Coudert Brothers LLP v. Sullivan

Background

Coudert Brothers LLP dissolved and entered bankruptcy. Development Specialists, Inc., acting as Coudert’s Plan Administrator, brought related adversary actions against former Coudert partners William A. Sullivan and James B. Varanese to enforce contractual obligations. An arbitrator issued final awards determining damages owed by each defendant. Development Specialists then sought confirmation of those awards in bankruptcy court. Bankruptcy Judge Robert D. Drain issued proposed findings in the two cases for review by the District Court.

The District Court had previously identified service problems in a related proceeding involving another former Coudert partner. In Sullivan’s case, the filed affidavit referred only to notice of the arbitration-award hearing, not service of the summons and complaint. In Varanese’s case, no affidavit of service had been filed. The District Court therefore ordered Development Specialists to explain why the actions should not be dismissed for failure to prosecute.

Rule for Service on Foreign Defendants

Federal Rule of Civil Procedure 4(f) governs service on an individual in a foreign country. It permits service through internationally agreed methods, methods authorized by the foreign country’s law, certain forms of personal or mailed delivery, or other methods ordered by the court when not prohibited by an international agreement. Alternative service under Rule 4(f)(3) must satisfy due process, meaning it must be reasonably calculated to inform the defendant that the action is pending.

The court also noted that failure to prove service does not necessarily invalidate service and that proof of service may be amended. But the court separately considered whether the available evidence showed that service had actually been completed.

Sullivan Action

Sullivan held the title “Senior Foreign Counsel” at Christian Teo & Partners in Indonesia. Development Specialists obtained the firm’s workplace address from a public online notice and Sullivan’s email address from his professional biography on the firm’s website.

The court stated that Indonesia was not party to an applicable treaty or agreement governing service. It recognized conflicting decisions about whether international registered mail could be used to serve defendants in Indonesia. It also noted that federal courts have generally permitted email as alternative service on foreign defendants when no international agreement prohibits it.

Because Sullivan was publicly listed at the workplace and email address identified by Development Specialists, and because Federal Express delivery to the workplace could be tracked, the court granted permission to serve Sullivan by Federal Express at his workplace and by email at his publicly listed email address.

Varanese Action

Varanese had a primary residence in London, United Kingdom, and a secondary residence in Fort Lauderdale, Florida. The United Kingdom is a signatory to the Hague Convention and does not object to service through postal channels. The court therefore stated that Federal Express service to Varanese’s London address would meet Rule 4(f)(2)(C)(ii)’s requirements.

Development Specialists lacked a signed return receipt. It provided postal tracking information stating that packages were delivered and “left with Individual” at Varanese’s business address in the United Kingdom and his Florida residence. The court concluded that this evidence was insufficient to establish the usual basis for dispensing with a signed receipt: evidence that the recipient refused to accept delivery. Development Specialists’s unsupported suspicion that Varanese received the package and sent it to counsel’s London office did not establish that refusal.

Because Development Specialists had also identified another London address for Varanese, the court required new service at Varanese’s known addresses rather than deciding that the prior service was valid.

Order

Judge Kenneth M. Karas ordered Development Specialists to file proof that it served Sullivan in the Sullivan Action by Federal Express at his workplace and by email within 30 days. The court also ordered Development Specialists to file proof that it served Varanese in the Varanese Action by Federal Express at his known addresses within 30 days.

If Sullivan or Varanese did not appear or respond within 30 days after service, Development Specialists was ordered to notify the court by letter so that the court could issue an order requiring the relevant defendant to explain why the case should not proceed toward dismissal for failure to prosecute. The order addressed service and case administration; it did not decide whether the arbitration awards should be confirmed.