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Samsung Electronic Co., Ltd. v. Savings

United States District Court, S.D. California

October 2, 2014

SAMSUNG ELECTRONIC CO., LTD., a Korean corporation; and SAMSUNG TELECOMMUNICATIONS AMERICA, LLC, a Delaware corporation, Plaintiffs,
v.
EARLY BIRD SAVINGS, a company operating from China; SHENZHEN OKELER SCIENCE & TECHNOLOGY CO., LTD., a company operating in China, Defendants.

ORDER: (1) DENYING MOTION REQUESTING COURT TO FIND DEFENDANTS PROPERLY SERVED (2) GRANTING MOTION TO EXTEND THE TEMPORARY RESTRAINING ORDER [Docket No. 23]

ROGER T. BENITEZ, District Judge.

Before this Court is a Motion Requesting Court to Find Defendants Properly Served and to Extend the Temporary Restraining Order filed by Plaintiffs Samsung Electronic Co., Ltd. and Samsung Telecommunications America, LLC (collectively, "Samsung"). (Docket No. 23). For the reasons stated below this Court DENIES the Motion Requesting Court to Find Defendants Properly Served and GRANTS the Motion to Extend the Temporary Restraining Order.

BACKGROUND

This Court issued a Temporary Restraining Order (TRO) on January 7, 2014. On January 21, 2014, this Court set a preliminary injunction hearing on January 28, 2014 and found good cause to extend the TRO until that date. (Docket No. 13). On January 24, 2014, Samsung asked this Court to extend the existing TRO, as Samsung had not been able to effect service of the Complaint and related papers. (Docket No. 15). On January 27, 2014, this Court extended the TRO until May 26, 2014. (Docket No. 17). On May 23, 2014, this Court again extended the TRO until October 6, 2014 because Samsung still had not been able to effect service on Defendants in China. (Docket No. 21). This Court informed Samsung that if further extension is necessary, Samsung must file a motion to extend the TRO no later than September 29, 2014. ( Id. at 3). Samsung filed the instant Motion on September 16, 2014.

Samsung has been engaged in the process of formally serving Defendants, who are Chinese corporations, under the Hague Convention. Samsung moves this Court to deem that service was completed on June 9, 2014 on the grounds that service was attempted by the Chinese Central Authority ("CCA") on that date. (Mot. at 2-3). Additionally, if this Court deems service on Defendants completed, Samsung moves to extend the TRO on the grounds that the TRO is set to expire before Samsung will have time to file a motion for default judgment. (Mot. at 5-6). If this Court does not deem service completed, Samsung moves to extend the existing TRO until such time that this Court enters a final disposition on the matter. ( Id. ).

According to the Motion and supporting documentation, Samsung received notice on September 15, 2014 that the CCA had attempted service on Defendants. (Mot. 2; Ingalls Decl.). Celeste Ingalls, employee for Samsung's processing agency, Crowe Foreign Services, has submitted a declaration in support of Samsung's motion, providing information on Samsung's efforts to serve Defendants. (Ingalls Decl.). According to Ingalls, the CCA returned two certificates that were dated June 9, 2014. The certificates stated that "the document has not been served" because the Defendants "refused to accept the document." (Mot. 3; Ingalls Decl. Exs. A & B). After receiving the certificates, Ms. Ingalls contacted the CCA for an explanation of the attempted service. (Mot. 3). The CCA responded to Ingalls by letter saying, it is not their practice, when attempting service from a foreign jurisdiction, to leave the documents with the party to be served if the party refuses to accept them. (Mot. 3; Ingalls Decl. ¶ 2). The response explains that the CCA assumes that their efforts are sufficient, and states that it is for the "foreign judge to decide the effect of service." (Mot. 3; Ingalls Decl. ¶ 2). It is solely upon this letter from the CCA that Samsung bases the instant Motion.

DISCUSSION

I. Motion Requesting Court to Find Defendants Properly Served

Federal Rule of Civil Procedure 4(h)(2) authorizes service on a foreign corporation outside of the United States "in any manner prescribed by Rule 4(f) for serving an individual, except personal delivery under (f)(2)(C)(I)." Rule 4(f)(1) authorizes service by means prescribed in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163 [hereinafter Hague Convention].

The Hague Convention applies in all civil cases where a party must transmit a judicial document for service abroad, and requires member states to establish a central authority to receive requests for service. Hague Convention, art. 1-2. "Once a central authority receives a request in the proper form, it must serve the documents by a method prescribed by the internal law of the receiving state or by a method designated by the requester and compatible with that law." Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 699 (1988) (emphasis added) (citing Hague Convention, art. 5). The central authority will then issue a certificate of service that designates whether or not service was completed. Hague Convention, art. 6. "Both China and the United States are parties to the Hague Convention." Herman Miller Inc. v. Alphaville Design Inc., No. C 08-03437 WHA, 2009 WL 3429739, at *5 (N.D. Cal. Oct. 22, 2009); see also The Hague Conference on Private International Law website, "Status Table of the Service Convention, " www.hcch.net (last visited Sept. 22, 2014).

Under the Hague Convention, a court shall not issue a default judgment unless "(a) the document was served by method prescribed by the internal law of the State addressed for the service of documents in domestic actions upon persons who are within its territory, or (b) the document was actually delivered to the defendant...." Hague Convention, art. 15, ¶ 1.

Samsung has not effected formal service on Defendants. The text of the Hague Convention establishes that service must be effected in accordance with the law of the State in which the defendant is to be served. Here, the CCA did not effect service according to Chinese law. This is evidenced by the CCA's return of certificates indicating that service was not complete.

The CCA may effectuate service by choosing one of two methods. Hague Convention, art. 5. First, the CCA shall serve documents "(a) by a method prescribed by its internal law for the service of documents in domestic actions upon persons who are within its territory...." Id. Second, the CCA shall serve documents "(b) by a particular method requested by the applicant, unless such a method is incompatible with the law of the State addressed." Id. Samsung did not specify by which method it asserts that it fulfilled the service requirements of the Hague Convention. However, after reviewing the two methods available, this Court finds that the second method is inapplicable in this instance because Samsung did not provide delivery instructions to the CCA. It seems Samsung asks this Court to disregard the CCA's conclusion that service was not complete. Instead, Samsung suggests that the fact that the CCA returned the certificates at all is sufficient to show that the attempted service is actually completed service.

The first method requires service to be effected according to internal law. The Civil Procedure Law of the People's Republic of China, Part 1, Chapter 7, Section 2, Article 79 governs service where the ...


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