800px-Ortizpoint
Yes, Big Papi. Among the most famous Dominicans. (Image: Toasterb via Wikimedia Commons.)

This is penned on July 9, 2024, well in advance of the Dominican Republic’s implementation of the Hague Service Convention. It will be revised in total on October 1 when the Convention enters into force.

If the action can wait until then… wait, because for the moment, the Convention’s lack of force is at once a blessing and a curse. On one hand, we aren’t bound to a mandatory means of service (this applies to U.S. and Canadian actions alike). On the other, we don’t have a streamlined way of doing things either. As such, there are really three ways currently available, though none of them carries the heft of a Hague procedure. These methods pertain to U.S. federal (civil matters) only– state matters and those heard in Canadian courts require a bit more complex analysis. Still, you’ll get the gist:

  • Option 1: MAIL. Ordinarily, I contend that mail service is a bad idea, but in most non-Hague jurisdictions, I often recommend it. The DR is one of them. If you don’t anticipate having to go abroad to enforce, it’s completely viable, legally speaking. You still have a fact problem, but legal validity isn’t a challenge. Just make sure you’re doing it right.
  • Option 2: ELECTRONIC SERVICE. Completely valid from a due process standpoint, and available by court order under Rule 4(f)(3). Like mail, if you don’t anticipate having to go abroad to enforce, you’re on solid ground.
  • Option 3: Letter Rogatory. The oldest of old-fashioned methods of serving someone in a foreign jurisdiction. It’s pricy, it takes a while, and plaintiff’s counsel has zero control over the matter, but it’s the only way to overcome a validity challenge in an enforcement action abroad.

Stay tuned in the fall, as this will change.

Rich Coast. Delicious Coast. Abundant Coast. However you want to translate Costa Rica into English, it conjures images of palm trees and stunning beaches and lush interior rainforest. And parrots. Lots and lots of parrots. I have a friend who spends a month down there every winter, and who can blame him?

But there’s quite a bit more to this Central American nation than umbrellas you sit under and umbrellas poking out of an icy beverage. Costa Rica has more teachers than soldiers, they say. Its economy is one of the healthiest and it’s the most politically stable in Central America, and it enjoys free trade with several of its neighbors and the United States.  Since 2016, serving process in Costa Rica 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.

  • The roadmap to the overall process—the recipe to our Secret Sauce.
  • The structure of the Convention itself is discussed in this four-part series.
  • And an absolutely critical note: the Hague Service Convention does not pertain to subpoenas.  Repeat after me—you can’t just SERVE a subpoena abroad.  You have to file a Hague Evidence Request (on in the case of Costa Rica, a Letter Rogatory)  Dramatically different from serving a summons or notice.

Here’s how service is done in Costa Rica:

Article 5 Service

  • Translate the documents. Yes, into Spanish. Yes, it’s required. Opt to not do this… well, do not pass GO, do not collect $200.
  • Fill out a USM-94. Be very careful about ensuring that it is complete and concise (including all of the entered details in Spanish), 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 several months, 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 options may or may not be available– we don’t know, because Costa Rica’s declarations aren’t known. As such, don’t get cute.

Seriously—that’s all there is to it in Costa Rica.

Bonus practice tip #1: if the idea is strategically sound, ask the defendant to waive service.  Note that I didn’t say accept— I said waive.  There’s a very important difference.

Bonus practice tip #2: if you’re defense counsel, always question the validity of service effected on your overseas client.  The plaintiff may not have done it correctly.

Interestingly, the seminal case regarding electronic service, and its validity under the Mullane doctrine, would produce a dramatically different result to today.  At the time of Rio Properties, Costa Rica had not joined the Hague Service Convention.  Were the same facts at issue in 2024, electronic service and the Convention would conflict violently.

Ordinarily, a how-to guide like this would lay out methodology for the application of the Hague Service Convention. But Panama isn’t party to the Hague Service Convention, so that idea goes out the window. This is at once a blessing and a curse.

It’s a blessing

… because you aren’t tied to a method that is wholly reliant on the performance of foreign bureaucrats who aren’t exactly motivated to take care of you in a speedy manner– if they even like us at all. In Russia, U.S. and Canadian Hague Requests are rejected as a matter of course. Venezuela hasn’t had a functional government for years, so it’s tough to even get a Request on file. In Mexico, China, and India, internal procedures are so cumbersome that plaintiffs wait literally years for proof to come back.

It’s a curse

… because there’s no truly streamlined method that relies on those foreign bureaucrats to ensure compliance with local law and practice. The only government channel available is a Letter Rogatory, transmitted pursuant to an OAS treaty that does little but cut diplomatic legations out of the equation. If you must go that way, contact the contractor who handles the U.S. government’s Central Authority function for the InterAmerican Convention on Letters Rogatory and Additional Protocol. [Canada is not a Convention member, so you’re back to the traditional means of conveyance… diplomatic channels.]

Other options?

So what is a practitioner to do when faced with serving a defendant in Panama? Two ideas, described here in the context of U.S. federal rules (noting that state and Canadian provincial rules may have analogous provisions):

Mail

Ordinarily, I contend that service by mail is a terrible idea. Ordinarily, there are better options, though. In the case of Panama, mail is my first recommendation most of the time. Just be sure to comply strictly with Rule 4(f)(2)(C)(ii) or you’re out of luck.

The rule requires that the documents be (1) dispatched from the clerk’s office and (2) sent using a form of mail* requiring a signed receipt. That’s where the wheels fall off much of the time. (But keep reading.)

Electronic service

Rule 4(f)(3) is the mechanism by which a plaintiff can seek an order to serve electronically. It’s constitutionally valid from a due process perspective, and because Panama hasn’t signed on to the Hague Service Convention, there’s no treaty conflict.

Mail, but…

While you’re at it, take a belt & suspenders approach and in your 4(f)(3) motion, ask for an order dispensing with the signature requirement of 4(f)(2)(C)(ii). The ordinary rule allows service by mail as a matter of right, but requires that pesky signed delivery receipt– a rather arcane idea in a post-Covid world. Remember that the Mullane doctrine requires a means reasonably calculated to give the defendant notice and an opportunity to be heard. But mail and e-mail together in the third decade of the 21st century, and you’ve got pretty reasonable calculation.

Wrapping it up

Not a whole lot of fanfare involved– there’s no truly great method of serving in Panama like there are in other places. Letter Rogatory service– even within the treaty mechanism– is costly and time-consuming. Mail and electronic service might get speedier notice and bring your defendant to the table more quickly, but those methods offer a very convenient pretext to a foreign court that wishes to deny recognition and enforcement of your U.S. or Canadian judgment.

In any event, we’re always happy to provide a little direction (even though, for Panama, there’s nothing to engage us for!).

* FedEx and UPS qualify, and given DHL’s penetration of the Latin American market, it might be the best of the bunch. I contend that the actual Post Office, a shell of its former self, is the last thing you should think of if you truly want to get the job done.

Congratulations. Your USM-94 has arrived and you’ve fulfilled your obligation relative to the Hague Service Convention. Whether you’re a client who has retained us to file an Article 5 Request on your behalf with a foreign government, or you’ve used the Hague Envoy platform, or you’re one of those intrepid do-it-yourself* practitioners who has decided to, well, do it yourself… here’s what comes next:

Wait.

Seriously, that’s all you can do. Now that you’re on file in Beijing or Berlin or Bogota, you’ve done everything possible, and you’ve fulfilled your duty. From here, it’s all in the hands of a foreign sovereign, and it’s absolutely critical that you get out of your American lawyer head (or Canadian lawyer head) and recognize that things just work differently “over there”.

Here are some pertinent posts to offer perspective for you on what’s coming down the pike:

And even above that, know that we’re here for you.

Even when we’re taking the kids to the beach.

* Sure, I’m obviously biased, but I contend that going it alone is usually a bad idea– and even if you get it right, it’s costing you more than you think.

View from inside a clock face in Paris, France.
Catrina Carrigan, Unsplash

Another frequently asked question we get here at Viking Advocates is how much extra time an overseas defendant gets to answer.

A very easy reply: None. Nada, zip, zero, zilch.

But opposing counsel contends that they get 90 days because of the Hague Service Convention, says my client.

Ahem, no, says me.

The Convention merely governs how process* is served. It says nothing whatsoever about the conduct of the litigation itself. That question goes back to the rules of the court hearing the case. In short, if the summons says the defendant must answer in 21 days, he gets 21 days, period. It doesn’t matter that he’s served in the Republic of Notamerica. If the summons says he gets 30 days, he gets 30 days. It doesn’t matter that he’s served in the Republic of Notamerica. There’s no variance on that.**

So where did opposing counsel get the crazy idea that the answer deadline gets extended? In all likelihood, he’s conflating actual service abroad (pursuant to the treaty) with waiving service at the plaintiff’s request.*** I give you Rule 4(d)(3)…

  • Time to Answer After a Waiver. A defendant who, before being served with process, timely returns a waiver need not serve an answer to the complaint until 60 days after the request was sent—or until 90 days after it was sent to the defendant outside any judicial district of the United States.

Two things have to happen for that 90-day grace to kick in: (1) the plaintiff has to actually request it, and (2) the defendant has to actually waive.

If either of those doesn’t happen, no extra time.

If the defendant must be served pursuant to the Hague Service Convention, the deadline does not extend.

Period.

Author’s note: there’s one glaring exception to this concept, and that involves defendants served pursuant to the Foreign Sovereign Immunities Act. The FSIA’s section on service provides a 60-day deadline to foreign governments, agencies, and instrumentalities. See 28 U.S.C. §1608(d). The extension is simply a matter of right, so in order to avoid any confusion on the issue, I advise my clients to have the summons language amended.

* Not just process, but all judicial documents that must be served (great exception: subpoenas, but that’s a different argument). For our purpose here, it’s all process.

** A little known quirk in Washington’s civ pro rules: defendants served in the state get 21 days, while defendants served out of state get 30. This variance has nothing whatsoever to do with the Hague Service Convention– and arises in a very goofy place. It’s baked into the various defenses & objections of Rule 12, rather than Rule 4 where it belongs. (Wash. rules are structured similarly to federal rules.)

*** I suggest sending a waiver request before hiring us to tackle Hague service because fee shifting is a possibility.

Latest trend in litigation nationwide: Danish pharmaceutical manufacturer Novo Nordisk and its subsidiaries, sued in the United States for dramatically adverse effects of Ozempic and Wegovy. At issue is the relative safety of two medications that were originally approved for treating different yet closely related (diabetes and cardiovascular recovery) maladies, but have been found dramatically effective in treating obesity. This post disregards merits of the suits,* and focuses solely on procedural requirements to launch them.

So, what’s necessary in serving Novo Nordisk? Not anything out of the ordinary, really. Our how-to guide on service of process in Denmark lays out all the particulars of service pursuant to the Hague Service Convention, but one issue is important to keep in mind: Denmark’s position on translation. Here it is, verbatim:

A translation is not required; in the case of an untranslated document, however, the addressee is informed that he is not, under Danish law, under an obligation to accept it.

A bit of a challenge, that. Very rare is the Dane who doesn’t speak English as well as I do– seriously. Technically, you shouldn’t have to worry if your pleadings are solely in English. But many of my clients do worry, and they pay for a pro to turn everything into Danish. Why? It’s tough to say whether the serving officer in Bagsværd will be adamant about that or whether the N.N. staff member who receives the documents will be recalcitrant. If they refuse, the plaintiff goes back to the drawing board and starts all over with the translation,.

Now, fortunately, the Danish authorities are pretty quick, only taking two or three months to return proof of service, but it’s still a gamble, and if the pleadings are relatively short, it won’t cost much to translate.

While the suits are barreling headlong into full MDL status, many must nonetheless be served now. Eventually, as the suits become more consolidated in Chicago (N.D. Ill.), and eventually defense counsel will be compelled to accept, service will be progressively less necessary.

But for now, from a service of process perspective, these cases are not extraordinary. There aren’t special rules for them, and there’s not an exemption from Hague requirements unless they waive or somebody in the United States waives or accepts for the offshore defendants.

* Full disclosure: I’ve struggled with weight my entire adult life, my entire adolescence, and much of my childhood. This culminated with literally life-saving gastric bypass surgery twenty years ago. This issue is personal. I’m still fighting it at 52, and actually pondering these medications, but also realizing that fewer beers and a couple more sessions at the YMCA every week would go a long way toward the goal.

c5e4bee2e7506a55e87ef85fb01ff91a
What? Atticus Finch was also a whaling ship captain?

(Hat tip to Ted Folkman, for whom Gurung v. Molhatra is a White Whale. This issue is one of mine, for similarly frustrating reasons.)

Remember that legal analysis hierarchy they told us about as 1L’s? In order of authority:

  • Constitution
  • Statutes
  • Rules promulgated pursuant to statute
  • Precedent (binding and then persuasive, giving obiter dicta less weight than ratio decidendi*)
  • (if the text of any statute or rule is ambiguous) Legislative History

Well, that’s the basis for today’s rant.

A takeaway I gleaned not long ago from The Secret Barrister (which I highly recommend) is this: yes, yes, legislatures make statutes, but courts feel an irresistible, instinctive need to put their own gloss on the text. While it’s critical for courts to fill in legislative gaps, that can a recipe for trouble, and that trouble is alive and well in at least one area of my practice.

My legal writing professor (who saved my career from oblivion) hammered into our brains that we should always go to the source for legal analysis. Don’t just look to case law– go the the statute or rule itself. Why? Because precedents may be out of date, Shepard’s may not catch critical changes in the law, and courts sometimes get it flat-out wrong. When they do, they spawn a line of cases that make matters worse. So here we go with a rant on one such ridiculous line.

Rule 4(d)(1) waiver obligation

Fed. R. Civ. P. 4(d)(1) obliges defendants to waive service. All of them, with the notable exception of governments and their agencies and instrumentalities. This is beyond contestation.

Verbatim:

(1) Requesting a Waiver. An individual, corporation, or association that is subject to service under Rule 4(e), (f), or (h) has a duty to avoid unnecessary expenses of serving the summons.

When you’re suing an offshore individual or entity (other than a government defendant), the defendant is obliged to waive, period.

But back to that gloss that courts feel the need to slather onto the words of various drafters. Here’s where the fun really begins.

Sometimes dicta is a problem child. It’s definitely a problem child when it is neither analyzed, explained, or sensical. I give you the following sentence– dictum, to be sure– from O’Rourke Bros. Inc. v. Nesbitt Burns, Inc. 201 F.3d 948, 951 (7th Cir. 2000):

Rule 4(d)(2) provides foreign defendants the ability to waive service but exempts them from costs for a failure to execute the waiver.

Seems pretty straightforward, no?

Well, no, it’s not. For one thing, the ratio decidendi (okay, it’s a fancy word for holding) of O’Rourke Bros. wasn’t even about a 4(d) waiver– it was about a Rule 60 motion to overturn a dismissal. But more importantly, the sentence is manifestly incorrect. The simple fact is, 4(d)(2) doesn’t provide “the ability to waive”– 4(d)(1) mandates the waiver. Rule 4(d)(2) also doesn’t exempt anything.

The Rule 4(d)(2) fee shifting provision

Here’s 4(d)(2), verbatim and in its entirety:

Failure to Waive. If a defendant located within the United States fails, without good cause, to sign and return a waiver requested by a plaintiff located within the United States, the court must impose on the defendant: (A) the expenses later incurred in making service; and (B) the reasonable expenses, including attorney’s fees, of any motion required to collect those service expenses.

Anybody see the word “exempt” there? Anybody see the words “but not if…” or “unless”? Am I the only one who can’t see any reference to non-U.S. defendants whatsoever?

Hmmm. Curious. There is not a single word in that rule pertaining to naughty foreigners. As it turns out, the original 1989 draft of 4(d)(2) didn’t distinguish based on where a defendant was subject to service. It just said that if a defendant didn’t have a good reason for not waiving, the court had to shift costs to him/her/it.

Pretty simple, and pretty reasonable, too, if you ask me.

This was not the view taken by the Court of St. James, whose diplomatic legation threw a hissy fit, objecting to such an affront to the sovereignty of Her Majesty and the freedom of her subjects. The drafting committee didn’t want to have the fight, so they punted.** (Sure, I exaggerate, but still– the last time we let the Court of St. James tell us how to write our rules, a bunch of guys dumped a shipload of tea into Boston Harbor.)

Getting back to that hierarchy… courts should only look to advisory committee notes and legislative history if there’s ambiguity in the rule or statutory text. And there is no ambiguity whatsoever in Rule 4(d)(2). It is a command: thou shalt shift fees onto naughty Americans. It says nary a word about what happens (or doesn’t happen) beyond our shores.

So my question: did the drafters just want to shut the Brits up and make them go away? (I thought we did that at Yorktown in 1781, but still…) Or did they seriously intend to prohibit fee shifting– in which case, why not remove the clear obligation in 4(d)(1)? Recall that defendants subject to service under 4(f) and 4(h)– so, individuals and entities in foreign countries– are obliged. The drafters left that language intact.

Advisory Committee Notes in Conflict

Even at that, the Advisory Committee notes paint a rather interesting picture– a conflicting picture if ever there was one. Regarding the obligation:

The rule operates to impose upon the defendant those costs that could have been avoided if the defendant had cooperated reasonably in the manner prescribed. This device is useful in dealing with defendants who are furtive, who reside in places not easily reached by process servers, or who are outside the United States and can be served only at substantial and unnecessary expense. Illustratively, there is no useful purpose achieved by requiring a plaintiff to comply with all the formalities of service in a foreign country, including costs of translation, when suing a defendant manufacturer, fluent in English, whose products are widely distributed in the United States.

(Emphasis added. I disagree that there’s no useful purpose in it– my stockbroker makes very nice commissions thanks to it. But I digress.)

Continuing:

The opportunity for waiver has distinct advantages to a foreign defendant. By waiving service, the defendant can reduce the costs that may ultimately be taxed against it if unsuccessful in the lawsuit, including the sometimes substantial expense of translation that may be wholly unnecessary for defendants fluent in English.

(Emphasis added.)

Yet regarding fee shifting:

Nor are there any adverse consequences to a foreign defendant, since the provisions for shifting the expense of service to a defendant that declines to waive service apply only if the plaintiff and defendant are both located in the United States.

Um, huh?

On one hand, there’s no useful purpose in making the plaintiff shell out healthy four- or five- (I’ve even seen six!) figures to serve a foreign defendant– and those costs may impliedly be taxed against the defendant anyway– yet there are no adverse consequences to being furtive? Are you kidding me?

Remember the old adage that a camel is a horse designed by a committee? Well, this set of Notes is what we get when one committee member doesn’t know what another committee member is saying.

Mercifully, in that 1L hierarchy, the Notes don’t constitute law, and they only have bearing where the law is ambiguous.

Fee shifting to recalcitrant offshore defendants is not prohibited by 4(d)(2). It’s discretionary, and well within the court’s inherent authority to enforce obligations.

O’Rourke Bros. should be overturned. Or at least, its dunderheaded dictum should be disregarded.

* Yes, I like Latin.

** For a more thorough rundown– and criticism– of the rule drafting story, see Brockmeyer v. May, 383 F.3d 798, 807-808 (9th Cir. 2004).

Hilly Cityscape of the Victoria Harbour region of Hong Kong during a blue sunset
Manson Yim, Unsplash

[TL; DR: don’t even bother with it in most cases. Likely the only way to get effective service in Hong Kong lies in Article 10.]

In 1997, Hong Kong ceased to be an outpost of the waning British Empire and returned to Chinese control for the first time since the Opium Wars early in the reign of Queen Victoria (1842, in case you’re curious).

At the time of the handover, China recognized the practicality of maintaining the British way of doing things– for at least a little while– and as of this writing, Hong Kong is still designated as a Special Administrative Region of the People’s Republic of China. It still has an ostensibly independent local government and common law courts, it has kept its own currency (the HK dollar), and its affairs are still conducted in the English language. China has also maintained the British mechanism of the Hague Service Convention in Hong Kong– allowing service by mail (Article 10(a)), service at the direction of a solicitor (Article 10(b)), or service at the direction of its Hague Central Authority (Article 5).

Now, setting aside my arguments against service by mail– it’s just a bad idea– – I now have to conclude that Article 5 is even more likely to fail. About a decade ago, the Central Authority began rejecting requests for service of pleadings that failed to properly distinguish Hong Kong from sovereign states. In 2016’s Service of Process in Hong Kong means Hong Kong, CHINA, I wrote:

Simple practice tip: if your defendant is located in Hong Kong, be sure to refer to the jurisdiction as Hong Kong, China or, alternatively, Hong Kong S.A.R. (shorthand for “Special Administrative Region”).  Any request which refers to Hong Kong in isolation, and is submitted to the Hong Kong Central Authority for the Hague Service Convention, will be rejected as a matter of course.  Hong Kong government officials are particularly wary of showing any offense to the government in Beijing, and they insist on this nomenclature out of abundance of caution.

That seemed perfectly reasonable, and not at all difficult to head off in the drafting phase of a lawsuit. But in 2020, they started applying the same scrutiny to exhibits— which cannot be amended– rendering all but the barest of complaints impossible to serve pursuant to Article 5. Even those bare complaints (without exhibits, with very careful diligence to include the S.A.R. designation) are now problematic too. Last week, I got this:

Tons of fun built into that. I initially thought, based on their regular acceptance of the S.A.R. designation without reference to China, that there was something missing in what I sent in. Did I screw up? Did my client goof something up despite my advice? Did I miss their goof? Nope. I didn’t miss anything and my client didn’t goof up.

For the “examples flagged” bit, with handwritten corrections (identifiers redacted), see the following from the description of the defendants in the complaint:

I was astounded. “Hong Kong S.A.R.” alone is now insufficient. It now must be Hong Kong, SAR, China. [I can’t say whether just Hong Kong, China— omitting SAR– would suffice.]

If the Central Authority rejects such omissions in pleadings and exhibits in the first place, how is a letter explaining why changes can’t be made going to remedy anything? This new basis for rejection renders Article 5 service all but impossible, so I strongly urge my colleagues to not even try. Of course it costs more, but the only truly viable option now is Article 10(b). In Hong Kong, service can be effected at the direction of a solicitor.

1712846965-6824-4620-lxb_photojVCWcao53u0lxb_photo-
Kido Dong, Unsplash

By far– and I’m talking miles here– the single most frequent question to hit my inbox:  “hey, Aaron, any update yet?”  Most of the time, the answer is no.

In many cases, the question comes from a lawyer who needs to calm an anxious litigant who just doesn’t understand that (1) things don’t work abroad the way they do here and, (2) consequently, things take longer— a lot longer in some cases.  Sure, I told the lawyer at the outset that it would take X months, and he told the litigant that it would take X months, but the litigant either wasn’t listening or didn’t believe him.  [In mercifully rare cases, it’s my lawyer client who wasn’t listening or didn’t believe me.]

In still other cases, it’s an impatient judge or clerk of court trying to throw his or her weight around, and they just don’t get that U.S. courts don’t call the shots overseas.  They also don’t realize that federal rules negate service deadlines outside the U.S. (a reasonable diligence standard applies instead).  If state court rules don’t simply track the federal, they almost universally give wide latitude to extend.

None of that seems to matter when it’s been several months and not a peep has been heard from overseas.  The question isn’t unreasonable– it’s perfectly expected, in fact– but the explanation behind the “no, not yet” is rarely simple.

Something to bear in mind…

There are three types of Central Authorities in the Hague Service Convention community:

  1. the highly responsive ones,
  2. those who respond but are at the mercy of a massive bureaucracy (and once the stuff leaves their office, tracking is not a thing), and
  3. those who just ignore us completely.

The Authorities in category 1 are relatively fast– these are the ones who don’t take very long anyway– and status updates aren’t really necessary.  Before counsel starts to worry, we have proof in hand, so the question only rarely arises.*  Think Switzerland and Korea.

In category 2, well, the folks at the Central Authority would love to help, but the system in which they operate is so ponderous that they really can’t tell us anything.  The moment the request package is forwarded on to local authorities (courts or sheriffs/bailiffs) for processing, the Central Authority is just as much in the dark as I am.  Think China and Mexico here.  Occasionally, we’ll get confirmation that a Request has been forwarded on to local authorities, but never anything truly substantive that gives any forecast of a timeline.

As for category 3, what can I say?  Everything is in the hands of a foreign sovereign– a foreign sovereign who is under precisely zero obligation to answer to U.S./Canadian courts, or especially U.S./Canadian lawyers.  They don’t give a tinker’s cuss, and it shows.

It’s the second and third categories that cause so much consternation.  But there’s nothing we can do about it.**

* It does happen from time to time, but mostly as a function of overburdened government offices where things simply fall through the cracks.  It’s not because of corruption or ineptitude.

** At least, there’s nothing we can do about it after the fact.  In countries where faster alternatives are available, I advise my clients to spend a little more to take advantage of that speed.  Sometimes the price tag drives the strategy, and they go with the slower official method.  To their consternation.  The biggest culprits here?  Canada and Australia, of all places.  Their Central Authorities are frustratingly slow.  But private service is available in both, and well worth the extra cost.

1711198353-7669-9946-lxb_photoGGCP6vshpPYlxb_photo-
wu yi, Unsplash

[Author’s note: although this post focuses mainly on entity defendants, we encounter the same problem with individual defendants. Individuals are simply harder to ascertain and locate, just like on this side of the Pacific.]

Over the past decade I’ve submitted dozens– if not hundreds– of Hague Service Requests to the People’s Republic of China. It takes quite a while for proof of service (or failure) to come back, usually many months but sometimes as long as two years. That’s not a typo, and it’s incredibly frustrating for U.S. and Canadian litigators. The frustration doubles when a request fails after so much time has passed, and it doubles again when we see this reason for failure:

No such defendant at the address provided.

Harumpf. Harumpf harumpf. I mean a Mel Brooks-style harumpf harumpf.

Pretty ambiguous, that statement. Did we not properly name our defendant? Do we have a bad address? Did we strike out on both?

Every single time clients ask me to have a Chinese company served, I recommend that they undertake– at additional cost, of course– some research to look into that company and make sure it’s properly named and located. Just like we’d do with a corporate defendant here in North America.

Every. Single. Time.

When a client declines to avail her/himself of a little advance intelligence, the odds of failure literally skyrocket. To be sure, the investigation is no guarantee that service will be executed– it takes so long to get the thing pushed through the system that defendants often move before local officials get around to serving. We’re always dealing with the caprices of local officials who may not be entirely honest or motivated, or a judicial officer who might simply be in a bad mood because he had a fight with his wife at breakfast. There are about 137 variables that can throw the train off the tracks, an incorrect or incomplete address being just one. And this doesn’t apply solely to China– it’s the same calculus anywhere we rely on officials to effect service.

But a little homework at the beginning eliminates the single biggest problem in China.

The big questions surrounding that homework…

What?

What’s necessary? Nothing truly onerous. Just a reasonable inquiry into the defendant, to make sure you’re doing everything you can to serve successfully, hale the defendant into court, and make your client whole.

Why?

Why be so persnickety about this? Well, Big Tony (my 2L Business Organizations professor in law school) hammered into us on Day 1 that, if you’re going to sue an entity, you’d better name it properly, or your cause of action is dead before it leaves the starting gate.

That’s a vital, but not incredibly tricky, question in China. Chinese companies have to follow a recipe when they set up shop and paint a name on the door. Writes my friend and fellow global legal tour guide, Dan Harris, over at the China Law Blog about setting up a WFOE (Wholly Foreign-Owned Enterprise):

  • In China, only the Chinese language name has any legal status; as a legal matter, the English is not relevant. This means you can use any English language name you want.
  • Chinese company names follow this rigid structure: [City of formation] Company Name [business type] [Company Ltd.]
  • So, an English equivalent of a typical Chinese company name would be: Shenzhen ABC Consulting Co. Ltd.
  • The elements in [] square brackets are fixed by the local government. This means the only thing we need determine now is the Company Name. Since as you can see, company names can get rather long, it is usually best to limit the Company Name part to 3 or 4 Chinese characters at most.

For the record, Dan’s outline tracks with everybody else out there who writes about corporate naming conventions in the PRC. Take this to the bank, and recognize that, if your defendant’s trade name is “Chairman Mao’s Widgets” you can be assured of failure if that’s the name you slap on your summons and Hague Request.** Chairman Mao’s Widgets might be the name the company holds forth to the world in English, but the legal Chinese name literally translates to Shanghai Mao Rocks Widget Manufacturing Co. Ltd.

Sometimes the name starts in English but gets translated very poorly (ie: phonetically, Pidgin) into Chinese. As Dan stressed, a company can use any English name it wants, but the Chinese name is the only legally relevant moniker.

(To be sure, the necessity of an accurate name applies to individual defendants as well– but they’re a lot harder to track down absent a listing in a corporate filing or high internet profile. You can bet a request to serve Dave Xiaoping is going nowhere when his real name is Deng Xiaoping.***)

When?

When should it be done? The best time to undertake the investigation is before the suit is even filed. It saves a huge hassle to pinpoint the name in the first place, because you still have that single bite at the amendment apple that doesn’t need justification with the court. But if you’re already filed, you still absolutely must have the correction made before translation and before you send the Hague Request to Beijing. At that point, it’s all over but the shouting. There are no requests to amend over there. No mulligans, no do-overs. no take-backs.

You’re back to square one, starting over with a whole new Request and the additional costs that entails.

Who?

Hire a reputable, professional investigator in China. Yes, they have them, on the mainland and in Hong Kong. Don’t just call your usual guy that skip traces U.S. defendants for you, because it’s just not the same undertaking. And if your usual guy doesn’t speak and read simplified Chinese, well, how accurate do you think his result is going to be?

If an actual Chinese investigator provides the name and address of your defendant, it may differ from an SEC filing or Bill of Lading, but those documents don’t necessarily identify the proper address for service. That gets to the next question…

Where?

“Where?” is the most important question in serving any defendant– not just in China, but anywhere, at home or abroad. The single, most important piece of information in serving a properly identified defendant is his/her/its location.  Without the “where,” nothing else matters. 

The research we do at the outset gives us not only an accurate name and correct address for a Hague Service Request– it also gives us ammunition for alternative service in the rare instance that a Request fails. I once worked a case where my client (plaintiff’s counsel) took my advice and paid for an inquiry into the company defendant. My investigator came back with an address that appeared not only on the entity’s website, but also in its registry. Unquestionable intel that went straight into the Hague Request. A year later… “No such defendant at the address provided.” So we asked for — and were granted– a 4(f)(3) order to serve electronically. Now, that would have conflicted violently with the Hague Service Convention, but the Certificate of Nonservice was an official statement from the Central Authority that we didn’t know the defendant’s address. That negated applicability of the Convention.

Defense counsel (herself a Chinese lawyer admitted in the U.S.) argued until she was blue in the face that we violated the treaty. She contended that we had the right address, the company website and the registry agreed, and we agreed. The Central Authority called the shots, though, so it would be silly to think that it would work a second time. That didn’t matter, she insisted, telling me to resubmit and just tell the Chinese authorities to go back and do it properly.

Um, huh? Have you ever been able to order the Chinese government around?

The judge was not amused. He told defense counsel to shut up and stop being silly… all because we knew what we were doing and had done our homework in the beginning.

Wrapping up

No exaggeration here– just attempting to serve a defendant in China costs thousands of dollars and a year or two of a litigant’s life. Spending a few hundred extra dollars early to mitigate the odds of failure is always a worthwhile expenditure.

I cannot recommend an investigation strongly enough.

* I did not name this outfit. NECIPS is a silly-sounding acronym, but they tell me it sounds awesome in Chinese.

** This applies to Hong Kong as well, but with even more peculiarity. Take a read of A Hong Kong Cautionary Tale for more.

*** Set aside the fact that Deng is his surname.