Filed: May 04, 2009
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2009 Decisions States Court of Appeals for the Third Circuit 5-4-2009 Chiang v. US Small Bus Admn Precedential or Non-Precedential: Non-Precedential Docket No. 07-2686 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009 Recommended Citation "Chiang v. US Small Bus Admn" (2009). 2009 Decisions. Paper 1411. http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1411 This decision is brought to you for free and open access by the
Summary: Opinions of the United 2009 Decisions States Court of Appeals for the Third Circuit 5-4-2009 Chiang v. US Small Bus Admn Precedential or Non-Precedential: Non-Precedential Docket No. 07-2686 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009 Recommended Citation "Chiang v. US Small Bus Admn" (2009). 2009 Decisions. Paper 1411. http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1411 This decision is brought to you for free and open access by the O..
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Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
5-4-2009
Chiang v. US Small Bus Admn
Precedential or Non-Precedential: Non-Precedential
Docket No. 07-2686
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009
Recommended Citation
"Chiang v. US Small Bus Admn" (2009). 2009 Decisions. Paper 1411.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1411
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2009 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEAL
FOR THE THIRD CIRCUIT
No. 07-2686
GAIL WATSON CHIANG;
CALEDONIA SPRINGS, INC.,
Appellants
v.
UNITED STATES SMALL BUSINESS
ADMINISTRATION
On Appeal from the United States District Court
for the District of the Virgin Islands
(D.C. Civil No. 00-cv-00071)
District Judge: Hon. Harvey Bartle, III
Submitted Under Third Circuit LAR 34.1(A)
April 23, 2009
BEFORE: BARRY, HARDIMAN and COWEN, Circuit Judges
(Filed: May 4, 2009)
OPINION
COWEN, Circuit Judge
Gail Watson Chiang and her Virgin Island’s based company, Caledonia Springs,
Inc., appeal from the District Court’s order dismissing the Amended Complaint for failure
to timely serve the U.S. Small Business Administration and the Attorney General of the
United States (collectively “the Government”). Because Appellants, who were
represented by counsel, inexplicably delayed for almost four years before perfecting
service on the SBA and the Attorney General, we find that the District Court did not
abuse its discretion in declining to grant an extension of time for service of process and
dismissing Appellants’ Amended Complaint without prejudice. Accordingly, we will
affirm.
I.
On October 31, 2000, Chiang filed an Amended Complaint on behalf of herself
and the company she runs with her father and her husband, Caledonia Springs, Inc. The
three count Amended Complaint alleged breach of contract and fiduciary duty by the U.S.
Small Business Administration (“SBA”) and discrimination against Chiang. The
allegations arose out of a twelve year course of dealing between Caledonia Springs and
the SBA.
The Amended Complaint was properly served on the U.S. Attorney for the District
of the Virgin Islands in November of 2000. A copy of the Amended Complaint was also
mailed to the Attorney General; however an affidavit from the Attorney General’s Office
states that it has no record of ever having received the complaint. Both the original
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Complaint and the Amended Complaint were personally served on Carl Christensen, an
Economic Development Specialist for the SBA; however the District Court found nothing
in the record to establish that Christensen was authorized to accept service on behalf of
the SBA. No further attempts to perfect service were made at that time.
In July of 2004, approximately four years after the filing of the original Complaint,
the Government entered a limited appearance and filed a motion to dismiss for lack of
proper service. No significant activity occurred on the District Court docket between the
filling of the Amended Complaint and the filing of the Government’s motion to dismiss.
Following the filing of the Government’s motion to dismiss, Chiang’s husband, Peter,
sent copies of the Amended Complaint by certified mail to the SBA and to the Attorney
General, finally effecting proper service.
In ruling on the Government’s motion, the District Court conducted a two-step
analysis, considering first whether Appellants had shown good cause as to why they had
not complied with the requirements of Rule 4 of the Federal Rules of Civil Procedure.
Finding that Appellants had failed to offer any reason for their non-compliance with
requirements of Rule 4, the District Court then considered whether any additional factors
existed that warranted granting Appellants an extension of time in which to serve the
Amended Complaint, despite the lack of good cause shown. The District Court was not
persuaded that relief was justified on account of the expiration of the statute of
limitations, which would bar the refiling of the action, because no other factor weighed in
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favor of granting an extension of time. Finding no reason to exercise its discretion to
extend the time for service, the District Court dismissed the Amended Complaint without
prejudice for failure to effect proper service. Chiang filed a timely appeal.
II.
This Court reviews a dismissal pursuant to Rule 4(m) for abuse of discretion.
Boley v. Kaymark, 123 F.3d 756, 758 (3d Cir. 1997). We have jurisdiction over this
appeal pursuant to 28 U.S.C. § 1291 and 28 U.S.C. § 1294.
Proper service is an essential step in establishing a district court’s personal
jurisdiction over the defendants. Rule 4(i) of the Federal Rules of Civil Procedure very
clearly sets out the requirements for service of a summons and complaint on the United
States and its agencies. “The plaintiff is responsible for having the summons and
complaint served within the time allowed by Rule 4(m).” Fed. R. Civ. P. 4(c)(1). “If a
defendant is not served within 120 days after the complaint is filed, the court . . . must
dismiss the action without prejudice against that defendant or order that service be made
within a specified time.” Fed. R. Civ. P. 4(m). If a plaintiff can show “good cause” for
the failure to timely serve a defendant, “the court must extend the time for service for an
appropriate period.” Id. This Circuit has equated good cause with the concept of
excusable neglect. See Petrucelli v. Bohringer & Ratzinger,
46 F.3d 1298, 1312 (3d Cir.
1995).
District courts conduct a two-part analysis when determining whether to extend the
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time for service of a summons and complaint. Boley, 123 F.3d at 758. First, the district
court must determine “whether good cause exists for a plaintiff’s failure to effect timely
service.”
Id. If good cause does not exist, the district court must then “consider whether
to grant a discretionary extension of time.”
Id.
A. Mandatory Extension for Good Cause
A showing of good cause “requires a demonstration of good faith on the part of the
party seeking an enlargement and some reasonable basis for noncompliance within the
time specified in the rules.” MCI Telecomms. Corp. v. Teleconcepts, Inc., 71 F.3d 1086,
1097 (3d Cir. 1995). Indeed, the “primary focus” of the good cause inquiry “is on the
plaintiff’s reasons for not complying with the time limit in the first place.”
Boley, 123
F.3d at 758 (quoting
MCI, 71 F.3d at 1097).
Despite Appellants’ arguments to the contrary, they have not shown good cause for
an extension of time for service. The District Court was presented with nothing that was
sufficient to excuse Appellants’ lack of diligence. See Boley, 123 F.3d at 758.
Appellants properly served the Amended Complaint on the U.S. Attorney for the District
of the Virgin Islands but they ignored the unequivocal instructions of Rule 4(i) and used
unauthorized methods of service on the SBA and the Attorney General. Appellants have
offered no explanation for why they were unable to comply with the requirements of Rule
4(i). Nor have Appellants explained why it took them almost four years to move for an
enlargement of time and complete service. Indeed, Appellants did not even ask for an
5
extension of time until after the Government had filed its motion to dismiss. The fact that
Appellants initially made good faith efforts to serve the Attorney General and the SBA,
which may have put them notice of the legal action, is of no consequence. The “absence
of prejudice alone can never constitute good cause to excuse late service.” MCI, 71 F.3d
at 1097.
B. Discretion to Extend Time for Service
Even if good cause is not shown, other factors may warrant an extension of time
for service. Petrucelli, 46 F.3d at 1307. A district court may consider actual notice of the
legal action; prejudice to the defendant; the statute of limitations on the underlying causes
of action; the conduct of the defendant; and whether the plaintiff is represented by
counsel, in addition to any other factor that may be relevant when deciding whether to
grant an extension or dismiss the complaint. See Fed. R. Civ. P. 4(m) Notes of Advisory
Committee on 1993 amendments;
Boley, 123 F.3d at 759.
Appellants present two factors that cut in favor of an extension of time that they
argue were not properly considered by the District Court. First, Appellants assert that a
dismissal without prejudice would effectively bar their action because in the four years
that it took the Government to file its motion to dismiss, the statute of limitations expired
on the their underlying causes of action. Second, Appellants contend that the
Government had actual notice of the legal action despite imperfect service, and therefore
would not suffer any prejudice on account of the delay.
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Although the expiration of the statute of limitations and the lack of prejudice cut in
favor of extending the time for service, when balanced against the other factors in this
case, it cannot be said that the District Court abused its discretion in denying Appellants’
request for an extension of time for service of process. The running of the statute of
limitations may be “a factor supporting the discretionary granting of an extension of time
to make service under Rule 4(m),” Boley, 123 F.3d at 759, but it “does not require the
district court to extend time for service of process,”
Petrucelli, 46 F.3d at 1306 (emphasis
added). A district court may “still dismiss the case, even after considering that the statute
of limitations has run and the refiling of an action is barred.”
Id. In addition, the District
Court found that Appellants had been put on notice by a letter from the U.S. Attorney
following the improper service of the original complaint that the Government was
expecting perfect service and would not waive any defects. Still, it took Appellants
almost four years to perfect service on the SBA and the Attorney General. During this
time Appellants, who were represented by counsel, did not ask the District Court for an
extension of time for service until they were facing a motion to dismiss.
III.
Given Appellants’ lack of explanation for the four year delay in perfecting service
on the Government and the other detracting factors, we find that the District Court did not
abuse its discretion in denying Appellants’ request for an extension of time for service of
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process and dismissing the Amended Complaint.1 Consequently, we will affirm the order
of the District Court.
1
Appellants argue that the District Court abused its discretion because it refused to
give them reasonable time to cure a failure of service on the Attorney General and the
SBA after they had properly served the U.S. Attorney for the District of the Virgin
Islands, as required by Rule 4(i)(4). Although the District Court did not directly address
this question, it can be gleaned from the court’s discussion of whether to grant an
extension of time for service under Rule 4(m) that three and a half years is not a
reasonable time in which to complete service under Rule 4(i). This is not an unreasonable
conclusion. Accordingly, the District Court did not deprive Appellants of the reasonable
time allowed by Rule 4(i) to perfect service on the Government.
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