U.S. Court of Appeals for the Ninth Circuit, Radu v. Johnson Shon, Docket No. 22-16316, For Publication

Foreign Law

 

Interpretation of Foreign Law

 

Judicial Notice

 

Expert Testimony

 

Legal Research (Int’l)

 

Comity (Int’l)

 

Federal Procedure

 

 

 

(…) Federal Rules of Evidence. Fed. R. Civ. P. 44.1. Moreover, “the court is not limited by material presented by the parties; it may engage in its own research and consider any relevant material thus found.” Fed. R. Civ. P. 44.1 advisory committee’s note to 1966 amendment. That said, “expert testimony accompanied by extracts from foreign legal materials has been and will likely continue to be the basic mode of proving foreign law.” Universe Sales Co., Ltd. v. Silver Castle, Ltd., 182 F.3d 1036, 1038 (9th Cir. 1999). Courts nonetheless have an “independent obligation to adequately ascertain relevant foreign law, even if the parties’ submissions are lacking.” de Fontbrune, 838 F.3d at 997. Though international comity requires American courts to “carefully consider a foreign state’s views about the meaning of its own laws,” that deference has its limits. Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co., 138 S. Ct. 1865, 1873 (2018). “The appropriate weight in each case . . . will depend upon the circumstances; a federal court is neither bound to adopt the foreign government’s characterization nor required to ignore other relevant materials.” Id.

 

 

(…) And our de novo review of the ultimate legal conclusion ensures that foreign legal issues are treated like domestic ones.

 

 

The district court neither abused its discretion nor violated Shon’s due process rights by communicating with the State Department and, through it, the German Central Authority. “Independent judicial research” on a legal question “does not implicate the judicial notice and ex parte issues spawned by independent factual research.” de Fontbrune, 838 F.3d at 999; see also G&G Prods. LLC v. Rusic, 902 F.3d 940, 948 (9th Cir. 2018) (“formal notice” of court’s intent to research foreign law not required). Nor do the Federal Rules of Evidence and its hearsay rules apply to foreign law materials, much as legal research on domestic law cannot trigger evidentiary objections. See de Fontbrune, 838 F.3d at 999.

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, March 13, 2023, Radu v. Johnson Shon, Docket No. 22-16316, For Publication)

 

Court of Chancery of the State of Delaware, In Re Côte d’Azur Estate Corp., Docket C.A. No. 2017-0290-JTL

Discovery

 

Letter of Request

 

Evidence

 

Attorney: Privilege

 

Crime/Fraud Exception

 

Convention on the Taking of Evidence Abroad in Civil or Commercial Matters

 

Comity

 

 

 

Plaintiff Lilly Lea Perry has moved for the issuance of a letter of request to obtain the assistance of the central authority in Switzerland to facilitate discovery. Lilly seeks international assistance to obtain electronic data that Swiss investigators seized from the law office of X., a defendant in this case, while investigating whether X. falsified evidence in a civil proceeding in Switzerland. A Swiss court determined that the investigators had reasonable cause to obtain the materials and that the investigators acted properly by only seizing evidence that was directly relevant to their investigation. The resulting evidence consists primarily of emails sent or received by X. and one of his assistants covering the period from May 1, 2015, through March 1, 2017 (the “Discovery Materials”). To obtain a letter of request, the movant must show initially that production would be ordered if the materials sought were subject to the court’s jurisdiction. In one of her proposals, Lilly seeks all of the Discovery Materials. In an alternative proposal, Lilly only seeks the Discovery Materials to the extent that they touch on particular issues relevant to this proceeding. The court adopts the latter proposal which makes the materials sought plainly relevant. If the Discovery Materials were subject to this court’s jurisdiction, the court would order them produced.

 

 

Whenever discovery involves a lawyer, there will be concerns about privilege. Here, those concerns are likely to be limited, because the investigators conducted a focused investigation and have stated that the Discovery Materials primarily implicate X. and his assistant, rather than clients. Additionally, privilege issues are unlikely to be of concern because of the crime/fraud exception. This court has previously ruled that the actions X. took that form the basis for this case bear sufficient hallmarks of fraud to invoke the crime/fraud exception. The Discovery Materials were also seized as part of an investigation into a crime.

 

 

A party seeking a letter of request also must convince the issuing court to ask a foreign court for assistance, taking into account the burden that such a request necessarily imposes on the judicial system of another nation. Lilly has met her burden on that issue by showing that the letter of request is targeted and appropriate. The Discovery Materials have already been collected and are easily identifiable. Under Swiss law, a private plaintiff can obtain the Discovery Materials, and Lilly has shown that investigators have provided similar information to a private plaintiff in the past.

 

 

Although not required to secure the issuance of a letter of request, Lilly has shown that it will be difficult, if not impossible, to obtain the information through other means. To be sure, X. is a party to this case and ostensibly subject to compulsory process. But since April 2017, X. has failed to participate meaningfully in this proceeding. He is a foreign national who previously refused to be deposed, despite his status as a defendant. Because of his non-participation in an earlier phase of this case, the court drew an inference that any evidence that X. could have provided would be favorable to Lilly. Another powerful indicator of X.’s non-participation is his failure to respond to Lilly’s motion. Only the BGO Foundation has raised objections to the letter of request. Lilly has made a convincing showing that X. would not produce the Discovery Materials if he had them, and the record suggests that he may no longer have them. The investigators reported that they seized the Discovery Materials, not that they made copies of them. It is reasonable to infer that the only source is the investigators’ files. Lilly’s motion is granted. The letter of request will issue.

 

(…) 

 

The court held a two-day evidentiary hearing to determine whether personal jurisdiction existed over the Foundation. The court then issued an opinion which concluded that the court could exercise personal jurisdiction over the Foundation because the Foundation had conspired with X. to commit torts that had a sufficient nexus to Delaware. Perry v. Neupert (Jurisdictional Decision), 2019 WL 719000, at *37 (Del. Ch. Feb. 15, 2019).

 

(…) 

 

Based on these and other events, Lilly is pursuing claims for fraud, conversion, and tortious interference with contract against X. and the Foundation. She seeks a decree invalidating (i) the issuance of shares to the Foundation and (ii) the conversion of the LLC into the Corporation.

 

 

The court’s factual findings only addressed the issue of personal jurisdiction, not the merits. After still more motion practice, the parties began merits discovery. As part of that process, both sides have asked the court to issue letters of request to obtain discovery from various foreign jurisdictions. In total, the parties have sought twenty-one letters of request. Lilly has sought three. The Foundation has sought eighteen.

 

 

On August 1, 2022, Lilly moved for a letter of request to the central authority of Switzerland to obtain the Discovery Materials, which are in the possession of the Prosecutor’s Office of the Canton of Zurich (the “Zurich Prosecutor’s Office”). Dkt. 375.

 

 

Lilly seeks to obtain the Discovery Materials using the procedures authorized under the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, which opened for signature on March 18, 1970. 23 U.S.T. 2555, T.I.A.S. No. 7444 (Codified as 28 U.S.C. § 1781. “This Convention—sometimes referred to as the ‘Hague Convention’ or the ‘Evidence Convention’—prescribes certain procedures by which a judicial authority in one contracting state may request evidence located in another contracting state.” Societe Nationale Industrielle Aerospatiale v. U.S. Dist. Ct. for the S. Dist. of Iowa, 482 U.S. 522, 524 (1987).

 

 

See, e.g., Cosmo Techs. Ltd. v. Actavis Lab’ys FL, Inc., 2016 WL 4582498, at *2 (D. Del. Aug. 31, 2016) (issuing letter of request where witness was located in Italy and possessed evidence that was relevant and unlikely to be duplicative); Eli Lilly & Co. v. Teva Parenteral Meds., Inc., 2013 WL 12291616, at *3 (S.D. Ind. Apr. 26, 2013) (“It is undisputed that Dr. Calvert is a citizen of the United Kingdom. Defendants represent that Dr. Calvert refused to make himself available for deposition or to produce any documents. In these circumstances, Defendants’ resort to the Hague Convention appears entirely appropriate.”); Metso Mins. Inc. v. Powerscreen Int'l Distrib. Ltd., 2007 WL 1875560, at *3 (E.D.N.Y. June 25, 2007) (finding that use of Hague Convention procedures was warranted where witness had relevant evidence and “the procedures of the Hague Evidence Convention may be the only means by which the requested discovery may be obtained given the fact that Mr. Rafferty is a citizen of Northern Ireland, who is not a party to this action and is similarly not subject to the jurisdiction of this court”); Tulip Computers, 254 F.Supp.2d at 474 (“Resort to the Hague Evidence Convention in this instance is appropriate since both Mr. Duynisveld and Mr. Dietz are not parties to the lawsuit, have not voluntarily subjected themselves to discovery, are citizens of the Netherlands, and are not otherwise subject to the jurisdiction of the Court.”); Orlich v. Helm Bros., Inc., 160 A.D.2d 135, 143 (N.Y.A.D.1990) (“When discovery is sought from a non-party in a foreign jurisdiction, application of the Hague Convention, which encompasses principles of international comity, is virtually compulsory.”). (Fn. 5).

 

 

(…) As an alternative, Lilly asks for production of electronic records on all computers and other electronic devices belonging to X. or Y., which are currently in the possession of the Zurich Prosecutor’s Office, and which pertain to: a. Côte D’Azur; b. Filings with the Delaware Secretary of State; c. The Deed of Assignment . . .; d. Proceedings before the English Serious Organized Crime Agency (“SOCA”) involving the Deed of Assignment. Id. at 17 (the “Narrow Proposal”).

 

 

(…) The Narrow Proposal ties the production to the topics at issue in this proceeding. It identifies four categories of information that relate to materials at the heart of this case. Under the Narrow Proposal, the production is limited to relevant material.

 

 

 

(…) Discovery also must be “proportional to the needs of the case.” Ct. Ch. R. 26(b)(1). Neither of Lilly’s proposals raise any issues involving proportionality. The Discovery Materials already present a finite and easily accessible scope of production.

 

 

(…) Discovery extends to “any non-privileged matter.” Ct. Ch. R. 26(b)(1). X. has not responded to Lilly’s motion and has not taken any position on privilege. The Foundation objects that the letter of request will result in the production of privileged material simply because X. is a lawyer. Dkt. 393 ¶ 20. As a threshold matter, privileged communications involving X.’s clients are not likely to be a problem because of the focused nature of the investigation. As a Swiss court has found, the Zurich Prosecutor’s Office tailored its seizure to narrowly focus on its forgery investigation. Dkt. 375, Ex. 4 ¶ 2. The seizure involved only documents that were directly relevant to its investigation and from the narrow timeframe regarding the tortious act. Id. Privilege also is not likely to be at issue because of the crime/fraud exception. Delaware Rule of Evidence 502 shields from discovery any “confidential communications made for the purpose of facilitating the rendition of professional legal services to the client.” D.R.E. 502. But the rule establishes an exception when “the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit what the client knew or reasonably should have known to be a crime or fraud.” Id. 502(d)(1).

 

 

The premise behind the crime-fraud exception is “that when a client seeks out an attorney for the purpose of obtaining advice that will aid the client in carrying out a crime or a fraudulent scheme, the client has abused the attorney-client relationship and stripped that relationship of its confidential status.” Princeton Ins. Co. v. Vergano, 883 A.2d 44, 55 (Del. Ch. 2005) (Strine, V.C.). For the crime-fraud exception to apply, the client must intend to use the communications “as a basis for criminal or fraudulent activity, whether or not that criminal or fraudulent intent ever comes to fruition.” In re Sutton, 1996 WL 659002, at *11 (Del. Super. Aug. 30, 1996). “To invoke the crime-fraud exception, . . . the proponent of the exception must make a prima facie showing that the confidential communications were made in furtherance of a crime or fraud.”. Buttonwood Tree Value P’rs, L.P. v. R.L. Polk & Co., Inc., 2018 WL 346036, at *6, *8 (Del. Ch. Jan. 10, 2018) (cleaned up)).

 

 

(…) Consequently, if the Discovery Materials were subject to this court’s jurisdiction, then the court would order production in conformity with the Narrow Proposal.

 

 

(…) Because Lilly seeks the issuance of a letter of request to the central authority of a foreign jurisdiction, it is not enough for the court to find that it would order production of the Discovery Materials that fall within the Narrow Proposal. The court must engage in additional analysis to determine whether to impose a burden on the courts in a foreign jurisdiction. In this case, Lilly has made the necessary showing. In Societe Nationale, the Supreme Court of the United States identified five factors to consider when determining whether to issue a letter of request. To reiterate, the five factors are: •the importance to the litigation of the documents or other information requested; •the degree of specificity of the request; •whether the information originated in the United States; •the availability of alternative means of securing the information; and •the extent to which noncompliance with the request would undermine important interests of the United States, or compliance with the request would undermine important interests of the state where the information is located. Societe Nationale, 482 U.S. at 544 n.28; see Restatement (Third) of Foreign Relations Law §§ 441–442 (Am. L. Inst. 1987), Westlaw (database updated Oct. 2022). Evaluating these factors “requires a particularized analysis of the facts of a case, the sovereign interests involved, and the likelihood that resorting to the Hague Convention will prove effective.” Ingenico Inc. v. Ioengine, LLC, 2021 WL 765757, at *2 (D. Del. Feb. 26, 2021).

 

 

(…) No one has identified any Swiss legal requirements that would limit or prevent production. Instead, Lilly has shown that under Swiss law, civil litigants can obtain information like the Discovery Materials. The third factor supports the issuance of a letter of request.

 

 

(…) The final factor is a balancing of the competing interests of the sovereigns involved. Societe Nationale, 482 U.S. at 544 n.28. Under this factor, the court weighs any interest that the United States or the forum state has in obtaining production of the information against any interest that the foreign state has in not providing discovery. Activision, 86 A.3d at 547. When considering the interests of the United States, the court may take into account the requesting party’s “important interests in developing its claims and defenses. ”Ingenico, 2021 WL 765757, at *3. When considering the interests of a foreign state, the court should take into account any foreign law that limits production. See Activision, 86 A.3d at 547 (giving consideration to French laws regarding data privacy). This factor is most important where the litigation implicates national security concerns or national economic policies. No such concern is implicated here. This is a civil case involving private parties. Where the litigants are all private parties, this factor is of secondary importance. See Milliken, 758 F. Supp. 2d at 248 (“Here, the underlying interest—collection of a judgment by a private party—is not so dramatic.”)

 

 

 

 

Secondary Sources: Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2005.1 at 70 (3d ed. 2010); Restatement (Third) of Foreign Relations Law §§ 441–442 (Am. L. Inst. 1987).

 

 

 

 

(Court of Chancery of the State of Delaware, Nov. 18, 2022, In Re Côte d’Azur Estate Corp., Docket C.A. No. 2017-0290-JTL)

U.S. Court of Appeals for the Ninth Circuit, Vincent de Fontbrune v. Alan Wofsy, Docket No. 19-16913

Recognition and Enforceability of a Foreign Judgment

 

International Diversity Case

 

Comity

 

Standing (Federal v. California Courts)

 

Subject Matter Jurisdiction

 

Service of Legal Process

 

Notice of the Proceeding

 

Mail Service

 

Summons

 

California Law

 

 

California version of the Uniform Foreign-Country Money Judgment Recognition Act, Cal. Civ. Proc. Code §§ 1713–1725

 

Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638

 

 

 

(…) Wofsy maintains that he was never served with process in the Astreinte Proceeding. Sicre de Fontbrune asserts that a huissier—a bailiff-like officer of the French court—sent the complaint and French equivalent of a summons to Wofsy through procedures consistent with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638. The French court official requested service at addresses that the French courts already had on file: 401 China Basin Street in San Francisco, and P.O. Box 2210 in San Francisco. The U.S. process server, however, failed to effect service.

 

 

(…) Before Wofsy filed the Review Proceeding, though, Sicre de Fontbrune brought the instant action in the Superior Court of California in Alameda County in November of 2013, seeking recognition of the astreinte judgment. After Wofsy removed the action to federal court, the district court dismissed the case with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). We reversed, holding that the astreinte was not a penalty but rather a judgment for “a sum of money” cognizable under the Recognition Act. Sicre de Fontbrune, 838 F.3d at 1007.

 

 

“In international diversity cases such as this one, ‘enforceability of judgments of courts of other countries is generally governed by the law of the state in which enforcement is sought.’” Naoko Ohno v. Yuko Yasuma, 723 F.3d 984, 990 (9th Cir. 2013) (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 433 F.3d 1199, 1212 (9th Cir. 2006)). In this removed action, California law—the Recognition Act—governs.

 

 

California’s Recognition Act is modeled on the 2005 version of the Uniform Foreign-Country Money Judgments Recognition Act. AO Alfa-Bank v. Yakovlev, 230 Cal. Rptr. 3d 214, 221 (Ct. App. 2018), as modified on denial of reh’g (Apr. 3, 2018); see Unif. Foreign-Country Money Judgments Recognition Act (Nat’l Conf. of Comm’rs on Unif. State L. 2005). Amendments to California’s Recognition Act became effective in 2018. See Alfa-Bank, 230 Cal. Rptr. 3d at 221. But those amendments apply only to claims commenced after their effective date. Id. at 222. The district court was thus correct to apply the version of the state Recognition Act effective at the time Sicre de Fontbrune filed this action in 2013. A majority of states have adopted either the 1962 version of the Uniform Foreign-Country Money Judgments Recognition Act, or its 2005 update. Ohno, 723 F.3d at 990 n.8. Non-California authorities that interpret the 1962 or the 2005 uniform acts, or that apply principles of comity-based recognition to foreign judgments, carry persuasive value in the application of California’s Recognition Act. Alfa-Bank, 230 Cal. Rptr. 3d at 222–23 (citing Cal. Civ. Proc. Code § 1722). “Once coverage under the Uniform Act is established,” as it has been here,7 “the presumption in favor of enforcement applies,” and the party resisting recognition must establish a ground for nonrecognition. Ohno, 723 F.3d at 991 (quoting Cal. Civ. Proc. Code § 1716(d)). The Recognition Act lists several grounds for nonrecognition. Some grounds, if established, preclude recognition, Cal. Civ. Proc. Code § 1716(b), but others only confer discretion on courts to deny recognition, Cal. Civ. Proc. Code § 1716(c).

 

 

7 Given our previous opinion, the parties no longer dispute that the 2012 Astreinte Judgment falls within the coverage of the Recognition Act. See Sicre de Fontbrune, 838 F.3d at 1007.

 

 

Public Policy

 

The California Recognition Act allows a court to decline to recognize a foreign-country money judgment if the “judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of California or of the United States.” Cal. Civ. Proc. Code § 1716(c)(3). The United States undoubtedly has robust public policy favoring free expression. See Cohen v. California, 403 U.S. 15, 24 (1971) (“The constitutional right of free expression is powerful medicine.”). But “some restriction on expression is the inherent and intended effect of every grant of copyright.” Golan v. Holder, 565 U.S. 302, 327–28 (2012). The fair use defense to copyright infringement is one of the “built-in First Amendment accommodations” that ease the apparent tension between free expression and U.S. copyright law. See Eldred v. Ashcroft, 537 U.S. 186, 219 (2003).

 

 

Lack of Subject Matter Jurisdiction

 

The applicable version of the California Recognition Act provides that a court “shall not” recognize a foreign-country judgment if the “foreign court did not have jurisdiction over the subject matter.” Cal. Civ. Proc. Code § 1716(b)(3). “Courts and commentators agree that subject matter jurisdiction must be assessed with reference to foreign law.” Tanya J. Monestier, Whose Law of Personal Jurisdiction? The Choice of Law Problem in the Recognition of Foreign Judgments, 96 B.U. L. Rev. 1729, 1747 (2016). “In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence.” Fed. R. Civ. P. 44.1; Sicre de Fontbrune, 838 F.3d at 997.

 

 

(…) The plain language of California’s Recognition Act requires a proponent of the subject matter jurisdiction defense to establish that the foreign court “did not have jurisdiction over the subject matter.” Cal. Civ. Proc. Code § 1716(b)(3). We are aware of no authority holding that a procedural defect that produces a similar practical result can suffice.

 

 

(…) Even if we were to assess subject matter jurisdiction with reference to domestic law, we could not say that a lack of standing necessarily deprives a court of subject matter jurisdiction. To be sure, a party must show the “irreducible constitutional minimum of standing” to vest an Article III federal court with subject matter jurisdiction. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). But California is one of numerous states whose judiciaries’ subject matter jurisdiction does not depend on standing. Jasmine Networks, Inc. v. Super. Ct., 103 Cal. Rptr. 3d 426, 432 (Ct. App. 2009); Weatherford v. City of San Rafael, 395 P.3d 274, 278 (Cal. 2017) (observing that California’s “state constitution has no case or controversy requirement imposing an independent jurisdictional limitation on our standing doctrine”); Tax Found. of Hawai’i v. State, 439 P.3d 127, 143 (Haw. 2019) (collecting examples of states where “standing is a prudential concern and not an issue of subject matter jurisdiction”).

 

 

Lack of Personal Jurisdiction

 

A court applying California’s Recognition Act must refuse to recognize a foreign-country judgment if the “foreign court did not have personal jurisdiction over the defendant.” Cal. Civ. Proc. Code § 1716(b)(2). But a court shall not refuse recognition for lack of personal jurisdiction if the defendant “voluntarily appeared in the proceeding, other than for the purpose of protecting property seized or threatened with seizure in the proceeding or of contesting the jurisdiction of the court over the defendant.” Cal. Civ. Proc. Code § 1717(a)(2).

 

 

Courts applying other states’ analogues to Section 1717(a)(2) have recognized that a voluntary appearance may occur “in the proceeding” either before or after judgment. See CIBC Mellon Tr. Co. v. Mora Hotel Corp. N.V., 792 N.E.2d 155, 162 (N.Y. 2003) (quoting Restatement (Second) of Conflict of Laws § 33, cmt. b) (noting that a defendant may be deemed to have submitted to a court’s jurisdiction by “taking steps in the action after judgment either in the trial court or in an appellate court”); S.C. Chimexim S.A. v. Velcro Enters. Ltd., 36 F. Supp. 2d 206, 215 (S.D.N.Y. 1999) (defense waived where one of defendant’s arguments in appellate proceedings in the foreign forum “concerned the merits of the underlying dispute”); In re Transamerica Airlines, Inc., No. CIV.A. 1039-VCP, 2007 WL 1555734, at *10 (Del. Ch. May 25, 2007) (waiver where one of defendant’s arguments on appeal went “to the merits” of the contested judgment). We have confirmed that this principle applies to California’s Recognition Act. See In re Rejuvi Lab’y, Inc., 26 F.4th 1129, 1134 (9th Cir. 2022) (holding that a defendant “waived its personal jurisdiction challenge by voluntarily appearing in the trial court that had entered a default judgment in its attempt to set aside the default judgment”).

 

 

Insufficient Notice

 

The Recognition Act provides that a court may refuse to recognize a foreign judgment if the “defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend.” Cal. Civ. Proc. Code § 1716(c)(1). The district court determined that issues of fact precluded summary judgment regarding this defense. Only Wofsy challenges that determination. The parties dispute the adequacy of two efforts at notice: a failed effort to serve the summons and complaint for the Astreinte Proceeding, and a letter that the French TGI mailed to Wofsy after the first hearing in the Astreinte Proceeding but before the TGI entered judgment.

 

 

A California Court of Appeal has held that a mere failure of actual notice does not prove the inadequate notice defense. Rather, the proponent of this defense must show the absence of notice “‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’” Alfa-Bank, 230 Cal. Rptr. 3d at 224 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)). The applicable standard, in other words, aligns with the constitutional minimum for due process. See id. at 233. Under that standard, where “notice is a person’s due,” the “means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.” Id. at 225 (quoting Mullane, 339 U.S. at 315).

 

 

(…) In Isack, the Court of Appeals of Michigan—interpreting the analogous provision of that state’s codification of the Uniform Act—concluded that “recognition of a judgment may be declined where the defendant was aware, or waived notice, of the litigation, but where the defendant was not notified of certain actions taken within the suit.” 733 N.W. 2d at 86–87; see also Restatement (Fourth) of Foreign Relations Law § 484 (2018) (recognizing that “the notice requirement governs not just the initiation of a proceeding, but relevant actions taken within the suit”).

 

 

(…) We begin by considering whether the attempts to serve Wofsy before the October 2011 hearing constituted sufficient efforts at notice, despite their failure. An officer of the French TGI attempted to serve both defendants through procedures established in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638. The Hague Service Convention was “intended to provide a simpler way to serve process abroad, to assure that defendants sued in foreign jurisdictions would receive actual and timely notice of suit, and to facilitate proof of service abroad.” Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698 (1988). Its “primary innovation” is a requirement that each state party designate a “Central Authority” that can receive foreign requests for service of process and arrange for service on an addressee. Id. at 698–99; Hague Service Convention, 20 U.S.T. 361, art. 2.

 

 

In accordance with that procedure, the French court’s officer sent the complaint and the French equivalent of a summons to the United States’ Central Authority, and requested service on the defendants at their addresses as listed in the summons. The summons listed the address of Alan Wofsy & Associates as 401 China Basin Street in San Francisco. For Alan Wofsy himself, the summons listed Post Office Box 2210 in San Francisco. Article 6 of the Hague Convention requires the Central Authority (or another designee of the state where process is to be served) to send to the applicant for service a certificate stating the method, place, date, and recipient of service, or the reasons that have prevented service. Hague Service Convention, 20 U.S.T. 361, art. 6. Accordingly, the huissier’s requests for service also included requests for these certificates. The U.S. process server’s attempt to serve Alan Wofsy & Associates failed. The process server—a contractor of the U.S. Central Authority—issued a certificate of non-service dated August 12, 2011, attesting that service had been attempted at 401 China Basin Street; that no such address existed; and that the process server had confirmed on the U.S. Postal Service website that the address was “non deliverable.”

 

 

(The delivery trouble apparently arose from the fact that San Francisco renamed the old China Basin Street as “Terry Francois Boulevard” in the 1990s, and reassigned the name “China Basin Street” to a newly built road at some point after 2010. But it is undisputed that Wofsy continued to receive mail addressed to 401 China Basin Street for years after the Astreinte Proceeding. In any event, Sicre de Fontbrune offers no indication that Wofsy was obligated to apprise Sicre de Fontbrune or the French courts of any change of address at the time the Astreinte Proceeding commenced. Thus, there is no indication that Wofsy is to blame for the huissier’s use of an outdated address or for the process server’s failure to effect service. Cf. Alfa-Bank, 230 Cal. Rptr. 3d at 230 (holding that a Russian court’s mail service to a defendant’s last known address was adequate notice, where the defendant was required by a surety agreement to keep his address up to date with the Russian government). (Fn. 14).)

 

 

Upon learning of a failure of notice, “deciding to take no further action is not what someone desirous of actually informing the addressee would do; such a person would take further reasonable steps if any were available.” Jones v. Flowers, 547 U.S. 220, 230 (2006) (internal quotation omitted). The Supreme Court accordingly held that a state failed to afford constitutionally adequate notice where the state sold a tax-delinquent property after the state’s certified-mail notice to the property owner was returned unclaimed and the state failed to take further reasonable and available steps to accomplish notice. Id. at 239. “Although the State may have made a reasonable calculation” of how to reach the property owner, the state had “good reason to suspect when the notice was returned that the addressee was ‘no better off than if the notice had never been sent.’” Id. at 230.

 

 

(…) (Quoting Malone v. Robinson, 614 A.2d 33, 37 (D.C. 1992)); see also United States v. Ritchie, 342 F.3d 903, 911 (9th Cir. 2003) (“When initial personal notice letters are returned undelivered, the government must make reasonable additional efforts to provide personal notice.”). Since the French huissier had requested a certificate of service in accordance with the Hague Service Convention, the absence of any confirmation of successful service signaled a problem. And the issuance of a certificate of non-service left no doubt that service had failed. It thus triggered an obligation to take any available and reasonable further steps to give notice of the proceeding to Alan Wofsy & Associates. See Jones, 547 U.S. at 230.

 

 

Before considering whether such steps were available or pursued, we turn to the process server’s attempt to inform Alan Wofsy himself. It unfolded similarly. When the Astreinte Proceeding was filed in July 2011, the U.S. Central Authority received a request to serve process at “POB 2210 San Francisco”—the address listed for Alan Wofsy on the French summons. The U.S. process server eventually issued a certificate of non-service, indicating that a server had attempted to contact Alan Wofsy at 401 China Basin Street on October 22, 2011, but had found “no such address.” The certificate of nonservice did not issue until October 31—six days after the October merits hearing in the TGI. Under these circumstances, the failed service on Alan Wofsy was as insufficient an attempt at notice as was the failed service on Alan Wofsy & Associates. The request for a certificate of service was unfulfilled at the time of the first astreinte hearing. That should have alerted the huissier that Wofsy might have lacked notice of the proceedings, and that actual notice therefore might require further reasonable efforts if any were available. Moreover, the certificate of non-service issued more than two months before the TGI entered judgment.

 

 

(…) The Supreme Court has “repeatedly recognized that mail service is an inexpensive and efficient mechanism that is reasonably calculated to provide actual notice.” Tulsa Pro. Collection Servs., Inc. v. Pope, 485 U.S. 478, 490 (1988). The Hague Service Convention allows mail service directly to a defendant—circumventing the Central Authority—if the receiving country has not objected to mail service and if mail service is authorized by otherwise applicable law. Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1513 (2017). The applicable law in California permits service via mail, with acknowledgment of receipt, at a Post Office box. Cal. Civ. Proc. Code § 415.30.

 

 

(…) 39 C.F.R.  § 265.6(d)(5)(ii) (2011) (current version at 39 C.F.R. § 265.14(d)(5)(ii)) (permitting disclosure of post office boxholder name and information to a person authorized to serve legal process).

 

 

(…) Wofsy directs us to Julen v. Larson, 101 Cal. Rptr. 796, 798 (Ct. App. 1972), for the proposition that notice, to be adequate, must be given in the “language of the jurisdiction in which the defendant is served,” among other requirements. In Julen—unlike here—the foreign legal documents were written in German, which no one argued the defendant could read. Id. And Alfa-Bank later clarified that Julen did not “define constitutional ‘requirements’ for adequate notice.” 230 Cal. Rptr. 3d at 232. (Fn. 16).

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, July 13, 2022, Vincent de Fontbrune v. Alan Wofsy, Docket No. 19-16913, for Publication)

U.S. Supreme Court, ZF Automotive US, Inc. v. Luxshare, Ltd, Docket No. 21-401 and 21-518

Discovery

 

Evidence

 

Judicial Assistance

28 U. S. C. §1782 

Proceeding in a Foreign or International Tribunal 

Arbitration Proceedings Abroad

Are Adjudicative Bodies Here Governmental or Intergovernmental?

Comity

Split Among the Courts of Appeals

 

 

(…) 28 U. S. C.  §1782 permits district courts to order testimony or the production of evidence “for use in a proceeding in a foreign or international tribunal.” These consolidated cases require us to decide whether private adjudicatory bodies count as “foreign or international tribunals.” They do not. The statute reaches only governmental or intergovernmental adjudicative bodies, and neither of the arbitral panels involved in these cases fits that bill.

 

 

In the contract governing the sale, the parties had agreed that all disputes would be “exclusively and finally settled by three (3) arbitrators in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS).” App. in No. 21–401, p. 93. DIS is a private dispute-resolution organization based in Berlin. The agreement, which is governed by German law, provides that arbitration take place in Munich and that the arbitration panel be formed by Luxshare and ZF each choosing one arbitrator and those two arbitrators choosing a third.

 

 

(Section 1782 allows a party to obtain discovery even in advance of a proceeding. See Intel Corp. v. Advanced Micro Devices, Inc., 542 U. S. 241, 259 (2004).)

 

 

(…) We granted a stay and certiorari before judgment to resolve a split among the Courts of Appeals over whether the phrase “foreign or international tribunal” in §1782 includes private arbitral panels.

 

 

Second case: The Fund initiated a proceeding against Lithuania under a bilateral investment treaty between Lithuania and Russia (titled “Agreement Between the Government of the Russian Federation and the Government of the Republic of Lithuania on the Promotion and Reciprocal Protection of the Investments”). App. to Pet. for Cert. in No. 21–518, p. 56a. The treaty seeks to promote “favourable conditions for investments made by investors of one Contracting Party in the territory of the other Contracting Party.” Ibid.

 

 

Relevant here, the treaty addresses the procedure for resolving “any dispute between one Contracting Party and an investor of the other Contracting Party concerning” investments in the first Contracting Party’s territory. Id., at 64a. It provides that if the parties cannot resolve their dispute within six months, “the dispute, at the request of either party and at the choice of an investor, shall be submitted to” one of four specified forums. Id., at 64a–65a. The Fund chose “an ad hoc arbitration in accordance with Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL),” with each party selecting one arbitrator and those two choosing a third. Id., at 65a; App. in No. 21–518, p. 159a. Under the treaty, “the arbitral decision shall be final and binding on both parties of the dispute.” App. to Pet. for Cert. in No. 21–518, at 65a.

 

Section 1782(a) provides: 

“The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.”

 

 

Luxshare argues that commercial arbitral panels are §1782 tribunals because they “fit comfortably” under the “quasi-judicial paradigm” from our decision in Intel. Brief for Respondent in No. 21–401, p. 19. There, we recognized that the body at issue, the Commission of the European Communities, was a §1782 tribunal in part because it was a “first-instance decisionmaker” that rendered dispositive rulings reviewable in court. 542 U. S., at 254–255, 258. But we did not purport to establish a test for what counts as a foreign or international tribunal. The issue before us now—whether a private arbitral body qualifies as a “foreign or international tribunal”—was not before us in Intel. No one there disputed that the body at issue exercised governmental authority. (Fn. 1).

 

 

(…) The word “foreign” takes on its more governmental meaning when modifying a word with potential governmental or sovereign connotations. That is why “foreign” suggests something different in the phrase “foreign leader” than it does in “foreign films.” Brief for Petitioners in No. 21–401, pp. 20–21; Brief for Respondent in No. 21–401, pp. 7–8. The phrase “foreign leader” brings to mind “an official of a foreign state, not a team captain of a European football club.” Brief for United States as Amicus Curiae 17. So too with “foreign tribunal.” “Tribunal” is a word with potential governmental or sovereign connotations, so “foreign tribunal” more naturally refers to a tribunal belonging to a foreign nation than to a tribunal that is simply located in a foreign nation.

 

 

This reading of “foreign tribunal” is reinforced by the statutory defaults for discovery procedure. In addition to authorizing district courts to order testimony or the production of evidence, §1782 permits them to “prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing.” §1782(a) (emphasis added). The reference to the procedure of “the foreign country or the international tribunal” parallels the authorization for district courts to grant discovery for use in a “foreign or international tribunal” mentioned just before in §1782. The statute thus presumes that a “foreign tribunal” follows “the practice and procedure of the foreign country.”

 

 

(…) So understood, “foreign tribunal” and “international tribunal” complement one another; the former is a tribunal imbued with governmental authority by one nation, and the latter is a tribunal imbued with governmental authority by multiple nations.

 

 

Extending §1782 to include private bodies would also be in significant tension with the FAA, which governs domestic arbitration, because §1782 permits much broader discovery than the FAA allows. Among other differences, the FAA permits only the arbitration panel to request discovery, see 9 U. S. C. §7, while district courts can entertain §1782 requests from foreign or international tribunals or any “interested person,” 28 U. S. C. §1782(a). In addition, prearbitration discovery is off the table under the FAA but broadly available under §1782. SeeIntel, 542 U. S., at 259 (holding that discovery is available for use in proceedings “within reasonable contemplation”). Interpreting §1782 to reach private arbitration would therefore create a notable mismatch between foreign and domestic arbitration. And as the Seventh Circuit observed, “it’s hard to conjure a rationale for giving parties to private foreign arbitrations such broad access to federal-court discovery assistance in the United States while precluding such discovery assistance for litigants in domestic arbitrations.” Rolls-Royce, 975 F. 3d, at 695.

 

 

That leaves the question whether the adjudicative bodies in the cases before us are governmental or intergovernmental. They are not.

 

 

Luxshare’s dispute with ZF is straightforward. Private parties agreed in a private contract that DIS, a private dispute-resolution organization, would arbitrate any disputes between them. See Stolt-Nielsen, 559 U. S., at 682 (“An arbitrator derives his or her powers from the parties’ agreement to forgo the legal process and submit their disputes to private dispute resolution”). By default, DIS panels operate under DIS rules, just like panels of any other private arbitration organization operate under private arbitral rules. The panels are formed by the parties—with each party selecting one arbitrator and those two arbitrators choosing a third. No government is involved in creating the DIS panel or prescribing its procedures. This adjudicative body therefore does not qualify as a governmental body.

 

 

The ad hoc arbitration panel at issue in the Fund’s dispute with Lithuania presents a harder question. A sovereign is on one side of the dispute, and the option to arbitrate is contained in an international treaty rather than a private contract. These factors, which the Fund emphasizes, offer some support for the argument that the ad hoc panel is intergovernmental. Yet neither Lithuania’s presence nor the treaty’s existence is dispositive, because Russia and Lithuania are free to structure investor-state dispute resolution as they see fit. What matters is the substance of their agreement: Did these two nations intend to confer governmental authority on an ad hoc panel formed pursuant to the treaty? See BG Group plc v. Republic of Argentina, 572 U. S. 25, 37 (2014) (“As a general matter, a treaty is a contract, though between nations,” and “its interpretation normally is, like a contract’s interpretation, a matter of determining the parties’ intent”).

 

 

The provision regarding ad hoc arbitration appears in Article 10, which permits an investor to choose one of four forums to resolve disputes:

 

“a) a competent court or court of arbitration of the Contracting Party in which territory the investments are made;

“b) the Arbitration Institute of the Stockholm Chamber of Commerce; 

“c) the Court of Arbitration of the International Chamber of Commerce; 

“d) an ad hoc arbitration in accordance with Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).” App. to Pet. for Cert. in No. 21–518, at 64a–65a.

 

 

(…) An ad hoc arbitration panel, by contrast, is not a pre-existing body, but one formed for the purpose of adjudicating investor-state disputes. And nothing in the treaty reflects Russia and Lithuania’s intent that an ad hoc panel exercise governmental authority.

 

For instance, the treaty does not itself create the panel; instead, it simply references the set of rules that govern the panel’s formation and procedure if an investor chooses that forum. In addition, the ad hoc panel “functions independently” of and is not affiliated with either Lithuania or Russia. 5 F. 4th, at 226. It consists of individuals chosen by the parties and lacking any “official affiliation with Lithuania, Russia, or any other governmental or intergovernmental entity.” Ibid. And it lacks other possible indicia of a governmental nature. See ibid. (“The panel receives zero government funding,” “the proceedings . . . maintain confidentiality,” and the “‘award may be made public only with the consent of both parties’”). 

 

(…) We reverse the order of the District Court in No. 21–401 denying the motion to quash, and we reverse the judgment of the Court of Appeals in No. 21–518. 

 

 

 

(U.S. Supreme Court, June 13, 2022, ZF Automotive US, Inc. v. Luxshare, Ltd, Docket No. 21-401 and 21-518, J. Barrett, for a Unanimous Court)