New York state's highest court recently held that service on Brazilian defendants in Brazil was effective under New York law even if it did not satisfy Brazilian standards for service of process. Morgenthau v. Avion Resources, No. 167 (N.Y. Ct. App. Nov. 20, 2008).
In the case, the New York County District Attorney seeks access to funds allegedly sent to the United States in violation of Brazilian monetary regulations and New York banking laws. Because defendants operated out of Brazil, the DA served process upon them there (and upon the attorneys of those defendants who could not be reached for personal service). The Supreme Court dismissed the complaint after concluding that “plaintiff’s service of process failed to comply both with service requirements prescribed by the Inter-American Convention on Letters Rogatory and the service requirements of Brazil, which utilizes only letters rogatory or a letter of request transmitted through diplomatic channels, and with principles of comity.” The Appellate Division affirmed.
The Court of Appeals reversed the dismissal, focusing largely on the lack of any requirement in New York’s Civil Practice Law and Rules (CPLR) that service of a defendant abroad comply with the foreign country’s service procedures. The Court held that “comity is not an additional hurdle for a plaintiff to overcome in serving a party in a foreign country” where CPLR service requirements are satisfied. The Court further pointed out that Brazil is not a signatory to the Hague Service Convention, and, thus, that treaty should not trump New York law. Furthermore, although the United States and Brazil are both signatories to the Inter-American Convention on Letters Rogatory, the Court found that the treaty’s text does not preclude service pursuant to the CPLR.
This holding underscores the relative ease with which many foreign defendants can be forced to appear in New York courts.
For a copy of the decision, please click here.