United States District Court, N.D. California
ORDER GRANTING MOTION FOR SUBSTITUTED SERVICE;
DENYING MOTION FOR ATTORNEY’S FEES AND COSTS RE: DKT.
Gonzalez Rogers United States District Court Judge.
24, 2016, the Court heard oral arguments on the specially
appearing defendants’ motion to dismiss this action.
(Dkt. No. 71.) The Court dismissed the complaint with leave
to amend and ordered that the parties engage in
jurisdictional discovery. (Dkt. No. 71; see Dkt. No.
74 (Transcript of May 24 Hr’g) at 4.) On June 7, 2016,
the Court issued a written order incorporating its orders on
the record at the May 24, 2016 hearing, and further dismissed
the claims against defendant Andre Viegas for insufficient
service of process because plaintiff Products and Ventures
International failed to follow the requirements of Federal
Rule of Civil Procedure 4(f) and the Hague Convention. (Dkt.
No. 72.) In the order, the Court stated that it would
entertain a motion requesting substituted service on Mr.
Viegas, if Mr. Viegas did not voluntarily agree to accept
17, 2016, plaintiff filed a motion for substituted service on
Mr. Viegas. (Dkt. No. 75, “Mtn.”) Additionally,
plaintiff requests that the Court award plaintiff with
attorney’s fees and costs associated with filing the
instant motion for substituted service. (Id.) On
June 24, 2016, Mr. Viegas specially appeared through his
U.S.-based counsel to serve an opposition to
plaintiff’s motion (Dkt. No. 79,
carefully considered the papers submitted, and for the
reasons set forth below, the Court hereby Grants the motion
for substituted service, but Denies the motion for
attorney’s fees and costs. The jurisdictional discovery
request plaintiff served on Mr. Viegas through his U.S.-based
counsel on June 6, 2016 (see Dkt. No. 76, Decl. of
Gaw ¶ 3) shall be deemed properly served as of the date
of this Order.
MOTION FOR SUBSTITUTED SERVICE
requests the Court to order substituted service on Mr. Viegas
through his U.S.-based counsel pursuant to Federal Rule of
Civil Procedure 4(f)(3). Rule 4(f)(3) states that service
upon an individual in a foreign country may be perfected by
any “means not prohibited by international agreement,
as the court orders.” Defendant argues first that
plaintiff must demonstrate an “urgency” requiring
an order for substituted service-and has failed to do so-and
second that plaintiff has provided no reason explaining why
service could not be effected on Mr. Viegas pursuant to the
Hague Convention. The Ninth Circuit held the following with
respect to Rule 4(f)(3):
By all indications, court-directed service under Rule 4(f)(3)
is as favored as service available under Rule 4(f)(1) or Rule
4(f)(2). Indeed, Rule 4(f)(3) is one of three separately
numbered subsections in Rule 4(f), and each subsection is
separated from the one previous merely by the simple
conjunction “or.” Rule 4(f)(3) is not subsumed
within or in any way dominated by Rule 4(f)’s other
subsections; it stands independently, on equal footing.
Moreover, no language in Rules 4(f)(1) or 4(f)(2) indicates
their primacy, and certainly Rule 4(f)(3) includes no
qualifiers or limitations which indicate its availability
only after attempting service of process by other means.
Rio Props., Inc. v. Rio Int’l Interlink, 284
F.3d 1007, 1017 (9th Cir. 2002). The Ninth Circuit further
explained that a plaintiff need “only to demonstrate
that the facts and circumstances of the present case
necessitate the district court’s intervention.”
Id. at 1016. Here, the Court finds sufficient facts and
circumstances making the Court’s intervention
Mr. Viegas is not similarly situated to the other defendants
who reside in the People’s Republic of China
(“PRC”) and for whom plaintiff is working through
the prescriptions of the Hague Convention for the purposes of
service. Mr. Viegas argues his exclusion at this time would
not cause any undue delay because he would be on the same
litigation track as the other PRC defendants if plaintiff
were to serve him through the Hague Convention. However,
unlike these other defendants, Mr. Viegas is a U.S. citizen
and was one of the signatories to the contract at issue here.
Moreover, Mr. Viegas is alleged to have significant ownership
of all of the corporations at issue in this litigation and
allegedly has been decommissioning corporations and
transferring assets to avoid potential liability in this
litigation, necessitating urgent action. Accordingly, the
Court finds that the facts and circumstances surrounding Mr.
Viegas, narrowly and specifically, as opposed to all the
defendants, necessitate the Court’s intervention here
in authorizing substituted service. The Court further finds
that service on Mr. Viegas’ U.S.-based counsel comports
with the rules and is not expressly prohibited by the Hague
Convention. See Richmond Techs., Inc. v. Aumtech Bus.
Sols., No. 11-CV-02460, 2011 WL 2607158, at *13 (N.D.
Cal. July 1, 2011) (“Service upon a foreign
defendant’s United States-based counsel is a common
form of service ordered under Rule 4(f)(3).”); In
re TFT-LCD (Flat Panel) Antitrust Litig., No.
10-CV-04945, 2011 WL 845882, at *3 (N.D. Cal. Mar. 8, 2011)
(finding that “service on [defendant] through its U.S.
counsel comports with due process”); Brown v. China
Integrated Energy, Inc., 285 F.R.D. 560, 566 (C.D. Cal.
2012) (allowing substituted service on individual officer
defendants in PRC by serving the company’s authorized
agent for service in Delaware or its U.S. counsel).
the Court Authorizes service on Mr. Viegas to be effected by
service on Hogan Lovells U.S. LLP, Mr. Viegas’
U.S.-based counsel. The Court Orders that the jurisdictional
discovery requests authorized by the Court and served by
plaintiff on Mr. Viegas’ counsel be deemed effective as
of the date of this Order.
MOTION FOR ATTORNEY’S FEES AND COSTS
also requests attorney’s fees in the amount of $5,
757.50 for the preparation and filing of the motion for
substituted service because defendant refused to waive
service. The Court declines to grant such a request at this
case plaintiff cites in support of its request for
attorney’s fees recognizes that courts have the
inherent power to assess attorney’s fees against
counsel but only in “narrowly defined
circumstances.” Chambers v. NASCO, Inc., 501
U.S. 32, 45 (1991). Chambers further notes that
courts may assess fees when a party “shows bad faith by
delaying or disrupting the litigation or by hampering
enforcement of a court order.” Id. at 46.
Although Mr. Viegas’ refusal to waive service may have
the effect of delaying or disrupting the litigation, the
Court is unable to find at this time that it has been done in
plaintiff’s instant motion for attorney’s fees
and costs ...