Transnational Litigation Planning

Peggy and I just took a time warp to 1882.  No, really.  We are on board the schooner Grace Bailey for a bit of a break from Kansas City’s brutal July weather.  All week, we’ll be sailing, sailing, over the bounding main (whatever that is), but not accessible to handle client needs.  If you email me this week, fuggedaboutit.  You’ll get my out-of-office response for the first time in well over two years.  Our floating home is propelled by wind, off the coast of Maine, lacking internet access and a cell signal and… electricity.

A few weeks ago, I was chatting with my favorite new client, letting her know that I’d be out of pocket all this week.  “When I say ‘out of pocket,’ I mean I will be on this thing…”

Grace Bailey, flagship of Maine Windjammer Cruises.

The thought occurred to me that, fairly regularly, I will field a frantic phone call or desperately drafted email from a lawyer or paralegal facing an imminent service deadline.  Two years ago, I posted “There is no such thing as a service of process emergency” to illustrate (1) the glacial pace at which service abroad can sometimes move, and (2) the widespread safe harbor afforded by court rules.

At the federal level, Rule 4(m), along with the case law construing it in transnational cases, invokes a reasonable diligence standard, and gives ample time to litigators who need to serve offshore defendants.  Just about all state rules (sorry, Wisconsin & Michigan) offer some sort of extension or similar reasonable diligence standard– if not automatically, then by fairly pro forma motion.

The point is…

Relax.

Really– relax.  Perhaps call Margaret and the good folks at Maine Windjammer Cruises and see what they can put together for you.

As long as you’re not at Day 80 with a 350-page patent infringement claim to translate and serve in China* or some such scenario, you’re going to be okay.  I promise.  I also promise I’ll get in touch with you as soon as I dig out of the thousand emails (not an exaggeration) I expect to have waiting for me when we reach safe harbor at the weekend.**

 


* In which case, I probably can’t help you anyway, unless you’ve been trying to secure a waiver from the defense.  In any event, a few days is unlikely to upset the apple cart.

** See what I did there?  Safe harbor!  Yeah, yeah– Peggy’s always saying “if you have to explain it, it’s not funny

Wikimedia Commons

Ninety days.  That’s how long you have to serve your defendant, counsel.  If you don’t get it done, your case is dismissed.

Put another way… cross a certain line on the calendar without progress, and your claim is dead.

Ah, but wait!  The defendant is overseas, and Rule 4(m) says the 90-day deadline doesn’t apply!  I have to follow the Hague Service Convention, and that means months or years to get a proof back.

Well, that’s true (and I’m giddy that you recognize the mandatory nature of the Convention).  But that doesn’t mean you have unlimited time.  Rather than a hard deadline to serve, you’re subject to a reasonable diligence standard, which is usually interpreted to mean that you have 90 days to file a request with a foreign Central Authority.  If you don’t even try… dismissed.  [For a real world illustration, see Ted Folkman’s post on State Farm v. Amazon from last fall.  For some higher authority: Nylok Corp. v. Fastener World Inc., 396 F. 3d 805 (7th Cir., 2005).*]

Bottom line:  don’t drag your feet.

It ain’t rocket surgery.  Although it’s easy to get tripped up by intricate details here & there, getting a Hague request filed is not such an arduous task, especially when you can consult with other lawyers (hint, hint) who do this sort of thing regularly (I’m not the only one).

Now, to be sure, 4(m)’s automatic safe harbor doesn’t necessarily exist at the state level.  Many states’ procedural rules do track the FRCP directly, or with just a bit of variance (say, 60 or 120 days instead of 90).  Others have fairly liberal rules that allow extensions for good cause– and what better cause than a mandatory mechanism that requires counsel to rely on the caprices of a foreign sovereign?  Still others, especially New York, lack a codified safe harbor but reach the same result with case law.**

Only in Michigan and Wisconsin is the issue problematic… there’s no wiggle room in their respective rules.  Must be something about making beer and Buicks that warrants a hardline rule.   (Hey, Badgers and Wolverines and Spartans… I’m looking for a test case that runs into the deadline buzz saw up there.  I think I may have a good argument to carve out an exception.)

Elsewhere, rest easy– but not so easy that you’re deemed dilatory (yeah, I had to Google that one the first time I heard it).  Even though you have safe harbor, it doesn’t stay safe forever.

 


Yes, I know it’s summer. Watch this movie anyway. It’ll brighten your mood.

* Nylok was decided when 4(m) required service in 120 days.  The Rule has since been amended to 90, but the same analysis no doubt applies.

** The New York view on the matter is beautifully illustrated in Bumpus v. NYC Transit Authority.  CPLR 306-b requires service in 120 days, but Bumpus specifically acknowledges circumstances beyond the plaintiff’s control, including the delay caused by Hague strictures.  [Bumpus also specifically reminds me of A Christmas Story, so it’s incredibly easy to remember the citation.]

He can bat left-handed or right-handed.  He’s amphibious.

The lessons they tried to hammer into us as 1L’s were incredibly revealing.  They told us a lot about the professor doing the teaching, and even more about the practice.  My favorite one: behind each of these cases you’re reading is a real-life human being with a problem that required a lawyer to solve.*  I thought of that humanity when ConLaw turned to Korematsu, which made me even more pissed than my semester-long rage against the felony murder rule.  I recognized in Property class that, without the Shelley family and the case that bore their name, my African-American neighbors wouldn’t have been able to buy the house next door in our very nice, yet historically segregated, neighborhood.  When I was a 3L (an old 3L), UMKC Law hosted a symposium involving the actual litigants from famous education law cases, most notably the Tinker kids.  I happened to be standing in a hotel lobby chatting with the former superintendent of the Hazelwood School District, as he told me that he was looking forward to seeing the lead plaintiff, who he hadn’t spoken to since he’d handed her her diploma some twenty-five years earlier.  Within thirty seconds, she walked into the same lobby, and that case became more tangible than anything I’d read in law school.**

When we study Supreme Court opinions as students, it’s hard to humanize the dense text.  They can’t be real, can they?  Do we really care who owned the pelt of a fox that stumbled into somebody’s yard after the hunter shot him, or who’s liable when a toddler is negligent?

Yes.  Behind each of these cases are human beings, with real-life problems that require lawyers to solve.

That informs everything we do as lawyers, and in that light, makes it imperative that everything we do for a client has an eye toward making them whole.  Or at least, as whole as a court can make them.  So when a lawsuit is filed, we have to plan the route to actually getting a check into the client’s hands.  An eye toward enforcement of a settlement or judgment is absolutely critical.

Proper planning is essential, especially in the transnational realm, where enforcement may have to be sought overseas, without the benefit of Full Faith & Credit.  Even though the rules may say it’s perfectly fine to serve a defendant by mail, that small detail may be the only basis necessary for a foreign court to reject an enforcement action.  Likewise the extraction of evidence from an offshore third-party without the consent of the courts in the third-party’s home country.

A trial lawyer may give the most brilliant oration any jury has heard since Clarence Darrow, but it won’t mean anything to the litigant until enforcement puts the award in her hands.  That must be foremost in the lawyer’s mind from the initial consult.

It ain’t over ’til it’s over.  And that’s when the client gets a check.

 


* Hat tip to my torts professor, Nancy Levit.  She and my ConLaw professor, Doug Linder, authored two must-reads: The Happy Lawyer and The Good Lawyer.

** Yes, an awkward moment.  The superintendent showed grace and class.  His former student, not so much.

(Wm. Grimes, via Wikimedia Commons.)

Our handy-dandy “How to Serve Process in China” guide has been posted for quite some time.  Pretty straightforward stuff, given that the Chinese declarations to the Hague Service Convention eliminate Article 10’s alternative methods from the equation.  There’s only one way to get it done, and that is by filing a USM-94 with the Ministry of Justice in Beijing.  On its face, a seemingly simple undertaking… rock & roll that thing on over to the PRC.

Not so fast, though.  It’s always been a bit more complicated than that.  For starters, the Chinese bureaucracy is excruciatingly slow– historically, they’ve taken six to nine months to return a proof of service.  Lately, though, more than a year passes, and there are rumblings in the transnational litigation community that they’ve stopped executing U.S. requests altogether.  But Hague strictures remain mandatory doctrine in U.S. procedure [see Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988) for more], so you have to at least attempt it.  And unlike their counterparts in Russia, the Chinese have not expressly stated that they will not execute U.S. Hague requests.  Instead, China assesses a reciprocal fee of $95 per request– as a countermeasure to the U.S. fee charged due to Congress’ outsourcing of the Justice Department’s Central Authority function.*

But recently, two critical developments have come to light, and practitioners need to know about them:

First, the reciprocal fee can no longer be submitted by check.  The fee has to be wired to our friends in Beijing, and a wire transmittal confirmation must accompany the Hague request instead of a bank draft.

Second, they moved!  And they didn’t tell anybody for a couple of months.  The new address for China’s Hague Central Authority:

Ministry of Justice of China
International Legal Cooperation Center
No.33 PingAnLi XiDaJie
Xicheng District, Beijing,100035
People’s Republic of China

Critical information right there.  And there’s been no official notification to the Hague Conference for a website update– as of this writing, the Conference’s site still shows the old address (which is summarily walled off, my courier tells me) and it can only be updated upon official notification from Beijing.  An update is coming eventually, I’m confident, but meanwhile a good many requests could be lost in the ether.  [UPDATE:  The Hague Conference website has been updated, as of June, 2018.]


* I still happen to think the Russians are completely justified in their recalcitrance.  I also think the Chinese are completely justified in their reciprocal fee requirement.  The Convention prohibits fees, but we charge one anyway because Congress decided we didn’t need all those gubmint employees drawing a paycheck.  Now, to be sure, the Central Authority function is outsourced to a top-flight organization– and I’m a huge advocate of outsourcing where it’s reasonable.  But the United States charges foreigners a fee for something that ought to be a routine government function, provided at public expense.

(Public Domain, courtesy Jayess, via Wikimedia Commons.)

My family is populated on both sides by blue-collar workers and farmers, going way back to the Old Country (ie: various parts of northern Europe).  Part of the ethos I gained from all four of my grandparents is “fix the damned thing yourself.”

Put another way, if that doo-hickey is so complicated that you need to hire somebody to fix it for you, you don’t need it that badly.  As a result, our houses have historically been a mishmash of DIY plumbing, wiring, plastering, and various code violations.  We never hired a plumber at $100 an hour– we just fixed the damned thing ourselves.  Or we called the old man (my maternal grandfather, Clyde*) and he fixed it.  But the old man wasn’t concerned with aesthetics.  Or efficiency.

Although we saved a few bucks in the process, we wasted a whole bunch of time and created a whole bunch of ugly-but-functional physical plant.  “Does it work?” and “did you save a buck?” trumped other considerations like “is it efficient?” or “could your time have been better spent elsewhere?”

Going way back to the Old Country, my family didn’t have much choice.  Saving a buck was critical to having food on the table– and we hated having to take the government cheese, although it made better sandwiches than the expensive stuff.**

As I started practicing law, I began to recognize the wisdom in hiring someone else to do the job.  I now hire plumbers and drywall guys and painters– not because I don’t know how to do those things.  I hire them because I don’t do them well, because it takes me six times as long to produce functional-but-ugly, and because I bill more than they do, so it just makes sense.  When I vary from that practice, bad things happen.  Peggy and I needed a new kitchen faucet earlier this winter.  Simple stuff, putting in a faucet, so off to Sutherland’s we go.  This ain’t rocket science, we said.  And it’s true.  Putting the thing in took all of twenty minutes.

Getting the old one out took two hours.  Had it been done by a pro, it would have cost me about twenty minutes of billable time.  I should have adhered to the theory and outsourced it.

An interesting article popped up in my newsfeed from the Business Journal a few weeks ago.  Jim Blasingame laid out a simple three-question test to determine whether a particular task or process ought to be outsourced…

Blasingame’s Outsourcing Power Question: Must this task be done in-house? 

The answer will come from these three questions:

  1.  How much control do we lose, and can we live with it?

  2.  What impact will our decision have on customers?

  3.  How much of not using outsourcing is about ego?

Now, I’m biased here, but I think much of what makes a law firm run should be farmed out.  IT, translation, investigation & process service, appellate work, accounting & billing, coffee service.  Those processes do require that a lawyer cede some control.  But they can have a huge positive impact on a client’s checkbook– efficiency does that naturally.

Far be it for me to ever challenge anybody’s ego.  I’m a lawyer.  All of my clients are lawyers.  And although we may not all have massive, outsized, bigger-than-life egos… it’s a rebuttable presumption.  And I’ll presume that much of the hesitation lawyers feel about outsourcing is as much about ego as about fear.  (Fear?  Yes.  Fear of a malpractice suit or disbarment.)

But we get a whole bunch of functional-but-ugly if we don’t call in some help– and functional-but-ugly is usually pretty inefficient.


* Clyde was an Air Force fighter jet mechanic in the early 1950s, and joined the union at the Sioux City Stockyards the same day he met a young U.S. Senator named John F. Kennedy.  I never saw a piece of machinery he couldn’t fix, and he could tune up a Ford truck engine so well that it would sing Puccini arias– it just wouldn’t look pretty.  Regardless, I did not inherit this talent.

** For the uninitiated, the USDA gave away surplus food decades ago– the chief give-away being in the form of processed American cheese.  It benefited struggling farmers, it benefited poor and working class families who’d fallen on hard times, and it gave conservatives a huge political punching bag.  But I gotta tell you, there has never been a better grilled cheese sandwich than the ones we made with day old bread from the Metz Baking thrift store, a couple of slices of government cheese, and the surplus butter that came with it.

The Ha’Penny Bridge, across the River Liffey, Central Dublin.

This morning, Peggy and I awoke in Dublin, the capital of the Republic of Ireland.  I’m incredibly fortunate to have traveled extensively since I was a young kid (Army brats never really shake the wanderlust), but until yesterday, the Emerald Isle was an unchecked box on my list.  I’ve been waiting decades for this, and it does not disappoint.  We’re here not only to see the sights, but also to build relationships with colleagues who serve Irish defendants for my clients.  It’s a great mix of business and leisure.

Throughout Dublin, there’s an undercurrent of revolutionary spirit, even a century after the Easter Rising and the subsequent advent of the Irish Free State.  Homages to Daniel O’Connell and Michael Collins and Wolfe Tone are everywhere, much as Washington and Jefferson and Franklin abound in the District of Columbia.  Atop the political history is a layer of culture and vibrancy– and even refinement– that make Dublin truly a world-class capital, even though it governs a country far smaller and less populated than my home state of Missouri.

On the downside, Dublin is expensive, it’s touristy, it’s aged, and it’s a bit grimy.  Just like every other big city.  Hard to criticize a major metro for any of those things when it has so much else to offer.

But the most striking thing I’ve noticed about Dublin is its distinct multicultural atmosphere.  This is, as far as I can tell, among the most European of European cities, perhaps second only to Brussels.  In a few hours’ time, I heard a dozen different languages and encountered people of every hue, faith, and economic class.  It’s not a stretch to predict that, following Brexit, the Celtic Tiger will awaken once again and make Dublin the English-speaking capital of a renewed Europe.

That’ll be exciting to watch.


Aside: I highly recommend the concept of VRBO– Vacation Rental By Owner.  It’s really a cross between AirBnB and a traditional hotel.  For about the same cost as a standard double room in a Hilton or Intercontinental, we have an entire apartment in Smithfield, just steps away from the Jameson distillery (they don’t make whiskey there anymore, but that’s beside the point!).  If you have occasion to visit Ireland’s capital, check out Dublin City Rentals.  Ask for Séamus.  He’s a good fellow.  (And his name is Séamus— there is no name more Irish.)

Hedwig‘s cousin, Dave, who used to deliver mail for a grumpy old warlock in Hogsmeade.  When he retired, Dave found life in the Muggle world far less taxing. [Floyd Davidson via Wikimedia Commons.]
Last May, the Supreme Court resolved a circuit split– quite decisively– over the validity of serving a defendant by mail under Article 10(a) of the Hague Service Convention.  In Water Splash v. Menon, the Court cleared up all debate and held that, yes, Hague mail service is fine… under certain conditions.

The big condition: the destination country (ie: where the defendant is located) can’t object.  Many countries do object, so if you need to serve in China, Germany, Mexico, or Switzerland (just to name a few), sorry.  You can’t.  It isn’t valid in those countries, regardless of Water Splash.

And perhaps even more critical:  the forum court’s rules have to allow it.  If the case is being heard in a jurisdiction that views mail service as invalid,* the Hague Service Convention doesn’t magically make it okay.  There’s no fancy spell that Hermione Granger can conjure up to confer validity on mail service.  Professor Dumbledore cannot simply wave his wand and make it okay.  Harry Potter can’t just send Hedwig instead of hiring a process server.  (I’ll stop.)

So the Supremes sent the Water Splash case back down to Texas, where, as luck would have it, the state courts don’t allow mail in the first place.  After all that fighting over Article 10(a), the parties missed the far simpler argument.

Regardless, mail is a bad idea except in the rarest of cases anyway.


* My personal take:  mail isn’t a means reasonably calculated to put a defendant on notice of the claim against him/her/it (see Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950)).  Mail is almost as horrible a legal fiction as publication, when it comes down to it.  Don’t get me wrong– I still think the U.S. Postal Service is a pretty effective outfit, despite how much it is maligned by the very people who govern it (I’m looking at you, Congress).  But even though the Post Office might deliver a letter, that doesn’t reasonably ensure that the right person receives the envelope.  If you have to mail it, I suggest a belt & suspenders approach: serve by mail, in conjunction with email and Facebook.

Palace of Justice, on Plaza de Bolivar, Bogota. Kamilokardona, via Wikimedia Commons.

Most of us in the U.S. have a fairly warped image of Colombia in our heads– usually something to do with cocaine or a big emerald the size of your hand.  If it’s not Pablo Escobar in (pick a movie about the drug trade), it’s Michael Douglas sliding down a rain-soaked hillside after Kathleen Turner in Romancing the Stone.

Oh, yeah, and then there’s Shakira… whose Hips Don’t Lie.  She’s Colombia’s biggest export of late.

But there’s quite a bit more to this South American nation than drug trafficking and pop culture, and litigation involving legitimate Colombian companies is picking up lately.  For about four years now, serving process in Colombia has been subject to the strictures of the Hague Service Convention, 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.

Now, for the chase scene.  Here’s how service is done in Colombia:

Colombia in the Hague Service Convention

The Convention only entered into force for Colombia in November, 2013, and the Colombians have yet to make their declarations known to the Hague Conference.  That’s such a short time that they really don’t have much of a track record for Hague Service requests– by comparison, Mexico took a decade to really hit its stride, make its declarations known, and get the job done… but serving there is still not smooth.  For my money, you’re best served (very bad pun intended) to stick to what’s known on Colombia.  Don’t assume, just because they haven’t said anything, that everything’s jake and you can use Article 10.  It ain’t.

In my estimation, there’s really only one practical avenue to service: Article 5.

Article 5 Service

  • Translate the documents. Colombia’s declaration to Article 5(3) only says that they’d appreciate having your request completed in Spanish– there’s no real requirement indicated.  Seriously– just that they’d appreciate the form being in Spanish– although they recognize that Article 7(2) says it doesn’t have to be.  The reality is that if you don’t translate the served documents into Spanish, your request will probably be rejected, if not by the Central Authority, then by the local officials who actually execute the request.  Plus that, always keep Due Process/Natural Justice requirements in mind.
  • 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 9 months, perhaps a year, from submission to return of proof.  The judge is just going to have to accept that fact, because there is no realistic alternative.

Article 10 alternative methods

  • Article 10(a) may or may not be available– we don’t know.  But even if mail is legally valid, it’s still a bad idea.
  • Article 10(b) & 10(c) amount to nothing, because if the Colombians haven’t declared whether they’re opposed or not, they also haven’t declared who is a “competent person.”

Seriously—that’s all there is to it in Colombia, but don’t get excited.  Sure, the method is straightforward and simple, but actually making it happen could be anything but easy.  It may take an interminably long time, and in many cases, local authorities are decidedly less than motivated to act against large local entities, so service on the local factory boss may not happen at all.  Pablo Escobar may be dead, but hometown loyalty is not.

Colombia’s Central Authority information—as well as that of all the other countries in the treaty—can be found here.


You didn’t seriously think I’d do this without a picture of Shakira, did you?

Shakira looks like my wife’s cousin, the anesthesiologist.  [I actually spelled anesthesiologist on the first shot. Yes, I Googled it to make sure.]
CIA World Factbook, via Wikimedia Commons.

This blog carries a good many posts about country-specific procedures under the Hague Service Convention, and that’s completely intentional.  But until now, there hasn’t been a consolidated list of them, easy to click and access.  Here’s a handy index of “how to” posts for serving in the most prevalent countries in the Hague community:

And a trio of non-Hague countries for good measure (just because they aren’t Hague signatories doesn’t mean all is lost):

Curious about a particular country that isn’t listed here?  Check the search bar above, and if I haven’t written anything about it, by all means, tap me on the shoulder at hlb@vikinglaw.us with a suggestion.

RalphGL, via Wikimedia Commons.

Due Process isn’t solely an American idea.  It goes by other names in other countries (natural justice in Canada), but it is still a bedrock concept in most judicial systems that espouse fairness and the rule of law.  Germany, in particular, views due process rights as inherent and inviolable (this is the central tenet of its Basic Law, arising as a reaction to the horrors of Nazi tyranny).  Accordingly, when German authorities receive a Hague Service Request accompanied by a “date certain” summons, they are meticulous about ensuring that a defendant has sufficient time to retain foreign counsel to litigate.

Put another way, if a summons demands a German defendant’s appearance in a U.S. court on a specific date, the request for its service has to arrive at least two or three months in advance.  The bureaucratic wheels must turn and the defendant must be afforded time to answer.

Example:  the summons indicates a hearing date of June 1st.  The defendant should reasonably expect at least three or four weeks’ answer time,* so it has to be served by May 1st, if not earlier.  But that isn’t the date the request should arrive in Munich or Berlin or Freiburg.  Anticipate at least a two-month processing time by the German authority– preferably three (or even four).  This means that if the forum court demands the defendant’s appearance on June 1st, the request can’t arrive later than March 1st.   February 1st is better, and January 1st is better still.

An even more problematic variation:  any summons containing self-expiring language, such as a bankruptcy court summons to an adversarial proceeding.  “This summons shall expire 30 days following its issuance” is especially difficult to handle, as it leaves no latitude for the plaintiff to adhere to the mandatory nature of the Hague Service Convention.  In just about all cases, these summonses die sitting on the desk of a clerk– awaiting processing.

The only solution there is to remove all “date certain” deadlines or expiry language, if possible.  If the forum court won’t work with you, you’re in a Catch-22 situation.  Not fun.

And the only practical solution to the “date certain” dilemma:  push the thing out far enough to allow the Germans to do their job.  For Mexico, India, China, and Venezuela… give it at least a year.  No, seriously.  I mean it.

 


* NB: ordinary U.S. federal summonses carry a 21-day answer deadline (and most states between 21- and 90-day deadlines), but these are not problematic, as the required answer period relies on the date of service– not the court’s calendar.  These sorts of summonses usually sail through without any raised eyebrows.