The case of the day is Luxottica Group S.p.A. v. Partnerships and Unincorporated Associations Identified on Schedule A (N.D. Ill. 2019). The case is in the “Chinese internet luxury goods knockoff” genre. The court had granted a temporary restraining order, which had authorized Luxottica to serve process by electronic means, namely, by email and by “electronically publishing a link to the Amended Complaint, this Order, and other relevant documents on a website to which the Defendant Domain Names which are transferred to the Plaintiff’s control will redirect.” The defendants moved to dismiss, arguing that the service did not comply with the Hague Convention. They were obviously right if the Convention applied. But did it?
The main question was whether the defendants’ addresses were known. AliExpress, the company that hosted the defendants’ online stores, had their email addresses but no postal addresses. There was address given on the defendants’ webpages. On the other hand, the defendants offered packing slips that accompanied the allegedly infringing goods and that did contain postal addresses. Luxottica asserted that such addresses were oftentimes fraudulent, but it did not provide evidence to substantiate this point, nor did it provide evidence that it had investigated the addresses on the packing list. In light of the plaintiff’s duty of reasonable investigation before invoking the address exception in Article 1 of the Convention, the court held that Luxottica had failed to show that the Convention did not apply.
The court went on to hold, correctly, that since the Convention did apply, service by email in China is improper. This is the second case in just a few days to make this point. Is the tide turning? The judge’s reasoning was spot on:
This court is persuaded by the cases treating Rule 10(a) objections as precluding service by email. Because email would bypass the methods of service the Hague Convention authorizes, the Convention preempts it as inconsistent. See Schlunk, 486 U.S. at 698. Suppose, as several cases conclude, that Article 10(a) treats email as a type of postal channel. If Article 10(a) uses language broad enough to reach email, it is difficult to see why an objection using Article 10(a)’s language should be given equal breadth. See Elobied, 299 F.R.D. at 108; Mapping Your Future, Inc. v. Mapping Your Future Servs., Ltd., 266 F.R.D. 305, 308 (D.S.D. 2009).
China’s Article 10 objection embraces all forms of service the Article allows. China “oppose[s] the service of documents in the territory of the People’s Republic of China by the methods provided by Article 10 of the Convention.” China’s objections are substantially in the form of objections which courts have determined prevent service by email. These include objections communicated by Switzerland, see Elobied, 299 F.R.D. at 108; Germany, see Agha v. Jacobs, 2008 WL 2051061, at *1–2 (N.D. Cal. May 13, 2008); and Mexico, see Katz, 287 F.R.D. at 396–97. China’s objections likewise preclude email service. See also Jian Zhang v. Baidu.com Inc., 293 F.R.D. 508, 515 n.2 (S.D.N.Y. 2013) (dictum suggesting that email service is not permissible in China).
The remaining authority cited by plaintiffs does not persuade the court otherwise. Plaintiffs submit a chart listing three pages of TRO’s and orders authorizing service issued ex parte by judges of this court, including this judge. ECF No. 114-8. These orders, plaintiffs claim, reflect a broad consensus that authorizing email service on a defendant located in China is compatible with the Hague Service Convention. The orders were issued at the early stage of litigation in similar counterfeiting cases. See id. There is no indication that plaintiffs’ counsel brought to the court’s attention the contrary legal authority discussed in this order or the fact that the plaintiff had access to return addresses for the defendants. For all of these reasons, the cases collected in plaintiffs’ chart have little persuasive value. See Greyhound Lines, Inc. v. City of Chicago, 398 F.2d 36, 39 (7th Cir. 1968); United States v. Bowman Dairy Co., 185 F.2d 159, 167 (7th Cir. 1950); see also generally Ayestas v. Davis, 138 S. Ct. 1080, 1091 (2018) (“In our adversary system, ex parte motions are disfavored, but they have their place.”) (citations omitted).
My prediction is that today’s case, and the NOCO case I wrote about a few days ago, will begin to be cited and in the long run will displace Gurung v. Malhotra and its progeny. The common law process of developing the law in an extended discussion between judges and lawyers works!
There is one other interesting point raised by the case, though the judge didn’t discuss it. One of the forms of service authorized was service by publication of the summons and complaint on a website, to which the defendants’ seized domain names were to be redirected. That is, suppose the defendants owned the knockoffs.com domain name and were using it to sell knockoffs of the Luxottica brand. At the outset of the case, Luxottica would receive an order from the court requiring the domain name registrar to give control of the knockoffs.com domain name to Luxottica. Luxottica could then publish new DNS records, so that when a user visited knockoffs.com, he or she would see the summons and complaint. Does the Convention apply to this form of service? The question is whether the service involves transmission of a judicial document abroad for service. of course, the plaintiff wants the document to be read in China, but it is simply publishing the document on a web server—suppose it is a web server located in the United States. The defendant types “knockoffs.com” into his web browser and then retrieves the document from the US-based web server. Has the plaintiff transmitted hte doucment to China? Of course, the same issue can arise in the case of email, since a defendant anywhere in the world who does not host his or her own email server might retrieve his or her email from a US-based server via the IMAP protocol. But at least in the case of email there is a very clear functional analogy to the postal channel. The closest analogy to service by publication on the web might well be service by publication, which does not entail transmission of a document for service abroad. I discussed these issues in my talk at the Law’s Porosities conference in 2017.