United States District Court, N.D. Indiana, South Bend Division
STATE FARM FIRE AND CASUALTY COMPANY, as subrogee of DENNIS HOLDREN, Plaintiff
GREE USA, INC., et al., Defendants
OPINION AND ORDER
L. Miller, Jr., United States District Court Judge
Electric Appliances, Inc. and Gree Electric Appliance Sales
in Hong Kong (both foreign corporations) moved to dismiss the
claims asserted against them under Fed.R.Civ.P. 12(b)(5)
contending that they weren’t properly served under the
Hague Convention. For the following reasons, the court denies
Farm Fire and Casualty Company, as subrogee of its insured,
Dennis Holdren, filed this products liability suit after Mr.
Holdren’s home was damaged in a fire allegedly caused
by a defective dehumidifier manufactured by Gree Electric
Appliances in China, exported to the United States by Gree
Electric Appliance Sales in Hong Kong, and distributed by
Gree USA and MJC America, Ltd. State Farm served its compliant
on the defendants at the California address listed for Gree
USA (a California corporation and wholly-owned subsidiary of
Gree Electric Appliance Sales in Hong Kong, which, in turn,
is a wholly-owned subsidiary of Gree Electric Appliances in
Electric in China and Gree Electric in Hong Kong moved to
dismiss the claims asserted against them under Rule 12(b)(5),
contending that State Farm’s service at the California
address of Gree USA didn’t comply with the Hague
Convention. State Farm maintains that because Gree USA was a
wholly owned subsidiary of the foreign corporations, service
upon their U.S. subsidiary was sufficient to denote service
upon the foreign parent company.
defendant challenges the sufficiency of service, the
plaintiff bears the burden of demonstrating that proper
service occurred. See Homer v. Jones–Bey, 415
F.3d 748, 754 (7th Cir.2005); Day v.
Multi–Temp, No. 08 C 5981, 2010 WL 3835886, at*1
(N.D. Ill. Sept.23, 2010). When a foreign corporation is
served within a United States judicial district, service may
follow the procedure outlined in Rule 4(e)(1), which governs
the service of an individual. Rule 4(e)(1) makes service
proper when the process “follow[s] state law for
serving a summons in an action brought in courts of general
jurisdiction in the state where the district court is located
or where service is made.” If a foreign corporation
isn’t served within a United States judicial district,
the corporation must be served according to Rule 4(f). A
person “may be served at a place not within any
judicial district of the United States . . . by any
internationally agreed means of service that is reasonably
calculated to give notice.” Fed. R. Civ. Pro. 4(f)(1).
While the court can expand the time for service, it
can’t excuse the requirement of service altogether.
See McMasters v. United States, 260 F.3d 814, 817
(7th Cir. 2001). “Actual notice to the defendant is
insufficient; the plaintiff must comply with the directives
of Rule 4.” Id.
Hague Service Convention is a multilateral treaty formulated
in 1964 by the Tenth Session of the Hague Conference of
Private International Law. Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698 (1988).
The Convention revised parts of the Hague Conventions on
Civil Procedure of 1905 and 1954, intending to provide
“a simpler way to serve process abroad, to assure that
defendants sued in foreign jurisdictions would receive actual
and timely notice of suit, and to facilitate proof of service
abroad.” Id. 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. Volkswagenwerk v.
Schlunk, 486 U.S. at 698-699 (citing 20 U.S.T. 362,
T.I.A.S. 6638, Art. 2). China, Hong Kong, and the United
States are all parties to the Hague Convention. See Home
Casual Enter. Ltd. v. Home Casual, LLC, No.
11-CV-661-WMC, 2012 WL 13042156, at *4-*6 (W.D. Wis. Nov. 13,
Electric in China and Gree Electric in Hong Kong contend that
State Farm’s service didn’t comply with the terms
of the Hague Convention, citing in support Volkswagenwerk
Aktiengesellschaft v. Schlunk, 486 U.S. 694 (1988). The
Volkswagenwerk v. Schlunk, the plaintiff served
Volkswagen of America, an Illinois corporation and wholly
owned subsidiary of Volkswagen AG. Volkswagen AG, like Gree
Electric in China and Gree Electric in Hong Kong, cited the
Hague Convention and moved to dismiss the claim for improper
service. In upholding the Illinois state court’s
ruling, the Supreme Court held that service on a U.S.
subsidiary of a foreign corporation is proper service on the
parent. 486 U.S. at 707 (“Where . . . service on a
domestic agent is valid and complete under both state law and
the Due Process clause, our inquiry ends and the [Hague]
Convention has no further implications . . . .”).
California courts have also found that the Hague Convention
doesn’t apply to service of a foreign defendant under
California law if the complaint was served on a California
subsidiary of the foreign parent. See Yamaha Motor Co. v.
Superior Court, 174 Cal.4th 264, 273-276 (2009).
corporations must be served “in a judicial district of
the United States: (A) in a manner prescribed by Rule 4(e)(1)
for serving an individual; or (B) by delivering a copy of the
summons and of the complaint to an officer . . . or any other
agent authorized by appointment or by law to receive service
of process.” Fed.R.Civ.P. 4(h)(1). Rule 4(e)(1) deems
service proper “following state law for serving a
summons in an action brought in courts of general
jurisdiction in the state where the district court is located
or where service is made.” Fed.R.Civ.P.
4(e)(1) (emphasis added).
Gree USA was served in California, Rule 4 dictates that
California law controls whether service was proper.
California Civil Procedure Code § 416.10(b) provides
that “a summons may be served on a corporation by
delivering a copy of the summons and the complaint to a . . .
general manager, or a person authorized by the corporation to
receive service of process.” Cal. Civ. Proc. Code
§ 416.10(b) (West 2017).
Electric in China and Hong Kong argue that unlike the
scenario in Yamaha Motor Co., the individual who
accepted service wasn’t Gree USA’s designated
agent for service of process, or any of the other listed
positions contemplated by § 416.10(b). But the term
“general manager” has a broad interpretation
under California law. See e.g., Yamaha Motor
Corp., 174 Cal.4th 264 (2009); Falco v. Nissan North
America Inc., 987 F.Supp.2d 1071; Khachatryan v.
Toyota Motor Sales, U.S.A., Inc., 578 F.Supp.2d 1224
(C.D. Cal. 2008). For the purposes of § 416.10(b), a
California subsidiary is considered a “general
manager” of a foreign parent corporation for which the
subsidiary is the parent's distributor in the country.
See Falco v. Nissan North America Inc., 987
F.Supp.2d at 1076-1077.
Farm’s service on Gree Electric in China and Gree
Electric in Hong Kong through Gree USA was proper under both
federal and state law. Accordingly, the defendants’
motion to dismiss and/or quash that service [Doc. No. 18] is