18Jun
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Service of process in China can be a lengthy and involved procedure. As a result, some have attempted to find work-arounds to serving process in China pursuant to the Hague Service Convention (HSC).

A 2019 case highlights one such failed attempt where plaintiffs sought service via email.

Luxottica Group S.p.A. v. Partnerships and Unincorporated Associations Identified on Schedule A[1] provides an interesting look at Article I of the Hague Service Convention’s [2] implied requirement of due diligence and email service.

Plaintiffs’ Seek Service Via Email Under Article I’s Exception

In this case, the plaintiffs brought a trade market action[3] against several defendants including eBay and Alibaba, as well as 906 “individuals and business entities who, upon information and belief, reside in the People’s Republic of China or other foreign jurisdictions.”

The plaintiffs sought and obtained an en parte order for alternative service of process via email. After receiving service of process via email, six defendants brought this motion to dismiss the case for improper service.

The plaintiff  bears the burden to show proper service.[4] Article 1 sets out the scope of the Hague Service Convention: the “Convention shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad.” In this case, however, the plaintiffs argued that Article I’s exception applies. Under Article I, the Convention does not apply “where the address of the person to be served with the document is not known.”[5]

Email Service Ruled Invalid Due to Lack of Required Due Diligence

The defendants’ position was that the plaintiffs did not conduct an investigation to determine the Defendants’ mailing addresses – so, having failed to exercise the requisite due diligence, they were not entitled to Article I’s exception.

Courts have interpreted the second sentence of Article 1 consistently. A “plaintiff cannot close its eyes to the obvious to avoid the Hague Service Convention; the plaintiff must make reasonably diligent efforts to learn the defendant’s mailing address.”[6] The court then stated that at the time it granted service by other means:

the court had no reason to think that defendants’ addresses could be determined with reasonable diligence. Plaintiffs had submitted screenshots of defendants’ websites. The screenshots showed that plaintiffs purchased counterfeit products from the defendants’ online stores and had them shipped to Illinois addresses. The parties have not directed the court to a screenshot listing a contact email or physical address for the defendants. Also, a declaration accompanying plaintiffs’ motion for leave to serve electronically averred that the defendants who operated Internet domains ignored governing rules and “provided incomplete and/or false physical address information to the domain name registrars.” … Plaintiffs argued that “it is far more likely that Defendants can be served electronically than through traditional service of process methods” because online companies using online marketplaces must provide a valid email address to accept payment.[7]

Needless to say, when the court states that it has been hoodwinked, the outcome is not going to be good for the side that did the hoodwinking. This is especially true when the court cited the defendant’s brief to add that the plaintiffs “neglected to mention an important source of information:” Having received packages from the defendants, the plaintiffs had actual knowledge of the defendants’ addresses. The court then ruled that Article I’s exception did not apply in this case. Accordingly, service in this case would only be proper if it was performed pursuant to the Hague Service Convention.

Note: Another 2019 similar Texas case[8] also found that a plaintiff must exercise due diligence to receive Article I’s exception.

Is Email Service Ever Proper Under the HSC?

Service upon overseas defendants may be made “by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention.”[9] But Rule 4(f)(3) authorizes service “by other means not prohibited by international agreement, as the court orders.” The Hague Service Convention “specifies certain approved methods of service and ‘pre-empts inconsistent methods of service’ wherever it applies.”[10] The Convention authorizes “service by certain other means, but it does not speak directly to service by email and other electronic means.”[11]

Federal trial courts have been “divided over whether the Convention limits their authority to authorize service of process by email.” “The Convention’s text does not speak in specific terms of service by email, fax, or other means of delivery unknown in the 1960’s.” Rather the text of the Convention contemplates service by “postal channels.”[12]

However, the

Supreme Court has stated that the drafters of the Hague Service Convention intended to prohibit a method of service not mentioned in its text. The Court took a broad view of the Convention in 1988, holding that it “pre-empts inconsistent methods of service . . . [wherever] it applies.” Article 19 “clarifies” the scope of this preemption by providing that the Convention does not preempt signatories’ internal laws permitting service by methods the Convention does not allow. As this example shows, the absence of express language prohibiting service by email or any other unlisted means in the Hague Service Convention is not dispositive.[13]

According to the court, the proper inquiry “must be whether email is inconsistent with the service methods the Convention allows.” The court “was only able to identify one case that held that email service is consistent with the Hague Service Convention, but the conclusion is stated without any further analysis.”[14]

Conversely, other courts have either ruled that when a destination country has opposed Article 10(a) service that includes email mail service;[15] or courts have “declined to extend countries’ objections to specific forms of service permitted by Article 10 of the Hague Convention, such as postal mail, to service by other alternative means, including email.”[16]

The court then stated:

China “oppose[s] the service of documents in the territory of the People’s Republic of China by the methods provided by Article 10 of the Convention.” China’s objections are substantially in the form of objections which courts have determined prevent service by email. These include objections communicated by Switzerland and Mexico. China’s objections likewise preclude email service.

Accordingly, the court held that the email service of the Chinese defendants was improper because service was not pursuant to the Hague Service Convention.

As a footnote, earlier in June 2019 NOCO Co. v. Chang,[17] reached a similar conclusion using similar logic. This certainly seems to be the majority rule event though these opinions explicitly state that email constitutes a “postal channel.”

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Notes

[1] No. 18 CV 2188, (N.D. Ill. 2019).
[2] 20 U.S.T. 361.
[3] Lathem Act, 15 U.S.C. § 1051 et seq., and the Illinois Uniform Deceptive Practices Act, 815 ILCS § 510 et seq.
[4] Homer v. Jones–Bey, 415 F.3d 748, 754 (7th Cir. 2005).
[5] Art. 1, 20 U.S.T. at 362.
[6] See Advanced Access Content Sys. Licensing Admin., LLC v. Shen, 2018 WL 4757939, at *4–5 (S.D.N.Y. Sept. 30, 2018); Progressive Se. Ins. Co. v. J & P Transp., 2011 WL 2672565, at *3 (N.D. Ind. July 8, 2011) (citing Opella v. Rullan, 2011 WL 2600707, at *5 (S.D. Fla. June 29, 2011)); Compass Bank v. Katz, 287 F.R.D. 392, 394–95 (S.D. Tex. 2012) (collecting and discussing cases).
[7] Citations omitted.
[8] VIAHART, LLC v. DOES, Civil Action No. 6:18-CV-00604-RWS., Dist. Court, ED Texas 2019
[9] Fed. R. Civ. P. 4(f)(1).
[10] Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1507 (2017) (quoting Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698 (1988)).
[11] Water Splash, 137 S. Ct. at 1508 (discussing means of service authorized by the Convention).
[12] Article 10(a).
[13] Citations omitted.
[14] See MacLean-Fogg Co. v. Ningbo Fastlink Equip. Co., Ltd., 2008 WL 5100414, at *2 (N.D. Ill. Dec. 1, 2008) (citing Williams-Sonoma Inc. v. Friendfinder Inc., 2007 WL 1140639, at *2 (N.D. Cal. April 17, 2007)).
[15] Elobied v. Baylock, 299 F.R.D. 105, 108 (E.D. Pa. 2014).
[16] Sulzer Mixpac AG v. Medenstar Indus. Co. Ltd., 312 F.R.D. 329, 331–32 (S.D.N.Y. 2015).
[17] NOCO Co. v. Chang, Case No. 1:18-cv-256 (N.D. Ohio 2019).


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