Service of Process by E-Mail on a Foreign Defendant

In a case that was heard in the UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA, Judge Jeffrey S. White ordered the following:

"Although the Court does not find that the service already effectuated by Plaintiffs was improper, in an abundance of caution and considering that the WikiLeaks Defendants may be foreign  parties, the Court ORDERS Plaintiffs to re-serve the amended complaint and summons and all TRO-related papers, including this Order, on the WikiLeaks Defendants at their listed email addresses by no later than 3:00 p.m., today, February 13, 2008."

This is an example that the world we live in is getting smaller or perhaps more local.  This is in large part thanks to the power of the internet and its ability to bring things that were once far away or difficult to gain access to directly to our desktops.

The power of the internet and the technology that enables it is making easier  to communicate in ways that were not even contemplated just a few short years ago.   This power to communicate is spilling over into the world of litigation and more specifically the act of giving notice to a party of a pending action or Service of Process.  

This blog has in part called to your attention numerous examples of courts worldwide that have come to recognize that sometimes the most effective manner for providing legal notice of a pending action is by electronic means.  In the past the only alternative for effecting service on a party that could not be located was publication. Now we are seeing service by Twitter, Facebook, and email more and more frequently.  

Is this a much ado about nothing as some in positions of power in the process serving community have suggested or is this yet another example of trend that seems to be gaining momentum?  

You be the judge. 

District of Court Permits International Service of Process via Email

MR Printing Equipment, Inc. and MR Sales and Service, Inc

-v-

Dietmar Potscher

Case Number: 10cv00937

Filed: February 10, 2010

Court: Illinois Northern District Court

U.S. District Judge John W. Darrah permitted Plaintiff, MR Printing Equipment, Inc., to serve a complaint and summons on Austrian defendant, by e-mail. This is yet another example of a continuing trend in federal litigation in the US and courts globally.

The case, MR Printing Equipment, Inc. v. Potscher, is pending in the United States District Court

in Illinois. Upon motion of the MR Printing the court permitted the defendant, to be served via e-mail under Rule 4(f)(3) of the Federal Rules of Civil Procedure.

The fact that the defendant resides in Austria which is not a signatory to the Hague Convention and the permissive language of the Federal Rules related to the service of process, allowed the Judge to permit international Service of Process via email.

Below is the Judges Minute Order on the Plaintiff's Motion to allow International Service via email and the Proof of Service filed in the case indicating the manner of service.



Canadian Judge Allows Service of Process Via Facebook

Cyber-service ‘a new frontier’

Story Source - By Michael McKiernan | Publication Date: Monday, 25 October 2010

An Ontario judge has urged lawyers to be creative with electronic methods of service after allowing a litigant to do it using Facebook in a family law case. 

This makes five or six cases worldwide that this blog has chronicled in the last year.  Admittedly this form of alternative service continues to be authorized when other forms of service have failed. 

That said, check out one Canadian lawyer said about service of process in the digital age.

For him, Facebook is a much better option than traditional methods of substituted service, such as placing an ad in a newspaper. He has also considered creating a web site using the name of a defendant with originating documents available for download.

“The chances of someone Googling themselves is probably higher than somebody catching a legal notice in the Toronto Star directed to them,” he says. “It’s not a great way of serving someone but compared to putting an ad in the newspaper, it’s much better.”

“We need some reform in the Rules to allow for more efficient service. There are many ways the lawsuit could come to that person’s attention without having to have a third party go and knock on that person’s door at the dinner hour.”

New York Attorney General Shuts Down Another Process Serving Company

In July of this year New York Attorney General Andrew M. Cuomo filed a complaint against SERVES YOU RIGHT, INC and DAVID WARSHALL. The complaint alleged that the defendants engaged in fraudulently business practices, making false representations on affidavits of service throughout Long Island and New York City.

Seven days later, a Consent Order and Judgment was entered in this case permanently enjoining the defendants from being involved in or being employed by any process serving companies or process serving activities. SERVES YOU RIGHT, INC was required to immediately cease operations within 60 days of the Order. DAVID WARSHALL was also ordered to pay a fine to the NY AG's office in the amount of $50,000.00 within ten (10) days of the order.

The complaint can be found at this link. The Consent Order and Judgment can be found at this link.

This action is part of an ongoing investigation by Attorney General Cuomo into unlawful debt collection practices. Since commencing the statewide initiative in May 2009, Cuomo has shut down more than a dozen debt collection and affiliated process serving companies and required others to reform their deceptive practices.

Singapore's Supreme Court Considers Service via Social Media

Process Servers have a sometimes difficult sometimes easy job to perform. This task "the service of civil process" has remained largely unchanged for more than 100 years. This Blog was dedicated to chronicling the many challenges the process serving profession currently faces.

On several occasions in the last year this Blog has cited examples of how modern technologies are impacting or posing threat to the traditional role of process servers.



For those the follow this Blog you know that I have cited several examples of social media already being used to effect the service of process most notably in Australia (twice), New Zealand, Canada and the United Kingdom.


The Singapore Supreme Court is exploring how to leverage social media platforms for the benefit of the civil litigation process. Specifically, the high court has published a document titled USE AND IMPACT OF SOCIAL MEDIA IN LITIGATION.


This twenty-six page document explores the opportunities and challenges associated of the use and impact of social media in civil litigation. The document proposes several best practices for both personal and substituted service discovery, exchange of documents between parties and other applications for social media platforms.


The Supreme Court is inviting public comment on these best practices and proposals. The due date for comments is September 15, 2010.   The document can be found here. 

On occasion I have accused of “promoting” electronic service of process. That is not the case; all I have been doing is calling attention to the issue in the hopes that NAPPS and all private process servers will one day have a meaningful and productive conversation about what these challenges mean to our profession.


Unless we want to be like the pony express (extinct) we had better find a way to insure that a disinterested third party (process server) retains a role in an electronic world.

What are process servers going to do when there is a proposal at the federal level that seeks to leverage today’s technologies in a way that marginalizes our role? It will happen; it is only a matter of time.


I am not saying the sky is falling. I am saying it is time to acknowledge these types of changes challenge our very existence and these types of challenges are presenting themselves with ever increasing frequency.

The fundamental question is; what if anything are process servers going to do to ensure that they remain relevant? The notaries figured it out… why can’t process servers? If we do not figure it out, social media and email may well fill the void. Then where are we?


I might be wrong, but I doubt it.

Eviction Notice Served via Email - Will That Work?

That depends... In a recent California Appellate Case the issue of giving notice by email came into question.

In Culver Center Partners East #1, L.P. v. Baja Fresh Westlake Village, 185 Cal. App. 4th 744 (2010), the court found that the landlord in a commercial lease had failed to give proper notice of failure to pay rent to the tenant even though the tenant admitted receiving notice of default from the landlord by email.

The signed lease provided for the notice by hand delivery, regular mail, and facsimile. In an apparent effort to to keep pace with technology, the lease also allowed for notice by Email.

The court found that notice was not properly given and the default must start over. The court cited that even thought the lease had an electronic transmission provision; the provision was not specific enough to satisfy the court that actual notice was given. Had the lease provision actually listed the tenants email notification address and the landlord could show that it the email was delivered to the physical address designated in the lease the electronic notice provision would have been sufficient.

Moral of the story if you are going to have an electronic notice provision in your lease be sure to consult counsel who should be able to draft language that makes clear that electronic notice via email is effective whether or not addressee actually opens or reads the email notice and any attachments.

India Supreme Court Allows Process to be Served via Email

Last month, The Supreme Court of India acknowledged that over half of the cases before it are delayed by the act of process serving. As a result the Supreme Court ruled as follows:

[i] In addition to normal mode of service, service of Notice(s) may be effected by E-Mail for which the advocate(s) on-record will, at the time of filing of petition/appeal, furnish to the filing counter a soft copy of the entire petition/appeal in PDF format;

[ii] The advocate(s) on-record shall also simultaneously submit E-Mail addresses of the respondent(s) Companies/Corporation(s) to the filing counter of the Registry. This will be in addition to the hard copy of the petition/appeal;

[iii] If the Court issues notice, then, in that event alone, the Registry will send such an additional notice at the E-Mail addresses of the respondent(s) Companies/Corporation(s) via E-Mail;

[iv] The Registry will also send Notice at the E-Mail address of the advocate(s) for respondent(s) Companies/Corporation(s), who have filed caveat. Advocate(s) on-record filing caveat shall provide his/her E-Mail address for effecting service; and

[v] Within two weeks from today, Cabinet Secretariat shall also provide centralized E-Mail addresses of various Ministries/Departments/ Regulatory Authorities along with the names of the Nodal Officers, if already appointed, for the purposes of service.

It is worth noting that the mode of service typically used that is causing the delays is service via the Postal Service, return receipt required.  Without the proper safeguards and requirements service via email is arguably less reliable than service via postal service.  Maybe if these notices were served by private process servers these delays would not exist...
Regardless this ruling is yet another example of technology having an impact on the practice and procedures associated with the act of giving notice to the parties/litigants to a case.

For a copy of the order click here.

Evasive Subject Served via Facebook

In yet another example of how social media is creeping into every aspect of our lives, last month Australian Court in Adelaide ordered that the social networking site Facebook be used again to serve legal documents on an alleged father in a child support case.

This is the fourth instance of Facebook being allowed/ordered for the Service of Process that I am aware of. Australia, New Zealand and Canadian judges have all signed orders allowing a defendants to be served by posting the Notice of the Action to the defendants Facebook account.

Clearly judges around the world see social networks as being at least as reliable a means for giving notice if not more so than publication when all other methods have failed. I have to admit that I would agree that in certain circumstances service of process via social-networks or by other electronic means makes more sense than service by publication.

I would not dismiss these recent developments as being a fad or a trend. They are important and I believe they demonstrate that the courts and our customers are more and more willing to consider alternate manners of service that only a few short years ago where unthinkable.

As I write this post I am researching a ruling from the Supreme Court of India that appears to have ruled that Service of Process via email is now an acceptable manner of service for certain case types.

Stay tuned, more to follow.

FTC Final Report of Debt Collection Industry

FTC Issues Report on Reforming Debt Collection Litigation and Arbitration; Recommends Steps to Protect Consumers and Repair a Broken System

Process Servers are called Out as Part of the Broken System.   The Report Recommends Four Steps to Help Insure Proper Notice.   The Recommendations though well meaning, will only serving to make the act of service of process more cumbersome and expensive.  

They will not stop those that chose to break the law regardless of the rules and regulations.   

A new Federal Trade Commission report concludes that the system for resolving consumer debt collection disputes is broken, and recommends significant litigation and arbitration reforms to improve efficiency and fairness to consumers.

The report, “Repairing A Broken System: Protecting Consumers in Debt Collection Litigation and Arbitration,” reflects information gathered at roundtable discussions the FTC held throughout the country in 2009, as well as public comments and the FTC’s experience in debt collection matters. The roundtables followed a February 2009 report that identified some concerns with debt collection litigation and arbitration, but concluded that more information was needed about certain debt collection litigation and arbitration practices before further recommendations could be made.

The Commission therefore recommends state and local governments consider making a variety of reforms to service of process, pleading, and court rules and practices to increase the ability of consumers to defend or otherwise participate in debt collection litigation.

The FTC’s 2009 report found that debt collection litigation raised concerns about collectors failing to properly notify consumers of suits they have filed, collectors filing suits based on insufficient evidence of indebtedness, courts frequently granting default judgments against consumers who do not appear or defend themselves, collectors seeking to recover on debts beyond the statute of limitations, and banks freezing funds in bank accounts that are exempt from garnishment by law. In its new report, the Commission’s principal recommendations to address these concerns in litigation are:

States should consider adopting measures to make it more likely that consumers will defend themselves in litigation, decreasing the prevalence of default judgments.

Service of process may be inadequate or improper for many reasons. For example, process may fail to reach the consumer if it is delivered to an old or otherwise incorrect address or it is delivered to the wrong person, such as someone with a similar name. Some process servers may simply not serve the consumer but falsely assert that they have done so.

States should require collectors to include more information about the alleged debt in their complaints.

The FTC committed to closely monitor debt collection arbitration and evaluate whether creditors and arbitration forums provide consumers with meaningful choice and a fair process. The Commission also said that, as appropriate, it will report its views on new debt collection arbitration models to policymakers, industry, consumer groups, and the general public.

The FTC believes that reforms such as those discussed in the report should be made to ensure that the debt collection litigation and arbitration systems adequately protect consumers without unduly burdening the debt collection system, which helps to keep credit prices low and helps to ensure that consumer credit remains widely available.The Commission vote to issue the report was 5-0. Commissioner Julie Brill issued a concurring statement in which she urged Congress to enact a temporary ban on the mandatory arbitration of consumer debt collection disputes. “Such a ban should remain in place until the arbitration process can be shown to be fair, transparent, and as affordable as traditional litigation, and until consumers have a meaningful opportunity to opt out of pre-dispute arbitration without losing access to the credit services they seek,” she said.

Many consumer advocates and judges who adjudicate debt collection cases stated that inadequate or improper service occurs frequently. One local official reported that her agency’s comprehensive investigation of process servers in New York City revealed that “many are not performing service. They are filling out false affidavits of service. They are not going to the addresses. They are not sufficiently checking the addresses.” A Chicago judge explained similarly that one of his colleagues had conducted a “spot audit” of one process server and found that he “claimed to be in areas thirty miles apart in the Chicago-land area within minutes . . . . And we [asked,] ‘Is he Superman?’”

Nevertheless, the very high rate at which consumers do not appear and the service of process problems documented in some jurisdictions give the Commission a sufficient basis to conclude that efforts to improve service of process in debt collection litigation would benefit consumers in many locations.

An electronic version of the report text is available at http://www.ftc.gov/os/2010/07/debtcollectionreport.pdf

Superpoked and Served: Service of Process via Social Networking Sites

Whether professional process servers like it or not increasingly courts worldwide are leveraging technology and social media outlets to provide parties with a method of service that is reasonably calculated to provide actual notice over other forms of alternative service. I submit that this trend is part of a natural evolution of the Service of Process and that service by electronic means is more reliable and predictable than Service by Publication or by the Postal Service.

In 2009 the University of Richmond Law Review Article was published regarding the use of Social Networks to affect Service of Process. I have to admit that I somehow missed its publication. It is yet another example of logical and practical thinking coming from the legal community related to the evolution of Service of Process.

The following are a few key points made in the Law Review article I found worthy of mentioning here...

The fact that the Hague Convention does not expressly permit service of process through social networking sites is not detrimental; the Convention does not expressly permit service through other technological means such as fax and e-mail, but these methods have been approved by a number of courts and were even endorsed by the Hague Commission.

Rule 4 - Courts have held that service of process can be effectuated by electronic means when foreign defendants are evasive. At least one commentator has suggested that electronic service should be permitted in domestic cases, even though doing so would require amending the current Federal Rules. Absent an amendment to the Federal Rules, the only logical prong under which service of process via Facebook might suffice is Rule 4(f).

Technological advancement often presents difficult barriers for courts to overcome in the application of traditional law,” but service of process is “so fundamental to the operation of law that historically [it has] been more open to adaptability and change.” Courts are beginning to find electronic service constitutionally permissible under Mullane, and the trend toward electronic service is “a logical step forward in the evolution of civil procedure and reflects the popular use of new technologies in common communication.” Facebook is one such new technology.

If you would like to read the entire law review article I have posted it to my Google documents page that can be found here.

Are You Liable For Your Process Server Under FDCPA?

By Tomio Narita, Simmonds & Narita LLP


Consumers often assert FDCPA claims against collectors based upon alleged misstatements or misconduct by process servers while serving a state court summons and complaint. Thus, consumers may claim a process server was rude or abusive at the time of service, causing them to suffer emotional distress, or that a process server made false statements about the debt. These allegations are not sufficient to impose liability on the collector under the FDCPA.


For the rest of the post please click here.

Service on Foreign Corporations - Hague Convention not Required

California Appellate Court Okays Service on Foreign

Corporations Through Service on Their California

Subsidiaries in Certain Circumstances Despite Hague

Convention Requirements

Authors: Cristian L. Vallejo & Eric S. Jones
http://manattcentral.manatt.com/news.aspx?id=11458


Foreign companies doing, or planning on doing, business in California should be aware that a recent decision from the California Court of Appeal for the Fourth District held that under certain circumstances a foreign corporation can be validly served in California by serving such corporation’s California-based subsidiary despite the requirements of the Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters (the “Hague Service Convention”). Such Decision requires foreign companies to be alert to the receipt of service documentation by their California-based subsidiaries.

In Yamaha Motor Company, Ltd. v. Superior Court, the California Court of Appeal for the Fourth

District reminded us that federal law makes the validity of service dependent on state law. Relying on Cosper v. Smith & Wesson Arms Co. (California Supreme Court decision) and Volkswagenwerk Aktiengesellschaft v. Schlunk (U.S. Supreme Court case) and interpreting the relevant provisions of the California Code of Civil Procedure and Corporations Code, the California Court of Appeal ruled that a Japanese company could be served under California law by serving its American subsidiary (alleged by plaintiff to be the Japanese company’s “general manager” in California) rather than through the Hague Service Convention. The Court of Appeal held that although such method of service seems “too easy a way to get around the Hague Service Convention,” in reality, under California law, that is the case.

The plaintiff in the case was a 12-year-old boy who was injured while riding a Yamaha product. A lawsuit was brought against Yamaha Motor Corporation USA (“Yamaha-America”) and Yamaha Motor Company, Ltd. (“Yamaha-Japan”). Plaintiff alleged that Yamaha-America was the wholly owned domestic subsidiary of Yamaha-Japan and the exclusive importer and distributer of Yamaha vehicles for the United States. In addition, plaintiff alleged that Yamaha-America conducted the following activities in connection with Yamaha vehicles: testing, provision of warranty and owner manuals, marketing, and receiving of all customer complaints and accident reports for the United States. Plaintiff’s theory to serve Yamaha-Japan by serving Yamaha-America was that Yamaha-America was Yamaha-Japan’s “general manager” in California and, as

such, it can be validly served on behalf of Yamaha-Japan under California law.

In Schlunk, the U.S. Supreme Court held that “the only transmittal to which the [Hague Service] Convention applies is a transmittal abroad that is required as a necessary part of service” and that “the Due Process Clause does not require an official transmittal of documents abroad every time there is service on a foreign national.” Therefore, the question becomes a matter of state service of process law. That is, if the applicable state law requires service abroad, then the Hague Service Convention will apply, and if it does not, then the Hague Service Convention is not implicated.

While California does state in California Code of Civil Procedure Section 413.10 that the rules Governing summonses are “subject to” the Hague Service Convention, the Yamaha court was quick to point out that “subject to” does not mean “pursuant to the rules of,” but rather that “treaties trump conflicting state law.” Pursuant to California Code of Civil Procedure Section 416.10, a corporation may be served, among other techniques, by any method authorized in Sections 1701, 1702, 2110, or 2111 of the California Corporations Code. Corporations Code Section 2110 specifically applies to foreign corporations and authorizes hand delivery of process to the “general manager in this state” of a foreign corporation as valid service on such foreign corporation, therefore the Hague Service Convention is not implicated.

In Cosper, while interpreting a subsequently repealed California Corporations Code Section, the California Supreme Court concluded that, under California law, service was proper when the “agent served is of sufficient character and rank to make it reasonably certain that the defendant will be apprised of the service made.” In formulating this language, the court was attempting to determine if a sales representative that operated on a nonexclusive basis was the  “general manager” in California of the foreign corporation. The court found that, yes, such a sales representative was the “general manager” and that service was proper because the representative was of sufficient rank to make it reasonably certain that the foreign corporation

would be apprised of the service made.

Taking into account the fact that Yamaha-America provided to Yamaha-Japan the exclusive services described above, which are much more in-depth than those found in the Cosper case, the Yamaha court found that it was “reasonably certain” that Yamaha-America would apprise Yamaha-Japan of any service in California, and as a result, Yamaha-America was the “general manager” in California for Yamaha-Japan. In addition, the Yamaha court found that the fact that the Corporations Code Section discussed in Cosper had been repealed was a “non-issue,” as the court could not “tease out an intervening change in the statutory law.” Therefore, service on Yamaha-Japan’s domestic subsidiary, Yamaha-America, which acts as its “general manager” in California, was valid.

Although, as a result of this California Court of Appeal’s decision, plaintiffs may, under certain circumstances, forgo service on a foreign corporation pursuant to the Hague Service Convention, it is important to keep in mind that there are very good reasons to prefer such service instead. As Justice O’Connor pointed out in the Volkswagenwerk case, “those who eschew [the Hague Service Convention’s] procedures risk discovering that the forum’s internal law required transmittal of documents for services abroad and that the [Hague Service Convention] provided the exclusive means of valid service.” In addition, she points out that “parties that comply with the [Hague Service Convention] ultimately may find it easier to

enforce their judgments abroad.”

Manatt, Phelps & Phillips, LLP’s attorneys stand ready to assist you with any questions you may
have regarding the implications of this decision.

For additional information on this issue, contact:

Cristian L. Vallejo - Mr. Vallejo’s practice focuses on both financial restructuring and finance and corporate transactions with particularly experience in cross border transactions. His experience includes: Representation of lenders and investors in corporate finance transactions of all types; Representation of clients in connection with the start -up and acquisition of companies in the US and throughout Latin America; Representa tion of bondholders, lenders, servicers and other creditors in connection with financial restructuring and workouts, involving multiple jurisdictions, of US and Latin American based companies; and
Representation of clients in connection with the development and financing of large energy and other infrastructure projects throughout Latin America.

Eric S. Jones - Mr. Jones is an associate with the Business, Finance & Tax practice group in the
Los Angeles office. He has a broad-based tax practice in corporate, partnership, international and individual income tax, including mergers and acquisitions, reorganizations and dissolutions, choice of entity considerations, executive compensation, and transactional matters.

http://manattcentral.manatt.com/news.aspx?id=11458

Federal Court Authorizes Email Service of Process of Chinese Defendant

Trends In International Litigation : International Business

Lawyer & Attorney : Ed Joffe : Joffe & Joffe Law Firm :

Miami, Florida Global Customs & Trade Issues

Published By Edward M. Joffe of Joffe & Joffe, LLC

Chanel, Inc. brought suit against Zhong Zhibing, a/k/a Zhong Zhiping under the federal trademark laws

for illegally promoting, advertising, selling, offering for sale, and distributing products bearing exact copies of Chanel-registered trademarks in the Western District of Tennessee through various fully interactive commercial internet websites.

After filing suit, Chanel hired several investigators to learn Defendant's name, physical address, electronic mail address, and other identifying information. One investigator purchased a Chanel-branded handbag, which was processed entirely online, which order included shipping and billing information, payment, and confirmation. The only contact information gleaned were several email addresses. Another investigator working in China was able to find the defendant through a telephone number, but never a physical address. As a result of its inability to find the defendant’s physical location, Chanel asked the court for leave to serve by email.

The Court noted that under Fed. R. Civ. Pro. 4(f), a plaintiff was required to use the Hague Convention

for service of process in China. However, the Hague Convention did not apply if a physical address did not exist. Rule 4(f) provides that a party may use an alternative means to affect service if two conditions are met: (1) the party obtains the permission of the court, and (2) an international agreement does not otherwise prohibit the means of service approved. See Fed.R.Civ.P. 4(f)(3)

Here, the court noted that service by e-mail did not appear to violate Chinese law. Article 84 of the Civil

Procedure Law of the People's Republic of China states that “[i]f the whereabouts of a recipient ... is

unknown ... the document shall be served by public announcement.”

Likewise, use of email under the facts of the case met the constitutionally mandated due process equirements of “notice reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.”

Under all of those circumstances, the court allowed service by email.

Practice Pointer: Counsel for Chanel did its due diligence, including using a Chinese investigator, in trying to find a physical address for the defendant and only then asked the court for leave to serve by email. Absent a strong record of these efforts, the court it is unlkely the court would have granted the request.

Collectors and Process Servers Impacted by New Regulations in New York

The New York City Council adopted and published a new set of rules governing Debt Collectors that became effective April 24, 2010.

These new rules were promulgated by the same body that took on Sewer Service in New York that resulted in arguably the strictest regulations on private process servers in the United States.

Normally I would not write about rules effecting the collectors in New York, but these rules among other things place strict requirements on the collectors to maintain records of the activities of the process servers they contract with.

The following are the relevant sections of the new rules in New York City that will have an impact of process servers that work for debt collectors covered by these rules:

(3) A record of all cases filed in court to collect a debt. Such record shall include, for each case filed, the name of the consumer, the identity of the originating creditor, the amount claimed to be due, the civil court index number and the court and county where the case is filed, the date the case was filed, the name of the process server who served process on the consumer, the date, location and method of service of process, the affidavit of service that was filed and the disposition for each case filed. Such record shall be filed in a manner that is searchable or retrievable by the name, address and zip code of the consumer and the creditors who originated the debts that the debt collection agency is seeking to collect.

(4) The original copy of each contract with a process server for the service of process, and copies of all documents involving traverse hearings relating to cases filed by or on behalf of the debt collection agency. Such records should be filed in a manner that is searchable by the name of the process server.

The entire rules can be found at the following link: http://www.nyc.gov/html/dca/downloads/pdf/debt_collection_agency_law_rules.pdf

Electronic Subpoena System to replace cumbersome hand delivery of 100,000 paper subpoenas

Louisville Metro police have signed a $454,000 contract to adopt an Electronic Subpoena System to replace the county's cumbersome system of hand-delivering 100,000 paper subpoenas annually and help make sure officers show up for court.

“Everybody's going to benefit from this,” especially police, said Bruce McMichael of the Louisville Metro Criminal Justice Commission.

Metro Police Lt. Col. Vince Robison, responsible for overseeing court attendance, said the department is “very optimistic this will help us eliminate” the problem of officers missing court.

In recent years, an estimated 10 percent of the approximately 100,000 paper subpoenas issued annually to Louisville police never reached the officers, according to department officials. They and others cite the process as one reason why officers miss court. More on this story can be found here.

For those of you following my Blog you know this is the second major instance where government has deployed this type of solution to deal with the challenges associated with physical paper service of process.

I suspect this is just the beginning of things to come...

New York AG Shuts Down Another Process Serving Agency

The NY state Attorney General’s office has shut down a process server company that repeatedly claimed in legal affidavits that its employees had made proper service of legal documents to thousands of consumers when in fact it had not.


The Attorney General Office entered into a settlement requiring Brockport-based We Serve It For You Process Serving Agency, LLC, operated by Joanne Marie Coy, John Coy, Theresa Buehler, and Wesley Converse, to immediately cease operations and cooperate with ongoing investigations. The business and its owners must also pay fees, costs, and penalties totaling $10,000 and John Coy must surrender his notary public commission.

The AG’s office began investigating We Serve It For You in 2009 as part of an ongoing probe into debt collection lawsuits.

“The toxic business practices of this company impacted individuals across New York State,” said Attorney General Andrew Cuomo. “People need to have trust in the legal system, and that’s why we are banning this company and its owners from serving legal documents to the people of New York.”

The Attorney General’s investigation determined that those documents were regularly signed and mailed to John Coy, who would notarize them without witnessing the signature. From 2007 to 2009, We Serve It For You served approximately 54,000 complaints and maintained a database detailing each service. The Attorney General’s Office and the Unified Court System determined that:

On more than 1,100 occasions, We Serve It For You process servers claimed to have made service or service attempts at two or more places at the same time.

On more than 700 occasions, We Serve It For You process servers claimed to have made service or service attempts before they even received the documents to serve.

On tens of thousands of occasions, John Coy notarized the signatures of We Serve It For You process servers when he did not witness the signatures.

Through the agreement with Attorney General’s Office, We Serve It For You and its operators are permanently barred from having any legal or beneficial interest in any business involving the delivery or service of legal documents. The business will permanently cease all activities and dissolve.

We Serve It For You and its operators are also required to cooperate with the Attorney General’s ongoing investigations into illegal debt collection practices.

The settlement follows recent action against another process server, American Legal Process (ALP), which engaged in a similar fraud and caused more than 100,000 consumers to have costly judgments entered against them without the chance to respond or defend themselves in court. Aside from a civil suit and criminal prosecution against the owner of ALP, Cuomo’s office is seeking to have more than 100,000 default judgments that were caused by the faulty service overturned.

The NY AG Press Release can be found here

NYC cracks down on process servers with new law passed today 3-25-10

Process Servers in New York City have been given notice that a new law is coming that will regulate them at a level that is was unthinkable a year ago. If the Mayor of New York signs the law process servers will be forced to do the following:



• Process servers must pass an exam showing they understand the law


• They also must electronically log their attempts to serve papers, using wireless or GPS, and keep those records in a database for seven years


• The legislation requires independent process servers to file a $10,000 surety bond


• The legislation requires companies to file a $100,000 surety bond


No longer is the process servers affidavit of service good enough in New York. All of this is thanks American Legal Process who allegedly dumped (sewer service) as many as 100,000 summons and complaints.


Business Week story here.

Substituted Service of Process by E-Mail

The Whois Subcommittee of the Internet Committee of the International Trademark Association recently published a report that discusses the problem of Service of Process in cases of fictitiously owned commercial websites.


The report steps through the committees premise that service of process by electronic mail on the e-mail address should be allowed. The committee specifically recommends that Service of Process by electronic mail to the email address provided in the Whois record associated with the domain name for that website shall be effective against the named registrant of a domain if sent to their email address. The committee is recommending that this change in the laws or treaties be enabled without the need for a court order allowing for an alternative manner of service.


In the report the committee cites fifty-six (56) cases of relevance in the analysis of the challenges associated with giving actual notice of an action to a foreign or fictitious defendant who has infringed on another’s trademark.


They go on to cite several Law Review articles and other secondary sources that support their proposal that in certain circumstances Service of Process by email should be allowed. The report is available at the following link: http://bit.ly/963Cwr. The Committee is welcoming comments on the Report at any time, comments should be sent to eservicereport@inta.org.

This committee’s work is yet another example of the ongoing erosion of traditional Service of Process. In my opinion this report accurately and thoroughly points out that traditional means for service of process can be insufficient in circumstances where a defendant is able to hide behind a fictitiously owned website, especially if you take into consideration the modern communication tools available today. There are those within the profession that continue to believe that examples like the one cited above are not a real threat.

If you believe that changes like the one proposed above will stop and do not have the potential to lead to other shifts in the laws and the behaviors of the legal profession you are fooling yourself. Those that argue that electronic service is only allowed after all other methods of service have been exhausted fail to realize that what the rules governing Service of Process allow and what the practices the legal profession employ, sometimes are two totally different things.

If you think the absence of rules formally allowing eService will stop it from happening you are mistaken. I know for a fact that not a day goes by when more and more process is served by means not authorized by codes or statutes including email and other electronic means. That includes Summons, Citations, Subpoenas and other documents that are required to be served personally.

I have come to believe that if the professional process serving profession seeks to maintain a role long-term, it needs to first acknowledge that CHANGE is happening that challenges the professions very existence. The profession also needs to stop being so change-adverse. If the profession comes to the conclusion that it needs to adapt then and only then will it be able to formulate a strategy that enables process servers to retain over the long term the vital role they perform today. That strategy should take into account the cold hard fact that the profession will not stop the march of technological advances that are likely to continue to threaten traditional Service of Process. The strategy should understand and account for the arguments for the change that threatens the profession and in doing so should offer an alternative solution that insures a role for process servers in the increasingly electronic world. And finally, the strategy should look at the big picture and provide for both long and short term goals that seek to insure the profession remains relevant.

The following is an example of what the Notary profession did when it was similarly threatened. Several years ago the National Notary Association (NNA) recognized the threat of eNotarization in their industry. They realized that they needed to be a part of the solution if they if their members were going to retain a role. Approximately four years ago they gathered various notary groups and other interested parties to start a discussion about eNotarization. Today, thanks largely to vision, determination and focus they lead the way forward in eNotarization, keeping their interested parties in business.

The private process serving profession faces similar challenges today. Individual process servers without a strategy for personal and industry development will have a hard time ensuring their long term success.


This challenge is bigger than one association. It requires that all interested parties partner in an effort to create the foundation for a strategy moving forward. Once the foundation is in place, the profession can continue to build and transform the industry to not only keep pace with the legal industry, but also ensure that process servers’ businesses will continue to thrive.
 
If we do not find a way to clarify and define our role in an electronic world, we risk becoming obsolete. We will not become obsolete if we take charge and become the Masters of Our Own Domain. In order for that to happen we need leadership at a state and national level that understands the challenges we face and more importantly is willing do the hard work necessary to protect, promote and preserve the private process serving profession. The status quo is unacceptable.
 
This challenge is not much-a-do about nothing. It is about the future of the profession. As always, I welcome your comments.

New York City Council Seeks to Crack Down on Process Servers Who Lie

Yesterday's New York Times published an article on the topic of Sewer Service. http://www.nytimes.com/2010/02/27/nyregion/27sewer.html


For those that have been following this developing story, you know this is the second effort in recent months by the NYC Council to regulate process servers in NYC. The first effort was unsuccessful primarily because the last session of the council ran out of time to pass the Bill.

This time around in a new session the sponsor has come back with an even stronger effort to further regulate private process servers who operate in the city and who forward process into the city even though they might reside outside the city or even outside the state. The Bill if passed in its current for would require process serving agencies to maintain a $100,000.00 bond and process servers to maintain a $10,000.00 bond.

The Bill also requires process servers to have a GPS device or other so called real-time tracking so that the process server can prove that they were where they claimed to have been at the time of the attempt or service event.

Essentially this means that the process server’s affidavit is no longer good enough! It means that there is no presumption that what the process server is attesting to is factual.

I am told that in order to get a Bond in the amount of $100,000.00, the process serving agency must be credit worthy in at least that amount. I suspect that will eliminate many agencies from being able to comply should this Bill pass.

This bill is a severe over reaction to a problem that came to light when ONE rogue agency was found to have committed sewer service. This bill is an attack on all in the profession and it must be fought and defeated.

The New York Professional Process Servers Association needs your support fighting this measure.

Please consider donating to the effort to fight this measure. You can do so by going to http://www.nysppsa.org/Legislative%20Fund%20form.pdf

The bill can be found here .

Single attempt at notice did not satisfy the Maryland Rules of Civil Procedure.

Case: Rafael Flanagan v. Department of Human Resources, CA No. 64, Sept. Term 2009. Reported. Opinion by Harrell, J. Filed. Feb. 9, 2010.

Issue: Did leaving a show-cause order under the door of defendant’s last known address provide sufficient notice of his court date?

What The Court Held: Maryland’s highest court ruled that the Maryland Department of Human Resources made a mistake when it had a process server slide under the door of the defendants “last known address” an order that he appear in a Baltimore court to explain why he was in arrears in his child support. That single effort to contact the defendant in 1995 was insufficient to notify him of his court date, thus nullifying his admission that he owed back child support.

The opinion means that notice delivered to the defendants last known address happened in this case is sufficient only with a judge’s permission and only after good-faith efforts to notify the defendant have been unsuccessful or if he or she is trying to evade service.

NY Sewer Service. What's next... Ankle Bracelets?

For those of you following the New York Attorney General case against William Singler and American Legal Process and the fall-out that has followed might not be surprised to learn that the New York City council is again attempting to pass a law that would further regulate process servers and process serving agencies.

The first such attempt by the NYC council was defeated by the New York Association of Professional Process Servers and NAPPS.

This time around NYC council is coming back with even harsher requirements. NYC council is seeking to track the movements of process servers by some sort of GPS device that would apparently to insure that process servers were where they claimed to have been as reflected on their affidavit of service.

They are also seeking impose stricter licensing requirements including $100,000.00 bonds for each process serving agency and $10,000.00 bond for each process server. It gets better, they also want to impose penalties and create a civil action against process servers who violate any of the provisions of the new law.

I fully understand that the NYC council is seeking to protect the rights of the citizens of New York. That is part of their job after all. I understand that what happened in NY was a serious problem that needed to be addressed. I am not surprised that the governing bodies in NY are seeking to further regulate process servers. I would only hope that the regulation does not go too far. In my opinion this proposed bill does just that. It is a severe over-reaction to what appears to be an isolated instance of one process serving agency allegedly engaged in criminal wrong-doing.  That one agency is not representative of the practices of an entire profession.

The New York Process Servers Association can use your help in defeating this proposed law click here to donate.

The following is the proposal that is going to be heard next week by the NYC council.

Int. ______

By Council Member Garodnick

A Local Law

To amend the administrative code of the city of New York, in relation to process servers.


Be it enacted by the Council as follows:

Section 1. Section 20-403 of the administrative code of the city of New York is amended to read as follows:

a. Process server license. It shall be unlawful for any person to do business as, be employed as or perform the services of a process server without a license therefor.


b. Process serving agency license. It shall be unlawful for any process serving agency to assign or distribute process to individual process servers for actual service in the city of New York without a license therefore.


§2. Section 20-404 of the administrative code of the city of New York is amended to read as follows:


a. A process server is a person engaged in the business of serving or one who purports to serve or one who serves personally or by substituted service upon any person, corporation, governmental or political subdivision or agency, a summons, subpoena, notice, citation or other process, directing an appearance or response to a legal action, legal proceeding or administrative proceedings.


b. A process serving agency is any person, firm, partnership, association or corporation, other than an attorney or law firm located in this state or deputized city marshal, who maintains an office, bureau or agency, the purpose of which is to assign or distribute process to individual process servers for actual service in the city of New York.


[b.] c. For the purposes of this subchapter the service of five or more process in any one year shall be deemed to constitute doing business as a process server.

§3. Section 20-406 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:


c. Each such applicant for a process server license or renewal thereof shall be required to pass an examination satisfactorily. Such examination shall be under the supervision of the commissioner and shall test the knowledge of the applicant concerning proper service of process within the city of New York and familiarity with relevant laws and rules.


§4. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections, 20-406.1, 20-406.2, 20-406.3 and 20-406.4 to read as follows:


20-406.1 Bond required. a. As a condition of the issuance of a process server license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond executed by the applicant in the sum of ten thousand dollars, payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant's compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition. The commissioner may by rule authorize an individual applicant, in lieu of furnishing a bond, to satisfy the requirements of this section by depositing cash in an amount equal to the amount of the surety bond required by this section.


b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be required to furnish a surety bond pursuant to subdivision (a) of this section.


c. As a condition of the issuance of a process serving agency license, each applicant for such license or a renewal thereof shall furnish to the commissioner a surety bond in the sum of one hundred thousand dollars executed by the applicant payable to the city of New York, and a surety approved by the commissioner. Such bond shall be conditioned upon the applicant's compliance with the provisions of this subchapter and any rules promulgated thereunder, and upon the further condition that the applicant will pay (i) to the city any fine, penalty or other obligation the city imposes relating to a violation of this subchapter and any rules promulgated thereunder, and (ii) to a plaintiff any final judgment recovered in an action arising out of the violation of any of the provisions of this subchapter within thirty days of its imposition. The commissioner may by rule authorize an applicant, in lieu of furnishing a bond, to satisfy the requirements of this section by depositing cash in an amount equal to the amount of the surety bond required by this section.


§20-406.2 Responsibilities of process serving agencies. Every process serving agency licensed under this subchapter shall:


a. Comply with all applicable state and federal laws;


b. be legally responsible for any failure to act in accordance with the laws and rules governing service of process by each process server to whom it has distributed, assigned or delivered process for service;


c. Provide to each process server employed by such agency a written statement indicating the rights of such employee and the obligations of the process serving agency under city, state and federal law. Such statement of rights and obligations shall include, but not be limited to, a general description of employee rights and employer obligations pursuant to laws regarding minimum wage, overtime and hours of work, record keeping, social security payments, unemployment insurance coverage, disability insurance coverage and workers' compensation;


d. Keep on file in its principal place of business for a period of three (3) years a statement for each employee, signed by such employee, indicating that the employee read and understood the statement of rights and obligations such employee received pursuant to subdivision (c) of this section.


§20-406.3 Records, Audits. a. Every process server and process serving agency licensed under this subchapter shall retain records in compliance with section 89-cc of the New York state general business law for no less than seven (7) years of each process served. Such records shall be retained in electronic form. Tampering with any such electronic records shall be prohibited.


b. A process server licensed under this subchapter who engages in the business of serving process exclusively as an employee of a process serving agency licensed under this subchapter shall not be subject to the provisions of subdivision (a) of this section, but shall be required to comply with all other applicable laws.


c. The commissioner may conduct audits of the information required to be kept pursuant to subdivision (a) of this section in order to monitor compliance with this subchapter.


§20-406.4 Educational materials. The commissioner shall develop educational materials to be provided to all process servers and process serving agencies licensed under this subchapter. Such materials shall at a minimum identify the laws and regulations pertaining to service of process in the city of New York.


§ 5. Section 20-408 is REPEALED and a new section 20-408 is added to read as follows:


§20-408 A process server licensed pursuant to this subchapter shall carry and operate at all times during the commission of his or her licensed activities an electronic device that uses a global positioning system, wi-fi device or other such technology as the Commissioner by rule shall prescribe to electronically establish and record the time, date, and location of service. All records created by such electronic device shall be maintained in an electronic database by the process server, or if such process server is acting exclusively as an employee of a process service agency, by the process service agency, for seven (7) years from the date such record is created.


§6. Section 20-409 of the administrative code of the city of New York is amended by adding a new subdivision c to read as follows:


c. Upon application for renewal of a license issued pursuant to this subchapter, applicants subject to subdivision (a) of section 20-406.3 of this subchapter shall certify in writing compliance with the record keeping provisions of such section.


§7. Subchapter 23 of chapter 2 of title 20 of the administrative code of the city of New York is amended by adding new sections 20-409.1 and 20-409.2 to read as follows:


§20-409.1 Violations and penalties. Any person who, after notice and hearing shall be found guilty of violating any provision of this subchapter, shall be punished in accordance with the provisions of chapter one of this title and shall be subject to a penalty of not less than seven hundred dollars nor more than one thousand dollars for each violation.


§20-409.2 Civil Cause of Action. Any person injured by the failure of a process server to act in accordance with the laws and rules governing service of process in New York state, including this subchapter and regulations promulgated thereunder, shall have a cause of action against such process server and process serving agency, which distributed or assigned process for service, in any court of competent jurisdiction for any or all of the following relief:


a. compensatory and punitive damages, provided that punitive damages shall only be awarded in the case of willful failure to serve process;


b. injunctive and declaratory relief;


c. attorneys’ fees and costs; and

d. such other relief as a court may deem appropriate.

§20-409.3 Reporting. Twenty-four months after the local law that added this section becomes effective, the commissioner shall submit a report to the speaker of the council regarding the effectiveness of these provisions on effectuating proper service and improving oversight over the process service industry. Such report shall include, among other things, the results of audits the commissioner has completed of process servers and process serving agencies, including information regarding their compliance with the provisions of this subchapt\er.

8. This local law shall take effect one hundred eighty days after enactment provided, however that the commissioner of consumer affairs shall take all actions necessary for its implementation, including the promulgation of rules, prior to such effective date.