Serving Overseas Judgment Debtors—Is The Digital Door Open?
Bluestone, P.C. has recently obtained two successful orders in New York’s federal court that underscore the availability of a key tool in enforcing judgments involving non-U.S. defendants/judgment debtors: e-mail service. Tracking down information about a judgment debtor’s assets is never an easy task, especially when the judgment debtor and assets are located outside the U.S. Recognizing that the digital door is open for service of post-judgment discovery, however, significantly reduces the ability of such a debtor to escape its obligations.
Rule 4(f) of the Federal Rules of Civil Procedures govern the service of non-U.S. parties. Litigants generally assume that the Hague Convention (Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters)—an international treaty adopted in 1969 to give litigants a reliable and efficient means in serving documents in other countries—is the only route for cross-border service. While recognized by 75 countries, the Hague Convention consists of an antiquated and lengthy process full of unyielding delays requiring service of process through “central authorities” that only seems to provide judgment debtors and fraudsters time and opportunity to insulate assets from enforcement of judgments entered in foreign jurisdictions.
Critically, however, Rule 4(f) further allows service abroad “by other means not prohibited by international agreement.” Notably—and a key point for judgment creditors—the Hague parties are generally not required to first spend months attempting service via the Hague Convention, especially where a party’s whereabouts are unknown before utilizing the possible “other means” of service. AMTO, LLC v. Bedford Asset Mgmt., LLC, No. 14-CV-9913, 2015 WL 3457452, 2015 U.S. Dist. LEXIS 70577, at *11 (S.D.N.Y. May 29, 2015) (noting that alternative service “is neither a last resort nor extraordinary. It is merely one means among several which enables service of process on an international defendant.”).
This landscape opens the digital door for service via our most ubiquitous form of business communication today—email.[1] An ever expanding list of U.S. federal courts are permitting service internationally by email where it can be shown that “the email is likely to reach the defendant.”[2] Litigants have met this reasonable burden in a variety of ways, including by: showing the court email negotiations from the defendant, presenting emails from the defendant issued after the action has been filed, and even where a defendant’s email account was used three years prior to the lawsuit. Ultimately, with a seemingly favorably bent towards judgment creditors, a court’s inquiry, as with all service questions, boils down to whether the moving party can adequately show that the person to be served is likely to receive the documents.
As noted, Bluestone successfully took advantage of these legal swings by obtaining orders in two recent judgment enforcement matters in the federal court for the Southern District of New York permitting email service:
In the first case, Nemesis 2 LLC v. Pure Brazilian Company, S.L., et al., Judge Ronnie Abrams granted a request for email service upon an individual defendant based in Switzerland where he had used e-mail to correspond with both plaintiff and the court concerning the litigation. Judge Abrams noted that while certain situations require service under the Hague Convention, the combination of the defendant’s failure to respond after seeking an extension from the court for a filing deadline and using his own e-mail in correspondence, confirmed that e-mail was an appropriate means of serving post-judgment discovery requests upon the individual.
In the second matter, also before Judge Abrams, Townsend Farms, Inc. v. Goknur Gida Maddeleri Enerji Imalate Ithalat Ihracat Ticaret ve Sanayi A.Ş., et al., the court permitted service of post-judgment discovery and other papers upon a Turkish joint stock corporation by email on a U.S. based lawyer that had conveyed settlement negotiations for the Turkish debtor and had an email address at the debtor company’s url address. Both matters reached favorable resolution shortly after entry of these orders.
Ultimately, Rule 4(f)(3) can provide a useful route for service abroad and eliminate lengthy and cumbersome procedures and should be added to the checklist for federal court litigants with uncooperative overseas defendants.
[1] See Zanghi v. Ritella, 19 Civ. 5830, 2020 WL 589409 (S.D.N.Y. Feb. 5, 2020) (declaring that “all pertinent decisions from the Southern District of New York” have rejected the claim that email is a “postal channel[]” as found in the Hague Convention and citing five cases in support thereof).
[2] In fact, a federal judge in New York has observed that email communications can be more reliable than postal communications, and the receipt of emails can be more readily tracked. Sulzer Mixpac AG v. Medenstar Indus. Co., 312 F.R.D. 329 (S.D.N.Y. 2015).