In today’s economy, it is no surprise to find that the product at the heart of a product liability suit was manufactured by a company outside of the United States. But properly serving that foreign manufacturer appears to cause some confusion. If strategy dictates the need for a claim against a foreign entity, especially in a product liability suit, it is necessary for the plaintiff to properly serve them under a hybrid of U.S. and international law.
This lesson was recently imparted on a subrogee attempting to bring suit against a South Korean company. Allstate Ins. Co. v. Hewlett-Packard Co., 2016 U.S. Dist. LEXIS 18155 (M.D. Pa. Feb. 16, 2016). The plaintiff’s insured purchased a computer that overheated, caused a fire, and resulted in significant property damage to the insured’s home. During litigation, the plaintiff learned that a potential cause of the fire was the computer’s battery, manufactured by Samsung SDI Co. Ltd., a South Korean company. The plaintiff filed a complaint against both Samsung’s South Korean company and its domestic company (Samsung SDI America, Inc.). The relevant issue arose when Samsung’s South Korean entity argued the plaintiff failed to properly serve it under the rules of the Hague Convention, and did not even attempt service until 14 months after filing the complaint.
Any nation that is a signatory of the Hague Convention—which includes the U.S. and the Republic of Korea (aka “South Korea”)—must follow its guidelines when bringing suit against a resident of another signatory. Federal Rule of Civil Procedure 4(f) provides for application of the Hague Convention in such situations. In part, this requires a U.S. plaintiff to contact the foreign signatory’s “central authority” (established to receive requests for service), and then have service performed in accordance with that nation’s internal law. That central authority will provide a certificate of service that states whether service has been performed, the method of service, and the place, date, and person on who service was made. This certificate is then filed in the U.S. court.
Equally important is the time in which to make service on the foreign entity. A plaintiff generally has 90 days to serve a party after filing the complaint, pursuant to Federal Rule 4(m) (this was a recent change from the 120 days prior to the December 2015 amendments to the Rules). Yet, the Rule makes exception and does “not apply to service in a foreign country.” Fed. R. Civ. P. 4(m). But as courts consistently remind us, this does not eliminate a timing requirement. See, Allstate Ins. Co. v. Hewlett-Packard Co., 2016 U.S. Dist. LEXIS 18155, at 12. Instead, courts generally look to see whether the plaintiff diligently attempted service during that time period. Id.
The plaintiff here failed to follow these requirements, and the court dismissed its action against the South Korean entity. The record showed the plaintiff filed an unsworn certificate of service attached to an untranslated document (apparently in Korean) along with its filing. Without any translation accompanying the Korean documents, the court was unable to determine whether service was made in conformance with the Hague Convention. This led the court to dismiss the action for a failure of service.
The court also discussed the defendant’s alternative argument that service was not attempted within a reasonable amount of time. In its ruling, the court found the plaintiff failed to even attempt service until 14 months after the complaint was filed. This, the court held, was an “extraordinary delay,” without good reason, and therefore, stated this was an additional reason to dismiss the complaint against Samsung’s South Korean entity. Although service typically need not be completed within the timing restraints of FRCP 4(m), it must at least be attempted in good faith.
Once it appears that suit will be brought against a foreign entity, it is necessary to determine whether the foreign nation is a signatory of the Hague Convention. If so, there can be no delay in following its guidelines if the plaintiff wants to avoid a dismissal of its claim.