Transnational Litigation Planning

Croke’s Reports, 1661. On display in the Library of the Supreme Court of the United Kingdom.

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts“, I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point Three…

Choose a governing law.

If you don’t designate what body of law governs your dispute, you leave everything up to the default setting of the court hearing the case.  I wrote last week about the need to choose a venue, but choosing a governing body of law is just as critical.  Its necessity ought to be obvious, but this important factor is frequently omitted, perhaps by design, perhaps by simple forgetfulness.  Just get it in there, because certainty about unfriendly law is better than uncertainty about ostensibly friendly law.  Like the choice of a venue, this is a classic Conflict of Laws issue, and courts hate to wade into those questions if they don’t have to.  This might be the single most esoteric and arbitrary– yet wide-ranging and impactful–  field of law, SO TAKE IT OFF THE TABLE.  Make a decision about what law applies.  But think about a few things as you do…

  1. Be certain the selected law has sufficient applicability to the facts & parties involved. If you’re in California state court to adjudicate a dispute between an California plaintiff and an Illinois defendant, there’s probably not a good reason to choose Texas law, unless Texas is the nexus of the contract.  Likewise, choosing Chinese law to govern a dispute adjudicated by a U.S. court borders on silliness (see Dan Harris’ thoughts on this issue, in tandem with silly choice of court clauses).
  2. The Convention on the International Sale of Goods (CISG) is the default setting for international trade contracts.  Specifically disclaim the CISG if you don’t want it applied.  
  3. Don’t assume the CISG is bad just because you aren’t familiar with it.  Especially if you’ve chosen a foreign venue, the CISG could just be the most beneficial law for your client’s situation.  Take an hour to bone up on the thing– I guarantee that the offshore party’s counsel knows it.
  4. To parallel my suggestion last week, don’t just assume that the other (foreign) party’s hometown law is bad.  The foreign country’s law may align more closely with your client’s needs, and choosing it may go a long way to preventing a breach altogether.
  5. Above all, for crying out loud, make the venue and governing law correspond to the language!  It’s highly impractical to expect a Minnesota court to adjudicate a Swedish-language contract under German law.  Ponder that for just a moment– such an expectation insults Minnesota because you don’t like Minnesota law or the language of Shakespeare, it insults Sweden because you don’t believe in its courts or law, and it insults Germany because you can’t be bothered to adjudicate there in its language.

There is no one-size-fits-all approach to designing a solid agreement– every contract is different, even if the same parties are signing the latest agreement in a decades-long relationship.

 


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.  

 

Supreme People’s Court, Beijing (Reuters)

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts,“ I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point Two…

Include a choice of venue.

Even if that venue is overseas (and in many cases, it’s actually smarter to choose a foreign venue than a U.S. venue), agreeing on the appropriate place for a suit prevents a number of headaches—and can even prevent a dispute from arising in the first place.  Globally, this is referred to as a “choice of court clause” but has similar binding effect in most industrialized countries.

If no venue is selected, then any venue might end up taking up a dispute, and you don’t want that.  Don’t simply assume that the locus of performance will be the proper venue for a dispute.  Why not the locus of execution?  Why not the plaintiff’s hometown?  Why not the defendant’s hometown?  Why not the locus of the widget’s manufacture or export or import?

This is a classic Conflict of Laws issue, and courts hate to wade into those questions if they don’t have to.  This might be the single most esoteric and arbitrary– yet wide-ranging and impactful–  field of law, SO TAKE IT OFF THE TABLE.  Make a decision about where the parties want disputes to be heard.  But think about a few things as you do…

  1. Don’t be too certain that your hometown is the best place to go.  A rural Kansas state court may not have sufficient expertise to adjudicate an international trade case.  Sure, you’re more likely to have a sympathetic ear in a local judge & jury, but how competent are those folks to determine wrongdoing if everything about the contract (execution, performance, payment, etc.) takes place in Spain?
  2. Don’t be too certain that the other fellow’s hometown isn’t the best place to go.  In some cases, particularly in China (as highlighted frequently by Dan Harris’ excellent China Law Blog), choosing the other guy’s home venue can be a nice hedge against his breaching the contract!  If you have the guts to challenge him in his own backyard, he’ll think twice about trying to welch on you.  Sure, you may not win there, but Sun Tzu would tell you that the greater victory is to not have to fight in the first place.
  3. Be certain the selected venue has sufficient connection to the facts & parties involved.  Sure, the Delaware Chancery Court might have the most expertise applicable to a particular set of facts & law, but if there’s no Delaware party involved in the contract, why would it even want to deal with it?  Courts don’t take up cases just because someone asks them to.  
  4. Don’t be so sure the venue that seems smartest actually is the smartest.  Again, I shamelessly extrapolate Dan Harris’ thoughts on choosing Hong Kong as a litigation venue.  Yes, you know the rules and you know the law in a particular court.  You know that it’s a nice, neutral setting, so neither party is going to get hometowned (sp?).  You know it has a reputation for fairness and expertise in the particular area of law.  You know both sides are familiar with its unwritten rules and you know that language isn’t a problematic issue.  But how are you going to enforce a judgment from that court unless the other party has assets under its control?  It could be a massive waste of everybody’s time to litigate– and res judicata could destroy your chances of ever collecting.
  5. Ponder an arbitration clause. It serves the same purpose as a choice of court clause, and often designates specific rules and the governing law.  Thanks to the New York Arbitration Convention, arbitral awards are far easier to enforce abroad than litigated judgments and, despite their political unpopularity, provide significant cost savings in dispute resolution.  (Dan would also tell you that Chinese courts aren’t keen on enforcing arbitral awards, so don’t do it unadvisedly. If you’re drafting a China contract, call Dan.  Just do it.)  Sure, they’re de rigeur in consumer contracts, but they may not be the best way to go in commercial contracts– especially across borders.  Still, if the circumstances are right, arbitration could be a bright idea.
  6. Recognize that the choice of venue clause can be an outstanding negotiating concession.  If you’ve concluded that litigating in the other fellow’s back yard wouldn’t be a tragedy, give that fellow what he wants in exchange for something you truly need.
  7. Don’t get cute.  See Dan Harris’ “… Too Clever by Half” post.
  8. Above all, for crying out loud, make the venue and governing law correspond to the language!  It’s awfully impractical to expect a Minnesota court to adjudicate a Spanish contract under German law.  Ponder that for just a moment– it insults Minnesota because you don’t believe in English or Minnesota law, in insults Spain (or Mexico or Argentina, etc.) because you don’t believe in its courts or law, and it insults Germany because you can’t be bothered to adjudicate there in its language.

Seriously.  This stuff is crucial, and there is no standard form to fill out– every contract is different, even if the same parties are signing the latest agreement in a decades-long relationship.


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.  

Taos County, New Mexico. Sheriff Montoya discusses business with a process server, 1941. NARA photo.

The vast majority of cases I work on are a lot like the material we read in law school.  My Torts professor told us on more than one occasion that “there are real people behind every one of these cases.”  My cases are no different.

She also told us that they were in these casebooks because some lawyer goofed.”  Or words to that effect, anyway.  I took both thoughts to heart, and they have guided my immersion in the profession ever since.* 

Last year, when I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts,“ I had those real people– and preventing lawyerly goof-ups– in mind.  But lately, I’ve realized that some elaboration is necessary.  Why those five things matter ought to be apparent.  But some nuance is necessary, so I offer a five-part series that elaborates on each point, more for than benefit of lawyers than for the business owners who want to venture abroad.  

Those five things, in turn…

  1. Designate an agent for service in the United States.
  2. Include a choice of venue.
  3. Choose a governing law.
  4. Determine the operative language.
  5. Secure a guarantee of judgment debt.

If you choose not to decide, you still have made a choice.

— Neal Peart, 1979

To elaborate on Point One…

Designate an agent for service in the United States.

All U.S. entities must designate an agent for service when they incorporate, organize, or register with their respective Secretary of State.  Foreign (that is, non-U.S.) entities usually bear no such responsibility.  If a lawsuit against one of those entities becomes necessary, you probably won’t be able to just hire a process server in the foreign country. You will need someone like me to handle it for you or, worse, you’ll spend hours just researching how it’s done (and then bill you for that time).  With a U.S. agent, regular U.S. practice is perfectly fine.  (And to go one better, have the contract stipulate that the agent can be served by email!)

When you hire me, I’m going to charge you at least a few hundred bucks per defendant.  And although your client is going to save money if you hire me instead of doing it yourself (I elaborate here), I’m not cheap, and neither are my competitors if you’re doing it right.

Now, who should that agent for service be?  Well, that’s a tough one, especially if the foreign party isn’t registered with a particular Secretary of State (very few are– and don’t just assume you can serve a Secretary of State by default, because the Secretary is usually just a link in a chain of service, and Hague restrictions still must be observed).  The foreign party may have counsel, they may have a U.S. subsidiary, or they may have some other U.S. presence that can be specifically designated and authorized to accept service on their behalf.  Just be careful about who is selected.  Some pitfalls:

  • Designated counsel:  imagine that in the contract, the foreign party has designated its Boston attorneys– Crane, Poole, and Schmidt— to accept service on its behalf.  A year into the contract, the foreign party fires the firm because the principal partner has mad cow disease.  Then what?  
  • Designated U.S. subsidiary:  imagine a similar scenario, but instead of firing its lawyers, the foreign party dissolves its subsidiary or moves it offshore.  Then what?
  • Designated U.S. presence:  perhaps the foreign party has a storefront location in Peoria, or a satellite office in Kansas City, and they designate that U.S. presence as their agent for service.  Maybe the storefront is destroyed by fire, or maybe the KC office can’t hold onto its staff because the labor market is so vibrant.  Then what?

Your best course of action might be an established agency in the capital of the state that you expect to be the locus of performance.  A simple Google search pulls up dozens of agents who can be hired for fifty bucks a year.  Prepay the agent for the life of the contract, et voilà.  When a dispute arises, you don’t have to pay me a thousand dollars (and pay a translator six thousand dollars!) just to get the defendant into court.

It’ll cost you $37.00 in courier fees to overnight the summons & complaint to an agency in Dover.


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much, but I definitely learned a bunch from her.  The learning continued after I graduated, with two books she co-wrote with Doug Linder (my ConLaw professor, two semesters worth).  I highly recommend The Happy Lawyer and The Good Lawyer.  

Timmy the Biglaw Associate realizes that he needs to discover documents from a company in Italy.  Timmy knows from CivPro class that discovery requires a subpoena, so he dutifully sits down and writes one, to command the company to produce any and all documents related to XYZ, et c.  He seals it up in a FedEx envelope, sends it off to Milan, and a week later, the company’s avvocato tells them to fugghetaboutitit has no coercive effect in Italy.

Timmy went to an Ivy League law school, graduated at the top of his class, and was heavily recruited by the biggest white shoe firms on the east coast.  But they never told Timmy about extraterritorial effect in law school.  It simply never came up.  What Timmy didn’t know is that a Hague Evidence Request is the proper instrument to compel the production of evidence in Italy and a few dozen other countries.  Some very important rules apply to its use, and its execution relies on the kindness of a foreign judge who is a bit like that guy in the sleigh who gets his own tracking system at NORAD.

Some salty old veteran in the managing attorney’s office tells him, “no, Timmy, the Hague Evidence Convention applies here– try again,” so he copies and pastes the subpoena language into the form provided by the Hague Conference, and shoots it off to Rome.  It eventually lands on the desk of an Italian judge.

Sadly, a Hague Evidence Request is not what Timmy thinks it is.

It’s not a subpoena.  It’s a Letter to Santa Claus.

More to the point, it’s a Letter to Santa Claus in which you must not only justify the pony, but also describe its height, color, and breed, then tell Santa exactly what its responsibilities will be (carnival rides, herding cattle, pulling a beer wagon).  You can’t just tell Santa you want “a” pony.  You have to define what you mean, and then articulate why.

Think of the Italian judge like Santa Claus.  Timmy just demanded a whole bunch of ponies.  And you don’t just demand something from the man in the sleigh.  Even if you’re Veruca Salt and your daddy is a pushover.  You can’t just say you want the whole world, Veruca.

A little illustration…

The year I turned ten, I figured out the guy in the sleigh.  Around Thanksgiving, I told Mom & Dad that “I KNOW YOU’VE BEEN LYING TO ME”, and they reacted by threatening my life if I broke my kid sister’s six year-old heart and told her the ugly truth.  I almost spilled the beans a couple of times, prompting threatening glares from Mom and a simple tap of the belt buckle from the Old Man.  I had to think fast, or Christmas was really going to suck.

Dad had just gotten promoted (ah, life in an Army family), so we could finally afford some of the cooler stuff in the Sears Wishbook, and I was assured that the naughty/nice criteria remained in effect as to my own haul on Christmas morning.  I volunteered to help… I’d pitch in and make it special for Kid Sister.  On Christmas Eve, I stayed up until 3am with the Old Man to assemble the Barbie Dream House.  This evil monstrosity right here–>  

It was an epic nightmare.  A thousand little pieces and tabs and slots and a schematic to rival the Space Shuttle… just a nightmare.  But as much as she appreciated it and played with it for hours and hours, Sis confided in me years later that it wasn’t the one she wanted.  She wanted a far simpler version– the town house from the 1960s, rather than the massive Malibu Beach House that all the little girls wanted in 1980, give or take a couple of years.  We picked up a ’60s version at a garage sale five months later when the family next door was transferred to Germany.

Two decades later, I was the Old Man myself, and I expected another 3am assembly project.  The updated version of Barbie’s town house popped out of the box, folded open, snapped into place, et voila.  No assembly, no screws, no tabs… it was as if someone had clued the Mattel people into the fact that dads despised them.

But to compare, my sister hadn’t been specific.*  My stepdaughter was pinpoint accurate about her intent– for months– and she took me by the hand every time we were within a mile of Toys ‘R’ Us and said…

<– “THAT ONE, RIGHT THERE.”

Surgically specific.  I expected her to make me write down the numbers from the UPC label.  On Christmas morning, Santa Claus made that little girl sing with delight (and my heart sang right along with her).

The lesson for litigators here… don’t be like Timmy, or my kid sister.  Don’t just say you want “a pony” and think that by noon on Christmas Day, you’ll be driving a herd up to Abilene.  Don’t just say “I want a G.I. Joe.”  Santa Claus doesn’t know that you want the G.I. Joe with the kung fu grip.  He goes to the toy department at K-Mart* and is so overwhelmed with ALL the G.I. Joe stuff that he just gets you a nice, um… football.

In a Hague Evidence request, you have more like my stepdaughter.  Or Ralphie Parker– after he left Higbee’s (you know Ralphie, and if you don’t, you’ve obviously been living under a rock for thirty years).  Ralphie’s Old Man knew with certainty that he wanted “an official Red Ryder, carbine action, two-hundred shot range model air rifle!”

Why?  Because Ralphie was so utterly specific, once he overcame his awe of being in the presence of the big man himself.  Of course, he fought really hard to not overdo it.  He had to be subtle in communicating his specificity (Miss Shields’ theme assignment probably had no discernible effect on Santa Claus’ understanding of the matter).  But he very specifically stated what he sought, and his request was duly executed by the appropriate judicial authority (read: Dad) of the jurisdiction in which the thing was sought (3159 W. 11th Street, Cleveland, OH 44109– in real life).

The point is this: a subpoena demands that someone give you what you seek; if they don’t give it to you, consequences follow.  You don’t demand anything in a Hague Evidence Request; if you do, you’re headed for a very pink nightmare.


* The lesson was passed down to the next generation.  My nephews now send me URLs to specific products on Amazon.  Usually Nerf guns.

** I worked at K-Mart for a couple of seasons while I was in college.  It really was a class organization, although I think they treated me better because I was in college and not high school.  I worked the toy department for exactly one shift during the Christmas season.  Never again.  There was just too much… everything.  No wonder Santa wants specifics.

OH YEAH.  ONLY 84 DAYS UNTIL CHRISTMAS, KIDS.

New Orleans, Louisiana— I’ve written previously about my insistence that lawyers should outsource their international work.  I’ve also modified my thinking a bit, at least as far as nomenclature of the idea, opting instead to call it subcontracting.  At ClioCon this morning, Clio’s CEO, Jack Newton, offered a brief synopsis of his company’s 2017 Legal Trends Report.  A frightening set of statistics jumped off the screen as he went through his slide deck, and they really bring into focus my insistence about subcontracting.

Imagine a lawyer puts in an eight-hour day (just imagine it’s only eight, would ye?).  Of those eight hours, only 2.3 are spent on actual legal work.  The remainder is tied up in building business (critical, no doubt), non-billable learning (read: research the client won’t pay for) or administrative tasks.  And of the 2.3, only 1.6 actually results in dollars going into the firm’s operating account.  Twenty percent.

So how do we, Jack asked, turn those other six hours or so into dollars?  Any which way you can– especially if technology can streamline what we do.

That got me thinking more about the argument for subcontracting out work that isn’t profitable for a firm.  It reminded me of the Big Firm Partner who was incredulous that his firm would dare to look outside for help.  On anything.  Well, if Jack’s statistics are to be believed, Mr. Incredulous now has simple math to guide him.  If you’re only getting paid for twenty percent of your work, you’ve got to rethink things, man.  Really.

Law firms are under tremendous budgetary pressure, and only those who take advantage of every possible efficiency will survive the tsunami that’s been battering our little guild for going on a decade.

REUTERS/Yuya Shino

Another tech titan is getting into linguistics services.  The same guys who’re jumping into the grocery biz to dethrone Walmart are launching a new foray into the machine translation (MT) game to dethrone Google Translate.  You guessed it: Amazon, according to a CNBC report earlier this summer, hopes to  take on the fellows in Mountain View with a tricked out version of the Safaba platform, which it acquired two years ago.

To which I offer a very loud and emphatic… big deal.  It still doesn’t mean MT is a good idea in legal pleadings.

[Fellow lawyers, bear with me.  We’ll get to you soon, I promise.]

I’m sure the Bezosians are totally stoked about their soon-to-be launched product offering.  If it’s like most of the other Amazon stuff I subscribe to (Prime, anyone?), it will be awfully handy.*  If Amazon’s translator works as well as everybody expects from a Jeff “Midas” Bezos creation, I’ll probably use it just as much as I use Google Translate– which is to say, quite a bit.  My usage, though, will be for finding specific words, a thesaurus of sorts, and French accent marks that I can’t remember how to “hot key”.  Often, I’ll use it to get the gist of something in a language I don’t speak, but never to gain a complete translation.

The language services industry is justifiably scared– I found out about the CNBC story because a friend of mine in the business posted a Slator follow-up article about it on LinkedIn (Slator is an online trade mag for linguists).   Translation providers ought to be frightened of MT for the same reason horse breeders feared Henry Ford’s assembly lines a century ago.  Ford (and other carmakers, of course) reduced the equine industry to a shell of its former self, and MT threatens the same in translation.

But remember what Ford said about the response if he asked his customers what they wanted:  a faster horse.  [Okay, maybe he never said that.  But the underlying idea is absolutely true.]  Ask language service customers what they want right now, and they’ll say “cheaper translation”.  But that’s where the analogy breaks down.  A Model T would still get you from point A to point B– just like your horse could– but without the feed and caring necessary to keep a horse alive even when you weren’t riding it.

Translation is a whole different kettle of fish, especially for attorneys, especially when they have to serve process in a different country.  Here’s why a cheaper translation is not like a faster horse– whether or not you need a stable and so many bushels of oats:

  1. As with any professional service offering, you get what you pay for in a “cheap translation.”  Recall that old litigator’s saw, “cheap, fast, and accurate… pick two” whenever a client demanded more for less.  That happens in translation, too, whether a human is involved or not.  That cheap horse might be really fast for about half a mile, at which point it keels over dead.
  2. Unquestionably, MT is a faster horse than human translation.  Exponentially faster.  And that necessarily makes it cheaper (no care & feeding).  But it doesn’t get you from A to B.  Remember your high school computer teacher’s acronym, “GIGO”?  Garbage in, garbage out.  If your machine doesn’t start with a comprehensive and very accurate vocabulary in both languages, you will get a garbage translation.  Good luck enforcing your U.S. judgment when a Japanese judge (who spent a year at Stanford in 1991-92) sees that you translated “meeting of the minds” incorrectly.  The machine doesn’t have the sense to stop and look something up (or to pick up the phone and call you to explain an arcane term of art).  It just runs home to Mama and uses the closest thing it can find– like the Japanese word for headbutting.
  3. While you could be confident that a conversation on horseback would be kept between men of an honorable character, a Model T allowed occupants to speak freely and candidly, because nobody could hear them over the engine as they whizzed by going 40.  You can likewise expect a translation provider of honorable character to keep tight-lipped about the pleadings you hand them (they’ll sign a NDA if you ask… and if they won’t, go elsewhere).  But if you use Google Translate or Amazon/Safaba or any number of other MT systems on the web, you may as well just post your pleadings on the firm’s website, because they just became part of the Borg Collective.

Now, to be sure, I won’t be able to say all of this in a few years.  AI (artificial intelligence) is growing by leaps and bounds– and I, for one, will heartily welcome our new robot overlords.  The day will come in the not-too-distant future when MT will come complete with editing and formatting and all of the time-intensive production that is now performed by human translators.

But you as a litigator must still make sure you aren’t just cheaping out.  That Japanese judge is a funny guy, but he’ll kick your enforcement action out of court faster than you can say Akebono.


* The shameless plug portion of our show… I’m a big fan of both Amazon and Google.  Really.  Alexa keeps me entertained with her patient-but-funny answers to my stupid questions, and Google is my cell phone provider (seriously, click here to sign up for Project Fi, and we’ll both score an Andrew Jackson for our trouble).  Amazon and Google get a big chunk of my business & household budgets every month.  Now if I can just convince one of them to build their second headquarters here in Kansas City.

Albert Jankowski, via Wikimedia Commons.

My practice area is a very tight niche, and explaining it to colleagues sometimes means getting into very tall weeds.  Odd conversations tend to follow my CLE lectures.  Or bar association happy hours.  Or tours of farwaway legislative chambers.

I’ll describe what I do, and the colleague I just met will express appreciation for what I illustrated, tell me it’s a really neat niche, and then try to convince herself (or himself) that our practice areas don’t overlap.

Oh, but they do, I promise you.  The banter usually goes something like this:

Sorry, Aaron.  I handle employment law, not immigration.  But thanks for doing that CLE.  You’re a funny guy.  

Well, I appreciate that.  I’m glad you enjoyed it.  (Inside my head:  Funny how?  I’m a clown?  I amuse you?)

No, I mean I really like how you got that picture of Ned Stark into your slide deck!

Hang on a second…  first of all, immigration?  You’re kidding, right?  You did just sit through my lecture on international law, right?  Those are not the same concepts.  (She’s not kidding, sadly.*)

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

More importantly, though, what I do has direct bearing on your employment practice.  A huge impact, especially in a global economy where operations are directed from far-flung headquarters around the world.  Allow me to illustrate…

Let’s say your client, a gay Latino with a disability, works for a large retail chain that specializes in low-cost furniture and home products.**  Let’s also say that the employer provides a unique shopping experience and wonderfully tasty meatballs that are available to take home from a freezer located right next to a pallet of picture frames and window blinds.  Your client has been harassed for one reason or another, but his pleas to local supervisors and the company’s management team all the way up to the mothership have gone unanswered.  The abuse continues, and in the hope of vindicating the poor fellow’s rights, you take his case.

But who do you sue?  Well, the U.S. subsidiary that runs the store, of course.  The harassers & managers individually.  They’re pretty easy to identify as culprits.  Ah, but what of the off-shore mothership?  The one in Scandinavia, where the meatball was perfected?

Yes, you name the parent company as a defendant, too.  Just because they aren’t here doesn’t mean they aren’t part of the problem.  But now things get interesting, because you have to properly serve the parent company where it resides.  In this hypothetical, let’s “say” it’s headquartered in Sweden (wink wink, nudge nudge).

You’ll have to translate the service documents into Swedish (setting aside the fact that Swedes speak better English that I do).  You’ll have to fill out your USM-94 correctly (that’s a big one– very important, the USM-94).  And you’ll have to wait the three or four months it usually takes to get a proof of service back from Stockholm.  Odds are, you’ll get a call from opposing counsel to discuss settlement before you even receive the proof, but if you don’t even try to properly serve the mothership…

This is Ned Stark.

* A huge segment of the practicing bar thinks that international law is immigration law, and immigration law is international law.  My local bar association even conflates the two ideas in its committee structure.  This is so baffling that both the international lawyers and the immigration lawyers in town have given up trying to convince everybody else.

** Disclaimer:  I love Ikea— especially those Swedish meatballs that are finally available in Kansas City.  I know of no situation in which a disabled gay Latino employee has been harassed at an Ikea store, and I imagine that a company born in Sweden would take a very dim view of such treatment of its employees.  Its inclusion here is for illustrative purposes only.

Image by “Hibino”, via Wikimedia Commons.*

An interesting opinion was handed down this morning in the Middle District of New York—not very earth-shattering, to be sure, but a solid illustration of where lawyers think they know what they’re doing, but really don’t.

A brief rundown of the facts:  the plaintiff is a high school student, Peter B. Parker, who alleged that during a class field trip to The Banner Collection, a prominent midtown museum, he was stung by a rare and poisonous insect in the museum’s animal research facility.  Named as defendants are the Collection’s owner (Crown), and its former Director of Operations, Dr. Diana T. Prince.

On the surface, a fairly straightforward personal injury claim.  Things got more complicated in light of Prince’s departure from New York shortly before the suit was filed, to accept a position as Curator of Antiquities at the new Wayne-Kent Institute in her native Athens.  Crown waived service (as it must under FRCP 4(d)), but Parker’s attorney served Prince at the museum in Greece via FedEx.

When Prince failed to appear, the court granted Parker’s motion for default judgment, and proceeded to trial against the museum.  A jury found that the museum was negligent in allowing a class of high schoolers into a research laboratory, but found that the plaintiff’s own negligence far outweighed that of the museum.

After the verdict, Prince read about the case in a trade magazine circulated to museum curators around the world, and hired counsel in New York to revisit the claim against her.  In their motion to set aside the default, Prince’s lawyers made several arguments, all of which I see as pretty solid.

  • First, Parker presented no proof of actual delivery to Prince herself—only a printout from FedEx indicating that the parcel sent by counsel was left in the Wayne-Kent Institute’s mail room.  Lacking any demonstration that she had received the notice, her attorneys argued, the service attempt should be quashed and the default judgment thrown out.
  • Second, Prince’s lawyers pointed to the FedEx dispatch itself as deficient.  FRCP 4(f)(2)(C)(ii) requires that, where a treaty allows but doesn’t specify a means of notice, service by mail is valid if the Clerk of Court addresses & sends the documents, with a signed delivery receipt required.  Parker’s counsel sent it directly from their office and provided no signature whatsoever.
  • Third, even if Parker had properly observed 4(f)(2)(C)(ii), Greece objects to service by mail under the Hague Service Convention, so the method has no legal effect in the first place.
  • Fourth—and this is the one that really gets me, because it’s just sloppy, lazy lawyering at work—although Prince was the Curator of an Athens-based museum, her office and domicile were in Israel, and no attempt was made to locate and serve her there.  At all.  (In an ironic twist for Parker, Israel doesn’t object to mail service under the Convention!)
Dr. Prince at a press conference in Tel Aviv, announcing her appointment as Wayne-Kent’s Curator of Antiquities.

In the end, the judge set aside the default based solely on Dr. Prince’s first argument, but admonished plaintiff’s counsel in light of the legal deficiencies laid out in the other three… and assessed Prince’s costs to them.  Of course, they could take another bite at the apple, but Prince would still have a couple of fancy Latin terms at her disposal: res judicata, respondeat superior

Again, this all comes down to very sloppy lawyering by plaintiff’s counsel.  Truly, a simple Google search would have told them that, while the defendant was born in Greece, she is an Israeli citizen– she even served two years in the IDF.  Had they exercised even a modicum of diligence, they could have served her properly.

Moreover, this case illustrates the importance of client-vetting.  These attorneys should have known that their plaintiff, although an orphan, was little more than a whiny kid who didn’t just mitigate his damages– he made a fortune off of them.  Media appearances alone have made him millions in the few years since the injury; perhaps Crown has a cause of action against him for unjust enrichment?


* The image above is actually the Museum of Modern Art in New York, which Crown’s owner purchased in 1998 and renamed for an old friend, Dr. Bruce Banner.  The facility expanded beyond art and into natural history research shortly thereafter.

 

Bermuda Tourism Authority, at gotobermuda.com. No, seriously, go to Bermuda. And take me with you.

We ain’t building rockets here.  But we are building a ship of sorts, and a leaky vessel means the cargo may not make it to its destination; this could be a frightening concept if, like me (at the age of eight), you believe in the mythology surrounding the Bermuda Triangle.

Serving process in Bermuda is subject to the strictures of the Hague Service Convention, regardless of which U.S. venue is hearing the matter.  The tiny island is an overseas territory of the United Kingdom, which has extended the treaty’s effect to most of the remaining parts of its former Empire; this includes the UK declarations.*  A fair number of U.S. tourists spend time in Bermuda, just a few hundred miles off North Carolina, and a whole bunch of financial houses are chartered there thanks to a highly favorable tax structure.  That means a fair amount of U.S. litigation involves entities on the tiny island.

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 effected in Bermuda:

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 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, 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 critical—make 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.

Pretty straightforward stuff in Bermuda.  For more insight, the UK’s declarations and Central Authority information—as well as those of all the other countries in the treaty—can be found here.  And I’m serious– when you go to Bermuda, take me with you.

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.


* Declarations (also called reservations in treaty law) frustrate the hell out of U.S. practitioners who aren’t aware that they change the effect of statutory text.  If a country declares its opposition to Article 10 (Germany and China do, for example), then Article 10 does not exist between it and the United States.  The methods described there aren’t even part of the agreement.

Perhaps it looks a bit too much like The Eye of Sauron to take seriously?  I took this during the total eclipse.  With my phone, if you can believe it.

Like many of our fellow humans, my wife and I took a few hours away from our respective offices yesterday to watch something that hasn’t happened in Kansas City since before the first intrepid Frenchmen paddled up the Mighty Mo seeking beaver pelts.  Just after noon CDT, we donned some funny cardboard glasses and watched a total solar eclipse for about 45 seconds.  This sort of event has been monumental in history, cajoling warring factions to the peace table, and offering a backdrop for great literature.  And we had an absolute ball.  I really didn’t think it would have an emotional impact on me, but it did.  As the sky darkened, the temperature tanked, crickets began chirping as if it were dusk, and the streetlights came on.*

Our soundtrack was a whole lot of fun, too…

Now enter The Honorable Steven D. Merryday of the Middle District of Florida, who took my Carly Simon reference to completely new heights with a tongue-in-cheek order regarding a government motion for continuance.  The AUSA’s offered grounds?  The key FBI agent had already bought plane tickets to Charleston (or Nashville or Kansas City or Portland) to see the eclipse in its full glory.

Now, as I started to read the thing, I thought to myself “outstanding– a judge who recognizes the monumental events here.”  But a few para’s into it, I caught on to his logic.  By the end, it was pretty apparent that somebody in the Justice Department played fast & loose with the facts.  Motion denied.

I have to think that if they hadn’t just pulled assertions out of a hat, His Honor might have granted the motion.  Who knows?  (Read the order on Scribd here.)

So what does this have to do with Hague service?  Not a thing.  Unless you recognize that pulling assertions out of a hat is dangerous in the law.  Sooner or later the judge is going to get wise to your antics and smack you.

Examples of such antics:

Far better to do it right the first time and not become the subject of listserv discussions** across a wide swath of the country.


* Thanks to my good friend and law school classmate Carl Scarborough (and his wife, Doreen) for letting us camp out in the zone of totality.

** And a hat tip to my colleague David Ransin for bringing the M.D. Fla. order to my attention on the Solo & Small Firm Listserv of the Missouri Bar.