Kadmon Corporation, LLC v. Limited Liability Company Oncon

Background

Kadmon moved under Federal Rule of Civil Procedure 4(f)(3), which allows a federal court to order another method of serving a defendant in a foreign country, for permission to serve Oncon in Russia. Kadmon asked the court to declare effective three forms of service: sending the summons and complaint by email, sending them by DHL courier, and delivering them through a private process server to a person authorized to accept service for Oncon.

The lawsuit arises from three contracts under which Kadmon licensed technology involving human monoclonal antibodies to Oncon. Kadmon alleged that Oncon failed to make required payments under one of the contracts and owed more than $6 million. The contracts selected New York law and New York courts for disputes relating to the agreements. They did not designate a United States agent for service of process. Oncon had actual notice of the summons and complaint, but the court explained that notice alone does not satisfy the separate procedural requirement of formal service.

Kadmon initially attempted service through the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, an international agreement governing service of court documents across borders. The opinion states that Russia had suspended judicial cooperation with the United States in civil and commercial matters and that, by September 2022, courier companies that could deliver service requests to Russia’s central authority had stopped operating there.

Court’s Analysis

Federal Rule of Civil Procedure 4(h) governs service on a foreign corporation, partnership, or association. It directs that service outside the United States generally must follow one of the methods permitted by Rule 4(f). Rule 4(f)(3) permits service by another method ordered by the court, but the method must not be prohibited by federal law or an international agreement and must satisfy constitutional due process.

The court held that email and DHL courier service were not permitted in Russia under Rule 4(f)(3). Russia had objected to Article 10 of the Hague Convention, which concerns service through postal channels. The court reasoned that international courier service is a form of postal service and that Russia’s objection to postal service also meant that email could not be treated as an approved service method. The court rejected the argument that the Convention’s silence about email amounted to permission to use email.

The court also rejected Kadmon’s argument that Article 5 of the Hague Convention allowed a private process server to deliver documents directly to an authorized recipient who voluntarily accepted them. Reading Article 5 together with the Convention’s overall structure, the court concluded that informal delivery under Article 5 is a method available to a central authority, not to private parties acting independently. The court also relied on the text of Article 5 and a report from the Convention’s special commission.

Disposition

The court acknowledged that its interpretation could leave Kadmon without a practical way to serve Oncon in Russia because Russia was not cooperating with the United States and courier service to the Russian central authority was unavailable. It nevertheless concluded that the law required this result. The court stated that Kadmon must either identify a United States agent for Oncon or wait until service can otherwise be completed.

Kadmon’s motion for alternate service was DENIED. The Clerk of Court was directed to close docket entry 13. The opinion did not state that the motion was denied with or without prejudice.