Desperately Seeking Interlocutory Appeal

Hague Conference on Private International Law – Conférence de La Haye de droit international privé

Despite some excellent opinions correctly interpreting the Hague Service Convention (HSC) and Rule 4(f)(3) in recent years, the district courts continue to be deeply divided on recurring questions of international service of process, in particular the permissibility of service by email or by other electronic means. Bill Dodge and I think such questions are clearly answered by the Convention and Rule 4, so why the persistent errors? The problem is that there are now too many district court decisions that have gotten the analysis wrong. That means plaintiffs have plenty of district court precedent to support aggressive international service—and given the stage of proceedings, there is typically no defendant in the picture who might bring to the judge’s attention the decisions coming out the other way.

It is past time for the courts of appeals to weigh in and resolve such questions definitively. But these questions have persistently evaded appellate review. District court judges should help litigants tee up ad hoc interlocutory appeals under 28 U.S.C. § 1292(b) to get the question of service by email before the courts of appeals. This post uses a recent district court decision to remind readers why Rule 4(f)(3) does not permit service by email in HSC member states and provides a roadmap for establishing appellate jurisdiction.

Service by Email and the HSC

In many ways, Seasons 4 Inc. v. Special Happy, Ltd. (Judge André Birotte, Jr., C.D. Cal.) is like dozens of similar cases decided every month by the federal district courts: A plaintiff asserts that their intellectual property is being infringed by Chinese defendants and seeks permission under Rule 4(f)(3) to serve those defendants by email. Rule 4(f)(3) enables a federal court to approve alternative methods of service on defendants located outside the United States, but only if those methods are “not prohibited by international agreement.” The HSC prohibits any method of service not enumerated within it and not expressly permitted by the receiving state (here, China). Because neither the HSC nor China has expressly permitted service by email, Rule 4(f)(3) cannot be used to authorize service by email when the HSC is otherwise applicable.

In Seasons 4, the HSC applied because the defendant was located in a state party (China) and its mailing address was known. Nonetheless, the judge approved service by email.

The misstep in the court’s reasoning was its assertion that “[t]he Hague Service Convention does not prohibit service by email.” This starting premise suggests that any method of service not specifically addressed by the HSC is permitted. In fact, the opposite is true: under the HSC, only those methods of service specifically agreed upon are permitted. The HSC sets out several channels of permissible service. Some of these channels must be accepted by states parties. Other channels are optional, meaning states can affirmatively opt out of them. China, for example, has objected to service “by postal channels” under Article 10(a). States can also unilaterally or bilaterally permit additional methods of service, as recognized by Articles 11 and 19.

The structure of the HSC, in other words, is to expressly identify the methods of service that are permitted. Any method not expressly included in the HSC or in the receiving state’s internal law (per Article 19) is presumptively not permitted. Because China has not in its internal law expressly permitted service by email from abroad, and because the HSC does not itself address service by email, the conclusion should be that the HSC bars service by email in China.

To illustrate the point in a different way, assume that China does indeed object to service by email. Under the HSC regime, how could it make that objection known? The HSC itself makes no mention of service by email, so there is nothing in the treaty to which China could object in order to make its position clear. It could perhaps adopt a law specifically denouncing service by email in transnational cases, but a literal reading of Article 19 would not appear to require other states parties to respect that internal law limiting methods of service. These logical oddities are a result of a mistaken starting premise: that any method of service not mentioned in the HSC is permitted. These oddities disappear under the correct starting premise: only specifically authorized methods of service are permissible under the Convention. Thus, there is no need—or even ability—for states parties to object to methods of service not mentioned in the HSC.

Nonetheless, the Seasons 4 decision—like dozens of similar decisions just this year—held that the HSC does not prohibit service by email on defendants in China. It thus approved service by email under Rule 4(f)(3).

There is one aspect of Seasons 4, however, that does set it apart from many similar cases: the defendant in Seasons 4 actually appeared to challenge the plaintiff’s motion. And when it lost, it appealed to the Ninth Circuit, which subsequently transferred the appeal to the Federal Circuit. Unfortunately, that appeal will likely fail for lack of appellate jurisdiction. Seasons 4 was another missed opportunity to seek an ad hoc interlocutory appeal under 28 U.S.C. § 1292(b), which is the most promising route for appellate review of this question.

Federal Appellate Jurisdiction

The default jurisdiction of the federal appellate courts is limited to appeals from final decisions of the district courts. A “final decision” means that the case has been fully resolved, typically after a dispositive motion or trial. Approval (or denial) of an alternative method of service is most definitely not a final decision. And because it is such a preliminary decision, preserving that question until the completion of the case is difficult, while the final outcome of the case may moot any reason to pursue it on appeal. For example, the Seasons 4 defendant will have to litigate the case to completion before appealing this decision under 28 U.S.C. § 1291, at which point an appellate decision agreeing that service was improper would have little practical significance.

Collateral Order Doctrine

The “final decision” rule of § 1291 reflects the highly disfavored status of interlocutory appeals, which are typically inefficient in terms of time and judicial resources. Nonetheless, the Supreme Court has recognized a limited category of permissible interlocutory appeals under the “collateral order doctrine.” Under that doctrine, an interlocutory decision is appealable if (1) the decision conclusively determined (2) an important question that is entirely separable from the merits of the action, and—most importantly—(3) the decision would be effectively unappealable after the final judgment is entered (i.e., at the time that appeal is normally permitted). A classic appealable collateral order is a decision denying immunity, as the benefit of immunity would be lost if the defendant had to bear the indignity of trial before seeking appellate review.

It appears that the defendant in Seasons 4 is asserting appellate jurisdiction under the collateral order doctrine. The first two conditions are met, but the third condition sets a very high bar. Wisely, the defendant is arguing that more than its own interests are at stake: that this decision risks violating U.S. treaty obligations and that this violation may not be adequately cured by an appellate decision far down the road. Still, given the stringency with which the collateral order doctrine is applied and the existence of actual notice in this case, this will be a hard argument to win.

Ad Hoc Interlocutory Appeals

In addition to the collateral order doctrine, Congress has legislated some narrow exceptions to the final judgment rule, which are located in 28 U.S.C. § 1292. Section 1292(a) permits interlocutory appeals from decisions concerning injunctions, as well as some bankruptcy and admiralty matters. More relevantly here, § 1292(b) permits other interlocutory appeals when both the district court and the court of appeals agree that an immediate appeal would be appropriate.

Specifically, § 1292(b) allows a district court to state in writing that its order “involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation.” Those conditions are arguably met for orders permitting (or denying) email service in countries that have joined the HSC. Indeed, some district court judges have already been calling for appellate intervention in their decisions. A small additional step would be formally invoking § 1292(b) and stating how the question satisfies the three conditions of the statute.

The court of appeals then would have discretion to accept the appeal. I would strongly urge the appellate courts to accept any such appeal. The treaty commitments of the United States are at stake. The question involves a fairly straightforward application of the treaty and the rule. Yet binding appellate clarification is desperately needed, given the accumulation of years’ worth of district court decisions that have gotten the analysis wrong.