The US Supreme Court has confirmed that US litigation may be commenced against foreign parties by sending documents through the mail, provided that certain conditions are met. In Water Splash, Inc. v. Menon, No. 16-254 (May 22, 2017), the Court held that the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (the "Convention") permits service of process by mail provided that the receiving state has not objected to service by mail and service by mail is authorized under otherwise-applicable law. In so holding, the Court has made it easier for plaintiffs commencing litigation in the United States to serve defendants located abroad.
Water Splash sued its former employee, Menon, a Canadian resident, in state court in Texas. Water Splash obtained permission to effect service by mail. After Menon failed to answer or enter an appearance, the trial court issued a default judgment in favor of Water Splash. Menon then moved to set aside the judgment, and the trial court denied the motion. She appealed, and the majority of the Texas Court of Appeals panel ruled in her favor and held that the Convention prohibits service of process by mail. Following unsuccessful attempts to obtain further appellate review in Texas courts, the US Supreme Court granted certiorari to resolve the conflict that had developed among courts as to whether the Convention permits service by mail.
The Supreme Court held that, under the Convention, service by mail is permissible if two conditions are met: (i) the receiving state has not objected to service by mail; and (ii) service by mail is authorized under otherwise-applicable law. The Court reached this conclusion by examining the text and structure of the Convention, as well as extratextual sources such as the drafting history of the Convention.
The Water Splash decision provides an additional method of service of process for plaintiffs seeking to bring suit in US jurisdictions that had previously held that the Convention prohibits service by mail abroad. Service by mail is in many instances faster, less expensive and more convenient than other methods enumerated in the Convention, such as service through a so-called "Central Authority" located in a foreign state.
While the Water Splash decision represents a significant development in the procedural rights of plaintiffs in the United States vis-à-vis non-US defendants, the ruling should not, however, lead to a flood of new complaints being mailed to defendants situated abroad for three reasons. First, service by mail had already been held permissible under the Convention in significant US jurisdictions such as the Second and Ninth Circuits. Second, numerous states that are signatories to the Convention have already objected to service by mail, prohibiting such service in those foreign states, regardless of the Water Splash decision. Third, to the extent that a plaintiff brings suit in a state court in the US and that state's rules bar service by mail, service by mail will also be prohibited under the Convention.
Nevertheless, we do expect that more complaints will be served by mail in light of this decision. As such, it will be even more important for non-US entities to adopt proper policies and procedures to screen their mail for judicial process, since one overlooked (and thus, unanswered) complaint could lead to entry of a default judgment in a US court.