The Fifth Circuit Court of Appeals has determined that, while the 120-day limit on service of process under the Federal Rules of Civil Procedure does not apply to defendants who are foreign nationals, a district court may limit the time needed to serve such defendants under a flexible due-diligence standard. Lozano v. Bosdet, No. 11-60736 (5th Cir., decided Aug. 31, 2012). Thus, the court rejected the Second Circuit’s approach, which allows plaintiffs to avoid the 120-day limit if they “attempt to serve the defendant in the foreign country” within that time, and the Ninth Circuit’s approach, which allows an unlimited time to effect service.
The plaintiff, a Mississippi resident, sued the driver of a rental car, her passengers and the company that rented the car for damages allegedly resulting from a traffic accident. The defendants are all apparently foreign nationals and believed to reside in Great Britain, although the passengers own a bed-and-breakfast facility in Mississippi. The suit was filed just within the three-year period of limitations. The car rental company was dismissed from the suit because its contract was with one of the passengers and not with the woman who drove the car; she had not apparently been designated as an authorized driver. Within 120 days of filing the complaint, the plaintiff communicated with the manager of the passengers’ business, and service was attempted by restricted mail delivery to an address in Canada, identified as the driver’s residence in the police accident report.
Thereafter, the plaintiff was given several extensions of time in which to effect service during which she undertook efforts to serve the defendants in Great Britain under the Hague Convention. The district court dismissed the case without prejudice for failure to effect service, which effectively ended the proceedings given the applicable statute of limitations. The Fifth Circuit concluded that Rule 4(m) plainly indicates that the 120-day limitation does not apply to service in a foreign country. Still, given the need of district courts to control their dockets, the court ruled that dismissal is appropriate where “the plaintiff has not demonstrated reasonable diligence in attempting service,” i.e., “[g]ood faith and reasonable dispatch are the proper yardsticks.”
Because the lawsuit would be barred under the statute of limitations and because the plaintiff “demonstrated signs of good faith in her escalating efforts to serve,” the court found no evidence of intentional delay or actual prejudice. The court also cited evidence showing that the defendants all had notice of the suit despite the repeated failure of service. Accordingly, the court concluded that “a litigation-ending dismissal with prejudice at this time is not in the interest of justice.” It reversed the lower court’s order of dismissal and remanded “subject to that court’s oversight and ultimate determination of whether or when to dismiss the case for failure to accomplish service.”