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PROPER LAWSUIT NOTIFICATION IN THE US AND THE UK IN THE ERA OF SANCTIONS
The problem of proper notification of a foreign defendant is one of the most complex and urgent problems of international civil procedure. In the framework of this study, we will not separate the categories of proper and timely notification, but will study proper notification as a broader concept, including timely notification.
Keywords
Court notices, notification of the defendant, international civil procedure,
proper lawsuit notification
AUTHOR
Yana S. Butakova,
Head of the International Risks Department JSC "URALCHEM" 6/2, Presnenskaya Embankment, Moscow, 123112, Russia [email protected]
1. Introduction
The complexity of the problem under study comes out of the conflict of jurisdictions - a situation when several legal systems simultaneously claim to regulate relations related to the notification of a foreign defendant (Baumgartner, The Proposed Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial
Cases: Transatlantic Lawmaking for Transnational Litigation. Tubingen, 2003). In such a situation, the court and the parties face a conflict of jurisdictions between the legislation of the court's country and the legislation of the respondent's country of origin. The urgency of the problem is caused, among other things, by unprecedented sanctions against Russia, which have caused difficulties in communication between the authorities of different countries, the rupture of logistics (courier) chains and the mass culture of "cancellation of Russia", which may lead to a violation of the right of the parties to participate in the trial, and at the same time to have an impartial court. As a part of our research, we will consider the general procedure of notifying parties about the process in the United States and the United Kingdom, and also focus on the emerging practice of such notifications in relations to the Russian government during the period of sanctions and "unfriendliness".
2. Methodological Framework
The methodology of this study consists of theoretical methods, in particular with the analysis of the regulatory framework of the United Kingdom and the United States, as well as with theoretical studies written by a number of English, American and Russian authors. The purpose of this article is to study the specifics of notifying a foreign defendant in the United States and United Kingdom of a lawsuit in the era of sanctions. The relevance of the topic of this study is due to its novelty and poor elaboration in the environment of Russian and European scientific research. As a result the author comes to the conclusion that it is necessary to form clear criteria for the proper notification of a foreign defendant of a lawsuit and to expand the admissibility of using alternative notification methods.
3. Discussions
3.1. Introductory part: legal regulation of the issue
The participation of Russian citizens in lawsuits in the UK and the US is not uncommon. And it doesn't always concern family and marriage relations, but also trade in general.
For example, under authority of the English Law on Marital Relations (Matrimonial Causes Act 1973), a spouse who has a proven connection with the UK (for example, if he has lived there for more than a year, including previous visits to the country) can apply to an English court with a property claim against his spouse or ex-spouse, including the case, when the marriage has already been dissolved outside the UK. The court may make a decision to divide the property, awarding the plaintiff a part of the property of the spouses, monetary payments - including the situation when the courts outside the UK (for example, in Russia) have already resolved the issue of the division of property. The amount of judgement awarded is determined by the court on the basis of the "reasonable needs" of the spouse. The statute of limitations does not apply to such cases.
Let's give another example. By virtue of the New York State Code of Civil Procedure of 1846), state courts have the right to consider disputes with a person residing outside of it, if the criterion of close connection of the disputed legal relationship with the territory (minimum contacts) is satisfied. With regard to family disputes, by virtue of section 302 (b) of the Code, this requirement is fixed as a requirement that the plaintiff has domicile in the state of New York, as well as that the spouses have permanently resided together in this state (Had Marital Domicile) before the termination of the actual family relationship. At the same time, the question of the duration of cohabitation for the presence of a close connection is considered differently. In particular, in Levy v. Levy, 185 A.D.2d 15 (N.Y. App. Div. 1993) this concept was interpreted broadly, covering the situation when the parties lived together in the state of New York for some time in the past, even if they later moved out of it.
At the same time, family and civil relations present only one of the branches within which a foreign jurisdiction may be present. At the moment, there is a certain amount of trade and financial relations between these countries and foreign jurisdictions, as well as in Russia.
3.2. Features of the legal regulation of the issue in the USA
Separately, we will focus on the issue of regulating the procedure for notifying a party of a lawsuit in the United States.
The legal system of the country in question has a complex structure in which state laws may contradict each other, and federal legislation gives a certain amount of discretion. In the procedural legislation of individual US states, it is established that notification of a foreign defendant located outside the United States is carried out by transmitting a notification to the Secretary of State (Secretary of State), who then must transmit it (most often by mail) to the defendant. At the same time, the notification period is counted not from the date of actual receipt of the notification, but from the moment of its transfer to the Secretary of State. This rule is enshrined in the Code of Civil Practice and Remedies of Texas 2017 (Civil Practice and Remedies Code). As an example, we can cite the case of the District Court of Texas (Blue Spike LLC v. Biolink Solutions LTD), the subject of which was the alleged violation by the Russian company Biolink Solutions of the rights of Texas Blue Spike (an American company) by means of individualization. At the same time, the notification of the Russian defendant was carried out precisely by sending a notification to the Secretary of State. At the same time, the American court did not take it into account and took into account the provisions of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases of 15.11.1965, and also did not take into account the absence of any direct or indirect connection between the Russian defendant and the territory of Texas.
According to the established American judicial practice, the main criterion for the proper notification of a foreign defendant is the compliance of the notification with the procedural legislation of the country of dispute resolution. At the same time, noncompliance with the law of the country of the place of notification (its violation) is not a sufficient reason for terminating further consideration of the dispute and making a decision against a foreign defendant in his absence (Bishop, Service of Process and Discovery in International Tort Litigation // Tort & Insurance Law Journal. 1987. Vol. 23. N 1. P. 70 - 146).
This conclusion is supported by the precedent of the New York State Court in the case of Morgenthau v. Avion Resources Ltd. (Morgenthau v. Avion Resources Ltd.), in which the defendant (Avion Resources Ltd.), residing in Brazil, was notified by registered mail, despite the fact that according to the procedural legislation of Brazil, notification of the defendants of a legal dispute located on its territory is allowed only by delivery of notification through diplomatic channels. The New York State Court of Appeals recognized such notification as a registered letter - the proper way to notify the party. The Court pointed out that the plaintiff lawfully and reasonably chose the method of notification provided for by the legislation of the state of New York, that is why a possible violation of the procedural legislation of the country of notification (Brazil) has no legal force.
Note that Article II of the US Federal Rules of Evidence of 1975 (Federal Rules of Evidence, "FRE") consists of a single rule - Rule 201. FRE 201 covers judicial notification of judicial acts that concern the parties to the trial, but not of legislative facts that are of a general nature.
FRE 201 (c) notes that a court notice may be permissive or mandatory. According to the wording of the rule, a court notice is permissive if the court accepts such a notice independently, and mandatory if it is requested by a party and the necessary information is provided to the court.
When determining the procedure for notifying a foreign party, the courts take into account federal public laws and treaties, state public laws and official regulations of both federal and local authorities.
FRE 201 (f) establishes that the effect of judicial notification of the court differs in civil and criminal proceedings. In a civil court, the fact in question may be considered definitively proven, the party may apply for improper notification without the procedure of initiating a separate meeting in this regard. In a criminal case, the defendant has the right to challenge every fact within the framework of one process or several processes (i.e., to take the fact of improper notification out of the main process), which may indicate his incrimination, including judicial notification. Separately, we note that issues of foreign law are subject to permissive judicial notification
An interesting practice has been emerging over the last decade, according to which the parties and the court can use forms of alternative notification. Facebook, Instagram, for example. So, in one of the cases, the plaintiff found the defendant's accounts in the specified social networks and found out the email address in them. The plaintiff only believed that they belonged to the defendant, but the plaintiff could not provide the court with indisputable confirmation of this. For this reason, the plaintiff asked to recognize as appropriate the notification of the second party, made simultaneously at her last known place of residence, and by e-mail and via Facebook. Separately, we note that issues of foreign law are subject to permissive judicial notification.
Another decision that received wide coverage in the foreign press was issued by the U.S. District Court for the Eastern District of New York, USA, in the case of Ferraresev Shaw (No. 1:15-cv-03738, 2016 (E.D.N.Y. Jan. 19, 2016). The case received such publicity in connection with the plaintiff's notification of the defendant of the claim via Facebook.
The case dealt with a family dispute concerning the residence of a minor child with another parent, after a short stay with a parent with whom, according to a previously issued court decision, this child should live.
The plaintiff, who was obliged to notify the defendant, could not do it in person or by mail due to the fact that she systematically changed both her residential address and her name. Her sister lived at the last known place of residence of the defendant, who refused both to accept the documents for transfer to the defendant and to inform her of her current place of residence.
Considering the case, the court noted that under the New York State Code of Civil Procedure of 1846 § 308(5), the court, if notification in the usual way is practically impossible, may instruct to notify the party in another way at its discretion, if such a method reasonably takes into account the interests of all parties and allows for compliance with constitutional law for consideration the dispute within the framework of due process of law ("dueprocess").
The Court referred to court precedents in which notification by e-mail was allowed if the message "with a certain degree of probability" ("likely") reaches the defendant (D.R.I. Inc. v. Dennis, No. 03 CV 10026, 2004 WL 1237511), and notification via Facebook, on the contrary, is allowed only as an auxiliary notification method (F.T.C. v. PC Care 247 Inc., 2013 WL 841037).
Note that no substantial evidence has been provided that the e-mail address data and the Facebook account belong to the defendant, the court nevertheless allowed them to be used as additional notification methods, along with notification by mail at the defendant's last known place of residence.
Despite the fact that the main thing in this case was the notification at the last known address of residence, the court recognized an alternative version of the notification as possible. Thus, the use of social networks as auxiliary notification methods is also not something new.
Nevertheless, this case is interesting because the court was quite loyal to the plaintiff's claims that the email address and Facebook account belong to the defendant. These conclusions were made by the plaintiff based on the similarity of the address and account with the name of the defendant and the fact that he recognized her in the account photo. The defendant herself did not confirm that these data relate specifically to her (unlike in the case of Maughan v Wilmot, where the defendant indicated his email address in the application). In a situation where the court already knew that the defendant did not live at her last place of residence, the judicial act issued could well lead to the fact that none of the notification methods could achieve the goal of actually notifying the defendant. Perhaps this approach of the court was due, among other things, to the procedural abuse of the defendant herself, who actively evaded receiving notification of the process by repeatedly changing her place of residence and name.
3.3. Features of the legal regulation of the issue in the UK
According to English law, the lex fori principle and the possibility of notifying a foreign defendant in any way not prohibited by the legislation of the defendant's country of residence are applied.
Although the lex fori principle, according to which notification of a foreign defendant is carried out only in the manner provided for by the legislation of the country of the court, prevails in the legislation of most States, the latest codifications in the field of international civil procedure contain certain deviations from this principle. Article 6.40 of the Rules of Civil Procedure of England and Wales 1998 establishes that notification of a foreign defendant can be carried out not only in the manner provided for by an international treaty /using diplomatic channels/ by means of a court order, but also in any way not prohibited by the legislation of the country of notification. At the same time, the party carrying out the notification is not granted the right to violate the legislation of the country of the notification. Thus, the law of England provides for the possibility of alternative notification of the party about the trial.
The consolidation in the Rules of Civil Procedure of England and Wales 1998 of the right of a party to notify a foreign defendant in any way not prohibited by the procedural legislation of the country of the court has two purposes:
1) it is better to protect the interests of the plaintiff by giving him the right to notify the foreign defendant in the most effective way not prohibited by the legislation of the country of notification, thereby ensuring procedural savings;
2) to increase the enforceability of English judicial acts by eliminating the possibility of refusal to recognize them due to improper notification.
Separately, it is worth paying attention to alternative notification methods. The decision of the Family Affairs Board of the High Court of Justice (High Courtof Justice, Family Division) in the case of Maughan (Wilmot), issued back in December 2015, but published relatively recently, attracted the attention of commentators to allowing the notification of the party by e-mail.
The applicant, the defendant in the family dispute, filed an application for the cancellation of a previously issued court order for the payment of alimony due to the fact that he was notified only by e-mail. At the same time, the defendant himself had previously filed applications to the court by e-mail, and subsequently the defendant asked not to use the only postal address specified by him (law firm) for correspondence. The Court found out that the defendant, a British citizen, works as a civil aviation pilot and is constantly on the move. He owned and used residential premises in the UK and on the Isle of Man, but visited these places only occasionally. His place of work was the airline's address in Turkey, but in fact the defendant was not there. The defendant tried to appeal the court's decision on appeal, but the right to appeal was denied to him. When attempting
to appeal, the defendant did not refer to the improper notification. He referred to the fact that the Family Procedure Rules 2011 (Family Procedure Rules), are in contrast to the Rules of Civil Procedure of England and Wales 1998. They do not explicitly provide for the possibility of notifying a person located out of the UK by "alternative means" at the discretion of the court. Instead, according to the respondent, the notification procedure provided for by The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases of 15.11.1965 should be applied.
The Court assessed the norms of the Family Court Rules of 2011, the Rules of Civil Procedure of England and Wales of 1998 and the Hague Convention, as well as earlier court decisions (Bayat Telephone Systems International Inc & Orsv Lord Michael Cecil & Ors [2011] EWCA Civ 135), where the court also allowed notification by e-mail), and concluded that in this situation notification by e-mail is possible.
The Court noted that in modern conditions, when access to e-mail is possible by using almost any mobile device, it is incorrect to talk about the "place" of delivery of the notification by e-mail - it is more important whether the message was received by a specific person. The court also noted that an email message once read remains on the server and can be read again. Such features of modern methods of communication, according to the court, require a revision of the established views on the delivery of court documents abroad.
As a consequence, the court pointed out that the defendant, due to his actions in the process, lost the right to refer to improper notification of a court order, and the general Rules of family proceedings 2011 concerning the right of the court to determine the notification procedure allow, among other things, the use of e-mail to notify a party abroad.
Thus, the novelty and revolutionary nature of this solution is not as great as one might assume at first glance. Notification by "alternative means at the discretion of the court", including parties outside the UK, is expressly permitted by the Rules of Civil Procedure of England and Wales 1998 in civil disputes, and there are precedent decisions of the priority of these rules over the procedure established in the Hague Convention. In addition, the defendant's conduct in the case clearly indicated an abuse of procedural rights (Preface by C. Bernasconi and H. van Loona: A practical guide to the Application of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases. 3rd ed. / Ed. N.A. Zhiltsov. M., 2007. P. VII of the Charter).
Nevertheless, it is of interest that the court is ready to broadly interpret not only the FPS norms, but also the very concept of "place of notification" in the context of the transmission of e-mail messages using mobile devices. This is a clear example of the flexibility of English legal proceedings and the willingness to use broad judicial powers to adapt outdated legal norms to modern realities, which can be both a boon and a danger for the party, depending on the situation.
At the same time, it should be noted that the prohibition on violation of the procedural legislation of the country of implementation of the notification has generated significant uncertainty about the consequences of such a violation. Let us consider the precedent of the English court in the case of Habib Bank v. Bank of Khartoum (Habib Bank v. Bank of Khartoum. [2006] EWHC 1767 (Comm).), in which, within the framework of a dispute being considered by an English court, it became difficult to notify the defendant (Bank of Khartoum) located on the territory of Sudan, since, in accordance with the procedural legislation of Sudan, only the courts of that country are authorized to notify the defendant. At the same time, Sudan does not participate in the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases dated 11/15/1965. or another international treaty imposing the obligation to provide international legal assistance, and the instructions of foreign courts to implement the notification are not executed by the Sudanese courts. Due to the inability to comply with the requirements of the legislation of Sudan on the implementation of the notification, the plaintiff
(Habib Bank) notified the defendant by directly delivering the notification to the address of its registration.
Subsequently, the defendant tried to recognize such a method of notification as improper, based on the fact that it does not comply with the procedural legislation of Sudan and, as a result, violates Article 6.40 (or Article 6.24 as amended at the time of the decision) of the Rules of Civil Procedure of England and Wales 1998. Such an argument was rejected by the English court, which pointed out that, based on the disposition of the given article, the notification of a foreign defendant can be considered improper only if its implementation is an offense under the legislation of the country of the notification (Born, International Civil Litigation in United States Courts: Commentary & Materials. New York, 1996). The mere non-compliance of the notification with the legislation of the specified country does not entail its invalidity, provided that it was carried out in the manner provided for by English law.
Such an approach was confirmed in the precedent of the Supreme Court of Great Britain Abella v. Baadarani (Abela v. Baadarani. [2013] UKSC 44.), in which it also became necessary to notify the defendant located in Lebanon, whose courts do not provide international legal assistance in the delivery of notifications and who was not a party of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases dated 11/15/1965. As in the previous precedent, the plaintiff notified the defendant using diplomatic channels, as well as directly to the address of his registration. Subsequently, the defendant tried to recognize such a method of notification as improper and inconsistent with the procedural legislation of Sudan and, as a consequence, violating Article 6.40 of the Rules of Civil Procedure of England and Wales 1998. The English Court, rejecting the defendant's arguments, pointed out that within the meaning of Article 6.40 of the Rules of Civil Procedure of England and Wales 1998. notification of a foreign respondent will be deemed improper only if its commission constitutes an offense in accordance with the legislation of the country of the foreign notification.
As in the previous case, the plaintiff notified the defendant by means of diplomatic channels, as well as directly to the address of his registration. Subsequently, the defendant tried to recognize this method of notification as improper, since it does not comply with the procedural legislation of Sudan and, as a result, violates Article 6.40 of the Rules of Civil Procedure of England and Wales 1998. The English Court, rejecting the defendant's arguments, indicated that within the meaning of Article 6.40 of the Rules of Civil Procedure of England and Wales 1998. notification of a foreign respondent will be considered improper only if its commission constitutes an offense in accordance with the legislation of the country of the foreign notification.
3.4. Features of the legal regulation of the issue of notification of the respondent from Russia
Both Russia, the United States and the United Kingdom are parties of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases dated 11/15/1965, while the procedure for notifying the parties specified in the convention, namely by consular authorities, is problematic in modern conditions.
The Convention provides for the following ways of serving judicial and non-judicial documents: 1) sending a request to the central authority of the requested State (Article 3 of the Convention), whose functions in the Russian Federation are assigned to the Ministry of Justice of the Russian Federation; 2) with the help of its diplomatic or consular agents (Article 8 of the Convention), provided that there are no objections from the requested State (Preface by C. Bernasconi and H. van Loona: A practical guide to the Application of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases. 3rd ed. / Ed. N.A. Zhiltsov. M, 2007. P. VII of the Charter).
However, in accordance with art. V Declarations of the Russian Federation under the Convention "diplomatic and consular agents of foreign States are not entitled to deliver documents on the territory of the Russian Federation in accordance with Article 8 of the Convention, except in cases when the document must be delivered to a citizen of the requesting State." In this regard, such a way of notifying a Russian citizen is directly prohibited; 3) using the ways provided for in Article 10 of the Convention. In particular, this norm provides for the following. "If the requested State does not object, this Convention does not prevent: a) the ability to directly mail court documents to persons located abroad; b) the ability of judicial and other officials or other competent persons of the requesting State to serve court documents, reporting directly to the services of judicial and other officials or other competent persons of the requested State; (c) The ability of any person participating in the judicial proceedings to serve a judicial document by directly resorting to the services of judicial and other officials or other competent persons of the requested State." However, in accordance with Article VI of the Declaration of the Russian Federation under the Convention, "the service of documents by the methods provided for in Article 10 of the Convention is not allowed in the Russian Federation." (Norros, M. Judicial Cooperation in Civil Matters with Russia and Methods of Evaluation. University of Helsinki, 2010. P. 348.).
In accordance with the Convention, the competent authorities of foreign states send court orders to the territory of the Russian Federation for the delivery of documents to Russian citizens. Court orders from foreign courts are received by the Ministry of Justice of the Russian Federation, appointed by the central state body for the implementation of the Convention (Decree of the President of the Russian Federation of August 24, 2004 No. 1101), which checks them for compliance with the norms of the Convention and, with proper execution of instructions, sends them to one of the main departments of the Ministry of Justice of the Russian Federation, which are authorized by Order No. 146 of the Ministry of Justice of the Russian Federation dated May 21, 2009 to receive requests for legal assistance from the competent authorities of foreign states through the Ministry of Justice of the Russian Federation in civil, family, criminal and other cases and sending them for the organization of execution to other state authorities within the federal district."
In this regard, it should be noted that alternative notification options, including messengers, e-mail, judicial intermediaries, the Russian side concerning the process in the UK and the USA may be blocked by Article 10 of the said convention. But this is not prohibited within the framework of receiving notification by the parties from the UK and the USA concerning the lawsuit in Russia.
4. Conclusion
Thus, the analysis of these US and UK precedents allows us to conclude that, as a general rule, the inconsistency of the notification with the procedural legislation of the country of notification does not prevent further settlement of the dispute in the English court. At the same time, an exception to this rule is allowed only if such notification constitutes an offense in accordance with the legislation of the country of notification. Separately, it is worth noting that the only legally permitted way to notify the Russian side about the process in the United States and Great Britain is consular procedures. But it does not exclude the use of alternative notification methods, which in turn may lead to the problem of the enforceability of court decisions rendered abroad in Russia (Yarkov, V.V. Judicial notices in international civil proceedings (on the example of notification of Russian citizens by the courts of Great Britain) // Law. 2012. N 8. P. 33-38.).
Speaking about proper notification, it is worth bearing in mind the practical side of this aspect. International courier services do not work in Russia; the Russian Post delivers
letters for several months. This means that notifying Russian defendants in an era of unprecedented sanctions against Russia is becoming more difficult.
Relatively recent decisions rendered by the courts of the United Kingdom and the United States demonstrate how the concept of proper delivery of a court notice is increasingly interpreted mainly in favor of electronic technologies.
At the same time, the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Cases of 15.11.1965 explicitly prohibits notifying the parties of the process from Russia by alternative means outside the consular authorities. But the complex geopolitical situation and the huge array of sanctions against Russia can form a new practice and, at least in the context of marital and family disputes, it is highly likely that a Russian citizen may find himself in the role of a party to a case resolved by the courts of the UK or the USA and the approaches of the courts described above about alternative methods of notification using e-mail and social media accounts networks may be relevant.
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Blue Spike, LC v. Biolink Solutions LTD. And Biometrics, LLC, Case No. 6:12-cv-648-LED (E.D. Tex. Jan. 14, 2013) https://patentlaw.jmbm.com/files/2016/12/Blue-Spike.pdf
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Yarkov, V.V. Judicial notices in international civil proceedings (on the example of notification of Russian citizens by the courts of Great Britain) // Law. 2012. N 8. P. 33-38.
