Case of the Day: State Farm v. Amazon

The case of the day is State Farm Fire & Casualty Co. v., Inc. (D. Ariz. 2018). Following a fire at the home of Hussein Zeitoun, Zeitoun’s insurer, State Farm, brought an action against LG Chem, Ltd. The facts of the case aren’t stated in the decision, but we can infer that State Farm paid Zeitoun’s claim for fire damage and then, as subrogee, brought a product liability claim against LG.

The case was filed in the Maricopa County Superior Court. Amazon, which was also a defendant, then removed it to the District Court. After removal, State Farm, using a “vendor” to handle the matter, sent a request for service to the South Korean central authority. The request sought service of the complaint and the state-court summons. The judge quashed the service, holding that the summons failed to meet the formal requirements of FRCP 4(a)(1).

The outcome is correct, but I think the judge didn’t identify the issue. Under 28 U.S.C. § 1448:

In all cases removed from any State court to any district court of the United States in which any one or more of the defendants has not been served with process or in which the service has not been perfected prior to removal, or in which process served proves to be defective, such process or service must be completed or new process issued in the same manner as in cases originally filed in such district court.

Arizona is in the Ninth Circuit, and that court has held (Beecher v. Wallace, 381 F.2d 372 (9th Cir. 1967)) that under § 1448, a state court summons issued before removal becomes a nullity upon removal, and if the defendant has not been served, the plaintiff has to get a new federal summons. On this reading, the purpose of § 1448 is to provide relief in cases where the service had occurred was defective in some way. But Beecher is not self-evidently correct—other decisions have allowed service of already-issued state court summonses after removal—but the judge in this case was bound by it.

Another example of the risk of not taking the law in this area seriously, or of outsourcing service altogether to a “vendor”! (Though no doubt the lawyer should have known to provide the correct documents to the vendor).

This Post Has 3 Comments

  1. Aaron Lukken

    In this particular case, the “vendor” was ABC Legal, the designated outsourcing agent for the DOJ in its capacity as Central Authority. As such… not just any vendor (ie: they know what they’re doing).

    The error here was completely on counsel’s part. Removal was in June, and ABC’s Hague request was submitted to the Koreans in September. Odds are, nobody told ABC that it had been removed, and it’s not ABC’s job to ascertain.

    1. Ted Folkman

      Hard to know what the “vendor” knew, but you may be right. The broader point is: serving process is not like photocopying or e-discovery management—the lawyer has a responsibility to understand the legal issues and shouldn’t rely on others.

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