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holding that plaintiff made a prima facie showing of adequate service under Rule 4(f)(C), where the court clerk served papers on foreign corporation via Federal Express
Summary of this case from Calix, Inc. v. Alfa Consult, S.A.Opinion
No. C 04-02581 JSW.
December 7, 2004
ORDER DENYING IN PART SYSTEM GENERAL CORPORATION'S RE-NOTICED AND REVISED MOTION TO DISMISS, OR IN THE ALTERNATIVE, TO QUASH SERVICE OF COMPLAINT
This matter is before the Court upon consideration of System General Corporation's ("SG Taiwan") motion to dismiss, or in the alternative, to quash service of the complaint. SG Taiwan moves to dismiss or quash pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(5). Having considered the parties' pleadings, relevant legal authority, and having had the benefit of oral argument on the motion, the Court DENIES the motion to dismiss for insufficiency of service of process. The Court defers ruling on the motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) pending jurisdictional discovery and further briefing.
BACKGROUND
On June 28, 2004, Plaintiff Power Integrations, Inc. ("Power Integrations") filed this action against SG Taiwan and its U.S. subsidiary, System General U.S.A. ("SG USA"). On June 30, 2004, Power Integrations filed a request with the Clerk of this Court to perfect service on SG Taiwan via Federal Express. (Docket Entry 4.) This request purportedly was made pursuant to Federal Rules of Civil Procedure 4(h)(2) and 4(f)(2)(C)(ii).
On or about July 1, 2004, the Clerk of the Court dispatched the Federal Express package provided by Power Integrations. (Docket Entry 4; Declaration of Cheryl Sherwood ("Sherwood Decl.") Ex. B.) On or about July 5, 2004, SG Taiwan received and signed for the package dispatched by the Clerk of the Court. (Sherwood Decl. Ex. B.)
SG Taiwan concedes that it received a copy of the summons and complaint.
Counsel for SG Taiwan has stated on the record at the hearing on this matter that, if the Court concludes that personal jurisdiction exists, he is willing to accept service on behalf of SG Taiwan.
DISCUSSION
In order for a court to exercise jurisdiction over a particular defendant, a plaintiff must have properly effected service on that defendant pursuant to Federal Rule of Civil Procedure 4. Hickory Travel Service, Inc. v. TUI AG, 213 F.R.D. 547, 551 (N.D. Cal. 2003). Thus, the Court must determine as a threshold question whether Power Integrations has made a prima facie showing that service was properly effected before it makes a determination on SG Taiwan's motion to dismiss for lack of personal jurisdiction. Id. at 555; see also United States v. Ziegler Bolt and Parts Company, 111 F.3d 878, 880 (Fed. Cir. 1997) (stating that where motion to dismiss under Rule 12(b)(5) is decided without an evidentiary hearing, plaintiff "had only to make a prima facie case of proper service in order to survive the motion").Because SG Taiwan is a foreign corporation, Rule 4(h) and Rule 4(f) govern service in this case. Rule 4(h)(2) provides that a foreign corporation may be served "in any place not within a judicial district of the United States in any manner prescribed for individuals by subdivision (f) except personal delivery. . . ." Where, as here, there is no "internationally agreed means of service," Rule 4(f) provides in relevant part, that "unless prohibited by the law of the foreign country" and so long as "service is reasonably calculated to give notice," service may be effected by "any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the party to be served." Fed.R.Civ.P. 4(f)(2)(C)(ii) (emphasis added).
It is undisputed that Rule 4(f)(1) is not applicable in this case. Further, Power Integrations does not rely on the other subsections of Rule 4(f)(2)(C) to contend service was valid.
SG Taiwan contends that service was ineffective because Taiwanese law does not provide for service to be effected by any means other than letters rogatory or via diplomatic channels, and Power Integrations has not used those means to effect service. (Mem. at 12.) SG Taiwan also contests the sufficiency of service because Power Integrations "addressed" the envelope that was undisputedly dispatched by the Clerk's office and because Power Integrations used Federal Express rather than U.S. Postal Service channels.
The Court rejects these arguments. First, although Power Integrations may have addressed the package, it is clear that the Clerk's office dispatched the package. Second, Rule 4(f)(2)(C)(ii) requires that service be effected by "any form of mail requiring a signed receipt." In this case, delivery by Federal Express required a signed receipt, and the declarations submitted by Power Integrations the Court demonstrate that the package was signed for by SG Taiwan. (Sherwood Decl. Exs. A, B.) Although the Courts are not in agreement on whether Federal Express constitutes "mail", at least one court within this Circuit has considered Federal Express to be a form of "mail" for purposes of Rule 4. See, e.g., R. Griggs Group Ltd. v. Filanto SPA, 920 F. Supp. 1100 (D. Nev. 1996) (implicitly concluding that Federal Express was a "postal channel" for purposes of analyzing whether service was proper under Hague Convention); cf. Dee-K, 174 F.R.D. at 379 (finding DHL courier to be form of mail requiring signed receipt). Accordingly, based on the facts before the Court in this case, Power Integrations has substantially complied with the provisions of Rule 4(f)(2)(C)(ii). Hickory Travel, 213 F.R.D. at 552.
To support its position SG Taiwan submits a letter from Formosa Transnational Attorneys At Law ("Formosa Transnational"). (Amended Declaration of Scott Mosko ("Mosko Decl."), Ex. C.) In that letter, Formosa Transnational states that it has been asked to give an opinion on, inter alia, "what means of service are prescribed under the laws, rules, and regulations of Taiwan, ROC, an [ sic] any action in any of its courts of general jurisdiction." Formosa National states that "Taiwanese Courts will serve litigation documents either by court staff or through the post office." (Mosko Decl. Ex. C at 2 (emphasis added).) Formosa National further opines that, with respect to service of foreign court documents, "the foreign court may request Taiwanese courts, under a letters rogatory process, to serve the legal documents in Taiwan in accordance with the ROC Code of Civil Procedure." ( Id.) The letter concludes with the statement "Taiwanese law does not contain a general provision authorizing the service of process through 'other means.' That is, according to the laws, rules, and regulations of Taiwan, ROC, service of process must be made through the methods of specified by law and described above." ( Id.)
As to this last statement, the Court notes that Rule 4(f)(2) does not use the term "other means". Rule 4(f)(3) does, however, permit service by "other means not prohibited by international agreement as may be directed by the Court." That subdivision of Rule 4 is not at issue here.
As stated, SG Taiwan asked for an opinion as to what methods of service are "prescribed" by Taiwanese law. The express terms of Rule 4(f)(2)(C), however, demonstrate that its focus is on whether a method service is "prohibited" by a particular country. Fed.R.Civ.P. 4(f)(2)(C); see also Rule 4, Advisory Committee Notes, 1993 Amendments ("Service by methods that would violate foreign law is not generally authorized.") (emphasis added). In contrast, Rule 4(f)(2)(A) authorizes service "in the manner prescribed by the law of the foreign country for service in that country for service in that country in an action in any of its courts of general jurisdiction. Fed.R.Civ.P. 4(f)(2)(A) (emphasis added).
Thus, Rule 4(f)(2)(C) provides for service in a manner that, while not expressly prescribed by the laws of a foreign country, is not prohibited by those laws. In the Court's view, this is not a distinction without a difference for if there were no distinction between those terms, Rule 4(f)(2)(C) would be rendered superfluous. See, e.g., Dee-K Enterprises, Inc. v. Heveafil SBN BHD, 174 F.R.D. 376, 380 (E.D. Va. 1997) ("[I]f all forms of service not 'prescribed' are 'prohibited', then the failure to satisfy subsection (f)(2)A) would preclude the availability of subsection (f)(2)(C) and the latter subsection have no effect; it would be useless. A construction of 'prohibit' that leads to this result should be avoided for it is well established that courts should be 'reluctant to interpret statutory provisions so as to render superfluous other provisions within the same enactment.'"); Resource Ventures, Inc. v. Resources Management Intel, Inc., 42 F. Supp. 2d 423, 429-430 (D. Del. 1999) (concluding that "is subsection (f)(2)(C) is inapplicable where a form of return receipt mail is not prescribed by the law of a foreign country, then a plaintiff's failure to satisfy subsection (f)(2)(A) would preclude the availability of subsection (f)(2)(C) thereby making the latter subsection useless).
The Court has also considered Judge Marshall's decision in Graval v. P.T. Bakrie Brothers, 986 F. Supp. 1326 (C.D. Cal. 1996), in which the court found the distinction between these two terms to be "without merit." The court in Graval, however, did not analyze the distinction in light of the interplay between subsection (f)(2)(A) and (f)(2)(C). Accordingly, this Court finds the reasoning of the Dee-K and Resource Ventures opinions to be more persuasive on this question.
To rebut SG Taiwan's assertions that service was invalid, Power Integrations has submitted as evidence information from the State Department's website that suggests that Taiwan does not prohibit service pursuant Rule 4(f)(2)(C)(ii), albeit according to that document Power Integrations may have difficulty enforcing a judgment if they rely solely on such service. (Consolidated Declaration of Howard G. Pollack ("Pollack Decl.") Ex. P.) Moreover, the opinion letter from Formosa Transnational lends further support for this conclusion. Formosa Transnational states that courts in Taiwan "will serve litigation documents . . . through the post office," implying that within Taiwan the courts use postal channels to effect service. Thus, in the Court's view the letter from Formosa Transnational does not support a finding that service under Rule 4(f)(2)(C)(ii) is prohibited by or violates Taiwanese law. Dee-K, 174 F.R.D. at 380; Resources Ventures, 42 F. Supp. 2d at 429-430; see also Emery v. Woods, 2001 U.S. Dist. LEXIS 12914, *4-*6 (finding prima facie showing of proper service on Taiwanese defendant pursuant to Rule 4(f)(2)(C)(ii) based on evidence similar to that presented in this case).
The Court also concludes that this method of service is reasonably calculated to give notice to the defendant of the pending action. Indeed, it is undisputed in this case that SG Taiwan did receive the complaint and is aware of the nature of the claims. Accordingly, for the foregoing reasons, Power Integrations has met its burden to establish a prima facie showing that service was proper, and SG Taiwan's motion to dismiss or in the alternative to quash for insufficiency of service of process is DENIED.
SG Taiwan's motion to dismiss pursuant to Rule 12(b)(2) is continued for further hearing to Friday, February 25, 2005, at 9:00 a.m. The parties shall complete jurisdictional discovery by no later than January 14, 2005. Power Integrations' supplemental briefing in opposition to the motion to dismiss shall be due on January 28, 2005. SG Taiwan's supplemental briefing shall be due on February 4, 2005. The parties may seek leave of court to adjust this schedule if necessary.