United States v. Glaister

Background

The United States brought two consolidated civil actions against Sarah E. Glaister and John K. Glaister to recover penalties assessed for alleged violations of Sections 5314 and 5321 of the Bank Secrecy Act. The United States filed a letter motion under Rule 4(d)(2) of the Federal Rules of Civil Procedure seeking reimbursement of expenses incurred to serve the defendants after they declined to waive service.

Rule 4 waiver requirements

Rule 4(d) allows a plaintiff to ask an individual defendant to waive formal service of a summons. The request must be addressed to the individual defendant and must include specified information and documents, including a copy of the complaint, waiver forms, a way to return the forms without paying postage, and notice of the consequences of waiving or refusing service. If a defendant refuses without good cause, Rule 4(d)(2) generally requires the court to impose the service expenses and reasonable expenses of a motion seeking those costs.

The court explained that compliance with Rule 4(d)(1) is a condition that must be met before a plaintiff can demand those expenses. The plaintiff need only show substantial compliance, meaning compliance sufficient to satisfy the rule’s purpose.

Why the court denied the motion

The United States did not show substantial compliance because it did not provide written notice and the waiver request to the defendants individually. When the cases began, the United States emailed Frank Agostino, an attorney who had represented the defendants in unrelated matters. Agostino was not counsel of record and did not then represent the defendants in these cases. Phillip Colsanto, another attorney associated with Agostino’s firm who had not appeared in the cases, later asked for more time to respond.

The United States did not show that it ever contacted either defendant directly. It later notified Agostino and Colsanto that it would seek expenses, served the defendants at their home in New York State, and then Agostino appeared for them when the cases were joined. The court held that these events did not establish that the defendants had received the required notice or waiver request.

The court also held that the United States had not shown that Agostino was authorized to accept service for the defendants. Merely being an attorney or having previously represented a client does not make an attorney an authorized agent for service. Agostino’s later appearance did not create authorization retroactively. The court further stated that Colsanto’s response did not satisfy the United States’ burden because an attorney’s own statement of authority is insufficient without evidence that the client granted that authority.

Disposition

The court concluded that the United States had not established substantial compliance with Rule 4(d)(1)(A). Accordingly, Judge Paul E. Davison denied the motion.