Letters Blogatory welcomes esteemed fellow blogger Chris Neumeyer, who practices law in Taipei. Chris has a new post on today’s case of the day, FTC v. PCCare247 Inc., which will be cross-posted on his blog. Readers may also be interested in my take on the case. Suffice it to say that in my view service by Facebook is impermissible if the Convention applies.
As technologies develop, courts worldwide are increasingly open to allowing service of legal documents by new means, including by FedEx, e-mail, Facebook and Twitter. In line with that general trend, last week a District Court in New York authorized service upon certain defendants located in India by means of e-mail and Facebook.
The case, FTC v. PCCare247 Inc. (S.D.N.Y. 2013), involves allegations that several individuals located in India operated a scheme that tricked American consumers into spending money to fix non-existent problems with their computers. The FTC applied to the court and obtained a temporary restraining order enjoining defendants’ business practices and freezing some of their assets.
Because India is a signatory to the Hague Convention on Service Abroad, the FTC submitted the Summons and Complaint to the Indian Central Authority, requesting service of process pursuant to Federal Rule of Civil Procedure (FRCP) Rule 4(f)(1) and Article 3 of the Hague Convention. The FTC also attempted to serve process on the defendants by e-mail, FedEx and personal service. FedEx confirmed delivery for most of the defendants and a process server personally served all of the defendants.
However, for five months the Indian Central Authority failed to act, failing to formally serve the defendants and failing to respond to the FTC’s inquiries regarding the status of the service, so the FTC filed a motion requesting leave to serve all subsequent documents, other than the Summons and Complaint, on the defendants by e-mail and Facebook, only. On March 7, the Court granted that motion.
As the Court explains, FRCP 4(f)(3) authorizes the Court to “fashion means of service on an individual in a foreign country, so long as the ordered means of service (1) is not prohibited by international agreement; and (2) comports with constitutional notions of due process.” Cases hold that Rule 4(f)(3) is neither a last resort nor extraordinary relief, but merely one of the possible means of service on foreign defendants. Nor is a plaintiff required to first attempt service through other provisions of Rule 4(f), although a Court may require proof that the party first attempted service by other means before requesting the court’s intervention under Rule 4(f)(3).
Ordinarily, service of judicial documents in a member state of the Convention is handled by the Central Authority in the foreign state, as stated at Article 2 of the Convention. However, the Court noted that Article 10 of the Convention also allows for service through certain alternative means, such as “postal channels,” provided the destination state does not object to those means. The Court further noted that India had objected to the methods specified at Article 10, although it had not specifically objected to service by e-mail or Facebook. Consequently, the Court found the Hague Convention did not bar such service.
Ted Folkman makes a convincing argument that the court was mistaken in that respect. First, compliance with the Hague Convention is mandatory in all cases to which it applies. That is, so long as the party to be served is located in a member state and no exception applies (e.g., Article 1 provides an exception where the address of the party to be served is not known), service of judicial and extrajudicial documents must be effected by means authorized under the Convention. Second, no provision of the Convention authorizes service by e-mail or Facebook.
In other words, the Court was wrong to find the Convention doesn’t prohibit service by e-mail and Facebook, so it must be allowed. Instead, service by such means is proper only if the Convention expressly permits it, and the only provision that might be seen as permitting such service is Article 10, which refers to “postal channels” (bear in mind that the Convention was drafted in 1965 and has never been amended, so it’s no surprise it doesn’t expressly refer to electronic communications), but India has formally objected to service under Article 10.
Perhaps the Court was exasperated with the lack of cooperation from the Indian authorities. As the court explained, “This litigation must move forward, and it is not tolerable to wait five months (or more) for every motion in this case to be served by the Central Authority.” However, the Convention doesn’t appear to authorize other means of service in cases where a member state fails to comply with its responsibilities.
Aside from the Hague Convention, it should be noted that the Court also examined whether the proposed means of service would deprive the defendants of due process, and the Court found—based on the facts at issue—that it would not. The service was reasonably calculated to provide the defendants with actual notice, because defendants had used the same e-mail addresses in connection with the accused activities and to send e-mails to the FTC and the Court. There was evidence the Facebook accounts had been set up by the defendants and not by some other party. And, it was already established that the defendants had actual notice of the lawsuit.
So, what can one learn from this case?
First, whether it was decided rightly or wrongly, the question was whether service by e-mail and Facebook may be authorized when the defendant is located in a Hague Convention member state and its address is known (so the Convention is applicable). Many countries are not members, including most of Southeast Asia, South America, Africa and the Middle East. The question was also complicated by the fact that India has objected to Article 10 of the Convention, which refers to service by “postal channels.”
Second, when considering whether to attempt service of process by less orthodox means, once should always keep in mind the nature of the relief being sought and whether foreign assistance may eventually be required. For example, a plaintiff seeking monetary damages from a foreign defendant that lacks assets in the U.S. should recognize the strong likelihood that foreign courts may refuse to enforce a judgment if service of process was made by e-mail or Facebook.