Opinion
Civil Action No.: 18-10106
2019-10-25
Len GAMBOA, et al., Plaintiffs, v. FORD MOTOR COMPANY, et al., Defendants.
Caroline F. Bartlett, James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody and Agnello, Roseland, NJ, Christopher A. Seeger, Seeger Weiss LLP, Ridgefield Park, NJ, David Stellings, Katherine Irene McBride, Lieff Cabraser Heimann & Bernstein, Jennifer R. Scullion, Seeger Weiss LLP, New York, NY, Dennis A. Lienhardt, Butzel Long, a professional corporation, Bloomfield Hills, MI, E. Powell Miller, Emily E. Hughes, Melvin B. Hollowell, Sharon S. Almonrode, William Kalas, The Miller Law Firm, P.C., Rochester, MI, Phong-Chau Nguyen, Wilson McClelland Dunlavey, Lieff Cabraser Heimann and Bernstein, San Francisco, CA, Scott A. George, Seeger Weiss LLP, Philadelphia, PA, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiffs. Jeffrey M. Yeatmann, Joel A. Dewey, DLA Piper LLP, Baltimore, MD, Patrick G. Seyferth, Stephanie A. Douglas, Susan M. McKeever, Bush Seyferth PLLC, Troy, MI, Matthew D. Slater, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, Carmine D. Boccuzzi, Jr., Polina Bensman, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, Jonathan E. Lauderbach, Warner Norcross & Judd, LLP, Midland, MI, Michael G. Brady, William R. Jansen, Warner, Norcross, Southfield, MI, for Defendants.
Caroline F. Bartlett, James E. Cecchi, Carella, Byrne, Cecchi, Olstein, Brody and Agnello, Roseland, NJ, Christopher A. Seeger, Seeger Weiss LLP, Ridgefield Park, NJ, David Stellings, Katherine Irene McBride, Lieff Cabraser Heimann & Bernstein, Jennifer R. Scullion, Seeger Weiss LLP, New York, NY, Dennis A. Lienhardt, Butzel Long, a professional corporation, Bloomfield Hills, MI, E. Powell Miller, Emily E. Hughes, Melvin B. Hollowell, Sharon S. Almonrode, William Kalas, The Miller Law Firm, P.C., Rochester, MI, Phong-Chau Nguyen, Wilson McClelland Dunlavey, Lieff Cabraser Heimann and Bernstein, San Francisco, CA, Scott A. George, Seeger Weiss LLP, Philadelphia, PA, Steve W. Berman, Hagens Berman Sobol Shapiro LLP, Seattle, WA, for Plaintiffs.
Jeffrey M. Yeatmann, Joel A. Dewey, DLA Piper LLP, Baltimore, MD, Patrick G. Seyferth, Stephanie A. Douglas, Susan M. McKeever, Bush Seyferth PLLC, Troy, MI, Matthew D. Slater, Cleary Gottlieb Steen & Hamilton LLP, Washington, DC, Carmine D. Boccuzzi, Jr., Polina Bensman, Cleary Gottlieb Steen & Hamilton LLP, New York, NY, Jonathan E. Lauderbach, Warner Norcross & Judd, LLP, Midland, MI, Michael G. Brady, William R. Jansen, Warner, Norcross, Southfield, MI, for Defendants.
OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR ORDER AUTHORIZING SERVICE ON DEFENDANT ROBERT BOSCH GMBH [ECF NO. 100]
ELIZABETH A. STAFFORD, United States Magistrate Judge
I. Introduction
Plaintiffs are individuals from several states who, on behalf of themselves and a putative class, sue Defendants Ford Motor Company, Robert Bosch GmbH and Robert Bosch LLC. [ECF No. 73]. Plaintiffs allege that defendants employed "defeat devices" to distort emissions testing on Ford's diesel trucks, so that "Ford's top selling Super Duty vehicles often emit far more pollution on the road than in the emissions-certification testing environment." [Id. , PageID.2436]. According to plaintiffs, Ford's trucks emit pollutants at levels that exceed both its customer's reasonable expectations and the maximum standards of the Environmental Protection Agency. [Id. , PageID.2434-2436]. Plaintiffs allege that Ford installed the defeat devices with the help of Robert Bosch GmbH and Robert Bosch LLC. [Id. , PageID2437].
Robert Bosch GmbH is a German company. [ECF No. 73-3, PageID.2973, 2980; ECF No. 73-5, PageID.3162]. Robert Bosch LLC, a U.S. company, is one of Robert Bosch GmbH's roughly 300 subsidiaries worldwide. [Id. ] Robert Bosch GmbH and its subsidiaries are called "The Bosch Group," and that group describes itself as "a leading global supplier of technology and services." [ECF No. 73-5, PageID.3162].
Plaintiffs' initial complaint was filed in January 2018, and an attorney from the law firm of Cleary Gottlieb Steen & Hamilton LLP entered an appearance for Robert Bosch LLC later than month. [ECF No. 1; ECF No. 16]. Robert Bosch GmbH has not yet been served with the complaint. In August 2019, plaintiffs moved to authorize service on Robert Bosch GmbH by hand delivery to Cleary Gottlieb in the United States and by email to kontakt@bosch.de. [ECF No. 100]. Plaintiffs alternatively request and order giving them 90 days to attempt service under the Hague Service Convention. [Id. ]. Cleary Gottlieb objects to plaintiffs' motion. [ECF No. 110].
The Honorable Denise Page Hood referred the motion to the undersigned for hearing and determination under 28 U.S.C. § 636(b)(1)(A). [ECF No. 101].
For the reasons below, the Court grants plaintiffs' motion to serve Robert Bosch GmbH by email, and with a courtesy copy being served on Cleary Gottlieb.
II. Analysis
A.
Federal Rule of Civil Procedure 4(h)(2) allows service on a foreign corporation in the manner prescribed by Rule 4(f). Relevant here, under Rule 4(f) a foreign corporation may be served:
(1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents;
...
(3) by other means not prohibited by international agreement, as the court orders.
Rule 4(f) (emphasis added).
The United States and Germany are both signatories to the Hague Convention, which applies to the service of civil judicial documents abroad. In re Mercedes-Benz Emissions Litig. , No. CV16881SDWJAD, 2019 WL 2913309, at *2 (D.N.J. July 2, 2019). Even so, plaintiffs have not tried to serve Robert Bosch GmbH under the Hague Convention, and are instead seeking to serve the company with the complaint under Rule 4(f)(3). Plaintiffs reason that German authorities have refused to serve under the Hague Convention complaints subject to split-recovery statutes, meaning that a percentage of punitive damages must go to the state. In re Mercedes-Benz Emissions Litig. , 2019 WL 2913309, at *3 & n. 3 ; Elfaridi v. Mercedes-Benz USA, LLC , No. 4:16 CV 1896 CDP, 2018 WL 4071155, at *13 (E.D. Mo. Aug. 27, 2018) ; In re Takata Airbag Prod. Liab. Litig. , No. 15-02599-MD, 2017 WL 8809362, at *2 (S.D. Fla. Mar. 24, 2017), adopted , No. 14-24009-CV, 2017 WL 8809106 (S.D. Fla. Apr. 27, 2017).
Objecting to service in the manner requested by plaintiffs, Cleary Gottlieb argues that plaintiffs have taken too long to try to serve Robert Bosch GmbH; that plaintiffs must attempt to serve Robert Bosch GmbH under the Hague Convention, as allowed by Rule 4(f)(1), before seeking service under Rule 4(f)(3) ; and that the alternative service plaintiffs propose is impermissible. The Court rejects Cleary Gottlieb's objections.
B.
1. Circuit Court authority states that service under Rule 4(f)(3) need not be the last resort.
The Court will first address whether plaintiffs must attempt Rule 4(f)(1) service through the Hague Convention before seeking alternative service under Rule 4(f)(3). Circuit courts having weighed in on the issue rejected the contention that Rule 4(f)(1) service is favored over Rule 4(f)(3) alternative service. Rio Properties, Inc. v. Rio Int'l Interlink , 284 F.3d 1007, 1015 (9th Cir. 2002) ("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) )."; Nuance Commc'ns, Inc. v. Abbyy Software House , 626 F.3d 1222, 1239 (Fed. Cir. 2010) (agreeing that Rule 4(f)(3) is on equal footing with the other means of service allowed under Rule 4(f) ); Nagravision SA v. Gotech Int'l Tech. Ltd. , 882 F.3d 494, 498 (5th Cir.), cert. denied , ––– U.S. ––––, 139 S. Ct. 480, 202 L.Ed.2d 376 (2018) (rejecting argument that service under Rule 4(f)(3) was invalid because it did not comply with the Hague Convention, as that "agreement does not displace Rule 4(f)(3)").
The Hague Service Convention "requires each state to establish a central authority to receive requests for service of documents from other countries." Water Splash, Inc. v. Menon , ––– U.S. ––––, 137 S. Ct. 1504, 1508, 197 L.Ed.2d 826 (2017) (internal citation and quotation marks omitted).
"The Sixth Circuit has not addressed whether there is a hierarchy or preference among Rule 4(f)'s methods of service." Slay v. IB Travelin, Inc. , No. 2:18-CV-02728, 2019 WL 572877, at *2 (W.D. Tenn. Feb. 12, 2019). But in a published decision, a district court within the Sixth Circuit agreed that " Rule 4(f)(3) is neither a last resort nor extraordinary relief. It is merely one means among several which enables service of process on an international defendant." Lexmark Int'l, Inc. v. Ink Techs. Printer Supplies, LLC , 291 F.R.D. 172, 174 (S.D. Ohio 2013) (internal citation and quotation marks omitted).
2. Cleary Gottlieb relies on unpublished and distinguishable cases.
Cleary Gottlieb argued in its brief that a "long line of precedent makes clear" that plaintiffs must try to serve Robert Bosch GmbH under the Hague Convention before seeking an order for alternative service under Rule 4(f)(3). [ECF No. 110, PageID.5153]. But, at the hearing, counsel for Cleary Gottlieb could cite no precedent that binds this Court. [ECF No. 126, PageID.5537]. It instead relies on unpublished district court opinions that are distinguishable from this case.
Cleary Gottlieb cites Plastic Molded Technologies, Inc. v. Bayerische Motoren Werke Aktiengesellchaft , as concluding that "Plaintiff's attempts at perfecting service outside of the parameters of the Hague Convention are deficient." No. 08-CV-14276, 2009 WL 10680593, at *2-3 (E.D. Mich. May 19, 2009) (Hood, J.). But there is no mention in that opinion of the plaintiff attempting service under Rule 4(f)(3) and Judge Hood did not address whether service under that subsection would have been proper.
Another opinion cited by Cleary Gottlieb said that " Rule 4(f)'s preferred method of service is service pursuant to an internationally agreed means, such as those authorized by the Hague Convention." Glob. Lift Corp. v. Hiwin Corp. , No. 14-CV-12200, 2014 WL 4536743, at *2 (E.D. Mich. Sept. 11, 2014) (Ludington, J.). This statement was dictum because the foreign country at issue, Taiwan, "is not a party to the Hague Convention or any other relevant international agreement," so Rule 4(f)(1) did not apply. Id.
Cleary Gottlieb also cites In re Auto. Parts Antitrust Litig . as holding, "For members of the Hague Convention, the primary means of service is through a receiving country's ‘central authority,’ which receives requests for service, arranges for service, and returns proofs of service." No. 12-MD-02311, 2017 WL 10808851, at *2 (E.D. Mich. Nov. 2, 2017) (Battani, J.) Judge Battani relied on authority stating that the Hague Convention "is mandatory in all cases to which it applies ." Id. (citing Volkswagenwerk Aktiengesellschaft v. Schlunk , 486 U.S. 694, 698-99, 108 S.Ct. 2104, 100 L.Ed.2d 722 (1988) (emphasis added). Cleary Gottlieb's reliance on In re Auto. Parts Antitrust Litig. is misplaced because, as noted, German authorities have taken the position that the Convention does not require it to serve split-recovery complaints.
Plaintiffs thus argue that trying to serve Robert Bosch GmbH through the Hague Convention would be futile. Because of this futility, service under Rule 4(f)(3) would be proper here even if serving under the Convention were otherwise preferred.
[E]ven if Rule 4(f) does not establish a preferred method of service among its options, many courts do require, as a factor in weighing whether to exercise its discretion and allow substituted service, a showing that reasonable efforts to serve the defendant have already been made, and that the Court's intervention will avoid further burdensome or futile attempts at service.
See Phoenix Process Equip. Co. v. Capital Equip. & Trading Corp. , 250 F. Supp. 3d 296, 306-07 (W.D. Ky. 2017) (internal citation and quotation marks omitted); see also In re Mercedes-Benz Emissions Litig. , 2019 WL 2913309 at *3 ("[W]here Convention service is impossible or impractical, or where Convention service is attempted but unsuccessful despite a plaintiff's good faith efforts to effect service, courts will allow alternative service pursuant to Rule 4(f)(3).").
In Phoenix Process Equip. Co. , the court was satisfied that service in Russia through the Hague Convention would be futile, reasoning in part that prior cases had noted Russia's refusal to serve process through its Central Authority. 250 F. Supp. 3d 296, 306-07. "[W]hen futility is almost certain to result, exercising no effort towards that end and seeking a different path is often the most reasonable course of action." Id.
At the hearing, Cleary Gottlieb conceded that the plaintiffs' amended complaint is subject to split-recovery statutes, and Cleary Gottlieb could cite no instances in which Germany agreed to serve split-recovery complaints. [ECF No. 126, PageID.5527]. And though Cleary Gottlieb argued that the German courts' view about split-recovery complaints could be challenged under German law, it provided no legal analysis. [Id. , PageID.5528-5529]. The Court is unconvinced that Cleary Gottlieb's understanding of German law is superior to the German courts that have refused service of complaints under split-recovery statutes.
Plaintiffs asserted, and Cleary Gottlieb did not deny, that it would cost up to $30,000 to seek service under the Hague Convention, mostly because of the cost of translating the long complaint into German. [ECF No. 126, PageID.5526]. As for timing, both parties agreed that plaintiffs' efforts to serve through the Hague Convention would take a couple of months. [Id. , PageID.5533]. Cleary Gottlieb's unsupported assertion that plaintiffs could challenge Germany's refusal to serve split-recovery complaints does not justify those costs and the delay.
C.
The Court will next address Cleary Gottlieb's argument that plaintiffs have waited too long to try to serve Robert Bosch GmbH. In a footnote, Cleary Gottlieb argued that the Court has discretion to dismiss Robert Bosch GmbH as a named defendant. [ECF No. 110, PageID.5153]. This argument is unavailing because Rule 4 includes no deadline for serving a foreign corporation and the precedent does not indicate that timeliness is a factor under Rule 4(f)(3).
1. Rule 4 includes no deadline for serving a foreign corporation and courts have not placed hard time-limits on such service.
Ordinarily, defendants must be served within 90 days after the complaint was filed, but that deadline "does not apply to service in a foreign country under Rule 4(f)." Rule 4(m). Without guidance from the text of Rule 4, "there is a considerable difference of opinion among circuits regarding what—if any—time limits apply to service of process on a foreign defendant." Harris v. Orange S.A. , 636 F. App'x 476, 485 (11th Cir. 2015). The Ninth Circuit rejected a challenge to the timeliness of service in a foreign country because Rule 4 includes no deadline. "Whether or not the Rules of Civil Procedure should be amended to deal more adequately with the question of service in foreign countries is not for us to decide." Lucas v. Natoli , 936 F.2d 432, 433 (9th Cir. 1991).
The Sixth Circuit has provided no guidance on a trial court's discretion to dismiss a complaint against a foreign defendant for lack of service.
Most circuits having addressed the issue have held that "a plaintiff's complaint may be dismissed upon a showing that she failed to exercise diligence in attempting to effectuate service on a foreign defendant." Harris , 636 F. App'x at 485-86. Applying this "flexible due-diligence standard," the Fifth Circuit found that a district court may dismiss without prejudice a complaint against a foreign defendant when the plaintiff "has not demonstrated reasonable diligence in attempting service." Lozano v. Bosdet , 693 F.3d 485, 486-89 (5th Cir. 2012).
None of this precedent is relevant to the issue before this Court.
2. Cleary Gottlieb's timeliness argument has no bearing on whether service is proper under Rule 4(f)(3) or any issue before this Court .
Cleary Gottlieb's timeliness argument is misplaced because none of the cited precedent addressed timeliness as a factor for deciding when service is permissible under Rule 4(f)(3). Harris , 636 F. App'x at 485-86 ; Lucas , 936 F.2d at 433 ; Lozano , 693 F.3d at 486-89. Harris and Lucas never mentioned Rule 4(f), and though Lozano referred to Rule 4(f)(3), the issue before the court was whether the district court abused its discretion when dismissing a complaint because of alleged lack of reasonable diligence in serving the complaint. Id.
The issue before this Court is not whether Judge Hood should dismiss Robert Bosch GmbH without prejudice because plaintiffs have not shown reasonable diligence in serving it with the complaint. First, Judge Hood did not refer this matter for a report and recommendation on that dispositive issue. [ECF No. 101]. Second, Cleary Gottlieb did not properly raise whether dismissal is warranted when making that argument in response to plaintiffs' motion. A local rule states that "a response or reply to a motion must not be combined with a countermotion," E.D. Mich. Elec. Filing Policies and Procedures, R5(f), so a motion to dismiss must be made in a separate motion. Finally, Cleary Gottlieb notes that it does not yet represent Robert Bosch GmbH here [ECF No. 126, PageID.5529], so its filing cannot be considered a motion to dismiss on behalf of Robert Bosch GmbH.
For these reasons, the Court finds Cleary Gottlieb's timeliness argument to be inapposite to the questions before this Court. The relevant inquiries are whether the proposed methods of service comport with due process and are not prohibited by an international agreement.
D.
As noted, Rule 4(f)(3) explicitly allows alternative means of service that are "not prohibited by international agreement." And when seeking alternative service under Rule 4(f)(3), "the chosen method must comport with constitutional notions of due process, namely that the service of process be reasonably calculated, under all the circumstances, to apprize interested parties of the pendency of the action and afford them an opportunity to present their objections." Lexmark Int'l, Inc., 291 F.R.D. at 174 (internal citation and quotation marks omitted); see also Slay v. IB Travelin, Inc. , 2019 WL 3804250 at *2 (W.D.Tenn. 2019). The means of service proposed by plaintiffs are hand delivery to Cleary Gottlieb and email to Robert Bosch GmbH in Germany.
1. Service by email does not violate the Hague Convention.
Cleary Gottlieb argues that email service would violate an international agreement because Germany objects to Article 10(a) of the Hague Convention, which allows service by postal channels. [ECF No. 110, PageID.5162]. But "[v]arious courts have agreed that service by email is not prohibited by the Hague Convention," even when "as here, the country objects to Article 10 of the Hague Convention." Lexmark Int'l, Inc. , 291 F.R.D. at 175 (collecting cases). Courts have construed a country's objection to Article 10 as applying only to the means enumerated in that article. Fed. Trade Comm'n v. Repair All PC, LLC , No. 1:17 CV 869, 2017 WL 2362946, at *4 (N.D. Ohio May 31, 2017). Email is not listed as a means of service under Article 10. Id. The Lexmark Int'l, Inc. court thus approved service to a German company by email. Lexmark Int'l, Inc., 291 F.R.D. at 175.
2. Cleary Gottlieb lacks standing to object to service by email.
Cleary Gottlieb admits that it has an attorney-client relationship with Robert Bosch GmbH, but said that it does not represent Robert Bosch GmbH in this case. [ECF No. 126, PageID.5529-5530]. At the hearing, the Court noted that unusual posture of Cleary Gottlieb's response to plaintiffs' motion to allow alternative service, given that it does not yet represent Robert Bosch GmbH here. [Id. , PageID.5531]. Cleary Gottlieb explained that it objects to being treated as an involuntary agent for Robert Bosch GmbH for service of process. [Id. , PageID.5531,5533]. But the Court pointed out that Cleary Gottlieb also objected to Robert Bosch GmbH being served by email. [Id. , PageID.5531].
Recently, another district court granted an application for alternative service on Robert Bosch GmbH, permitting the plaintiffs to serve Cleary Gottlieb. In re Mercedes-Benz Emissions Litig. , 2019 WL 2913309 at *1-4. The Court takes no position on the propriety of that decision. But after considering Cleary Gottlieb's concern about becoming an involuntary agent for Robert Bosch GmbH, the Court will instead allow plaintiffs to serve Robert Bosch GmbH by email, and to serve Cleary Gottlieb with a courtesy copy.
3. Service by email on Robert Bosch GmbH comports with due process.
When finding that by email comported with due process in Lexmark Int'l, Inc. , the court relied on evidence that the foreign company's websites listed the email address at issue. 291 F.R.D. at 175. Here, plaintiffs note that Robert Bosch GmbH's website identifies its email address as kontakt@bosch.de, the email through which plaintiffs move to serve Robert Bosch GmbH. The website shows:
https://www.bosch.com/corporate-information/?prevent-auto-open-privacy-settings=1 (last visited on October 25, 2019). Plaintiffs cite this link at ECF No. 100, PageID.4732.
Your contact at Bosch
kontakt@bosch.de
+49 711 400 40990
The Court finds that service through Robert Bosch GmbH's listed email address is reasonably calculated to "apprize interested parties of the pendency of the action and afford them an opportunity to present their objections." Lexmark Int'l, Inc., 291 F.R.D. at 174. Serving Robert Bosch GmbH through the listed email comports with due process. Id.
E.
In granting plaintiffs' motion for alternative service, the Court also relies on its obligation to best "secure the just, speedy, and inexpensive determination" of the action. Fed. R. Civ. 1. Cleary Gottlieb asserts that plaintiffs' attempt to serve Robert Bosch GmbH now would prejudice the parties and the "Court's orderly adjudication of the case." [ECF No. 110, PageID.5156]. But the parties are in the early stages of discovery and plaintiffs say that Robert Bosch LLC has asserted that much of the relevant discovery is in the possession, custody and control of Robert Bosch GmbH. [ECF No. 126, PageID.5520-5521]. Allowing plaintiffs to serve Robert Bosch GmbH as soon as possible will facilitate the Court's orderly adjudication of the case and prevent prejudicial delay to the parties.
III. Conclusion
The Court GRANTS plaintiffs' motion for order authorizing service on Robert Bosch GmbH [ECF No. 100] . Plaintiffs may serve Robert Bosch GmbH through email address kontakt@bosch.de by November 8, 2019 .