By: Tom On: February 4, 2020 In: International Service of Process Comments: 0
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When it comes to international service of process, novelty is never a good idea.

Around 1000 BCE, King Solomon observed that there was “nothing new under the sun.”[1] When contemplating international service of process, this is a good maxim to keep in mind. If you have never heard of a particular form of service, that’s because it’s already been tried and failed. Conversely, proper service of process is easy to recognize because the procedure used to serve is used over and over again.

Thus cases like Ganpat v. Eastern Pacific Shipping[2] are of interest because they remind us of a valuable lesson: Novelty in science, technology, and the arts is a good thing that leads to many rewards; while novelty in legal procedure is bad thing that wastes both time and money.

An Overview of Ganpat v. Eastern Pacific Shipping

In this action, the Plaintiff alleged that he had contracted malaria while working as a crew member aboard the M/V STARGATE. He brought a Jones Act action against Eastern Pacific — a private limited company with its principal place of business in Singapore. Documents to be served were delivered to Captain Owen Bona while on board the M/V BANDA SEA, which lay at anchor in the Mississippi River just below New Orleans.

The Plaintiff’s position in this case was that service was proper because: “(1) Captain Bona was Eastern Pacific’s actual or borrowed employee and/or (2) Captain Bona was a “managing agent” of Eastern Pacific vested with “general powers involving the exercise of independent judgment and discretion.”

Eastern Pacific, however, sought to have the case dismissed on several grounds, including insufficient service.

Service Upon Domestic vs. Foreign Corporations

Federal Rule of Civil Procedure 4(h) details service of process on a corporation, partnership, or association with respect to whether the service was effected on a domestic or foreign corporation. Specifically,

(A) in the manner prescribed by [Rule 4(h)(1)(A) and] Rule 4(e)(1) for serving an individual by “following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made”; or

(B) in the manner prescribed by Rule 4(h)(1)(B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and—if the agent is one authorized by statute and the statute so requires—by also mailing a copy of each to the defendant.[3]

1. If the defendant was a domestic corporation

For service upon a domestic corporation, FRCP 4(h) is further modified by Rule 4(e)(1), which incorporates Louisiana state law.[4] Under Louisiana law, a corporation may be served by “service on an employee of suitable age and discretion at any place where the business of the corporation is regularly conducted… only if the corporation has failed to designate an agent for service of process.”

However,

To determine whether Eastern Pacific has failed to designate an agent for service of process, the Court must first determine whether Eastern Pacific was required to designate an agent for service of process under Louisiana law. “Louisiana, like every other state in the country, requires a foreign entity to register to do business in the state before it can transact business in the state.” La. R.S. 12:301 requires a foreign entity to procure a certificate of authority from the secretary of state to transact business in Louisiana. Specifically, La. R.S. 12:301 provides, in pertinent part: No foreign corporation or association, except one which has before January 1, 1969, been granted a certificate of authority to do business in this state which is still valid, shall have the right to transact business in this state until it shall have procured a certificate of authority to do so from the secretary of state.[5]

But in Kirkeby-Natus Corporation v. Campbell, the “Louisiana Fourth Circuit Court of Appeal held the requirement that a foreign corporation obtain a certificate of authority to do business in Louisiana before transacting business in the state does not apply to a foreign corporation unless [the foreign corporation] is actually [doing] business in Louisiana.” While no statute precisely defined what it means to transact business, La. R.S. 12:302 defines “acts not considered transacting business” in Louisiana.

Significantly, La. R.S. 12:302 provides:

Without excluding other activities which may not constitute transacting business in this state, a foreign corporation or a business association shall not be considered to be transacting business in this state, for the purpose of being required to procure a certificate of authority pursuant to R.S. 12:301, by reason of carrying on in this state any one or more of the following activities… a foreign corporation engaged only in interstate or foreign commerce is exempt from the requirement of procuring a certificate of authority. [Here it is important to remember that to] serve process on an employee of Eastern Pacific in Louisiana under La. Code Civ. P. art. 1261(B)(2), Plaintiff has the burden of showing Eastern Pacific was transacting intrastate business in Louisiana, as opposed to interstate or foreign commerce, and as a result was required to procure a certificate of authority pursuant to La. R.S. 12:301 but failed to do so [emphasis added].

The court then discussed at length the relevant Louisiana case law and then stated:

In this case, Plaintiff has submitted no evidence showing Eastern Pacific transacts intrastate business in Louisiana. In fact, even after being granted extensive jurisdictional discovery, Plaintiff’s opposition to the motion to dismiss is almost devoid of any explanation as to how Eastern Pacific was transacting business in Louisiana at all. At most, in the complaint, Plaintiff alleges Eastern Pacific “regularly sailed upon the navigable waters of the State of Louisiana” and points to the affidavit of Anil Arjun Singh, who attests: Eastern Pacific’s activities and business in the Eastern District of Louisiana are limited to the management of international ocean-going vessels. Plaintiff offers no evidence that Eastern Pacific has offices, employees, or operations in Louisiana.[6]

Accordingly, the court held that: “Plaintiff has failed to establish that Eastern Pacific was transacting intrastate business in Louisiana;” and accordingly, the Plaintiff had failed to serve the defendant if the defendant were a domestic corporation.

2. If the defendant was a foreign corporation

The court then considered whether service was proper if the defendant were a foreign corporation. Such service is proper when service occurs “in a judicial district of the United States” and the documents to be served are delivered to an “officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and—if the agent is authorized by statute and the statute so requires—by also mailing a copy of each to the defendant.”

Here the Plaintiff conceded that Captain Bona was not an “officer,” a “general agent,” or an “agent authorized by appointment or by law to receive service of process” for Eastern Pacific. Thus the key to this case was whether Captain Bona was a “managing agent” of Eastern Pacific. Importantly, because this case was brought in federal court, the standard used to determine whether Captain Bona was a managing agent must likewise be a federal standard.[7]

Because “managing agent” is not defined by statue, the court examined case law. The Plaintiff had principally relied upon Neset v. Christensen, [8] a case in which service upon a ship’s captain was held to be good service upon the defendant corporation.

In Neset, the plaintiff served process on the owner and operator of the M/S Hermund, the vessel upon which the plaintiff was injured, through R. Christensen, the Hermund’s captain, while the vessel was in New York. Christensen was employed by the owner as the captain of the Hermund. The vessel’s owner moved to vacate service only on the ground that it was not doing business in New York and, as a result, service was not sufficient to confer jurisdiction over it. The defendant owner had only one vessel, the Hermund, of which Christensen was the master. New York was the Hermund’s only port of call in the United States. The time charter for the vessel was made in New York City and the plaintiff signed articles of employment in New York. Some 14 calls were made by the Hermund at New York ports within a period of at least seventeen months, which established a regular pattern of visits to New York rather than irregular or haphazard calls. Christensen, as master, was presumed to have authority from the owner to procure supplies and other necessities for the Hermund in New York.[9]

Unfortunately for the Plaintiff, Neset is easily distinguishable from the instant case.[10]

In Neset, the captain who was served (1) was the employee of the defendant vessel owner, (2) was the master of the Hermund, the vessel upon which the plaintiff was injured, (3) was served in New York where the owner was found to be doing business, and (4) was served in his capacity as managing agent of the owner with respect to the operations of the vessel on which the plaintiff was injured. In contrast, Captain Bona was not an employee of Eastern Pacific, was not master of the vessel upon which Plaintiff was allegedly injured, was not served in a state in which Eastern Pacific was doing business, and was not served in his capacity as managing agent of the owner with respect to the vessel on which the Plaintiff was injured. Neset is neither controlling nor instructive in this case.[11]

The court then observed that few cases address “Rule 4(h)(1)(B) in general or, more specifically, the issue of whether a non-employee may be served on behalf of a corporate defendant.”

In Calandra v. National Broadcasting Co. Inc., the Eastern District of Missouri considered delivery of service on an employee of an independent contractor in Missouri hired by a foreign corporation, National Broadcasting Company, Inc. (“NBC”), to be a sales representative only in “certain areas” in Missouri. The court held service was insufficient to confer jurisdiction over NBC… The court held that neither the individual served, nor his independent contractor employer, could be considered a “managing or general agent” of NBC because the individual and his employer “are only involved in one aspect of defendant’s business, and not even that aspect which relates to the cause of action herein.”[12]

The court then observed that the Plaintiff had failed to establish any agency – let alone a managing agent relationship — between Captain Bona and Eastern Pacific.

Singh, the Chief Operating Officer of Eastern Pacific, attested that Captain Bona “is not and has never been an employee of Eastern Pacific.” Plaintiff offers no evidence to the contrary. Plaintiff has not established that Eastern Pacific has any “operations, officers, or employees” in Louisiana, the state where Captain Bona was served. Eastern Pacific never designated nor authorized Captain Bona to accept service of process for Eastern Pacific… Moreover, Captain Bona, to the extent he has any general powers involving the exercise of independent judgment and discretion, is not involved in any aspect of Eastern Pacific’s business which relates to the vessel on which the cause of action arose. Rather, Captain Bona is the captain of the M/V BANDA SEA, a different vessel from the one aboard which Plaintiff was allegedly injured.

The Bottom Line

In addition to failing to show that service was proper if Eastern Pacific was a domestic corporation, the Plaintiff also failed to show that service was proper if Eastern Pacific was a foreign corporation. However, the court had mercy on the Plaintiff and granted him leave to effect service upon Eastern Pacific within the next 90 days.

Proper service in Singapore is effected by service overseen by a solicitor or via a Letter Rogatory. In this case, undoubtedly to avoid the not insignificant cost of either solicitor overseen service or service by Letter Rogatory, the Plaintiff came up with a novel strategy based on the concept of “tag” service of process, but got tripped up in the details of international service of process.

Although it is impossible to accurately say how much time and money the Plaintiff wasted just to be given leave to serve via a solicitor or Letter Rogatory, it is certain that the he expended a substantial amount of resources – in the form of motion preparation, appearance, and the burning of the court’s goodwill/patience.

All of these resources could have been saved if the Plaintiff had not tried to invent something new under the sun.

How LLS Can Help

International service of process is complex and should never be attempted without the help of experienced professionals. At LLS, we have more than 35 years of experience effecting service in 90+ countries. We can advise you on exactly how your Hague Service Request should be prepared, how it will travel through the foreign judicial system, and what potential pitfalls it may encounter along the way. Additionally, if Hague service is not an option, our staff attorneys can help you explore other options and determine the best method for service.

Contact LLS today to learn more about how we can assist you.

Call 1-800-788-0450 or simply fill out our free quote form.

Notes
[1] Ecclesiastes 1:9 KJV.
[2] Civil No. 18-13556, E.D. Louisiana, January 17, 2020.
[3] Footnotes omitted.
[4] Art. 1261.
[5] Citation omitted.
[6] Footnotes omitted.
[7] National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964). See also Vazquez-Robles v. CommoLoCo, Inc., 757 F.3d 1, 5 (1st Cir. 2014).
[8] 92 F. Supp. 78 (S.D.N.Y. 1950).
[9] Footnotes omitted.
[10] The court discussed and dismissed two other cases the Plaintiff cited to support service on Captain Boda being proper.
[11] Footnotes omitted.
[12] Footnotes omitted.

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