The case of the day is Subotich v. Travelers Property Casualty Co. of America (E.D. Wis. 2017). Michael and Jennifer Subotich sued Matt Palazsynski, who was in China. They attempted service via the Central Authority, and when they received no response for a year, they moved for entry of a default judgment. Palazsynski submitted a notice from the People’s Court of Liuyang, which would have been responsible for effecting service, stating that it had never received the papers and had not served them. The court nevertheless granted the motion for default judgment.
This seems to me to be a clear error, given that the court was willing to accept that service was not made. The question revolved around Article 15 of the Convention. The United States has made a declaration that allows entry of a default judgment if no response has been received after six months of transmission to the Central Authority, despite “every reasonable effort” to obtain one. One response to the decision would be to question whether the judge paid sufficient attention to whether Subotich had used best efforts to obtain a certificate from the Central Authority. Another would have been to ask whether the notice from the Chinese court could be the “certificate” described in Article 15(2)(c), cf. Burda Media, Inc. v. Viertel, 417 F.3d 292, (2d Cir. 2005) (foreign police report can qualify as an Article 6 certificate). But the more fundamental problem is that the court misunderstands the purpose of the second paragraph of Article 15, which reads:
Each Contracting State shall be free to declare that the judge, notwithstanding the provisions of the first paragraph of this Article, may give judgment even if no certificate of service or delivery has been received, if all the following conditions are fulfilled—
- the document was transmitted by one of the methods provided for in this Convention,
- a period of time of not less than six months, considered adequate by the judge in the particular case, has elapsed since the date of the transmission of the document,
- no certificate of any kind has been received, even though every reasonable effort has been made to obtain it through the competent authorities of the State addressed.
Article 15 doesn’t affirmatively authorize default judgments after six months: it simply says that if the law of the forum would allow a default judgment, the Convention won’t stand in the way. As the Practical Handbook puts it (¶ 315):
… the expiry of the minimum period of six months under Article 15(2)(b) does not imply that the service is valid; whether service is valid under those circumstances is a matter left to the law of the forum. Article 15(2) merely waives the obligation to stay entry of judgment under Article 15(1) and re-establishes the legal situation that would exist without Article 15(1).
If the court was willing to accept that the documents had never been served, then there is no theory under US procedural law under which the service is valid, unless one thinks that Article 15(2) itself validates the service—which as we have just seen is not so.
Now, you may wonder whether this proves too much. In a typical case, where documents are properly transmitted to a foreign central authority, six months pass, and there is no indication one way or the other that they have been served, should a default judgment be allowed? What I have just written suggests the answer to that question could be “no,” but perhaps that’s okay, since the purpose of Article 15(2) is quite limited. It isn’t meant to deal with tardy central authorities, but rather only “in cases where the defendant evades service in bad faith.” (Practical Handbook ¶ 314). And anyway, as a matter of domestic law, if a default judgment enters and then the judgment debtor with actual notice of the proceedings wants to vacate it on service of process grounds, he has the burden to disprove the service, at least in the Second Circuit’s view in the Burda decision, cited above.