By: Tom On: August 25, 2020 In: International Service of Process Comments: 0
Spread the love

When effecting service on a foreign corporation, when must said service be pursuant to the Hague Service Convention and when can service be effected through a domestic subsidiary? This is the question that is at the core of a well-written opinion by Justice Roberts in Meemic Insurance Company v. Zhuhai.[1]

Yet, in reading this opinion, I noticed that a key discussion point was missing – something that I’d like to call “the dog that didn’t bark” by way of an homage to the classic story, The Adventures of Silver Blaze, by Sir Arthur Conan Doyle.

In this story, as you may recall, while investigating a crime Sherlock Holmes realizes that a dog did not bark to alert others in the area that the crime was unfolding. From the fact that the dog did not bark, Holmes deduces (Holmes always deduces) that the dog stayed silent because it recognized its owner – so it must have been an inside job.

As you read the opinion see if you can identify the legal point that was not explicitly addressed by the court.

A Background of the Case

Meemic Insurance Company is a product liability case. The Plaintiffs served the Defendants Gree Hong Kong (a Hong Kong corporation) and Gree Zhuhai (a Chinese corporation) by effecting personal service upon Gree USA located in California.

In prior litigation, “Gree USA has been found to share a close enough connection to Gree Hong Kong and Gree Zhuhai such that Gree USA is a ‘general manager’ for purposes of Cal. Civ. Proc. § 416.10(b).” According to the Plaintiffs, the term “general manager” as used in § 416.10(b) has been broadly interpreted to allow service on a foreign corporation through its domestic subsidiary.”[2]

The Defendants’ position was that foreign corporation service would only be proper if it was effected at their home office pursuant to the Hague Service Convention.[3] In addition the

Defendants also contend that Plaintiffs failed to serve process properly under California law. To serve a corporation under California law, service must be made upon “the person designated as agent for service of process…” or the “president, chief executive officer, or other head of the corporation…” Service may be effectuated upon one of the individuals listed in § 416.10 by leaving a copy of the summons and complaint during usual business hours and then mailing a copy of the summons and complaint by US First Class mail to the place where the summons was left.[4]

Court Rules that Service Was Proper Under California Law

J. Roberts’ opinion begins by observing that under the Federal Rules of Civil Procedure, service upon “a domestic or foreign corporation” is proper if service is effected “in the manner prescribed by Rule 4(e)(1) for serving an individual.”[5]

In turn, service of corporation under this rule is proper when it follows “state law… in the state where the district court is located or where service is made.”[6]

Under California law, service on a corporation is proper when the documents to be served are delivered “to any of various officers of the corporation, including a “general manager.”[7] Moreover, California case law has interpreted the term “general manager” broadly

to allow service on a foreign corporation through its domestic subsidiary.” The broad interpretation of the term “general manager” is supported: (1) when the parent corporation is foreign and otherwise cannot be easily served in California, and (2) when the parent corporation and its subsidiary share a “sufficiently close connection.” A sufficiently close connection, “depends upon the frequency and quality of contact between the parent and subsidiary, the benefits in California that the parent derives from the subsidiary, and the overall likelihood that service upon the subsidiary will provide actual notice to the parent.”

Having made the above statement, J. Roberts then cited the prior litigation concerning Gree USA’s agency relationship with Gree Hong Kong and Gree Zhuhai to hold that service upon the Defendants was proper under California law.

Accordingly, because service was proper on the Defendants under California law, J. Roberts concluded that “compliance with the Hague Convention is not required.”

The Legal Point Not Addressed By the Court

J. Roberts, of course, is correct in her conclusion that service under the Hague Convention was not necessary in this instance. But, because the discussion of Hague service provided by the court is rather cursory, the dog never actually barked.

The Hague Service 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.”[8] So, not only was compliance with the Convention “not required” in this case because California law permitted service to be effected via the domestic subsidiary, but accordingly the Convention was not even applicable since domestic service was permitted and thus the documents to be served did not have to be transmitted abroad.

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.

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

Call 1-800-755-5775 or simply fill out our free quote form.

Notes
[1] Case No. 19-13489 (ED Michigan 2020).
[2] While this is a true statement generally, to serve foreign corporation by service on a US subsidiary, the plaintiff has to show that the subsidiary was an agent of the foreign corporation. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988).
[3] Id.
[4] Citations omitted.
[5] Fed. R. Civ. P. 4(h)(1)(a).
[6] Fed. R. Civ. P. 4(e)(1).
[7] Cal. Civ. Proc. § 415.10.
[8] Article 1.

Spread the love
0 0 vote
Article Rating
Subscribe
Notify of

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments