Transnational Litigation Planning

“Worried People,” Pedro Ribeiro Simões, via Wikimedia Commons

Plaintiffs’ attorneys are universally motivated by a single factor: making their clients whole. As a result of that, tortfeasors are held accountable– and hopefully they correct harmful behavior– and the world is made a better, safer place.  Sure, there’s a seemingly massive amount of money to be made, but most trial lawyers are firmly rooted in the middle class.  Doing well, but not spectacularly so, unless that one big unicorn of a case comes along.  Even the stars of the plaintiffs’ bar got to be stars only because the right client (the unicorn) walked into their office one day long ago.

In chasing the unicorn, we sometimes get into a case that will eventually lead nowhere, only draining firm resources.  We don’t even need to chase the mythical horse to get into an impossible case, especially if the defendant is located abroad.  

  • We see, in that chair across the desk, a fellow who’s been hurt, and our natural inclination is to go after the bad guys and make the poor fellow whole. 
  • We know a lawyer in Kansas City who can get the offshore defendants served (hint, hint).
  • We know we have a good shot at empaneling a sympathetic jury. 
  • We think we can win.

But two critical questions often get missed, only to be asked after filing and after hiring somebody like me to deal with the initial due process concerns (or worse, wading into the fray alone).  One focused on the beginning, and the other focused on the end:

  1. How do you establish jurisdiction?  (The one we hit last week.)
  2. How do you get paid? (The one we’re discussing here.)

Both are tougher than you might think.  And both are best illustrated with a hypo (pretty straightforward stuff): 

A young fellow and his new wife escape the brutal Iowa winter and go to the tropics on their honeymoon.  While he’s walking through the hotel lobby from the beach to the buffet, he doesn’t notice a puddle of water on the floor.  Apparently, neither does the staff.  As the guy steps through the puddle, his feet slide from beneath him, and he cracks his head on the floor.  Honeymoon ruined, medical bills amassed, work missed… a textbook slip & fall case. 

By all accounts, a lawsuit is in order, so he seeks counsel.

The most important issue in whether a lawyer takes the case:  where did it happen?

Well, if it’s in Florida, things are fairly simple– sue in Florida (unless the guy bought a package deal that the resort advertised in the Des Moines Register).  But what if the resort is in the Dominican Republic, or Thailand, or Sri Lanka?  What if he booked the trip directly through the resort’s website?

Jurisdiction

[Elaboration… see last week’s post here.]

In short, we’ve got to make sure the case will even be heard in the first place, so determining proper jurisdiction is critical.  And then, once it’s been heard and a judgment won, what comes next?

Enforcement (ie: Getting Paid)

The dicey one.  The one for all the marbles.  Where the rubber meets the road.  Where the buck stops.

Okay, I’ll stop with the goofy clichés. But this is really the most important analysis– how do we turn a judgment into a check that will clear?  If a losing defendant’s assets are all in foreign lands,* an American court can’t just reach out and grab the assets like it can here.  The plaintiff must ask a court in the foreign country to issue an order forcing the defendant to cough up the cash.  That’s a tough sell in a world that views U.S. litigation in such a negative light.  Not all is lost, but this is the analysis that should come at the beginning of a case– when the prospective client is sitting in the chair– not at the end.

The foreign court will take, essentially, a two-step approach.  Of course, this is a gross oversimplification, but the foreign court will look first at whether the judgment should be recognized.  That is, it will ask whether service was properly effected (the easiest part to screw up– and the easiest part to undertake properly with help), whether jurisdiction was proper, whether evidence was appropriately gathered.  Procedural stuff with some substance thrown in.

Then, once the judgment is recognized, the foreign court will analyze whether enforcement would violate its own public policy and– if not– whether a mechanism in its own law allows it to compel payment… in all, whether it has the power to enforce.

It all boils down to comity, because there is no treaty in force that compels any court anywhere in the solar system to enforce a U.S. judgment.  And what a waste it would be to go all the way down that road to be told “no”.

So, back to our Sri Lanka beachgoer… what of him?  Imagine going to all the trouble to hale that resort into an Iowa court, just to have a judge in Sri Lanka giggle at you while he signs the denial.  Not a good result.

It might have been better to just sue in Sri Lanka.


* Best case scenario: joint & several liability, with one or more U.S. defendants or foreigners holding U.S. assets.

Spoiler alert: a few goofy football analogies lie ahead.

Plaintiffs’ attorneys are universally motivated by a single factor: making their clients whole. As a result of that, tortfeasors are held accountable– and hopefully they correct harmful behavior– so the world is made a better, safer place.  Sure, there’s a seemingly massive amount of money to be made, but most trial lawyers are firmly rooted in the middle class.  Doing well, but not spectacularly so, unless that one big unicorn of a case comes along.  Even the stars of the plaintiffs’ bar got to be stars only because the right client (the unicorn) walked into their office one day long ago.

In chasing the unicorn, we sometimes get into a case that will eventually lead nowhere, only draining firm resources.  We don’t even need to chase the mythical horse to get into an impossible case, especially if the defendant is located abroad.  

  • We see, in that chair across the desk, a fellow who’s been hurt, and our natural inclination is to go after the bad guys and make the poor fellow whole. 
  • We know a lawyer in Kansas City who can get the offshore defendants served (hint, hint).
  • We know we have a good shot at empaneling a sympathetic jury. 
  • We think we can win.

But two critical questions often get missed, only to be asked after filing and after hiring somebody like me to deal with the initial due process concerns (or worse, wading into the fray alone).  One focused on the beginning, and the other focused on the end:

  1. How do you establish jurisdiction?  (The one we’re discussing here.)
  2. How do you get paid? (The one we’ll discuss later.)

Both are tougher than you might think.  And both are best illustrated with a hypo (pretty straightforward stuff): 

A young fellow and his new wife escape the brutal Iowa winter and go to the tropics on their honeymoon.  While he’s walking through the hotel lobby from the beach to the buffet, he doesn’t notice a puddle of water on the floor.  Apparently, neither does the staff.  As the guy steps through the puddle, his feet slide from beneath him, and he cracks his head on the floor.  Honeymoon ruined, medical bills amassed, work missed… a textbook slip & fall case. 

By all accounts, a lawsuit is in order, so he seeks counsel.

The most important issue in whether a lawyer takes the case:  where did it happen?

Well, if it’s in Florida or Hawaii, things are fairly simple– sue in Florida or Hawaii, unless the guy bought a package deal that the resort advertised in the Des Moines Register.  But what if the resort is in the Dominican Republic or Sri Lanka or Mauritius?  How about France or Greece?  What if, instead of using a professional travel agent, he booked the trip himself, directly through the resort’s website?

Establishing jurisdiction is going to be tough.  Enforcing a judgment is going to be even tougher.

Jurisdiction

The Nine Wise Souls haven’t had a completely cohesive view of personal jurisdiction in ages.  When I studied the issue in Civ Pro a few years ago,* the most current case was Asahi, and even there jurisdictional analysis was a maze of contradictions in a somewhat-plurality opinion.  Since that time, more opinions have come down from One First Street, but they don’t lay out a test to replace Asahi or the International Shoe/Worldwide Volkswagen line of holdings (essentially, purposeful availment, stream of consciousness commerce, etc.).  Consequently, state courts and lower federal courts are still all over the map in dealing with the issue.

Yeah, I’m like Sinbad.

Now, to be sure, I’m not up to speed on those SCOTUS decisions.  I just don’t have the emotional or intellectual stamina to navigate the labyrinth, and fortunately, I usually don’t need the answers; I’m a support lawyer, rather like the special teams coach or the really funny sidekick from Necessary Roughness (Sinbad).

But I can tell you that an Iowa court is probably not going to assert jurisdiction over a hotel in Sri Lanka when that hotel hasn’t actually marketed itself in Iowa.

If someone from Iowa is injured in Iowa, they naturally would sue in Iowa.  Not much controversy there.

If someone from Iowa is injured in Alabama, then Alabama may be the right place for the case to land unless the defendant has a connection in the Hawkeye State.  Even if Iowa could assert jurisdiction, forum non conveniens is still a thing, so the tide might roll right back to where the stars fell.  Conflict of laws analysis will tilt the decision one way or the other.  

But before a lawyer should take any case, s/he must first determine if the case can actually stay in the court where the plaintiff wants it filed.  Yes, this is all 2L-level stuff.*  But many of us are so focused on the adrenaline of the Super Bowl that we miss sight of the twenty-some weeks leading up to it.  We miss sight of that first kickoff in August.

Simply put, we’ve got to make sure the case will even be heard in the first place, so determining proper jurisdiction is critical.  And then, once it’s been heard and a judgment won, what comes next?

Enforcement (ie: Getting Paid)

Stay tuned for Part 2.


* Weird lawyering experience #473:  I basically live in FRCP 4 (Summons).  My practice is all about Civ Pro.  I gave a CLE presentation in Paris in 2016; a room full of American lawyers gave me their attention as I described the ins & outs of the Hague Service Convention and its application in France.  On my left sat a fellow who recently retired as an associate dean at UMKC Law.  On my right sat another associate dean from UMKC Law.  When the words “Federal Rules of Civil Procedure” came out of my mouth, it dawned on me that these were the guys who taught me the rules– CivPro 1 and CivPro 2 respectively.  No pressure, Aaron.  No pressure at all.

The Rock of Gibraltar… guaranteeing access to the Mediterranean since 1704.  USAF photo.

In 2016, I posted “Five Essential Things All Business Owners (and Their Lawyers!) Should Know Before Signing Global Contracts” with 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.

To elaborate on Point Five…

Secure a guarantee of judgment debt.

Face it.  As I wrote in July, a lawsuit ain’t over ’til the client gets a check.  An eye toward enforcement of a judgment is absolutely critical when litigation is in the planning phase.  The key is to think about it even earlier– when the contract is in the drafting phase– in order to prevent a breach from occurring at all.  Our clients honestly don’t expect the other party to welch on the deal, but it’s our job to give them a reality check.  Even though we hope it never happens, we have to anticipate it, and if we can do that, well… an ounce of prevention truly is worth a pound of cure.

So think ahead to the end of a potential lawsuit.  You’ve done everything right– served properly, undertaken the perfect scope of discovery, won the right motions, and convinced a jury that your client was damaged as a result of the other party’s intransigence.  You’re awarded seven figures in damages and your client is ecstatic.*

But… harumpf.  Your losing opponent (let’s say they’re from China) has no assets in the United States except a $170,000 corporate apartment in Galveston.  At the outset, you tried to convince the client that choosing Chinese law, venue, and language would be a great hedge against a breach, but they insisted on… ‘Murica, damnit, we’re the greatest country in the world.  They insisted on fighting it out here because they feared litigating over there.

Your defendant, counselor, is a turnip.  As in “can’t get blood out of a…”

Forget about enforcing the judgment in China. Just don’t waste your time, because Chinese courts have enforced exactly ONE U.S. JUDGMENT in as long as anybody can remember.  One.  And that was between two Chinese citizens in a case that Chinese courts wouldn’t touch with a ten-foot pole.

What to do?

AHA!  While your client dissed your Chinese law/venue/language recommendation, they did have the good sense to act on your recommendation that they get a guarantee of judgment debt.  Exercise the guarantee, whatever form it takes, and you’re able to collect that vaunted check.

Whatever the type of transaction, there are always options.  Sure, they’re likely to increase the cost of the transaction, but car insurance increases my cost per mile on the road, and I wouldn’t be without my coverage (or my agent, Irvin).  I hope I never have to use it, but peace of mind is awfully nice.  And if something horrible happens, I know I won’t have to live in a van down by the river.

Options

  1. Collateral.  Okay, so they only have that condo in Galveston.  But they put it up as collateral on the contract, you file the proper lien, and you don’t have to litigate to enforce the judgment.  Just act on the lien.
  2. Letters of Credit.  Like a deep pocketed co-signer, banks provide letters of credit all the time.  They may not be willing to back a Chinese party directly, but maybe a Chinese bank would provide a guarantee to the U.S. bank.  Again, this kicks up the cost quite a bit, but when you win that seven-figure judgment, the U.S. bank pays it and then collects from the Chinese bank, who in turn goes after the breaching party in… China.
  3. Other U.S. parties who are beholden to the foreign party.  Company XYZ in Oregon owes the foreign party an amount equal to half of the judgment.  Yes, collect it, but if it’s written into the contract that you can seize those receipts, much easier to collect.
  4. Some other U.S. guarantor.  Perhaps not specifically a Letter of Credit, but functionally similar.  An affiliate of the foreign party, perhaps, who does have sufficient assets in the United States, offers collateral or other guarantee on the contract.
  5. Export Insurance.  Just as Irvin and State Farm have me covered in case of a car accident or fire or other horrible event, export insurors have your client covered if their overseas buyer refuses to pay the balance due on a high-value shipment.  If you don’t know who to contact, just Google “export insurance”. **  In truth, this isn’t really a judgment guarantee– it’s a deal guarantee.  You wouldn’t even have to litigate in such a situation.

The list goes on.  But the bottom line is this:  a courtroom victory is Pyrrhic if there’s no way to collect on it.  So make life easier on your client by providing some kind of assurance that they’ll be paid if the other guy breaches.  Yes, it’s a pain in the neck.  Yes, it can drive up the cost of contracting and thus drive up the cost of the entire relationship.  But a judgment following a lawsuit is utterly worthless if it can’t be enforced.  If the foreign party’s assets are all in a country that won’t recognize and enforce a U.S. judgment, litigating the matter is a massive waste of time.


* Set aside the fact that the transactional folks who write this agreement aren’t likely to litigate it, too.

** For a more personal touch, call my friend Dave Clark at ARI Global.  He’s originally from Nebraska, but we don’t hold that against him, especially since he’s the fellow who introduced me to the concept of export insurance in the first place.

Tom Hall, via Wiki.

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.*

In 2016, 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.

To elaborate on Point Four…

Include a choice of language clause.

This is a classic problem, and it was at the heart of one of my favorite cases in law school, as well as a little known treaty that created a nation:

Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 F.Supp. 116 (S.D.N.Y, 1960).

Yes, you remember the case.  And if you don’t, here’s a hint:

Nobody does it better than Costco. Nobody.

When I first read Frigaliment, I thought I might just need new glasses.  A month into my 1L year, and the judge writes, quite literally…

The issue is, what is chicken?

Remember it now?  It seems the parties to the contract failed to define what they meant by a seemingly innocuous word.  Chicken is chicken, right?

No, said the buyer.  Chicken is “young fryers”, rather than those old, stringy stewing hens you sent us.  Give us our money back.

The case was included in our Contracts casebook to illustrate the concept of usages— course of performance, course of dealings, usage in trade– and it does so beautifully.**  But a significant part of the course of dealings analysis turned on communication between the parties in German.  The German word they used was just as ambiguous, so the court then had to move on to more attenuated analyses, but the analysis necessitated a whole bunch of bilingual gymnastics that courts hate having to deal with– so just avoid the issue altogether.  In the end, it could have been handy to have a translation of the contract, because a German translator may have asked for clarification.  The best ones always do.

The Treaty of Waitangi, 1840

Depending on how you look at it, a tragic loss befell an entire people in the early years of Queen Victoria’s reign.  It seems the Royal Navy sailed into what is now Auckland Harbor and offered a treaty to the native Maori tribes who had inhabited New Zealand for centuries.  The gist of the treaty, in the Maori language:  you guys let us Brits administer these two big islands– islands that strangely resemble Middle Earth, but whatever– and we’ll give you a big chunk of the profits.  Call it rent.

In the English version of the contract, the gist was different:  you guys let us Brits take ownership of these two big islands– islands that strangely resemble Middle Earth, but whatever– and we’ll give you… well, we won’t destroy your civilization completely.  Call it protection.

No choice of language clause would have mattered– the British would have certainly taken the place by force anyway– but the Maoris signed onto the treaty based on the understanding of the terms offered in their own language.  They assumed that their own language governed, and that was a tragic mistake.

The Bottom Line

Don’t let your clients make the same mistake.  Take the issue off the table altogether.  Make a decision about what language is operative because, if you have two versions of a contract without a choice, which do you think the forum court is going to prefer?  THE ONE IN ITS OWN LANGUAGE.

But think about a few things as you do…

  1. Don’t be too certain that your language is the best way to go.  A rural Kansas state court may not have sufficient expertise to adjudicate an international trade case, and it definitely doesn’t have the expertise to parse a contract written in both English and traditional Chinese.
  2. Don’t be too certain that the other fellow’s language is not the best way to go.  In some cases, particularly in China (as highlighted frequently by Dan Harris’ excellent China Law Blog), choosing the foreigner’s language (and law and venue) may prevent a breach altogether.
  3. Be certain the selected language has sufficient connection to the facts & parties involved.  Sure, French might be a great diplomatic language, but if the parties are American and Mexican and the court isn’t francophone, it makes zero sense.  A court might kick the case just out of spite because you’re making the judge and staff work harder than reasonably necessary.
  4. Recognize that the choice of language clause can be an outstanding negotiating concession.  If you’ve concluded that communicating in the other fellow’s language wouldn’t be a tragedy, give that fellow*** what he wants in exchange for something you truly need.  My favorite Nelson Mandela quote: “If you talk to a man in a language he understands, that goes to his head. If you talk to him in his language, that goes to his heart.”  There’s a whole lot of preventive medicine in that idea.  A good chunk of Ubuntu as well.
  5. 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 Spanish 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 “required” language.  Do what seems right in light of the circumstances surrounding the language issue.


* I learned Torts from Nancy Levit.  It was my best grade that very first semester, which isn’t saying much (a horrible 14 weeks, for sure), but I definitely learned a bunch from Nancy.  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.

** Usages are also a great way to illustrate customary international law.  Just because there’s no writing… doesn’t mean the parties aren’t bound by past practice.

*** An explanation on the gendered language: I’m not trying to exclude here.  Just trying to keep some lingustic cohesion in the paragraph.

Hugo Grotius, Father of International Law.  Portrait by Michiel Jansz. van Mierevelt, 1631 (via Wiki).

Litigators tend to get a bit skittish when treaty law creeps into lawsuits.  And with good reason– most American lawyers come up against treaties only very rarely, and their effects can really harm the unaware.  I promise you, in whatever practice area, sooner or later, some treaty or other doctrine of international law will have an effect on what they (you) do, and it’s critical to know where the landmines are buried.

All that said, let me bring the vaunted idea of a treaty down to the 1L level, because all you need to really know about treaties, you picked up in first year Contracts.  That’s all a treaty is: a contract.  Meeting of minds, offer, acceptance, consideration, breach, remedies, adhesion…  All that stuff plays into treaty analysis, because a treaty is just a contract.*  A special kind of contract.  See Foster v. Neilson, 27 U.S. 253, 314 (1829):

A treaty is in its nature a contract between two nations, not a legislative act. It does not generally effect, of itself, the object to be accomplished, especially so far as its operation is infra-territorial; but is carried into execution by the sovereign power of the respective parties to the instrument.

And remember the characterization of a contract as a sort of particularized law, enacted by the parties to govern a particular relationship.

Just about every treaty refers to its signatories as “Contracting States” or “High Contracting Parties”, so you don’t necessarily need Justice Story to illustrate the point.

That said, note the careful wording of the opinion (here’s where it gets a bit complicated).  A treaty in its nature is… not a legislative act.   But by virtue of the Supremacy Clause, it takes on the authority of a legislative act because it is ratified with the consent of the legislature (or at least half of it) and becomes supreme law.**  It thus overrides any lower authority in conflict with it.

Obviously, the best example in my world: the Hague Service Convention, which technically forces U.S. rules to give way to foreign law.

You read that correctly.  Foreign law overrides U.S. law.

Let’s say you’re suing a German defendant in federal court.  Due process requires that you serve by a means reasonably calculated to (1) put the defendant on notice and (2) provide the opportunity to defend.  FRCP 4(f) says serving by mail is okay if a treaty allows it, right?  And Article 10(a) of the Convention says mail is acceptable, right?

Well, not exactly.  They both defer to the other country’s viewpoint on the issue.  Rule 4(f)(2)(C)(ii) says mail service is okay*** if a treaty allows but doesn’t specify other means– and provided it isn’t prohibited by the foreign country’s law.  (See?  Even the FRCP defers to foreign law.)

But we don’t even need to analyze German law, because as it applies to Germany, the Hague Service Convention doesn’t allow it!

Article 10:  Provided the State of destination does not object…

Germany objects– as do China, Mexico, Switzerland, Korea, etc.– so Article 10, including the “postal channels” option in 10(a), is off the table.  A treaty thus allows a foreign country to override U.S. rules.  [That’s really gotta rub Roy Moore the wrong way!]

The power of this contract really is massive.


* Remember that you can have a contract without paper.  Even absent a written treaty, customary international law can still bind nations to a certain code of conduct.  Imagine customary law like you view usages… how have we done it in the past?  Course of performance, course of dealing, usage in trade… same concept, but applied differently.

** Not to get into tall weeds, but there are actually two types of treaty: those that come into effect by their own language upon ratification, and those that require implementing legislation.  The latter sort really does become a legislative act, requiring both chambers’ assent.

*** It’s usually a horrible idea– even if it’s legal.  And even in those rare cases where mail is the only viable option, it still must be done properly.

 

[Author’s note: this is the latest in a continuing series of commentary on practice-area-specific applications of the Hague Service Convention and other doctrines of international law governing service abroad– not only service of process, but other notices and orders as well.  The obvious irony here is that I’m using two images of the great actor Sean Bean which, although developed in satire, are blatant rip-offs.  My hope is that I’ll be forgiven, given my ardent and emphatic recommendation that my readers go back and watch The Lord of the Rings and Game of Thrones— at least Season One.  If that’s unacceptable, I will readily cease & desist.]

It happens all the time.  I’ll give a lecture or mention what I do at a bar association event, and the colleague I just met will express appreciation for what I do, tell me it’s a really neat niche, and then try to convince himself that our practice areas don’t overlap.  I’m here to tell you that, yes, they do.  The conversation usually goes something like this:

Sorry, Aaron.  I’m a a copyright lawyer– I don’t do immigration.  But thanks for doing that CLE.  You’re a funny guy.  (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!

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

Wait a sec, there, pal.  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.  (He’s not kidding, sadly.*)

Second of all (setting my incredulity aside), let’s say you do handle copyrights exclusively, no visa applications ever.  What if some random website hosted somewhere overseas decides that “all your base are belong to us,” rips off your client’s content, and publishes it as their own?  Your client justifiably seeks proper attribution and compensation, but the infringing party refuses to cooperate. So you sue.

But don’t you think you might have to serve the publisher?  (Yes.) And just how are you going to go about doing that?  (Hmmmm.  I never thought about that.)

Well, if you’re going to serve in a foreign country, odds are quite good that the Hague Service Convention applies, so you’ve got to figure out what options are available to you.

Next, you may have to set up a translation of the documents.  Never mind that the stolen copy is in English– so the bad guys must understand English– foreign translation requirements aren’t focused on the defendant’s comprehension.  They’re focused on the foreign officials handling the documents.

Then ask the appropriate Central Authority for help.  And pray that you’ve filled out your USM-94 correctly.  [That’s a big one.  Very important, the USM-94.]

If you don’t get them served…

This is Ned Stark.

You’ll have a tough time getting the copy attributed to your client without that defendant.


* 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.

The Royal Courts of Justice, London.  Cristian Bortes, via Wikimedia Commons.

Set aside any opinions on the merits of the Steele Dossier story– this is not a political commentary.  It is is a high profile illustration of something I’ve been preaching for a long time.  And it just so happens that I’m in England at the moment, to present on Hague issues for UMKC Law’s Oxford CLE program* and get a jump on my next reporting year.

This seems the perfect time to preach again.  The sermon:

Production of (third-party) evidence located outside the U.S. cannot be compelled with a U.S. subpoena.

Forget it, because it ain’t gonna happen.  I elaborate in my post “Hague Evidence Requests: 3 Cardinal Rules“… you cannot just serve a subpoena abroad and have it matter.  At all.   A subpoena loses its coercive effect when it leaves the jurisdiction, and only regains that coercive effect under a statute or domestication in the destination jurisdiction.

But every once in a while, somebody becomes a cheeky monkey and tries to argue that common law is common law, and another common law court will domesticate a common law subpoena, no problem.

Ahem… no.

Oh, sure, Florida might willingly domesticate a Missouri subpoena.  Missouri would do likewise with a Vermont subpoena.  Why?  Full Faith & Credit, that’s why.  But that doctrine does not extend north of the border or across the North Atlantic to this blessed plot, this Earth, this realm, this… ENGLAND.  A Letter of Request is the proper instrument to compel production:

  • In Canada, a classic Letter Rogatory, filed directly with a Canadian court of appropriate jurisdiction.
  • In England, a Hague Evidence Request.

Functionally, they’re the same thing.  They’re just conveyed differently.  Both paths eliminate the need for the State Department to handle them (and charge $2,275 for the favor).  But even though both countries are common law (I mean, because England), they still require adherence to those Cardinal Rules I described in 2016:

  1. Be surgically specific in identifying the evidence, whether testimonial or documentary.  (A very narrow WHAT.)
  2. Demonstrate a high degree of relevance, and tell the foreign authority how that evidence will be used at trial.  (A very narrow WHY.)
  3. For crying out loud, hire foreign counsel to help you draft the thing– and then argue about it if the foreign target (or a party-opponent) opposes its execution.

Now we have an appellate opinion to provide a definitive foundation for the first two of those rules (I rather think the third is self-evident).

In Buzzfeed Inc and another (Appellants) v Aleksej Gubarev and others (First Respondents), Christopher Steele (Second Respondent), [2018] EWHC 1201 (QB), the English High Court endorsed a pretty thorough ruling by Senior Master Barbara Fontaine** (hat tip to Ted Folkman for posting the Fontaine decision a few weeks ago, and the affirmation more recently).  The High Court is really a first-instance venue, but just as Article III judges hear appeals of Magistrate rulings, the EWHC hears appeals from Masters’ decisions.

Master Fontaine’s position, in a nutshell: we’re going to help our American cousins as much as we can, but… not if they’re allowing the parties to go fishing, and not if they haven’t shown me that the evidence sought is relevant to the proceedings.  (She even noted that the U.S. court had deferred to her judgment as to the relevance analysis!)

Stefan Bellini, via Wiki.

Essentially, Justice Jay’s opinion lays out the rationale that, because American courts don’t delve as deeply into relevance when requesting particular evidence, Hague requests can go pretty far afield from what’s actually admissible or appropriate.  As such, the Master has to sever certain parts of it.  In the end, the High Court thought Master Fontaine appropriately did so in the Buzzfeed case.

In reality, this isn’t far off the mark– American-style discovery entails a “produce now, and we’ll argue relevance at trial” mentality– go fishing, it’s okay!— and that is badly frowned upon even in other common law jurisdictions.  Truly, our Rules of Evidence exist primarily so that judges can exclude fish from being waved around the jury box.  But the English system hasn’t the need for such limitations– civil jury trials are exceedingly rare (no 7th Amendment), and their judges are pretty capable of determining what’s what.

Justice Jay laid out a pretty good framework for Hague Evidence Requests (to summarize):

  1. We (English courts) will do all we can to accommodate them (comity, after all), but although it isn’t appropriate for English judges to assess relevance under U.S. law, we have to have some indication that the U.S. judge has undertaken the assessment in the drafting of the Request.  If they don’t, we must, and that may necessitate a bit of cutting here & there.***  In short, give us a very narrow WHY.
  2. The scope of the request has to be limited, not just for relevance, but for the avoidance of oppression.  That is, don’t make it too vast, and don’t make it too vague.  Put your fishin’ rod away, or we’ll have to cut a bit here & there.  Give us a very narrow WHAT.

Conclusion:  The Special Master was right.  The U.S. court didn’t assess relevance, so Fontaine had to, determining that some of the evidence sought didn’t connect the dots.  Moreover, the scope of the requested questioning went too far.  For both reasons, she had to sever certain parts of the request.

Ah, guidance.  A wonderful thing.

 


St. Edmund Hall, Oxford. Founded in 1226, the oldest college at Oxford University, and the site of our CLE conference.

* The UMKC program takes place annually in the summer.  Comparable programs are also available in the fall, alternating between Rome (odd years) and Paris (even).

** Master Fontaine’s position is the oldest judicial post in England that remains in use (I got that from Wikipedia).  The office of Queen’s Remembrancer was created in 1154 by Henry II (okay, so it was the King’s Remembrancer… pipe down).  More pertinent to my practice is that she is the judge responsible for requests submitted pursuant to both the Hague Service and Evidence Conventions.

*** In the U.S., we say the judge would redline parts of the list.  Overseas, they say the judge would blue pencil parts of the list.  Either way, it’s sort of a line-item veto, but their way doesn’t conjure unhappy memories from junior high school.

Have fun, y’all…

Thinking back to Business Organizations class (because calling it “Corporations” doesn’t go far enough), one of the most important lessons I picked up was the importance of properly naming defendants in a lawsuit.*  Just as you wouldn’t call a defendant Daniel when her name is Danielle, don’t call it the XYZ Corporation if it’s really XYZ LLC.  When you boil it all down, that’s the entire point of BusOrg class– parsing the differences between the various alphabet soup combinations that make up the American business landscape.**

But broaden that to the world beyond our borders, and you’ve got problems if you don’t have a handle on the soup.  Fortunately, you’re not completely on your own.  Thanks to Jimmy Wales‘ favorite product, it’s pretty easy to look up.

While I would never advise anybody to cite Wikipedia as an authority– legal, academic, or otherwise– the value of the platform as a research tool is hard to overstate.  There’s a great Wiki on types of entities around the world, broken out by country.  My favorite of all time is the Aktiengesellschaft (AG), a German corporation.  Close second: Gesellschaft mit beschränkter Haftung (GmbH), a German LLC.

Say either of those ten times fast.  G’head… it’s fun.

Of course, you’ll have to observe the Hague Service Convention as you’re haling these outfits into court, but once you’ve named the defendants in the caption, use the Wiki to describe the defendant in the “Parties” section of the complaint:

  • Volkswagen AG is a German corporation.
  • Robert Bosch GmbH is a German limited liability company.
  • Airbus SE is a corporation organized under the laws of the European Union and headquartered in Toulouse, France.
  • Airbus Helicopters SAS is a French closely held corporation and a subsidiary of Airbus SE.
  • Angela Merkel is the German Chancellor and the subject of a hit Broadway musical.  (Okay, she’s a natural person, which is not defined in the Wiki.)

Just as you mustn’t confuse Inc. or Corp. with LLC, you mustn’t confuse AG with GmbH, or SA with SàRL… you get the picture.

And on the subject of pictures, cruise over to RedKid.net’s soup meme generator and make your own message in noodle lettering.  Just keep it clean, m’kay?


* Yet another hat tip to my BusOrg professor, Tony Luppino.

** In an exceedingly ironic twist, two hours after writing the initial draft of this post, FedEx Freight showed up at my door.  “Is this Viking?” the guy asked.  Yeah, says I, as he tells me he has a single skid to offload (You mean a pallet?!  OF WHAT?).  Turns out, it was a pallet of valves bound for Viking Group, Inc. (twelve miles away) instead of Viking Advocates, LLC.  Poor guy was given the wrong address on the manifest because somebody didn’t take BusOrg.

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.]