Filed under “wisdom borne of pain” — five things about using the Hague Service Convention that lop hours off of the time spent serving a foreign company in a US-based litigation.
In this particular case, the “wisdom” was gained in connection with members of a trial team serving an accused infringer in a US patent litigation, but these insights are relevant to US federal and state court litigation generally.
Quick primer on the Convention
The US ratified the Hague Service Convention on the Service Abroad of Judicial and Extrajudicial Documents (“Hague Service Convention” or the “Convention”) 50 years ago and compliance with the Convention is mandatory where service is attempted on a person or company in one of over 60 countries that are parties to the Convention. Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705 (1988).
The primary means by which service is accomplished under the Convention is through a receiving country’s “Central Authority.” The receiving country can impose certain requirements with respect to these documents (for example, that they be translated into the language of that country). If the documents comply with the applicable requirements, the Convention affirmatively requires the Central Authority to effect service in its country.
The Convention also does not “interfere with” other methods of serving documents. Article 10(a) of the Convention states: “Provided the State of destination does not object, the present Convention shall not interfere with — (a) the freedom to send judicial documents, by postal channels, directly to persons abroad.” (Emphasis added.)
So What Are the 5 Things about the Convention That Save Time and Money?
ONE. There is no extra credit for style or trying to improve on existing forms. Don’t get creative. Don’t take any shortcuts over the prescribed procedure. Imagine an international department of motor vehicles. Go to the official website page explaining service under the Convention, the status table showing participating countries, the specific requirements (referred to as “reservations, declarations and notices”) of the country where service will occur, e.g. Australia’s requirements, and then download the model service forms. Additional helpful background is provided in this Table reflecting acceptance of Convention provisions across the member countries.
TWO. It always takes longer than expected to complete service. The Hague Convention literature suggests the process in most jurisdictions can be completed within 2-3 months. Assume TWICE that. Also send an email to the Central Authority in the country where service is occurring and ask how long THEY think it will take. Assume TWICE that.
The good news is that the usual time limit for completing service of process is not applicable to service under the Hague Convention. See Fed. R. Civ. P. 4(f), 4(h)(2) and 4(m). This is no small consideration where many district courts have standing orders or local rules that schedule deadlines assuming service within 120 days of the filing of the complaint. The best thing to do is advise the district court well before the case management conference that service is being made pursuant to the Hague Convention and request modification of the schedule consistent with when service is realistically expected to be completed (see ONE above).
THREE. Don’t rely exclusively on the Hague Convention procedure of effecting service through the Central Authority. There is no prohibition on using non-Convention service methods concomitant to using the Convention. For example, if the accused infringer has counsel in the US who has represented them in other matters, ask whether counsel will accept service on behalf of the foreign company. Or use the Rule 4(d) procedure pursuant to which you mail the foreign company notice of the lawsuit along with a request that it waive service of summons (in exchange for receiving a longer period to respond to the complaint).
Plus the Convention itself allows for less onerous methods than serving process through the receiving country’s Central Authority. Under Article 10(a), if the receiving country does not object, a party can “send judicial documents, by postal channels, directly to persons abroad.” (emphasis added). The Convention’s seemingly straightforward recognition that the postal channels may be used (in compliance with the receiving country’s requirements) is not without its pitfalls, however. Currently, there is a split of authority in the federal appellate courts whether the Convention’s permission to “send” judicial documents includes “service” of the summons and complaint. The Ninth Circuit’s position is that “send” means “serve” such that the Ninth Circuit interprets the Convention as allowing service by mail. See Brockmeyer v. May, 383 F.3d 798, 802 (9th Cir. 2004) (refusing to follow the decisions in other Circuits such as Nuovo Pignone v. Storman Asia M/V, 310 F.3d 374, 384 (5th Cir. 2002) (held that Convention did not permit service on an Italian defendant in Italy by Federal Express)).
Furthermore, even assuming the Convention is interpreted as permitting service by mail, the use of postal channels to effect service outside the US must still comply with Fed. R. Civ. P. 4(f). Accordingly, under Rule 4(f)(2)(C)(ii), effective mail service requires the clerk of the court to send the summons and complaint directly to the foreign defendant by registered mail. Or, under Rule 4(f)(3), effective mail service (or by fax or email) is contingent upon getting a court order approving this form of service.
FOUR. If the overseas defendant company has a US subsidiary, name the subsidiary as an additional defendant in the complaint. Depending upon the level of overlap in management and business between US subsidiary and foreign parent, service on the subsidiary can be effective service on the parent and/or the subsidiary’s US business may give the court personal jurisdiction over the foreign parent. Even if THIS does not occur, the management of the subsidiary may agree to accept service on the foreign parent (see THREE above). And EVEN IF THIS does not occur, you have a “live” defendant to show the court, one upon whom you can begin discovery and whose presence justifies asking the court to move forward with the litigation on the merits – this in turn increases the leverage on the foreign parent to appear and protect its interests.
One caveat to this effective strategy (at least from the serving party’s perspective), is that it assumes compliance with the applicable rules regarding joinder of defendants in the same lawsuit. For example, regarding patent litigation, section 299 of the America Invents Act (“AIA”) imposes new requirements designed to prevent the joinder of defendants in the same lawsuit based solely upon their alleged infringement of the same patent. The above recommended joinder of a US subsidiary will comply with the AIA requirements so long as the subsidiary participates in the marketing and sale in the US of the accused product, thereby creating joint and several liability and/or giving rise to a relationship in which the subsidiary and parent jointly participate in the infringing transaction.
FIVE. Don’t forget to read the “fine print” in the receiving country’s declarations and explanatory “practical information.” This protects against a lot of wasted time and energy. Case in point is Australia and the widely held belief, even among practicing Australian lawyers, that the Convention permits service on an Australian company by mail. Closer inspection of Australia’s declarations shows that it is not that simple. Australia’s declaration to Convention, Article 10, par. a states in pertinent part:
Article 10, paragraph a service by postal channels: Australia does not object to service by postal channels, where it is permitted in the jurisdiction in which the process is to be served. Documents forwarded via postal channels must be sent via registered mail to enable acknowledgement of receipt.
Not only does the fine print require use of registered mail and obtaining an acknowledgment of receipt, but further limits service by registered mail to those Australian states that permit the use of registered mail. All of a sudden, as explained in the “Practical Information” published by Australia’s Central Authority, it could make a difference whether the accused infringer is resident in Victoria, New South Wales, Queensland, or some other Australian state.
Consider and apply these five things and avoid the pain (your time and client’s money) otherwise associated with obtaining this Hague Service Convention wisdom.