Search results for: mandatory exclusive

Ministry of the Interior, Havana. Evaronalotti, via Wikimedia Commons.

[UPDATE, May 3, 2019…  The tsunami now begins.  Title III of the Helms-Burton Act has been implemented.]

With all the fanfare this month over the government shutdown and the Kansas City Chiefs’ coin-toss defeat in the AFC Championship, a little-noticed story out of the Trump Administration could prompt a tsunami of litigation (yeah, I’ve wanted to use that expression for a while now) against offshore companies doing business with Cuba.  I withhold comment here about the broader ramifications of such suits,* but an important element of the puzzle lies squarely within my wheelhouse, and it bears discussion.

Title III of the Helms-Burton Act (HBA) allows U.S. litigants whose Cuban property was expropriated following the 1959 Revolution– for the most part native Cubans who’ve emigrated north– to sue entities who have profited from that expropriated property.  An example: let’s say “Autohersteller GmbH“, a fictional German carmaker, wants to develop a parts plant outside Havana, and the Cuban state grants a 99-year lease to the land on which they build it.  Prior to 1959, the plot of land was owned by a group of citizens loyal to President Fulgencio Batista; after his overthrow, the Castro government seized the land and title thereto.

Sixty years later, those citizens and their kids now live in Fort Lauderdale, and if the Trump Administration reverses a quarter-century of waivers, they’ll be marching into the United States District Court for the Southern District of Florida and filing suit.  Not against the Cuban government– there’s no realistic mechanism for that.**

Instead, they’ll be suing Autohersteller GmbH for damages under Helms-Burton.  Again, set aside any discussion of the practical impacts of the statute; but recognize that the only proper way to serve that company in Germany is by filing a Hague Service Request.  HBA establishes a cause of action (and, necessarily, jurisdiction) but does not override the procedural rules applicable to serving overseas defendants.  It does not supersede the mandatory and exclusive nature of the Hague Service Convention.  And it does not dispense with the defendants’ due process right to proper notice.

Plaintiffs, do it the right way, and remove at least one obstacle to an eventual verdict.

* Just Google “Helms-Burton III” to see much debate on the issue.  It’s a doozy.

** Cuba is not party to the Hague Service Convention, and it’s highly doubtful that Cuban courts would entertain Letters Rogatory in such a case anyway.  Service can still be effected by diplomatic note under the Foreign Sovereign Immunities Act, but the Cuban government may have a pretty compelling argument against jurisdiction under customary international law.  Regardless, they would have to be served in order for that discussion to ripen.

The very boots. This image is tastefully cropped & zoomed so as to not appeal to prurient interests.

[Author’s Note:  In a bit of sad irony, my initial draft of this post was written just as news of Kate Spade’s suicide broke on June 5th.  Honestly, I knew very little about her except that she (1) designed handbags and (2) is a local icon here in Kansas City.  She grew up here, and attended high school a mere two miles from my house.  As I’ve come to find out, she brought some Midwestern sensibility to the fashion game, and thus made a pretty big impact on a pretty big industry.]

I’ve attended a lot of CLE lectures over the years, but the best one I ever saw was overseas.*  All of the best ones are connected to some sort of long flight, because if you’re in Rome or Paris or Istanbul or Oxford, how bad can the lecture possibly be?  Just the setting alone makes them interesting.

Until a few years ago, I had no idea that “Fashion Law” was even a thing.  I doubted highly that designer clothes mattered even a bit in the great grand scheme of the universe.  Then I heard my friend Layne Randolph‘s lecture on trademarks and trade dress, and I was astounded to discover that, not only was this really “a thing,” but the thing matters– immensely.  I simply hadn’t ever contemplated the economic value of high-fashion brands.  I’d always viewed Ralph Lauren and Kate Spade and Vera Wang and Manolo Blahnik as a just bunch of fussy/snooty people that were waaaaay too proud of themselves and their work-product.  It didn’t help that I’m a big guy, and fashion houses aren’t exactly beating my door down, begging me to buy their stuff.  It also didn’t help that many years ago, an ex-girlfriend routinely forced me at emotional gunpoint to watch Sex & The City with her.  I hated every excruciating moment of it, and I hated fashion designers by association.

But Layne’s presentation was awfully compelling.  As a newly minted J.D., I found the just-filed Christian Louboutin suit against Yves Saint-Laurent an excuse to pay attention to her query: whether Louboutin’s iconic red soles were protected as a mark or dress.  It was a pretty compelling legal question.

You learn something new every day, right?

Well, a few weeks later, I plunked down nine dollars to see the third and final installment of the Men in Black series.  In the opening scene, a rather curvy alien woman walks down a hallway in a super-duper-maximum-security prison on the moon (hey, I didn’t write it) to spring her boyfriend/boss, one of the guys from Flight of the Conchords (I said I didn’t write it).

Of course, movies these days are all about prurient interests, so the very first action shot is of the bright red soles on the woman’s thigh-high boots as she walks away from the camera while it slowly rises to a very high-cut leather mini-skirt and…  well, you get the idea.  Just what every twelve year-old boy wants to see at the movies.

Being a twelve year-old boy myself (our bodies age, but our brains’ development arrests in the 7th grade), one would think I’d follow the camera and enjoy the highly inappropriate objectification of a woman’s body.  Nope.  I was fixated on those crimson soles and the legal issues surrounding them.  I wondered how many lawyers were involved in the licensing agreement that Columbia Pictures needed Christian Louboutin’s people to sign, just for that one shot, and w0w, what a waste, because the product placement value of this particular trade dress in a scene targeted to twelve year-old boys is…

This one would be a tough one to go after. Serving in India is a bear.

Dammit.  I’m an adult.  And a lawyer to boot.  (See what I did there?)

Now that I handle service abroad nearly full time, I still can’t watch that movie and not ponder the procedural implications.  What if a Dutch company decides to make a cheap knockoff of the same boot?  What are the procedural hurdles?

Well, watch the latest Louboutin kerfluffle unfold and you’ll find out.

In short, y’all, the world has reached globalized status, and all the ire the Tea Party can muster is not enough to put the Genie back in the bottle.  Litigation crosses borders more now than ever, and although we lawyers like to think the law has streamlined itself since the dawn of the internet age… nope.  Not as much as you might think.  In much of the world, service of process is still effected in the same manner it was in 1965, when the Hague Service Convention first came about.  The treaty is still mandatory, and it’s still exclusive doctrine, so trademark and trade infringement suits must still be properly served.  Pay attention to detail.  It matters.

* Shameless plug:  UMKC Law hosts a couple of CLE Abroad programs every year, and I have the privilege of speaking on many of them.  The trips are a whole bunch of fun… and potentially deductible.**

** You bet your sweet bippy there’s a disclaimer on this one.  I’m not a tax lawyer and, if you’re reading this, neither are you.  So seek specific professional advice on whether you can deduct an overseas CLE trip (or how much of it you can).

[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.]

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 patent 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 patents exclusively, no visa applications ever.  What if some offshore bad guy (let’s call him “OBG” for short) decides that “all your base are belong to us” and starts making your client’s widgets with his own name on them?  Your client, who sacrificed an incredible amount of blood, sweat, and tears** to invent– or an incredible amount of money to buy the rights to– the widget, wants to sue.  Now.

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

Well, for most of the world, start off by looking up the Hague Service Convention.  It’s mandatory doctrine if you need to serve OBG in his homeland.

In all likelihood, you’ll have to set up a translation of the documents– and that’s a big deal with patent cases, so here’s a handy guide on how to keep those costs down.

Then, you’ll have to determine what alternative methods are available.

Then, if you go the Article 5 route, ask the appropriate foreign Central Authority for help.

Last, 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 him served…

This is Ned Stark.

You’ll have a tough time making the patent-holder whole.

* 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.

** Apologies to a certain Mr. C of Blenheim, Oxfordshire.  The original quote included “blood, tears, toil, and sweat” but a 1970s fusion band morphed it a bit for brevity.

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 handle car accidents, not 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 Boromir into your slide deck!

Seriously.
This is Boromir.  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 car accidents exclusively, no visa applications ever.  What if some random Swede rents a car from the Avis desk at the airport, and an hour later, he sideswipes your client?  Yeah, you’re going to sue Avis.  Yeah, you’re going to sue their insurance company.

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

Borg 1980
A random Swede.  A random Swede with five consecutive Wimbledon titles.

Well, if you’re going to serve him in Sweden, start off by looking up the Hague Service Convention.  It’s mandatory doctrine if you need to serve Bjorn in his homeland.  Oh, wait… he lives in Monaco, you say?  Well, that muddies the waters just a bit (though not much). Hague restrictions apply there, too, so you have to decide where you think you have the best shot at serving him.  [Hey, John McEnroe almost pulled it off.]

Next, you’ll have to set up a translation of the documents, even though I have yet to meet a Swede who doesn’t speak English as well as I do.  Sweden requires it (kinda).  Monaco doesn’t require it (kinda), but good luck getting a huissier de justice to approach the net without one.

Then ask the Central Authority, either in Stockholm or Monte Carlo, for help (even though the Swedes don’t technically object to Article 10 methods).

Last, 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 him served…

THIS is Ned Stark.
This is Ned Stark.

You’ll have a tough time getting the judge to proceed without that indispensable 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.

1965_Volkswagen_Beetle_(7486333448)
Image by Niels de Wit, via Wikimedia Commons.

Over the years, I’ve repeatedly had lawyer clients say to me, “I have to serve a defendant in (Country X), but I don’t want to do it through the Hague.  That’s just too much hassle.”

Ahem, sorry, I say to them.  You don’t have a choice in the matter.  But that doesn’t necessarily mean what you think it means.  We just need to define ‘the Hague’.

The bottom line is this: if you have to serve a defendant in a country that is party to the Hague Service Convention, you must observe the strictures of the treaty.  Period.

Why? Because this lady said so:

Source: National Archives.
Sandra Day O’Connor’s swearing in, 1981.  Image source: National Archives.

And eight of her friends backed her up in much of the reasoning.  But again, that doesn’t necessarily limit your options.  It all depends on the country.

First, recognize the mandatory & exclusive nature of the treaty.  Just so you don’t have to brief the case as if you’re in law school again, here’s the skinny on Volkswagenwerk AG v. Schlunk, 486 U.S. 694 (1988), the granddaddy case in overseas service.  Schlunk set forth two absolutes:

  1. If the Convention applies, it’s mandatory, so don’t try to get cute with the methodology, even if the judge says you have to do it his way (at 699).
  2. The methods articulated constitute an exhaustive list (at 706).  Full stop.  Service by drone is not listed, so forget it.*  Delivery by  Hogwarts owl?  Nope.  Stick to the treaty or don’t serve.**

Interestingly, the court held that in the specific facts of Schlunk the Hague Service Convention didn’t apply.  Illinois statute allowed for service on a foreign corporation by delivery to its Illinois subsidiary.  Schlunk sued Volkswagen in Illinois state court, and his counsel appropriately served VW via its U.S. subsidiary’s Chicago headquarters.  Done.

By its own terms, the Convention applies only if there is occasion to send documents abroad for service.  No need to send abroad if you can get them in Chicago.  [Congratulations to the Cubs, while I’m thinking about it.]

Still, the decision is seminal in Hague service by U.S. plaintiffs.  Justice O’Connor was awfully clear in her logic:  if the treaty applies, follow it, but it doesn’t apply here, so the case can proceed.  That being said, the treaty also sets out more than one method for serving, provided the destination state doesn’t object.  Many of them do, so you’re limited in Germany (including Volkswagen), China, and Korea.  You’re kinda-sorta limited in Japan.

But you can hire a process server in Saskatchewan.  Depending on your venue, you can mail service to France (more in a later post on why that’s a bad idea).  You can make a direct request to a gerechtsdeurwaarder if your defendant is a very tall Dutch fellow in Rotterdam.

What my lawyer-clients really meant in all those phone calls was that they didn’t want to have to fill out all the paperwork necessary for a request to a Hague Central Authority.  The hassle is often unavoidable, but in many cases, isn’t required.

 

*Hat tip to Ted Folkman for perfect timing of that post.

** We’ll get into email service in a later post.  It may have only existed in Al Gore’s mind in 1988, but it might just fly under Article 10(a) today.  Might.

Photo by Henry Be on Unsplash

No, really.  There is truly no such thing.

There is urgency brought on by poor planning, poor execution, or being simply blindsided by a surprise issue.  There is a last minute realization that a foreign defendant must be joined, and a long delay will grind the litigation to a halt.  Or there is simple unfamiliarity with the rules by a practicing bar that rarely faces cross-border procedural demands.

Tried & true concepts in litigation are changing at extraordinary speed (a platitude, to be sure), and litigation involving foreign parties and witnesses is becoming a major challenge for attorneys and courts in every jurisdiction.

Fortunately, rules in most courts provide ample time for service, especially Federal Rule 4(m), which specifically abrogates a hard 90-day deadline for service where the defendant is outside the United States.  As long as counsel isn’t dilatory (I had to look that one up), the spirit of the deadline is honored once a request for assistance is handed off to a foreign authority.  At that point, a lawyer can only wait for the authority to accommodate the request.  [NB: Most states reach similar conclusions by either procedural rule or case law.  Wisconsin and Michigan are the lone holdouts, and even they may offer some safe harbor to litigants.]

Critical in this analysis is the mandatory and exclusive nature of the Hague Service Convention.  In Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988), Justice O’Connor wrote for a unanimous court that, where the Convention applies, its strictures must be followed.  The channels set forth by the Convention mean vastly different things in the various countries where it applies, and for the most part, this means the U.S. court hearing a case must usually wait patiently for service to be effected.  Simply put, our rules do not apply elsewhere.

Effective service abroad usually cannot be timed with a clock… several pages of a calendar comprise the better measuring device.*  In some cases, service can take over a year to be proved up– even more in the post-Covid era (are we past it yet?).

Yet 4(m)’s safe harbor does not give an attorney unlimited time.  The dilatory among us face sure dismissal, and it takes a long time to reach that level.

* Exceptions to this:  parts of Canada, Australia, and England, where Article 10 negates the need for government channels to have a defendant served.  In rare cases, process can be served within a matter of hours, and proved within days.  But don’t bet the farm on this possibility.  Ever.

** For the record, Big Ben is the bell inside the tower.  The former St. Stephen’s Tower has been renamed Elizabeth Tower.  We were 102 miles from Balmoral when the queen died on September 8, 2022.  I’ll call it the Elizabeth Tower if for no other reason than… dang, she was funny.

[Author’s note: Whether in state or federal court, the plaintiff absolutely must be cognizant of e-service’s conflict with Article 5 of the Hague Service Convention, even contrary to some very bad, no good, horrible case law.  That said, new developments in the summer of 2024 make it compatible with Article 10(a).]

A debate is simmering in the service of process community, and should come to a rolling boil in the next several years:  whether process can be legally served by electronic means.  Frankly, it ought to be—not just because it is so simple—but because it fulfills the constitutional standard much more effectively than other less practical means.

That standard?  In Mullane v. Central Hanover Trust Co., 339 U.S. 306 (1950), the Supreme Court held that service of process must be effected by a means reasonably calculated to put the defendant on notice of the claim against him—and to afford him the opportunity to defend against the charges.  At the core of Mullane was a highly critical view of publication– even seven decades ago, and that criticism is even more stark in today’s climate, where newspapers’ presence in society is waning with staggering speed.

Traditionally, service by publication has been used to “put the whole world on notice” of a claim where a defendant could not be located.  For many years after Mullane, publication was really a plaintiff’s last (remotely) reasonable resort.  Absent finding an address by dumb luck or just happening to catch a defendant on the street, not many options were left.

In reality, the method is no longer reasonably calculated to do anything but increase publishers’ revenue.  Its effectiveness is a gross legal fiction.  [Honestly, how many people read legal notices in the paper anymore, if ever?   For that matter, how many people read “the paper” anymore?  See my July, 2022 rant about why publication is utterly ineffective here.]

Nowadays, though, email and social media platforms have become all but ubiquitous.  No business can expect to remain a going concern if it lacks an internet presence.  And only the most impoverished individuals—aside from militant Luddites and the very aged—lack an email address.  Yet many courts still reject electronic service, opting to mandate more traditional methods:  personal delivery by a process server, registered mail (ahem, good luck with that), and the all-but-useless publication.

States are coming on board and allowing e-service to registered agents or to evasive defendants.  The real progress in case law is at the federal level, especially as to defendants located abroad.  The Federal Rules of Civil Procedure take particular care to codify the Mullane standard in Rule 4(f), which governs service on defendants located outside the United States, and 4(f)(3) specifically has been held to render “other means not prohibited by international agreement” just as valid as service effected by more traditional means. Rio Properties, Inc. v. Rio Int’l Interlink, 284 F. 3d 1007, 1015 (9th Cir., 2002).  [A cautionary note: Rio Properties involved a Costa Rican defendant, and today that would raise a conflict with the Hague Service Convention.  But at the time, Costa Rica had not signed on to the Convention.  That’s important, given e-service’s violent conflict with that treaty.]

By its own terms (Article 1, right up front), the Hague Service Convention is specifically inapplicable where a defendant’s address is unknown, and the Inter-American Convention on Letters Rogatory & Additional Protocol is not  a treaty whose effect is mandatory (these are the only two treaties on service to which the U.S. is signatory).  If the defendant is known to be abroad, but his/her/its address cannot be ascertained, email cannot then be prohibited by international agreement.  Accordingly, courts have wide latitude to authorize service by email, especially where the plaintiff has diligently searched for the foreign defendants.  [For a thorough analysis of such a case, see D. Light Design, Inc. v. Boxin Solar Co., Ltd., unreported, No. C-13-5988 EMC (N.D. Cal., 2015).]

Look for the validity of email service to grow, especially where it becomes considered a Postal Channel under Hague Article 10(a)… more on that at a later date.  For now, a couple of practice tips…

  • Practice Tip #1:  This idea can be awfully handy with Russian defendants… the Hague Service Convention is ineffective with Russia, so request an order from the court and click send.
  • Practice Tip #2:  When drafting a contract with a foreign party, don’t just designate an agent for service here in the United States… designate an agent and stipulate that they can be served electronically!
  • Practice Tip #3:  If you anticipate the need to enforce your judgment abroad, I wouldn’t go down the e-service road.  Instead, you’ll want to bite the bullet and serve pursuant to a Letter Rogatory.  That’s the only practical method, outside Hague channels (and a few common law systems like Singapore and New Zealand), that demonstrably respects the law of the country in which the defendant is served.

Update, August, 2018… for social media developments, see Twitter Service Hits the Bigtime.

Update, March, 2022… a client kindly forwarded my a great law review article from Pace Law on how it’s done in New York.  C.P.L.R. § 308(5) is the New York analog to FRCP 4(f)(3).

Update, February, 2024… more terrible, horrible, no good case law develops every day that says it’s okay to serve electronically in a Hague country, particularly China.  This is just flat-out wrong, and sooner or later, some appellate court, upon the petition of some foreign defendant, is going to smack the daylights out of some lawyer who tries to circumvent a mandatory and exclusive treaty.