Case of the Day: Products & Ventures International v. Axus Stationery

The case of the day is Products & Ventures International v. Axus Stationery (Shanghai) Ltd. (N.D. Cal. 2017). The claim was for breach of contract and for tort in connection with a contract for distribution of wooden pencils. Four of the defendants, Shanghai Marco Stationery Co. Ltd., Axus Stationery (Shanghai) Ltd., Shanghai Laikesheng Pen Material Co. Ltd., and Peifeng (Brian) Xu, were in China. The plaintiff, Products & Ventures, made diligent efforts to effect service via the Chinese central authority under the Hague Service Convention, but after eleven months, it sought to serve the Chinese defendants via their US counsel, Hogan Lovells, under FRCP 4(f)(3).

The main issue was the defendants’ claim that Hogan Lovells did not represent them in the litigation, and that therefore, service via Hogan Lovells would not comport with due process. You might ask how this could be: the defendants were obviously aware of the lawsuit, so what does it mean to say that the defendants would not have reasonable notice and an opportunity to defend the case? But anyway, the court took the question seriously and pointed out that Hogan Lovells had previously made statements inconsistent with the Chinese defendants’ position, but more to the point, whether Hogan Lovells technically represented the defendants in the case was not dispositive of the due process question.

Probably unsurprisingly, the court did not consider the textual issue we’ve discussed before: whether FRCP 4(f)(3) can ever permit service on a foreign defendant’s US counsel, given that FRCP 4(f) applies only when the defendant is to “be served at a place not within any judicial district of the United States.” Only a few courts have taken that textual point seriously.

5 thoughts on “Case of the Day: Products & Ventures International v. Axus Stationery”

      1. I like the philosophical progression of that. Still, I’d love a test case to adopt the E.D. Mich. opinion to settle the matter. It shouldn’t take verbal gymnastics to reach the same conclusion (ie: yes, serve U.S. counsel and you’ve fulfilled Mullane).

        1. To me this is a case where the precedents show good practical wisdom that the text of the rule may not. If you can’t serve via the Convention for whatever reason, and if it’s possible to construe the rule to permit service in the United States so as to avoid application of the Convention, and if the defendant has a US lawyer so as to obviate any due process concern, then I think the precedents are okay.

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