NOWAK v. XAPO, INC.

Background

Dennis Nowak, described in the opinion as a German resident, sued XAPO, Inc., XAPO (GIBRALTAR) LIMITED, INDODAX, and John Doe Nos. 1-10. He alleged that 500 Bitcoin stored in a Northern California-based cryptocurrency exchange were stolen and later deposited into exchanges owned by Defendants. The opinion addresses only Nowak’s motion for alternative service, not the underlying allegations.

Nowak sought permission under Federal Rule of Civil Procedure 4(f)(3), which allows a court to authorize service of process abroad by means not prohibited by an international agreement. He asked to serve XAPO (GIBRALTAR) LIMITED by First Class International Registered Mail, email, and social media, and INDODAX by email and social media. Defendants did not oppose the motion.

XAPO (GIBRALTAR) LIMITED

The court denied alternative service without prejudice as to XAPO (GIBRALTAR) LIMITED. It found the request premature for two reasons. First, Nowak had not provided enough evidence that the company did not operate or have an authorized service agent at its publicly listed address. Second, only about three months had passed since the summons and complaint were delivered to Gibraltar’s Registrar of the Supreme Court, the designated authority for service under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.

The court relied on a presumption that a foreign central authority has six months to complete service before alternative methods are used. It also stated that the desire for a faster method, by itself, did not justify alternative service. The denial was without prejudice, and the order allowed Nowak to renew the request after unsuccessful service by the Gibraltar registrar or an actual delay requiring court intervention.

INDODAX

The court granted alternative service as to INDODAX. A process server had made three attempts to serve INDODAX at its listed address in Bali, Indonesia, and had exhausted reasonable efforts to locate the business there. The process server reported that the online images appeared altered to create the impression that INDODAX operated at that address.

The court determined that no applicable international agreement between the United States and Indonesia prohibited service by email or social media. It further found that service through INDODAX’s publicly listed email address, Twitter account, and Facebook account was reasonably calculated to provide notice and an opportunity to respond. The order therefore authorized Nowak to use email, Twitter, and Facebook to serve process on INDODAX.

Disposition

The court granted in part and denied without prejudice in part Nowak’s motion for alternative service. It granted the motion as to INDODAX and authorized service by email, Twitter, and Facebook. It denied the motion without prejudice as to XAPO (GIBRALTAR) LIMITED.