CALLIE V.S. GRANADE, District Judge.
This matter is before the Court on the report and recommendation of the Magistrate Judge (Doc. 48), Defendants
After due and proper consideration of all portions of this file deemed relevant to the issues raised, and a de novo determination of those portions of the report and recommendation to which objection is made, the report and recommendation of the Magistrate Judge made under 28 U.S.C. § 636(b)(1)(B) is
Defendants argue that Plaintiff failed to provide proper notice of maritime attachment and garnishment when Plaintiff sent certain documents to them in China by Federal Express rather than according to the procedures prescribed by the Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("the Hague Service Convention" or "the Convention"). (See Doc. 21 at 7; Doc. 52 at 4-8). Because "compliance with the Convention is mandatory in all cases to which it applies," Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 705, 108 S.Ct. 2104, 100 L.Ed.2d 722 (1988), the Court must first determine what procedures — those allowed by the Convention or those set forth in Supplemental Rule B(2) — apply when a defendant is to receive notice of maritime attachment abroad. This appears to be an issue of first impression.
Defendants argue that, because they are Chinese corporations in the People's Republic of China, Articles 1 and 10(a) of the Convention trump Rule B. Article 1 declares that the Convention "shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad." Article 10(a) provides that, as long as the "State of destination" does not object, the Convention "shall not interfere with the freedom to send judicial documents, by postal channels, directly to persons abroad." The People's Republic of China has objected to Article 10. See Hague Convention, China Declaration Notification, 3, available at http://www.hcch.net/index_en.php?act=status.comment&csid=393&disp=resdn (declaring "to oppose the service of documents in the territory of the People's Republic of China by the methods provided by Article 10 of the Convention").
In an effort to extend the Convention's application beyond service of process, Defendants focus on the use of the words "transmit" and "send" in Articles 1 and 10, respectively. They argue that Plaintiff's notice via Federal Express was the "transmission" of a "judicial document," triggering Article 1 and rendering adherence to the Hague Service Convention's procedures mandatory. (Doc. 52 at 5). Defendants further argue that because China has explicitly rejected service by mail, Article 10 prohibits Plaintiff from "sending" notice via channels like Federal Express. (Doc. 21 at 5) Employing the doctrine of
In Volkswagenwerk, the Supreme Court demarcated the scope and reach of the Convention, maintaining that it applies only to instances of formal service. Relying heavily on the Convention's drafting history, and upon review of the record of the Convention's negotiations, the Court determined that "Article 1 refers to service of process in the technical sense."
Here, Plaintiff sought an attachment under Supplemental Rule B, and the Magistrate Judge ordered issuance of process. (Docs. 6-8). Plaintiff then mailed the summons, complaint and related documents to Defendants in China via Federal Express. (Doc. 21 at 2). If a return receipt was requested, Plaintiff may have complied with the notice procedures of Supplemental Rule B(2)(b).
Defendants also argue that Article 10(a), which permits a party "to send judicial documents" by mail so long as the "State of destination" does not object, prevents Plaintiff from mailing notice of maritime attachment. To date, the Supreme Court has yet to interpret Article 10(a), and there is a clear split among the circuits as to whether the use of "send" as used therein refers only to formal service of process. On one side of the split are the Ninth and Second Circuits, which relied on the intent of the drafters to conclude that "send" in Article 10(a) was intended to mean "service." See Brockmeyer v. May, 383 F.3d 798, 802-03 (9th Cir.2004); Ackermann v. Levine, 788 F.2d 830, 839 (2d Cir.1986). The Fifth and Eighth Circuits' textualist approach assigns great significance to the use of "send" rather than "serve" to conclude that Article 10(a) does not contemplate service through postal channels. Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 384 (5th Cir.2002); Bankston v. Toyota Motor Corp., 889 F.2d 172, 173-74 (8th Cir.1989). Federal district and state courts are similarly divided. See Practical Handbook at 76-77 nn. 270-71 (listing cases).
The Eleventh Circuit has yet to enter the fray. And having already determined that the Convention only applies to service of process, this Court need not take a side. Nonetheless, the Court finds that the Fifth and Eighth Circuits' analysis of Article 10(a) is unpersuasive for several reasons. Though the Fifth and Eighth Circuits both recognized that a treaty's plain language is conclusive absent a clearly expressed legislative intent, Nuovo Pignone, 310 F.3d at 384; Bankston, 889 F.2d at 174 (citing Consumer Prod. Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980)), neither court gave any weight to that intent. Neither circuit even acknowledged the Volkswagenwerk Court's thorough analysis of the Convention's
To extent that the Magistrate Judge's report and recommendation failed to state explicitly that the Hague Service Convention does not dictate the means by which a defendant abroad is to receive notice of a maritime attachment, the Court hereby does so. The Convention applies when a document is transmitted abroad for service; it does not govern the manner by which a defendant abroad must be notified of a maritime attachment. By mailing the summons, complaint and related documents to Defendants in China via Federal Express, Plaintiff failed to effect service of process or establish personal jurisdiction, but it may well have satisfied Rule B(2)'s notice requirement if a return receipt was requested.
WILLIAM E. CASSADY, United States Magistrate Judge.
Before the undersigned for entry of a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Rule 72.2
In the verified complaint filed on February 15, 2012 (Doc. 1), the plaintiff alleges that defendant Grand China Shipping (Hong Kong) Co. Ltd. ("GCS Hong Kong") failed to pay the plaintiff more than $19 million in charter hire for the use of its vessel GLOBAL COMMANDER (see id., ¶¶ 1-18) and sought
(Id., ¶ 17.) The complaint next alleges that defendant HNA Group Co. Ltd. ("HNA") guaranteed GCS Hong Kong's obligations under the charter party. (See id., ¶¶ 19-29.) And, as such, the plaintiff sought a similar maritime attachment against HNA. (Id., ¶ 28.) Finally, the complaint alleges that the Moving Defendants are both alter egos of the other defendants (id., ¶¶ 30-35) and that
(id., ¶ 36).
On March 15, 2012, the plaintiff filed an affidavit of service (Doc. 19), which provides that its counsel, Thomas S. Rue, Esq., served the summons (Doc. 18), verified complaint (Doc. 1), order authorizing issuance of process of maritime attachment and garnishment (Doc. 6), along with process of maritime attachment and garnishment (Docs. 7 & 8), supplemental process of attachment and garnishment (Docs. 14 & 15), and notice of lawsuit upon GCS Hong Kong, GCS Logistics, HNA, and the Moving Defendants
(Doc. 19 at 2.) Mr. Rue further provided that on March 15, 2012, he "confirmed through the website of Federal Express that all courier parcels had been delivered" to the parties at the addresses provided in the affidavit of service. (Id.)
The motion asserts two related — but, as will be explained more fully, distinct arguments. First, the Moving Defendants argues that the plaintiff's transmission of documents via Federal Express does not comply with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361 (the "Hague Service Convention" or the "Service Convention"), and, because service was defective, it should be quashed and the plaintiff's claims against the Moving Defendants dismissed pursuant to Rules 12(b)(2) (lack of personal jurisdiction), 12(b)(4) (insufficient process), and 12(b)(5)
The plaintiff contends that service under the Federal Rules of Civil Procedure and notice pursuant to the Supplemental Admiralty Rules are distinguishable. Thus, to properly provide notice, there was no need to comply with the Hague Service Convention. Importantly, however — as the plaintiff has conceded — "[a]lthough attachment may issue against property held for the defendant[s] in the district up to the amount sued for, execution in proceedings commenced by maritime in personam attachments in which the defendant[s have] not been personally served or appeared cannot exceed the value of the attached property." East Asiatic Co., Ltd. v. Indomar, Ltd., 422 F.Supp. 1335, 1341 (S.D.N.Y.1976) (citations and internal quotation marks omitted).
At the outset of the hearing, counsel for the plaintiff conceded that, because the Moving Defendants were not served in accordance with the provisions of the Service Convention, the Court lacks personal jurisdiction over them. This is correct. But, as to Ocean Container, served in Hong Kong, the issue of whether service was proper is more complex.
Because GCS Yantai, served at an address in Shandong Province (see Doc. 19 at 2), was served in a manner contrary to the Service Convention, the Court lacks personal jurisdiction over it, see, e.g., Ferrostaal, Inc. v. HACI HASSAN YARDIM, No. 03 CV 4886(GBD), 2006 WL 2819585, at *1-2 (S.D.N.Y. Sept. 29, 2006) (dismissing claims against two Turkish residents served by mail because service of process by mail contravened the Hague Service Convention — Turkey, like China, objected to Article 10(a) when it agreed to the Service Convention).
Id. at *2 (some citations omitted and other alterations to original); see also Intercontinental Indus. Corp. v. Luo, No. CV 10-4174-JST (Ex), 2011 WL 221880, at *2 (C.D.Cal. Jan. 20, 2011). ("China has objected to service by postal channels under Article 10(a). Hague Convention, China Declaration Notification, ¶ 3, available at http://www.hcch.net/index_den.php?act=status.comment&csid=393&disp=resdn (declaring "to oppose the service of documents in the territory of the People's Republic of China by the methods provided by Article 10 of the Convention"). Courts have interpreted this to mean that "[s]ervice therefore cannot be effected by postal channels" in China. In re LDK Solar Secs. Litig., No. C07-05182, 2008 WL 2415186, at *1 (N.D.Cal. June 12, 2008).").
The Court lacks personal jurisdiction over Ocean Container, served at an address in Hong Kong, not necessarily because the plaintiff violated the Service Convention, but because the plaintiff has
Although Hong Kong is a special administrative region of the People's Republic of China, there is no objection to service by mail in Hong Kong, pursuant to Article 10(a).
Therefore, service sent to Hong Kong via Federal Express may be effective if (1) such service is sent by the Clerk, see FED. R. CIV. P. 4(f)(2)(C)(ii); or (2) such service, sent directly by the plaintiff, would be effective in Hong Kong "in an action in its courts of general jurisdiction[,]" see FED. R.CIV.P. 4(f)(2)(A).
Next, as to Rule 4(f)(2)(A), the plaintiff has not proved, see Cornwall, 2011 WL 3878352, at *2 ("Once the sufficiency of service is brought into question, the plaintiff has the burden [to prove] proper service of process."), that its sending of the documents via Federal Express to Ocean Container at the address provided in Mr. Rue's affidavit (Doc. 19 at 2) would be effective in Hong Kong "in an action in its courts of general jurisdiction[,]" FED. R.CIV.P. 4(f)(2)(A). Such service may be effective,
The other, probably more pertinent, issue before this Court is whether the Hague Service Convention impacts, in any way, maritime attachment pursuant to Supplemental Rule B. In the motion to dismiss and on reply, the Moving Defendants
Putting aside the above discussion regarding service by postal channels in Hong Kong, the Moving Defendants have failed to provide a case to directly support their argument — that "send" in the Hague Convention somehow modifies the rules of maritime attachment-and they, moreover, ignore cases that stand for the proposition that the remedy afforded by maritime attachment pursuant to Supplemental Rule B is
This Court has recognized, moreover, that it is not unusual for a court to initially establish jurisdiction over a defendant's property "pursuant to a Rule B Attachment[,]" and for a plaintiff to "later perfect[] personal service upon [the defendant] pursuant to Rule 4(f)" and the Hague Service Convention. Servicio Marina Superior, LLC v. Matrix Int'l Ltd., Civil Action No. 07-0770-KD-C, 2009 WL 734114, at *6 (S.D.Ala. Mar. 17, 2009); cf. id. at *7 ("Attachment under Rule B serves to secure the defendant's appearance and assure satisfaction in the event
Based on the foregoing, the undersigned
The instructions that follow the undersigned's signature contain important information regarding objections to the report and recommendation of the Magistrate Judge.
1. Objection. Any party who objects to this recommendation or anything in it must, within fourteen (14) days of the date of service of this document, file specific written objections with the Clerk of this court. Failure to do so will bar a de novo determination by the district judge of anything in the recommendation and will bar an attack, on appeal, of the factual findings of the Magistrate Judge. See 28 U.S.C. § 636(b)(1)(C); Lewis v. Smith, 855 F.2d 736, 738 (11th Cir.1988); Nettles v. Wainwright, 677 F.2d 404 (5th Cir. Unit B, 1982) (en banc). The procedure for challenging the findings and recommendations of the Magistrate Judge is set out in more detail in S.D. Ala. L.R. 72.4 (June 1, 1997), which provides that:
2. Transcript (applicable Where Proceedings Tape Recorded). Pursuant to 28 U.S.C. § 1915 and Fed.R.Civ.P. 72(b), the Magistrate Judge finds that the tapes and original records in this case are adequate for purposes of review. Any party planning to object to this recommendation, but unable to pay the fee for a transcript, is advised that a judicial determination that transcription is necessary is required before the United States will pay the cost of the transcript.
The committee that prepared the preliminary draft deliberately used a form of the term "notification" (formal notice), instead of the more neutral term "remise" (delivery), when it drafted Article 1. Then, in the course of the debates, the negotiators made the language even more exact. The preliminary draft of Article 1 said that the present Convention shall apply in all cases in which there are grounds to transmit or to give formal notice of a judicial or extrajudicial document in a civil or commercial matter to a person staying abroad. To be more precise, the delegates decided to add a form of the juridical term "signification" (service), which has a narrower meaning than "notification" in some countries, such as France, and the identical meaning in others, such as the United States. The delegates also criticized the language of the preliminary draft because it suggested that the Convention could apply to transmissions abroad that do not culminate in service. The final text of Article 1 ... eliminates this possibility and applies only to documents transmitted for service abroad. The final report (Rapport Explicatif) confirms that the Convention does not use more general terms, such as delivery or transmission, to define its scope because it applies only when there is both transmission of a document from the requesting state to the receiving state, and service upon the person for whom it is intended. Id. at 700-01 (internal citations omitted).
Id.
Kennedy v. Grova, No. 11-61354-CIV, 2012 WL 1368139, at *2 (S.D.Fla. Apr. 19, 2012).
New Line Int'l Releasing, Inc. v. Marty Toy (USA), Inc., 91 CIV. 8638(JFK), 1995 WL 347381, at *2-3 (S.D.N.Y. June 8, 1995).
Without briefing from the parties on this issue or, more preferably, affidavits from a lawyer admitted to practice in Hong Kong, the undersigned simply cannot rely on this almost-seventeen-year-old decision's discussion of Hong Kong's then-applicable law, and say that the plaintiff has discharged its burden to prove proper service of process under Rule 4(f)(2)(A).
