The Supreme Court has agreed to review whether service of process by mail on foreign defendants is permissible or whether service through diplomatic channels is necessary. While the case that raised this issue is from a state court, the Court’s decision is likely to affect service of process in federal court cases, including IP litigation.
In Menon v. Water Splash, Inc., 472 S.W.3d 28 (Texas Court of Appeal, Fourteenth District, 2015), cert granted 137 S.Ct. 547 (Dec. 2, 2016), defendant Menon appealed from the trial court’s default judgment granted after she failed to answer a process sent to her by first class mail, certified mail, and Federal Express to her address in Canada and by email to each of her known email addresses. The suit alleged claims of unfair competition, conversion, tortious interference with business relations, and conspiracy. The trial court had granted a motion for default judgment, and awarded actual and exemplary damages and attorneys’ fees.
On appeal, Menon argued that the provisions for service of process through a central authority and diplomatic channels in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters are exclusive. Water Splash argued that service by mail was permissible under Article 10, which permits sending judicial documents to an address in a country that has not objected to that procedure, pointing to courts following this view, including the Second, Fourth, Seventh and Ninth Circuits.
In a 2-1 decision, the Texas Court of Appeal, reversed the default judgment, distinguishing the Hague Convention provisions for sending documents from those expressly applicable to service of process, and concluding that “the better-reasoned approach is to follow the so-called “minority view,” which adheres to and applies the meaning of the specific words used in article 10(a) and prohibits service of process by mail. The majority opinion cited Texas federal and state court decisions in support of that conclusion. The Texas Supreme Court refused to review the decision. The U.S. Supreme Court granted a writ of certiorari on December 2, 2016. The question presented is: “Does the Hague Service Convention authorize service of process by mail?” A decision is expected in the 2016-2017 term.
While Menon v. Water Splash is pending, foreign defendants who have been sent process by mail should consider preserving an objection to insufficient service of process grounds. See F.R.Civ.P. 12(b)(5) & (h).
Plaintiffs filing new cases, or in cases where defendants have not waived objections to service of process, should consider whether to serve foreign defendants through diplomatic channels, especially if they are concerned about a statute of limitations or the six-year limit on past damages in patent infringement litigation.
Formal service of process by the Hague Convention procedure is time-consuming and more expensive than simply sending a summons and complaint by certified mail. Many countries require that service of process include a translation, including a translation of any exhibits, which may include one or more patents. A potentially useful alternative is the waiver of service procedure in F.R.Civ.P. 4(d), although there is no penalty for failure to waive in the case of foreign defendants. If a foreign defendant waives service of process, the answer will not be due until 90 days after the waiver request is sent. In the author’s experience, a waiver under the Rule 4(d) procedure sometimes can be arranged after informally notifying the defendant of the filing of the complaint, in the course of negotiating a response date.