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Transnational Litigation:
Contrasting American and Israeli Approaches to Alternative Modalities of
Service Under the 1965 Hague Service Convention
CAT 2002, Inc. v. Evans, CV-04-1715, Mem.
Op. (E.D.N.Y. Sept. 22, 2005)
Israeli
Defendants in U.S. Federal Civil Action
Successfully Represented by ZGC’s Sheldon Schorer
L. Marc
Zell, Adv.
ZGC attorneys act frequently for Middle
Eastern clients in United States federal and state courts.
Recently in a precedent setting decision, ZGC Counsel,
Sheldon Schorer,
representing two Israeli defendants in a civil action brought in the
United States District Court for the Eastern District of New York
succeeded in preventing the entry of a default judgment and having the
complaint dismissed for
improper service of process
for failure to comply with the
requirements of the Hague Convention on the Service Abroad of Judicial
and Extrajudicial Documents in Civil or Commercial Matters:
CAT 2002, Inc. v. Evans, CV-04-1715, Mem. Op. (E.D.N.Y.
Sept. 22, 2005).
At issue in the CAT 2002 was the
effectiveness of service in Israel of the defendants by a law firm hired
and a private investigator both hired by the plaintiff for the express
purpose of serving the federal civil complaint and summons.
Adv. Schorer contended that under Article
10 of the Hague Convention, service in Israel
could only be made through the Administrator of Courts within the
Ministry of Justice. Service by private process server was not
allowed.
Judge Seybert of the Eastern District
noted that in ratifying the Hague Convention, Israel had expressly
refused to accept subsections (b) and (c) of Article 10. Those
subsections expressly permit service of process through other “competent
persons” in the State where service is to be effected. Judge Seybert
went on to say that in rejecting subsections (b) and (c), “Israel
manifested a preference that its attorneys and other competent process
servers be excused from the burdens of process-serving in actions filed
abroad.”
Service of process in Israel must be
made, according to Judge Seybert, only through the Administrator of
Courts and only after the foreign party seeking to have documents served
obtained authorization from a judicial or diplomatic authority in their
home country.”
Here, Plaintiff impermissibly
side-stepped this directive by hiring an Israeli law firm and a private
investigator to deliver the Complaint by “in hand” service.” This is
more than a mere technical error [citation omitted] and the Court will
not uphold such service as effective.
Mem. Op. at p.7
The U.S. court also rejected the theory
that Article 19 of the Hague Convention permits a foreign party to serve
persons within the destination State (Israel in this instance) where the
law of such State permits service by means other than those specified in
the Convention itself. In an important ruling in the evolving Hague
Convention jurisprudence, the Court reasoned:
Article 19 only pertains to circumstances
where a ratifying Country has already provided in its internal laws a
designated means by which a party abroad could permissibly serve
citizens within its territory. [Citation omitted]. Article 19 does not
create a multilateral Convention whereby all signatories may
automatically avail themselves of each others civil practice rules.
Id. at p. 8.
The decision in CAT 2002 is another
important milestone in the developing law of international civil
procedure.
The United States cases are divided
on the question of whether the methods of service specified in the Hague
Convention are exclusive or whether Article 10 of the Convention permits
alternative modalities of service, such as service by registered mail.
Compare, e.g., Bankston v. Toyota Motor Corp., 889 F.2d 172, 174
(8th Cir. 1989); Anbe v. Kikuchi, 141 F.R.D. 498, 500 (D. Haw.
1992).
Knapp v. Yamaha Motor Corp., 60 F. Supp. 2d 566,
573 (S.D. W.Va. 1999);
Ackermann v. Levine, 788 F.2d 830, 839-40 (2d Cir.
1986);
Eli Lilly & Co. v. Roussel Corp., 23 F. Supp. 2d
460, 470-74 (D.N.J. 1998);
R. Griggs Group Ltd. v. Filanto Spa, 920 F. Supp.
1100 (D. Nev. 1996).
The Israel Supreme Court has taken a
“liberal” view of the Convention at least with respect to service by
mail under Article 10(a). In another case brought by ZGC attorneys in
2002, the Israeli high court ruled that Article 10 does not prohibit an
Israeli plaintiff seeking to serve a foreign defendant in the United
States under Israel Civil Rule 500 from doing so by registered
international mail. Art. 10 of the Hague Convention does not require
that service of process be effected through the United States Department
of State or central authority in the state of the defendant’s
residence. Raytheon v. Ashborn Agencies, Ltd., App. Leave to
Appeal, 8402/03 (Isr. S. Ct. , Sept. 1, 2003).
The long-standing practice has been to
permit service of non-resident defendants abroad under Israeli Civil
Rule 500 by registered international mail. This was so prior to and
after the implementation of the Hague Convention in Israel in 1975.
Prior to the decision in Raytheon
(by way of a denial of leave to appeal an interlocutory order of the Tel
Aviv- Jaffa District Court), the Israel Supreme Court dealt directly
with the interpretation of Article 10 only in the 1975 case of
Frankel v. Kaufman, [Citation Omitted]. In that case the late Judge
Zusman stated in dicta that Article 10(a) did not prohibit service by
international registered mail under Rule 500, even though service there
was effected prior to the implementation of the Hague Convention in
Israel. See also Berg Yaakov & Sons (Furniture) Ltd. v. Berg
East Imports, Inc. [Citation omitted]
(which also is not dispositive of the Hague Convention issue).
In Raytheon a single judge of the
Supreme Court reasoned that the Israeli practice of permitting service
abroad by mail notwithstanding the arguable requirements of the Hague
Convention was adequate to allow Israel to acquire jurisdiction over
foreign defendants, so long as the requirements of
Rule 500 have been met and the foreign defendant actually received
process.
In the eyes of this judge at least,
the rules regarding the manner in which process is served are
technicalities only and will not be grounds for dismissal where the
defendants have actually received notice of the proceedings by
alternative means.
The rationale of the Israeli Supreme
Court in Raytheon conflicts with the views taken by many American
courts, including the Eastern District of New York in CAT 2000.
In CAT 2000,
the Israeli defendants had unquestionably been served by private process
server, a procedure which the federal court held was prohibited under
Israel’s reservations to Article 10 of the Hague Convention.
Had the American court applied the
rationale of the Israel Supreme Court in Raytheon,
service would have been held to have been technically erroneous
but not fatal to the exercise of the court’s personal jurisdiction over
the non-U.S. resident Israelis.
The failure of the Israel Supreme Court
to address the merits of the Hague Convention argument in Raytheon
is problematic, since to this date the Israeli high court has not
construed the language of the Convention.
If the rule of law in transnational
litigation is to have any meaning, it is incumbent upon national courts
to address the requirements of the Convention at a minimum. It is no
answer to say, as did the solitary justice in Raytheon,
that national rules of procedure permit a particular means of service of
original process, if the Hague Convention expressly prohibits it.
It is to be hoped that the Israel
Supreme Court will properly address the requirements of the Hague
Service Convention at the earliest possible opportunity if only to
articulate a principle basis for the long-standing Israeli practice of
permitting service of foreign defendants by mail.
Finally, the decision in CAT 2000
is significant since service by a lawyer or private detective is a
commonly used method of service, particularly as this method seems to
have been sanctioned in Israel under the rationale in the Raytheon
case. This case should cause attorneys to reconsider the use of this
method, as other Federal courts might adopt Judge Seybert's reasoning as
detailed in CAT 2002.
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