Zhang v. Lo

Background

Henry Haining Zhang brought this pro se action against individuals and entities described in the opinion as residents of the People’s Republic of China or Hong Kong. He asserted state-law claims involving an exclusive contract, fiduciary duties, interference with contract, and intentional infliction of emotional distress, along with a claim under the Racketeer Influenced and Corrupt Organizations statute. The alleged events occurred between 2006 and 2009.

The court had previously dismissed the case for failure to prosecute, later vacated that dismissal after Zhang withdrew an appeal, and gave him additional time to serve the defendants under the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents. Zhang then filed another motion for default judgment, but the Clerk had not entered certificates of default.

Service of Process

The court explained that default judgment requires proof that the defendant was properly served and that the Clerk entered the defendant’s default. Because the defendants were abroad, service generally had to comply with the Hague Convention and Federal Rule of Civil Procedure 4.

The court found the service attempts defective. For the defendants in the People’s Republic of China, the opinion states that China objected to service by mail and required use of its central authority, personal delivery by an appropriately appointed person, and Chinese translations. The record did not show compliance with those requirements.

For the Hong Kong defendants, the court discussed possible service by mail and personal delivery. It concluded that personal delivery by Xin Shi was not shown to be valid because the record did not establish that he was an authorized process server in Hong Kong. The court also found deficiencies in the affidavits concerning mail service, including the lack of evidence about where the mail originated and whether the mailing satisfied applicable requirements.

Rulings

The court denied Zhang’s motion for default judgment as to all defendants except HKCMCPA Company Limited and Tang. It dismissed the complaint with prejudice for failure to prosecute as to all defendants except those two defendants. The court stated that the other defendants could not be served again because Zhang had been warned to comply with the Hague Convention and had failed to do so over approximately six years.

As to HKCMCPA and Tang, the court denied the motion for default judgment without prejudice to renewal after a traverse hearing. A traverse hearing is an evidentiary hearing about whether service was properly made. The hearing was ordered before United States Magistrate Judge Sarah Netburn and was limited to the details of the alleged mail service and whether the court had personal jurisdiction over those defendants.

The court also stated that, even if service had been proper, it appeared doubtful that New York had personal jurisdiction over HKCMCPA or Tang. It further identified possible deficiencies in Zhang’s pleaded claims. But the court did not finally rule on those issues in this order. If service was found improper, the court stated that the case would be dismissed as to the two remaining defendants; if service was proper, the court would consider jurisdiction and whether the alleged facts supported default judgment.

Disposition

- Default judgment: denied as to all defendants except HKCMCPA Company Limited and Tang. - Default judgment as to HKCMCPA Company Limited and Tang: denied without prejudice to renewal after the ordered traverse hearing. - Complaint: dismissed with prejudice for failure to prosecute as to all defendants except HKCMCPA Company Limited and Tang. - Case classification: procedural, because the order turned on service, default procedures, prosecution, and potential personal jurisdiction rather than deciding the underlying claims.