Zanghi v. Ritella

Background

The plaintiffs sued the defendants over alleged fraud involving investments in pizzerias in New York City and Miami. The complaint included claims under the Racketeer Influenced and Corrupt Organizations Act, the Securities Act of 1933, and the Securities Exchange Act of 1934.

Piergraziano Ritella was served in the United States. The process server tried to deliver the summons and complaint at Ritella’s apartment, but the building’s doorman refused access. The process server left the documents with the doorman and mailed copies two days later to Ritella’s apartment in an envelope marked “PERSONAL & CONFIDENTIAL.”

Giuseppe Cavallaro, Alessandro Vacca, and Gioia e Vita S.r.L. were in Italy. The plaintiffs attempted service by FedEx and through Italy’s certified email system, known as PEC. The FedEx shipment to Vacca was not delivered. The shipments to Cavallaro and Gioia e Vita were delivered to the addresses used, but the plaintiffs did not provide sufficient evidence that the shipments complied with Italian law. The plaintiffs also did not provide sufficient evidence that the PEC emails complied with Italian law.

Rule 12(b)(5) Service Analysis

The defendants moved under Federal Rule of Civil Procedure 12(b)(5), which permits a defendant to challenge insufficient service of process. The plaintiffs had the burden of showing that service was proper.

The court held that service on Ritella complied with New York law. When a doorman prevents a process server from reaching an apartment, New York law treats the location where the process server was stopped as part of the person’s dwelling for service purposes. The doorman therefore could accept the papers, and the follow-up mailing satisfied the additional requirement. Service on Ritella was consequently proper under Federal Rule of Civil Procedure 4(e)(1).

The court held that service on Cavallaro, Vacca, and Gioia e Vita under Rule 4(f)(2)(A) was not established. That rule concerns service outside the United States and requires, among other things, a method permitted by an applicable international agreement and compliance with the law of the country where service occurs. The plaintiffs did not show that their FedEx service complied with Italian law. They also did not establish that their PEC emails complied with Italian law. In addition, the court concluded that email is not a “postal channel” permitted by the Hague Convention and therefore could not satisfy the international-agreement requirement for the attempted Rule 4(f)(2)(A) service.

Alternative Service Under Rule 4(f)(3)

The plaintiffs asked the court to authorize alternative service under Rule 4(f)(3), including service by email or service on the defendants’ U.S. lawyer, Rocco Lamura. Rule 4(f)(3) allows a court to order service by means not prohibited by an international agreement, so long as the method satisfies due process. Due process requires a method reasonably calculated to inform the defendant about the lawsuit and provide an opportunity to respond.

The court authorized service on Cavallaro by email at studiolegalecavallaro@live.it. Evidence showed that Cavallaro had recently used that address as an attorney and had used it for business related to facts underlying the plaintiffs’ claims. The court therefore found that an email to that address was likely to reach him.

The court declined to authorize service on Vacca or Gioia e Vita at the proposed Gmail address. The plaintiffs relied on an invoice listing that address, but the court found that the invoice did not establish that the address was operational, accessed by either defendant, or actually connected to either defendant.

The court also declined to authorize service on Cavallaro, Vacca, or Gioia e Vita through Lamura. Lamura had moved to withdraw because of an alleged severe breakdown in his relationship with the defendants, including alleged nonpayment of fees. Under those circumstances, the court could not conclude that serving Lamura would be reasonably calculated to notify the defendants.

Disposition

The court granted in part and denied in part the moving defendants’ motion to dismiss. It found that the plaintiffs properly served Ritella but failed to serve Cavallaro, Vacca, and Gioia e Vita through the methods they had already attempted. It nevertheless authorized service on Cavallaro by email at studiolegalecavallaro@live.it. The authorized email had to include the summons and complaint, a copy of the Memorandum and Order, notice that the court had authorized service by email, and a warning that failure to respond could lead to a default judgment. Judge Naomi Reice Buchwald also directed the Clerk of Court to terminate pending motions.