Friday, May 26, 2017

US Supreme Court Says Service By Mail in Canada is Okay

Water Splash Inc. v. Menon, 2017 No. 16-254, Supreme Court of the United States 581 U. S. ___ (2017)


The plaintiff, Water Splash Inc., is a corporation that produces aquatic playground systems.  The defendant, Tara Menon, is a former employee of Water Splash.  In 2013, Water Splash sued Menon in State Court in Texas, alleging that she had begun working for a competitor while still employed by Water Splash. 


Menon resided in Canada.   As a result, Water Splash sought and obtained permission from the Texas court to effect service of its complaint on Menon by mail.  After Menon declined to answer or otherwise enter an appearance, the Texas court issued a default judgment in favour of Water Splash.  Menon moved to set aside the judgment on the ground that she had not been properly served, but the trial court denied her motion. 


Menon appealed, arguing that service by mail does not “comport with the requirements of the Hague Service Convention”.   A majority of the Texas Court of Appeals sided with Menon and held that the Convention prohibited service of process by mail.  One Justice dissented.  The Court of Appeals declined further review and the matter made its way to the US Supreme Court.


In an 8 – 0 decision, the court found in favour of Water Splash and vacated the judgment of the Court of Appeals.  The Supreme Court remanded the case back to the Texas Trial Court for further consideration. 


The court’s reasoning is as follows.


The primary innovation of the Convention is that it requires each state to establish a central authority to receive requests for service of documents from other countries.  When a central authority receives an appropriate request it must serve the documents or arrange for their service and then provide a certificate of service.  However, submitting a request to a central authority is not the only method of service approved by the Convention.  At issue in this case was Article 10 of the convention which reads as follows:


10. Provided the State of destination does not object, the present Convention shall not interfere with

(a) the freedom to send judicial documents by postal channels directly to persons abroad,

(b) the freedom of judicial officers, officials or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination,

(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.


Articles 10(b) and 10(c) address additional methods of service that are permitted by the Convention (unless the receiving state objects).  By contrast, Article 10(a) does not expressly refer to “service”.  The question in this case was whether, despite this difference, Article 10(a) encompassed sending documents for the purposes of service. 


The US Supreme Court found that it did.  The key word in Article 10(a) “send” is a broad term and there is no apparent reason why it would exclude the transmission of documents for the purpose of service.  The Convention’s preamble and Article 1, limit the scope of the Convention to service of documents abroad and its full title includes the phrase “service abroad”.  The US Supreme Court had also previously held that the scope of the Convention is limited to service of documents.  It would therefore be strange if Article 10(a) concerned something other than service of documents.  Indeed such a reading would render Article 10(a) superfluous.  Since Article 1 already eliminated the possibility that the Convention would apply to any communications that do not culminate in service, in order for Article 10(a) to make sense it must pertain to sending documents for the purpose of service.  If the drafters of the Convention wished to limit Article 10(a) to something else, they could have said so as they did in other Articles.


Secondly, the structural considerations of the Convention strongly suggests that Article 10(a) pertains to service of documents.  Reading the word “send” as a broad concept that includes, but is not limited to, service is probably more plausible than interpreting the word to exclude service.  Indeed, the French version of the Convention which is equally authentic uses the word “adresser” which has consistently been understood to mean service or notice. 


Thirdly, extratextual sources are especially helpful in ascertaining Article 10(a)’s meaning.  The Convention’s drafting history strongly suggests that the drafters understood that service by postal channels was permissible.  In the half century since the Convention was adopted, the Executive Branch of the United States has consistently maintained that the Convention allows service by mail.  Also, other signatories to the Convention have adopted Water Splash’s view.


Fourthly, the fact that Article 10(a) encompasses service by mail does not mean that it affirmatively authorizes such service.  Rather, service by mail is permissible if the receiving state has not objected to service by mail and if such service is authorized under otherwise applicable law.  Because the Texas Court of Appeals concluded that the Convention prohibited service by mail, it did not consider whether Texas law authorized the method of service used by Water Splash.  The US Supreme Court remanded that issue and any other remaining issues back to the trial court in Texas for consideration.




No comments:

Post a Comment