It was a Nokia 6610 candy bar– manufactured in China, I’m sure, but designed in Finland.  You could throw the thing off a five-story building onto solid concrete, walk downstairs, and call your mom.  The thing was a beast.  Had Nokia kept up with the smartphone revolution, I’d still be using their stuff today.*

I digress.

Serving process in Finland is subject to the strictures of the Hague Service Convention.  This holds true regardless of which U.S. or Canadian venue is hearing the matter.  Some background is in order, if you’re so inclined, before we cut to the chase.

Here’s how it’s done in Finland:

Article 5 Service

  • Translate the documents… maybe.  Finland’s declaration to Article 5(3) does not require translation of service documents, but that doesn’t make things easy.  They also allow individual recipients to reject untranslated service, which can really throw a Mjölnir-sized monkey wrench into the works.  Companies that do business outside Finland, however, are deemed competent in English.
  • Fill out a USM-94. Be very careful about ensuring that it is complete and concise, and make sure that it is signed by a court official or an attorney.  If it is not, make sure that the person signing is commissioned by the court.
  • Send to the appropriate Central Authority, in Finland’s case the Ministry of Justice.
  • Sit tight. It may take a while—likely two or three months from submission to return of proof.

Article 10 alternative methods

  • Mail service is available, depending on where you are, but it’s a bad idea anyway. If you do select this route, pay particular attention to the venue court’s rules about how mail service is initiated—in federal cases, adhere strictly to FRCP 4(f)(2)(C)(ii).
  • Finland also allows direct access to “judicial officers or other competent persons” under Article 10(b), but they make no definitive statement in their declarations about who those people are.  Moreover, no authority is Finland is obliged to assist foreign litigants, so it may be a nonstarter.  And in any event, the Finnish Central Authority is pretty quick.

Seriously—that’s all there is to it in Finland.  Its declarations and Central Authority information—as well as those of all the other countries in the treaty—can be found here.

And remember… if you’re defense counsel, always question the validity of service effected on your overseas client, because the plaintiff may not have done it correctly.  That actually happened once, with a defendant in Norway, and her lawyers were smart enough to fight the issue.  The Washington Court of Appeals erroneously thought going outside the Central Authority was okay, but their Supreme Court saw the matter differently.

The 6610, a beast if ever there was one. Really.
The 6610, a beast if ever there was one. Really.

* Worth noting is that Microsoft acquired Nokia a couple of years ago and the company still exists as MS’ Finnish subsidiary.  When you’re suing them, you still have to serve properly, and serving the U.S. parent company will be just as ineffective as serving a U.S. sub of a foreign parent.

And lest I be remiss, I have to link the silliest reference to Finland in the known universe: Monty Python’s homage to the wintry land.

Yale Law Library... where the rules live. PENG Yanan via Wikimedia Commons.
Yale Law Library… where the rules live.  PENG Yanan via Wikimedia Commons.

An interesting and seemingly Hague-related case came to light this week, and it came specifically to my attention thanks to the NorCal IP Blog by the guys at Orrick Herrington.*   As it turns out, it isn’t a Hague case after all.  It’s a straight-up civil procedure question.

The case, in a nutshell:  Japanese company, Godo Kaisha IP Bridge 1 (Godo for our purposes here, but the judge calls them IPB), sues American company Xilinx  (ZY-links?) for patent infringement in E.D. Tex., the current hotbed of IP litigation.

Xilinx, as luck would have it, sued Godo for patent infringement in N.D. Cal.– the mother ship of IP litigation– the very next day, and asked the judge for leave to serve Godo via Godo’s U.S. counsel.  Motion granted.

The judge’s order, as you can see here, explores the interplay of Rule 4(f)(3) and the Hague Service Convention, but it misses a critical point in the analysis:  the Convention applies “where there is occasion to transmit a judicial or extrajudicial document for service abroad.”  It’s right there in Article 1.

If you can serve a foreign defendant in the U.S. (whether via a subsidiary or via its U.S. counsel), the Hague Service Convention is inapplicable.  Utterly irrelevant.  Moot.

But even more critical… so is Rule 4(f).**  It only applies to service at a place outside the U.S., not here at home.  If service is to be effective via a foreigner’s U.S. counsel, it must be pursuant to Rule 4(h)(1)(b)… that is, “by delivering a copy of the summons and of the complaint to (…) any other agent authorized by appointment or by law to receive service of process.”

The salient question, which I avoid exploring here, is whether U.S. counsel can be appointed by the judge hearing the case.  Ultimately, this shouldn’t even have been a Hague question– it should have been an analysis of Rule 4, its overseas procedures excepted.  Had the judge denied the motion, then plaintiff’s counsel would have been forced to serve in Japan, and only then would Hague procedures be implicated.

[Don’t even get me started on why everybody ought to just waive in the first place.  Sure, you wouldn’t have to hire me, but still…]

Update, 4/13/17:  Ted Folkman posted on a similar opinion out of the same district on this morning— the latest in a line of cases he’s explored over the years.  As Ted points out in the comments below, only one case, out of E.D. Mich., has gotten it right, but he squares the circle for the others quite nicely in his thoughts on the Michigan opinion.  I commend those thoughts to you.

* Hat tip to Daniel Justice (could there be a better surname for a lawyer?) and George Kanabe.

** Rule 4(f), in its entirety [applicable to corporations thanks to 4(h)(2)]:

(f) Serving an Individual in a Foreign Country. Unless federal law provides otherwise, an individual—other than a minor, an incompetent person, or a person whose waiver has been filed—may be served at a place not within any judicial district of the United States:

(1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;

(2) if there is no internationally agreed means, or if an international agreement allows but does not specify other means, by a method that is reasonably calculated to give notice:

(A) as prescribed by the foreign country’s law for service in that country in an action in its courts of general jurisdiction;

(B) as the foreign authority directs in response to a letter rogatory or letter of request; or

(C) unless prohibited by the foreign country’s law, by:

(i) delivering a copy of the summons and of the complaint to the individual personally; or

(ii) using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt; or

(3) by other means not prohibited by international agreement, as the court orders.

Iowa State House, Stephen Matthew Milligan, via Wikimedia Commons.
Iowa State House, Stephen Matthew Milligan, via Wikimedia Commons.

Two weeks ago, I posted that you can’t simply serve a U.S. subsidiary of a foreign company & get the parent on the hook in a lawsuit.  For such an idea to work, your state’s public policy has to disregard the corporate veil.  Only one state has done so– and under very limited circumstances.  [That was Illinois, where they did it by statute, and where the idea only pertains to Illinois subsidiaries.  That’s how we got Schlunk, the seminal case in Hague Service Convention jurisprudence.  No other state does it.]

Another misconception seems to pop up from time to time: the thought that you can serve a foreign* corporation by delivery to the Secretary of State wherever the case is being heard.  Sorry, but it just ain’t so.  When you do serve via the SoS, ask yourself, “what do they do with it?”

They don’t just stick it in a drawer and affirm that notice has been given.  They actually take steps to deliver the summons to the defendant.  Due Process must be observed, after all.  In that light, regardless of the venue, service must be effected via a means reasonably calculated to put the defendant on notice of a claim against him.**  The idea is to make sure that he (1) knows about it and (2) has an opportunity to refute the claims.  A summons essentially says “show up and defend this thing or we’ll take your toys away from you.”

If a defendant corporation is domiciled in another U.S. jurisdiction– that is, it’s foreign in the “across State Line Road” sense– your SoS will probably just drop a notice in the mail to the corporation’s registered agent in the other state.  Usually, when a company gets a notice from a state agency, somebody is going to read it, so it’s reasonable to deem the defendant on notice and given an opportunity to defend.

But what if the defendant is foreign in the “you need a passport to go there” sense?

The SoS staff aren’t likely to forward it properly, because it’s not their duty to ensure compliance with the various doctrines of international law that govern how you undertake the procedure.

  • They’re going to forward the documents by mail, even though mail service may be prohibited, and even though it probably can’t be substantiated.
  • They aren’t going to hire a process server or a judicial officer in the foreign country.
  • They aren’t going to bear the cost of translating the documents.
  • They aren’t going to coordinate with the Clerk of Court (federal) to ensure compliance with FRCP 4(f)(2)(C)(ii).

It simply doesn’t work the way you might think it does.  [Although, if the foreign company has designated an agent for service, the SoS can certainly serve at the designated address.]

Allow me to illustrate.  Imagine you’re suing Hyundai, the Korean automaker, in federal court in the Middle District of Iowa.***  Hyundai has no registered agent in the Hawkeye State, and it obviously isn’t headquartered there, so you send the summons & complaint to the SoS in Des Moines.

What comes next?  The SoS simply jets the summons off to Hyundai’s HQ in Seoul, and you’re gleeful that it was so easy to put the defendant on notice.  Three months later, you’ve gotten no response from Hyundai, so you move for a default judgment.  (Cue ominous theme music, ’cause something bad’s about to happen.)

The judge knows that, by its own terms, the Hague Service Convention applies whenever there is “occasion to transmit” documents to another member country for service, and this is definitely such an occasion.  She also happens to read my blog, so she knows a few other things.

Korea is a member of the Convention, so certain procedures must be followed.

  • Korea objects to Article 10, so service by mail is out, and you can’t just hire a guy in Seoul to serve for you.
  • Korea requires all documents to be translated into… Korean.

But did the SoS staff know any of that?  Maybe, maybe not.  If they knew, did they tell you?  Nope.  It’s not their job to make sure you know the applicable law.

So the judge tells you to back up the truck and do it the right way– learn how to fill out a USM-94, or perhaps consult with another lawyer who lives & breathes Hague stuff in his/her daily practice (hint hint, nudge nudge).  Either way, the judge is not amused that you tried to short circuit the process.

Default motion denied.  Oh, and you whiffed Rule 4(m), too, so you’re dismissed sua sponte.

How happy is your client?

*  A bit of lexical housekeeping here…  foreign is a term of art, meaning “from outside this jurisdiction.”  California is foreign to Missouri, Quebec is foreign to Missouri, and China is foreign to Missouri.  Context is key.

**  Magic words!  See Mullane, 1950 for the source of the magic.  It’s been codified in FRCP 4(f)(1) and 4(f)(2).

*** Completely fictional, that district.  Likewise, the judge.  (It’s a hypo, for Pete’s sake.)


My BusOrg professor in law school was a bigtime Boston Red Sox fan.  We didn’t hold it against him at the University of Missouri-Kansas City, because we sort of knew the pain Sox fans had felt for so long (they went 86 years between World Series titles; the Royals only went thirty, but still).  Big Tony* was an entertaining fellow with a biting wit, and he drove home some very important points about how to handle business law.  The most important (read: basic) lesson he taught us applies just as much to litigation as to corporate governance… get the company name right.

Name the correct foreign entity
Lots of juniors in the entertainment world

My variation goes something like this:  say you’re suing a guy named Harry Connick.  Which one?  Senior or junior?  It will matter, I promise you, because the senior is the former (longtime) D.A. in New Orleans, and he knows litigation, pal.  Hoo boy, he knows how to litigate.  Junior didn’t go as far.  He’s just a saloon piano player nobody’s ever heard of, but thanks to the old man, he knows some really top flight lawyers who also know how to litigate.  If you tag the wrong one in the lawsuit, you have a tough road ahead of you.

If you’re suing PwC because they goofed on your taxes, you’re not going to sue Price Water House, Inc.  If you do it correctly, you’re going to sue Pricewaterhouse Coopers LLP.  That’s the correct entity.  Price Water House, Inc. does not exist, so your suit is going nowhere.

Okay, sure, PwC is going to enter the suit anyway—and score some points with the judge in the process by not making  her deal with a silly issue—but, bottom line, make sure the right name is on the other side of the V.

If your defendant is a foreign entity, it’s even more critical that you properly name it in the suit.**

Don’t call it a Aktiengesellschaft (AG) when it’s really a Gesellschaft mit beschränkter Haftung (GmbH).  In German, that’s the difference between a corporation (Inc./Corp.) and a Limited Liability Company (LLC).  The distinction applies in Germany, Austria, and eastern Switzerland.

Don’t call it a Société anonyme (S.A.) when you really mean a Société à responsabilité limitée (SàRL).  Same analogy, but in French.  Applies in France, Belgium, western Switzerland…

Why does this matter, if the defendant is going to approach the situation like Pricewaterhouse and appear despite your scew-up?

Because service of process abroad won’t be effected if you misname the defendant.  Here in the U.S. (and maybe Canada), they aren’t going to quibble if you get it close.  Outside the U.S., you’ll have a problem if you name an entity defendant that does not exist—the government authority that serves documents won’t even process your request.  And yes, they do check.  You’ll get a tersely worded note that says “that defendant is not in our registry.”

In short, do not pass Go, do not collect $200, counsel.  You’re back to square one.  And you’re out all of the time & money you spent in the attempt.  So, properly investigate your defendant ahead of time—even better, thoroughly investigate potential business partners during due diligence.***

Sox* Gratuitous Red Sox logo just for Tony Luppino, whose tutelage in business law made corporate structures a whole lot less inscrutable.

** I have to look them up all the time.  Check out this really top-flight Wiki on on various entity types around the world.

*** If you need a good source, I’m happy to put you in touch with my Bloomberg guy.  They’ve got a pretty top-flight legal research program, augmented by all the business intel you can digest.


I’m not a fan of arbitration, as a general rule—especially in consumer contracts.*  That said, arbitration is far superior to litigation in many situations, and for many reasons.

In tort, not a good idea.  Certainly not an appropriate venue for a family law dispute. And consumer contracts?  Just… no.  Only the vendor benefits.*  But arbitration is definitely worth considering in global business and investment.  All of the parties involved have the benefit of counsel—or at least, they should avail themselves of counsel—and they are sophisticated enough to recognize what it means to be bound to a decision.  Or at least, they should be…

Some benefits of international arbitration:

  • It’s far cheaper than litigating a dispute.

    Judge Haller has zero tolerance for your crap.
    The Honorable Chamberlain Haller has zero tolerance for your crap, Mr. Gambini.

In arbitration, the parties pick the rule book. Good luck convincing Judge Haller that he should yield to your client’s preferences as to how things get done in the hearing.

  • Decisions are made by specialized neutrals who are selected by the parties. Honestly, if I’m litigating a contract dispute over drilling rights in the North Sea, I would much rather have the case decided by a specialist than a former prosecutor who got appointed to the bench because he was the governor’s roommate in law school.
  • Depending on the arbitral body, the process looks more like the inquisitorial system used by civil law jurisdictions. This makes enforcement far more likely in those civil law jurisdictions.
  • The process garners more respect from laypersons in civil law jurisdictions, for the same reason.  Consequence: they’re more willing to abide by the decision.
  • Two variations on that… losing parties can be more confident that they didn’t get hometowned, and are more likely to pay on the judgment because punitives are a rarity (remember that parties choose the rulebook!).
  • Sensible evidence production is more likely, again for the same reason. That is, when the arbitrator demands evidence, the parties can’t refuse without seriously harming their chances.  They also won’t just throw everything into a box for the other side to sort out.
  • Arbitral awards are more acceptable to foreign courts if the losing party doesn’t pay up.  Awards won in U.S. litigation… much harder to enforce.  [This is the big one…  it’s critical that you get enforcement, lest the whole ballgame be blown.]
  • We have a treaty basis for cajoling those countries who won’t enforce arbitral awards. The New York Convention on Arbitral Awards (1958) has been acceded to by just about every country we trade with.

Now, to be sure, it isn’t always the way to go.  Dan Harris argues, quite lucidly and from much experience, that arbitration clauses are a waste of time in Chinese contracts.  Despite China’s accession to the New York Arbitration Convention , they don’t follow through on their obligations to enforce awards.  Accordingly, Dan continues, the best thing you can do in China is choose (1) Chinese courts as the venue, (2) Chinese law as the controlling doctrine, and (3) Chinese as the operative language of the contract.

But China is one country.  One.  And, while it’s a biggie, it still isn’t our biggest export market by a long shot.  That distinction still lies with those polite, friendly folks to our north.  The home of Wayne Gretzky, SCTV, and Diana Krall (with whom I am in love, much to Peggy’s amusement and unbeknownst to Elvis Costello—or Diana Krall for that matter).  But I digress.  Mexico buys twice as much stuff from us than the Chinese do.  If you consider the European Union a single market (let’s not argue about that here, m’kay?), they beat China, too.  The only reason China tops the list for total trade: we buy four times what they buy from us.

Point is, our biggest trading partners—China excepted—believe in arbitration, and their courts are far more likely to compel a losing party to pay on an arbitral award than on a verdict.


* Forced arbitration clauses in consumer contracts are sinister.  Evil.  Downright rude.  While I can’t say that AT&T Mobility v. Concepcion was completely wrong, I do think that five of the the Nine Wise Souls dropped the ball.  Setting aside all the arguments about Congress occupying the field in interstate commerce with the FAA, they should have given more weight to the policy argument that goes like this:  class actions benefit society not because they make plaintiffs whole, but because they make defendants think twice about behaving badly.  It makes them think twice because, (1) punitive damages are rare, and (2) the publicity of a class action is harmful to their profitability.  But arbitration is usually a private affair, and damages are limited.  Maltreatment of a customer by a cellphone provider, cable company, airline, (insert player from random industry here)… used to be a costly thing.  Not only did the vendor have to write a large check, their clientele knew about it and judged them accordingly.  Now?  Individual claims only.  All hush-hush.  A massive waste of time for the aggrieved party, so they just suck it up and deal with it.

Not only is this not beneficial to the public, it’s harmful and it’s shameful.


You’ve served the complaint on all of your defendants, they’ve entered their appearances, and everybody is girded up for battle.  Discovery commences.  In one of your depositions, you learn that one of the defendants was somehow selling a knock-off of your client’s product through a German distributor, and you are convinced that somewhere in that company’s vast filing system lies the smoking gun.  The big enchilada  streuselkuchen.  The damning piece of documentary evidence that will vindicate your client’s rights and bring the defense to the light of truth and human understanding.

[The author intones, as if in a Gregorian chant…]

For you, glorious and gentle counselor, have preached the gospel of truth.  You have spoken the word! Echoing the wisdom of Moses, Hammurabi, Augustine… James Brown.

[You’re getting a bit of a big head, don’t you think?]

You implore your fellow pilgrims to create an epistle of truth for the ages!

Alrighty, then.  You tell your paralegal to draft a subpoena, and you tell her to run a Google search to find out how to serve that thing on the German company at its office in Munich.  She puts together the subpoena in about twenty minutes, and comes back to you with the name of a guy who says he handles process service in other countries.

Outstanding, you think, and off to the mission field you go.  You plunk down $1,000 to have the subpoena translated into German, and send another $1,000 to Joe Bob the Process Server to pull the paperwork together, and then you wait.

Joe Bob is not a lawyer.
Joe Bob is not a lawyer.

Three months later, you get a nasty-gram from the the Justice Ministry in Berlin, telling you that “NEIN, MEIN HERR/MEINE FRAU.  DAS IST UNMÖGLICH.”  No, sir/madam.  That is impossible.

Where did the wheels fall off?

  • Well, first, you let a process server [a guy without a without a law license] tell you that you had the right procedure in mind [yes, you should give your professional liability carrier a heads-up].
  • What Joe Bob didn’t know is that the Hague Service Convention doesn’t magically confer coercive effect on a subpoena (they’re covered by the Hague Evidence Convention), and even if it did, Joe Bob isn’t authorized to sign Hague Service Requests because Joe Bob is not a lawyer.
  • Second, even if the Service Convention were right, and even if you signed the thing instead of Bob, the Präsidentin des Oberlandesgerichts München (the State Court President in Munich) is the Central Authority in Bavaria.  Joe Bob erroneously sent the thing to Berlin.
  •  Third, you can’t just “serve” a subpoena.  It doesn’t work that way.  If you hold out any hope that the German third-party will comply, you have to send a Hague Evidence Request through the appropriate channels, and ask a German court in the right state* to compel production.
  • Fourth, the Germans have blocking statutes that may prevent compulsion, and they’ve indicated that they rather like Article 23 of the Evidence Convention.  Sorry, that’s just the way it is.  But there are certain exceptions to the statutes and to the Article 23 declaration; your request has to be written in just the right way.
  • Oh, and you didn’t say “bitte.”  The Germans have a very rigid view of decorum.  Where is your sense of propriety?  (I kid.  Of course, you said bitte.  You just didn’t say it to the right person in the right way.)

So, let’s tee this up again, and try a more subtle approach to getting the smoking gun you so gleefully seek.

Here are the THREE CARDINAL RULES for Hague Evidence Requests:

  1. Take the words “any and all”, and eliminate them from your vocabulary.  Seriously.  They are the hallmark of good old ‘Murican discovery, and the Germans hate that.  So do the French, the Chinese, the Brits, the Canadians (yes, the Canadians hate our broad discovery practices, of all people!).  You must be surgically specific in identifying what you seek.
  2. Articulate precisely how that evidence is going to be used at trial.  Not that you think it may lead to other evidence or that you suspect that it might be relevant.  You have to say you need it to impeach a witness’ expected testimony or that it is a critical component of your trial theory…
  3. Hire local counsel.  At the front end, they’ll help us/you draft the request (see #1 and #2 above) and at the back end, they will appear for you in the foreign court.

Give me a shout if any of this doesn’t make sense.  Enough said.

* Much like the U.S., Germany is a federal system, where some areas of the law are controlled at the national level, others at the state (“Land“) level.