1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 RANG DONG JOINT STOCK No. 2:18-cv-003195-KJM-KJN COMPANY, 12 Plaintiff, 13 ORDER v. 14 J.F. HILLEBRAND USA, INC., et al., 15 Defendants. 16 17 In this dispute involving a shipment of spoiled wine, defendants J.F. Hillebrand 18 USA, Inc. and Blue Eagle Consolidation Services move to dismiss plaintiff Rang Dong Joint 19 Stock Company’s first amended complaint. Mot. to Dismiss (“MTD), ECF No. 25-2. Relatedly, 20 plaintiff moves to file a second amended complaint, to swap a breach of fiduciary duty claim with 21 an alternative claim for negligence. Mot. to Amend (“MTA”), ECF No. 30-2. Plaintiff also 22 moves for leave to serve defendant Blue Eagle through alternative methods under Federal Rule of 23 Civil Procedure 4(f)(3). Mot. for Service, ECF No. 26-1. For the reasons set forth below, 24 plaintiff’s motion to amend and motion for alternative service are GRANTED. Accordingly, 25 defendants’ motion to dismiss is DENIED as moot. 26 /// 27 /// 28 /// 1 I. BACKGROUND 2 The factual allegations underpinning this case are set forth in detail in the court’s 3 order granting in part and denying in part defendants’ motion to dismiss. See Mot. to Dismiss 4 Order (“MTD Order”), ECF No. 23, at 1–2. For resolution of the present motions, the court need 5 only briefly summarize the facts and procedural history here. 6 On February 2, 2018, Rang Dong Joint Stock Company, dba Rang Dong Winery, 7 contracted with defendant Hillebrand to ship three containers of wine to Ho Chi Minh City Cat 8 Lai Port, Vietnam. First Am. Compl. (“FAC”) ¶ 9, ECF No. 24. Rang Dong alleges Hillebrand 9 represented that the shipment would be delivered to the Cat Lai Port, consistent with prior 10 shipping arrangements between the two parties. Id. ¶ 10. Without notice, Hillebrand allegedly 11 altered the shipment destination and ultimately delivered the cargo to Cai Mep Port, a different 12 terminal within Ho Chi Minh City Port. Id. ¶ 14; MTD Order at 2. Rang Dong warned 13 Hillebrand that if left too long at the Cai Mep Port, the cargo could be damaged by the heat in 14 Vietnam at the time. FAC ¶ 14. On March 30, 2018, after an eight-day delay, the shipment was 15 transported by barge from the Cai Mep Port to the Cat Lai Port. Id. ¶ 15. When the shipment 16 arrived at the Cat Lai Port, customs officials and Rang Dong agents examined the contents and 17 determined they were “extensively damaged.” Id. ¶ 16. 18 On December 12, 2018, Rang Dong filed suit alleging damages under the Carriage 19 of Goods by Sea Act (“COGSA”), false bill of lading, deviation and breach of fiduciary duty. 20 ECF No. 1. On July 17, 2019, the court granted in part and denied in part defendants’ motion to 21 dismiss the complaint, finding Rang Dong did “not sufficiently allege[] it is a ‘carrier’ under the 22 COGSA . . . .” MTD Order at 7. On July 31, 2019, attempting to cure the deficiencies the court 23 identified in its order, Rang Dong filed the operative first amended complaint, asserting the same 24 four causes of action as in the original complaint. See generally FAC. 25 On August 14, 2019, defendants once again moved to dismiss, arguing Rang 26 Dong’s first three causes of action based on COGSA fail as a matter of law and the fourth cause 27 of action fails for lack of fiduciary relationship. See MTD. Rang Dong opposes the motion, ECF 28 No. 29, and Hillebrand has replied, ECF No. 37. On September 19, 2019, Rang Dong moved to 1 amend the first amended complaint to replace the breach of fiduciary relationship claim with a 2 negligence claim. See MTA. Hillebrand opposes the motion, arguing Rang Dong has not shown 3 good cause to amend, nor has it satisfied the requirements for amendment under Federal Rule of 4 Civil Procedure 15(a). Opp’n to MTA, ECF No. 34. Rang Dong has lodged a reply. Reply to 5 MTA, ECF No. 38. 6 Rang Dong also moves to serve defendant Blue Eagle, a German corporation, via 7 alternative service under Federal Rule of Civil Procedure 4(f)(3) because, it says, Blue Eagle is 8 evading service of process. Mot. for Service. Hillebrand opposes, arguing that Rang Dong’s 9 proposed method of service is impermissible, Opp’n to Mot. for Service, ECF No. 34, and Rang 10 Dong has lodged a reply, Reply to Mot. for Service, ECF No. 35. 11 On December 9, 2019, the court submitted the matters for resolution by written 12 order. 13 II. DISCUSSION 14 A. Motion to Amend Complaint 15 1. Legal Standard 16 A party seeking leave to amend pleadings after a deadline specified in the 17 scheduling order must first satisfy Federal Rule of Civil Procedure 16(b)’s “good cause” standard. 18 Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 608–09 (9th Cir. 1992). Under Rule 16(b), 19 “[a] schedule may be modified only for good cause and with the judge’s consent.” Fed. R. Civ. P. 20 16(b)(4). Distinct from Rule 15(a)'s liberal amendment policy, Rule 16(b)’s good cause standard 21 focuses primarily on the diligence of the moving party and its reasons for seeking modification. 22 Johnson, 975 F.2d at 609. 23 If good cause exists, the movant next must satisfy Rule 15(a). Id. at 608 (citing 24 approvingly Forstmann v. Culp, 114 F.R.D. 83, 85 (M.D.N.C. 1987), for its explication of this 25 order of operations). Federal Rule of Civil Procedure 15(a)(2) provides, “[t]he court should 26 freely give leave [to amend its pleading] when justice so requires” and the Ninth Circuit has 27 “stressed Rule 15’s policy of favoring amendments.” Ascon Props., Inc. v. Mobil Oil Co., 866 28 F.2d 1149, 1160 (9th Cir. 1989). “In exercising its discretion [regarding granting or denying 1 leave to amend] ‘a court must be guided by the underlying purpose of Rule 15—to facilitate 2 decision on the merits rather than on the pleadings or technicalities.’” DCD Programs, Ltd. v. 3 Leighton et al., 833 F.2d 183, 186 (9th Cir. 1987) (quoting United States v. Webb, 655 F.2d 977, 4 979 (9th Cir. 1981)). Courts consider five factors in determining whether justice requires 5 allowing amendment under Rule 15(a): “bad faith, undue delay, prejudice to the opposing party, 6 futility of the amendment, and whether the party has previously amended his pleadings.” 7 Johnson v. Buckley, 356 F.3d 1067, 1077 (9th Cir. 2004) (citation omitted); Bonin v. Calderon, 8 59 F.3d 815, 845 (9th Cir. 1995) (citing Western Shoshone Nat’l Council v. Molini, 951 F.2d 200, 9 204 (9th Cir. 1991)). 10 2. Analysis 11 Rang Dong requests leave to file a second amended complaint replacing its breach 12 of fiduciary duty claim with a negligence claim. MTA at 3. Rang Dong argues Rule 16’s “good 13 cause” standard is satisfied because it diligently sought amendment and its reasons for 14 amendment are compelling. Id. at 4–5. Rang Dong also argues that all five Rule 15(a) factors— 15 bad faith, undue delay, prejudice to the opposing party, futility of the amendment, and whether 16 the party has previously amended its pleadings—are satisfied, thus justifying leave to file a 17 second amended complaint. Id. at 5–9. 18 Hillebrand contends no “good cause” exists to amend the complaint because Rang 19 Dong failed to act diligently in analyzing the viability of its proposed negligence claim and in 20 moving to amend the complaint. Opp’n to MTA at 2–5. Moreover, Hillebrand asserts the Rule 21 15(a) factors favor denial because Rang Dong’s motion is made in bad faith, defendants will be 22 prejudiced if amendment is allowed and the motion is futile. Opp’n to MTA at 5–12. 23 Having considered all relevant factors under Rule 16 and Rule 15(a), the court 24 finds amendment is warranted here. 25 a) Modification of Scheduling Order – “Good Cause” Under Rule 16 26 The court’s May 28, 2019 scheduling order provides that no amendment to the 27 pleadings is “permitted without leave of court, good cause having been shown.” Sched. Order, 28 ECF No. 22, at 2. The focus of a “good cause” inquiry is “the moving party’s reasons for 1 seeking modification.” Johnson, 975 F.2d at 609. “What constitutes good cause sufficient to 2 justify the modification of a scheduling order necessarily varies with the circumstances of each 3 case.” 6A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1522.2 (3d 4 ed. 2019). 5 Rang Dong asserts that after having first been advised of Hillebrand’s position that 6 Hillebrand was not a “carrier” under COGSA as argued in its first motion to dismiss, see ECF No. 7 9, Rang Dong then informed Hillebrand of its intent to amend the complaint and incorporate a 8 negligence claim. MTA at 4. Rang Dong’s intent to include a negligence claim is specifically 9 referenced in the parties’ Rule 26(f) joint status report filed April 5, 2019, three months after 10 Hillebrand filed its first motion to dismiss. See ECF No. 14 at 4 (“Rang Dong Winery expects to 11 amend its Complaint to add claims against Hillebrand. At this time, Rang Dong Winery is 12 analyzing potential claims for negligence and breach of contract against Hillebrand.”). Rang 13 Dong explains it chose not to seek immediate amendment prior to resolution of Hillebrand’s 14 pending motion to dismiss because the court’s order on the motion could influence Rang Dong’s 15 decision to pursue a negligence claim. MTA at 4–5. 16 After the court ruled on the motion to dismiss, Rang Dong filed a first amended 17 complaint, but omitted its negligence claim because the court’s order “did not authorize Rang 18 Dong Winery to add any new claims to its complaint . . . .” Id. at 5. Rang Dong asserts it was not 19 until the parties’ August 9, 2019 meet and confer efforts regarding Hillebrand’s anticipated 20 motion to dismiss that it could have moved to amend the complaint to include the negligence 21 claim. Id. Rang Dong argues that moving prior to resolution of the first motion to dismiss 22 “would [have] be[en] a waste of the parties’ and the Court’s resources if the Court decided 23 ultimately to dismiss the entire action . . . .” Id. Therefore, Rang Dong believes it has acted 24 diligently in moving to amend and presenting compelling reasons for modification of the 25 scheduling order. Id. 26 Hillebrand argues Rang Dong had eighteen months—nine months between the 27 alleged injury and the filing of the initial complaint, then nine additional months between the 28 initial complaint and moving for amendment—to incorporate the negligence claim but failed to 1 do so. Opp’n to MTA at 3. Furthermore, Rang Dong’s argument it was unaware of Hillebrand’s 2 position that Hillebrand was not a “carrier” under COGSA is without merit because Hillebrand 3 clearly stated its position in early meet and confer communications. Id. (citing Stroud Decl., Ex. 4 A, ECF No. 9-2, at 5–7 (meet and confer letter)). 5 Although Rang Dong’s reasons for its delay are not the most compelling, the court 6 nonetheless finds modifying the scheduling order to allow another opportunity to amend the 7 complaint is appropriate. The court possesses great latitude to control the pretrial phase of 8 litigation, and its decisions to that end will not be disturbed absent clear abuse of discretion. 9 Johnson, 975 F.2d at 607 (citing Miller v. Safeco Title Ins. Co., 758 F.2d 364, 369 (9th Cir. 10 1985)). Although the court’s order on Hillebrand’s first motion to dismiss contained no express 11 limitation on the ability to bring new claims on amendment, see MTD Order at 7, Rang Dong’s 12 failure to include a negligence claim in the first amended complaint is not fatal. At the time the 13 court issued its order on the motion to dismiss, the operative scheduling order was already in 14 effect. Compare Sched. Order (issued May 28, 2019), with MTD Order (issued July 17, 2019). 15 Thus, Rang Dong’s apparent belief that any amendment beyond what the motion to dismiss order 16 expressly allowed was subject to a showing of good cause is not wholly unfounded. 17 Moreover, the delay between Rang Dong’s filing its first amended complaint, FAC 18 (filed July 31, 2019), and moving to amend, MTA (filed September 19, 2019), is justified given 19 Hillebrand’s initial representation it would stipulate to amendment. MTA at 2–3; Tran Decl. ¶¶ 20 11–12, ECF No. 30-3, Ex. A (August 14, 2019 email from Hillebrand’s counsel stating 21 “Hillebrand will stipulate that Plaintiff may file an amended complaint as you have detailed 22 below”); but see id. Ex. B (August 20, 2019 email from Hillebrand’s counsel stating Hillebrand 23 “cannot agree to stipulate for your client to file another amended complaint”). Additionally, even 24 if Rang Dong’s decision to wait for the court to issue its order on the first motion to dismiss order 25 before seeking to further amend the complaint occasioned some inefficiency, there is some logic 26 to the decision given the central issues at play in the case. MTA at 5. Were the court to 27 determine Hillebrand was not a “carrier” under COGSA and that the bill of lading barred suit 28 against Hillebrand, amendment thereafter would likely have been futile. 1 Although prejudice to the opposing party is not central to a Rule 16 “good cause” 2 analysis, it may supply additional support for the court’s conclusion. Johnson, 975 F.2d at 609. 3 Hillebrand argues it will be prejudiced by the court’s allowing further amendment because in 4 order for the negligence claim to be deemed timely under the terms of the bill of lading, the court 5 would have to find the claim relates back to the date of the initial complaint; such a finding would 6 allow Rang Dong to contravene the terms of the bill of lading. Opp’n to MTA at 5, 7, 9. The 7 court finds permitting amendment alone will cause no such prejudice because the court at this 8 point is making no findings regarding the merits of each claim. Rather, Hillebrand will remain 9 free to attack the substance of Rang Dong’s second amended complaint once it is filed. Given the 10 court’s strong interest in resolving disputes on the merits, this interest carries great weight where 11 the showing of prejudice is slim as here. DCD Programs, 833 F.2d at 186. 12 Finally, allowing amendment will not significantly disrupt the progression of this 13 case. The parties have yet to exchange initial disclosures, defendant Blue Eagle has yet to be 14 served and discovery has yet to commence. MTA at 6; Sched. Order at 2. Even if discovery had 15 begun, Rang Dong’s proposed negligence claim is based on the same facts alleged in the original 16 complaint, and thus the need for additional discovery is modest if not completely unlikely. Id. at 17 8; see generally Opp’n to MTA (making no argument negligence claim based on new facts). 18 And, assuming defendants renew their motion to dismiss the second amended complaint, any 19 additional delay between motions will likely have little impact on the court’s ability to address the 20 motion in a timely fashion. 21 For each of these reasons, Rang Dong has shown good cause under Rule 16 that 22 modification of the scheduling order is justified to permit filing its second amended complaint. 23 b) Amendment Under Rule 15(a) 24 Having satisfied Rule 16’s “good cause” requirement, Rang Dong now must 25 “demonstrate that amendment [is] proper under Rule 15.” Johnson, 975 F.2d at 608 (citing 26 Forstmann, 114 F.R.D. at 85). In considering each of the amendment factors1—bad faith, undue
27 1 These factors are also commonly referred to as the Foman factors, based on the Supreme 28 Court’s discussion in Foman v. Davis, 371 U.S. 178, 182 (1962). 1 delay, prejudice to the opposing party, futility of the amendment, and whether the party has 2 previously amended its pleadings—the court is guided by Rule 15(a)(2)’s instruction that it must 3 “freely give leave when justice so requires.” Fed. R. Civ. P. 15(a)(2). “This policy is ‘to be 4 applied with extreme liberality.’” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 5 (9th Cir. 2003) (citation omitted). 6 Of the five factors, two are given considerable weight: prejudice to the opposing 7 party and futility of amendment. See id. at 1052 (“[I]t is the consideration of prejudice to the 8 opposing party that carries the greatest weight.”); Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 9 1995) (“[E]ach [factor] is not given equal weight. Futility of amendment can, by itself, justify the 10 denial of a motion for leave to amend.”). Given their importance, the court considers these two 11 factors first. 12 (1) Prejudice to Hillebrand and Futility of Amendment 13 For many of the same reasons discussed above with respect to Rule 16, 14 amendment will not prejudice Hillebrand, nor is it futile. By granting leave to amend, the court 15 does not prejudge the viability of Rang Dong’s negligence claim, including whether the claim 16 relates back to the date of the initial complaint. The relation back doctrine under Rule 15(c) sets 17 forth a specific standard and demands adequate consideration at the appropriate time. See, e.g., 18 ASARCO, LLC v. Union Pac. R. Co., 765 F.3d 999, 1004–05 (9th Cir. 2014) (discussing relation 19 back doctrine). It would be premature to resolve relation back at this stage, on the limited 20 briefing of the issue the parties provide. See MTA at 8–9; Opp’n to MTA at 5, 7, 9. Amendment 21 will not prejudice Hillebrand or permit Rang Dong to advance a wholly futile claim. 22 Hillebrand also argues amendment would be futile because the proposed second 23 amended complaint “completely fails to allege the existence of any duty owed by Hillebrand.” 24 Opp’n to MTA at 10. Amendment is futile, as Hillebrand asserts, “when the proffered 25 amendment merely restates the same facts using different language, or reasserts a claim 26 previously determined.” Wakeen v. Hoffman House, Inc., 724 F.2d 1238, 1244 (7th Cir. 1983) 27 (citing Kasey v. Molybdenum Corporation of America, 467 F.2d 1284, 1285 (9th Cir.), cert. 28 denied, 409 U.S. 1063 (1972)). However, in determining futility, the court effectively tests the 1 sufficiency of the allegations under Rule 8(a)(2). Hillebrand offers no authority for the legal 2 elements of a negligence claim of the sort Rang Dong wishes to bring here, asserting negligence 3 with respect to shipment of goods by sea. Hillebrand merely contends, “Rang Dong has set forth 4 no facts as to why Hillebrand had any duty or was negligent in arranging any aspect of the 5 shipment.” Opp’n to MTA at 11. Rang Dong’s proposed negligence claim ultimately may well 6 be subject to yet another motion to dismiss, but there Hillebrand has not identified a reason to bar 7 the claim at this stage. 8 For these reasons, the court is persuaded Hillebrand will not be greatly prejudiced 9 by amendment, nor is it readily apparent that amendment is futile. 10 (2) Bad Faith and Undue Delay 11 Bad faith is evident where “the plaintiff merely is seeking to prolong the litigation 12 by adding new but baseless legal theories.” Griggs v. Pace Am. Grp., Inc., 170 F.3d 877, 881 13 (9th Cir. 1999); Trans Video Elecs., Ltd. v. Sony Elecs., Inc., 278 F.R.D. 505, 510 (N.D. Cal. 14 2011) (“[T]he Court agrees . . . the motion to amend was taken in bad faith, more specifically, as 15 a last-ditch attempt to avoid the case being dismissed in its entirety.”), aff’d, 475 F. App’x 334 16 (Fed. Cir. 2012). “A court may also find bad faith when the moving party has a ‘history of 17 dilatory tactics.’” Naranjo v. Bank of Am. Nat’l Ass’n, No. 14-CV-02748-LHK, 2015 WL 18 913031, at *5 (N.D. Cal. Feb. 27, 2015). 19 Here, there is no evidence of bad faith by Rang Dong necessitating denial of the 20 opportunity to amend. Rang Dong maintains there is no bad faith because it seeks to trade its 21 breach of fiduciary duty claim for a negligence claim specifically in response to Hillebrand’s 22 argument that Hillebrand is not a “carrier” under COGSA. MTA at 7. Hillebrand, on the other 23 hand, argues Rang Dong is acting in bad faith because it knew, or should have known, Hillebrand 24 was not acting as a “carrier” as defined by COGSA. Opp’n to MTA at 6. Hillebrand further 25 argues Rang Dong exhibited bad faith in advancing its argument that Hillebrand provided a 26 “doctored bill of lading” in support of its motion to dismiss. Id. Finally, Hillebrand contends bad 27 faith is evident in Rang Dong’s tactic of moving to replace the fiduciary duty claim Hillebrand in 28 the face of the current motion to dismiss. Id. 1 Nothing before the court supports the conclusion Rang Dong has acted in bad 2 faith. Failure to assert a known or existing claim does not, by itself, constitute ill will by the 3 withholding party. See Chang Bee Yang v. Sun Tr. Mortg., Inc., No. 1:10-CV-01541-AWI, 2011 4 WL 2433640, at *4 (E.D. Cal. June 14, 2011) (“Even assuming the basis for Plaintiffs’ 5 amendment was known at the time of the initial complaint, that is not, by itself, objective 6 evidence of bad faith or tactical gamesmanship.”). Neither does the fact Rang Dong moved to 7 amend after Hillebrand filed its most recent motion to dismiss. See Naranjo, 2015 WL 913031, at 8 *6 (“[W]here, as here, a plaintiff files a motion to amend after a defendant files a motion to 9 dismiss, courts will still grant the motion to amend absent an independent showing by the 10 defendant of at least one of the Foman factors.”). Finally, as to Hillebrand’s argument that bad 11 faith is evident in Rang Dong’s assertion that Hillebrand “doctored” the bill of lading offered in 12 support of its motion to dismiss, the court’s prior order noted there was some support for Rang 13 Dong’s argument on this point. See MTD Order at 9 n.6. Rang Dong’s arguments based on the 14 bill of lading did not amount to bad faith. 15 As to undue delay, Hillebrand repeatedly says that Rang Dong unduly delayed in 16 filing its motion to amend but provides no substantive argument regarding delay. As noted 17 above, Rang Dong did not move as expeditiously as it could have to amend; nonetheless, the 18 delay here is not the type that justifies denying the opportunity to amend. See, e.g., Naranjo, 19 2015 WL 913031, at *7 (affirming denial of motion for leave to amend because of undue delay 20 where, inter alia, moving party sought amendment “eight months after the district court granted 21 summary judgment against it, and nearly two years after filing the initial complaint,” and “after 22 discovery was over, just four and a half months before the trial date” (citation omitted)); Jordan 23 v. Los Angeles County, 669 F.2d 1311, 1324 (9th Cir. 1982) (affirming denial of motion for leave 24 to amend because of undue delay where the proposed amendment “would have required [the 25 defendant] to conduct extensive, costly discovery in order to respond to the amended complaint”), 26 vacated on other grounds, 459 U.S. 810 (1982); Kaplan v. Rose, 49 F.3d 1363, 1370 (9th Cir. 27 1994) (affirming denial of leave to amend because of undue delay where moving party sought 28 amendment after discovery was completed and trial was only two months away, thereby 1 substantially prejudicing defendant), overruled on other grounds by City of Dearborn Heights Act 2 345 Police & Fire Ret. Sys. v. Align Tech., Inc., 856 F.3d 605 (9th Cir. 2017). 3 Here, initial disclosures have yet to be exchanged, discovery is months from 4 completion, the court has not made any dispositive rulings and a trial date has yet to be scheduled. 5 Given the procedural posture of this case, any delay in moving to amend has a minimal impact on 6 the fair and substantive resolution of the case. Even if there had been undue delay, that factor 7 alone is insufficient to deny opportunity to amend. Bowles v. Reade, 198 F.3d 752, 758 (9th Cir. 8 1999). 9 (3) Previous Amendment 10 In terms of previous amendment, while Rang Dong has once before amended its 11 complaint, it has not “repeated[ly] fail[ed] to cure deficiencies by amendments previously 12 allowed.” Foman v. Davis, 371 U.S. 178, 182 (1962). This factor favors amendment. 13 3. Conclusion 14 For each of the reasons discussed above, Rang Dong has established “good cause” 15 to amend the complaint under Rule 16 and established that amendment is proper under Rule 16 15(a). Therefore, Rang Dong’s motion to amend is GRANTED. 17 B. Motion for Alternative Service 18 1. Legal Standard 19 Federal Rule of Civil Procedure 4(h) governs service of a foreign corporation. A 20 foreign corporation may be served “at a place not within any judicial district of the United States, 21 in any manner prescribed by Rule 4(f) for serving an individual . . . . ” Fed. R. Civ. P. 4(h)(2). 22 Under Rule 4(f), a foreign party may be served: 23 (1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague 24 Convention on the Service Abroad of Judicial and Extrajudicial Documents; 25 (2) if there is no internationally agreed means, or if an international 26 agreement allows but does not specify other means, by a method that is reasonably calculated to give notice: 27 (A) as prescribed by the foreign country’s law for service in 28 that country in an action in its courts of general jurisdiction; 1 (B) as the foreign authority directs in response to a letter rogatory or letter of request; or 2 (C) unless prohibited by the foreign country’s law, by: 3 (i) delivering a copy of the summons and of the 4 complaint to the individual personally; or 5 (ii) using any form of mail that the clerk addresses and sends to the individual and that requires a signed 6 receipt; or 7 (3) by other means not prohibited by international agreement, as the court orders. 8 9 Fed. R. Civ. P. 4(f). 10 Rule 4(f) provides three distinct options for service, with no one contingent upon 11 exhaustion of another. Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1015 (9th Cir. 2002). 12 Thus, if a party chooses Rule 4(f)(3) as its method of service, there are “no qualifiers or 13 limitations which indicate its availability only after attempting service of process by other 14 means.” Id. Indeed, allowing “service of process under Rule 4(f)(3) is neither a ‘last resort’ nor 15 ‘extraordinary relief.’” Id. (quoting Forum Fin. Grp., LLC v. President, Fellows of Harvard 16 Coll., 199 F.R.D. 22, 23 (D. Me. 2001)). 17 “As [is] obvious from its plain language, service under Rule 4(f)(3) must be 18 (1) directed by the court; and (2) not prohibited by international agreement. No other limitations 19 are evident from the text.” Guifu Li v. A Perfect Day Franchise, Inc., 281 F.R.D. 373, 388 (N.D. 20 Cal. 2012) (alteration in original) (quoting Rio Props., 284 F.3d at 1014). “Additionally, any 21 method of service of process ‘must also comport with constitutional notions of due process,’ i.e., 22 they must be ‘reasonably calculated, under all the circumstances,’ to apprise interested parties of 23 the action and provide them with an opportunity to respond.” Id. (quoting Rio Props., 284 F.3d 24 at 1016). 25 2. Analysis 26 After two unsuccessful attempts to serve Blue Eagle Consolidation Services, a 27 German corporation, under the Hague Convention, Rang Dong moves under Federal Rule of Civil 28 Procedure 4(f)(3) for court authorization to serve Blue Eagle through its U.S.-based counsel, 1 Messrs. Stroud and Danas. Rang Dong contends this proposed method of service is permissible 2 because (1) it is not prohibited by the Hague Convention; (2) it is reasonably calculated to apprise 3 Blue Eagle of this action; and (3) Blue Eagle’s counsel’s representation that they are not 4 authorized to accept service on Blue Eagle’s behalf is irrelevant to the analysis. Mot. for Service 5 at 5–11. 6 In opposition, Hillebrand argues Rang Dong is now taking a position contrary to 7 the position it adopted in opposing Hillebrand’s first motion to dismiss. Opp’n to Mot. for 8 Service at 2–3. There, Rang Dong claimed Hillebrand was not an agent of Blue Eagle, thus 9 potentially exposing Hillebrand to liability as a “carrier” under COGSA; now, however, to obtain 10 the benefit of alternative service, Rang Dong argues Hillebrand is an agent of Blue Eagle, thus 11 permitting service through Hillebrand or its counsel. Id. Hillebrand also argues Rule 4(f)(3) is 12 subject to Rule 4(e)(1), which requires compliance with state law for service of summons. Id. at 13 2. Therefore, in order to effectuate service, Hillebrand argues, Rang Dong must comply with 14 California Code of Civil Procedure section 416.10(b) by serving Blue Eagle through an 15 authorized agent. Id. 16 In reply, Rang Dong notes Hillebrand does not dispute that Messrs. Stroud and 17 Danas represent Blue Eagle, and also argues service of a foreign defendant through U.S.-based 18 counsel is a permissible form of alternative service and that, as Blue Eagle’s agent, Hillebrand 19 would inform Blue Eagle of the service of process and the pending action. Reply to Mot. for 20 Service at 1. Rang Dong also argues Hillebrand lacks standing to oppose the motion because it is 21 an unaffected party and its opposition was not filed on Blue Eagle’s behalf, id. at 2, and reiterates 22 its positions that agency is irrelevant when determining adequacy of service under Rule 4(f)(3), 23 and Rule 4(e)(1) has no bearing on service under Rule 4(f)(3) because the two rules are mutually 24 exclusive. Id. at 3. 25 ///// 26 ///// 27 ///// 28 ///// 1 a) Rang Dong’s Proposed Method of Service is Not Prohibited by International Agreement 2 3 As the Ninth Circuit explained in Rio Properties, supra, alternative service under 4 Rule 4(f)(3) must be (1) directed by the court and (2) not prohibited by international agreement. 5 284 F.3d at 1014. Because Blue Eagle is a German corporation, and Germany is a signatory to 6 the Hague Convention, the Hague Convention is the controlling international agreement for 7 service upon a German corporation. Am. GNC Corp. v. GoPro, Inc., No. 18-CV-00968-BAS- 8 BLM, 2018 WL 6262934, at *1 (S.D. Cal. June 4, 2018) (“The United States and Germany are 9 parties to the Hague Convention and thus Plaintiff may serve Defendants pursuant to the Hague 10 Convention with no court order.”); Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004) 11 (“Because service of process was attempted abroad, the validity of that service is controlled by 12 the Hague Convention, to the extent that the Convention applies.”). Moreover, when attempting 13 service through the Hague Convention, service must be processed through the “receiving 14 country’s ‘Central Authority,’ which the Convention requires each signatory nation to establish to 15 act as an agent to receive a request for service, arrange for service of documents, and return 16 proofs of service.” Am. GNC Corp., 2018 WL 6262934, at *1. 17 Here, Rang Dong twice attempted to serve Blue Eagle under the Hague 18 Convention. First, on December 13, 2019, Rang Dong, through use of an outside vendor, 19 attempted to effectuate service under the Hague Convention, by way of the Central Authority, at 20 the German address listed on the bill of lading for the goods shipped here. Mot. for Service at 1– 21 2; Tran Decl. ¶ 2, ECF No. 26, Ex. A (Dec. 13, 2019 email authorizing service). On March 26, 22 2019, the Central Authority notified Rang Dong that the Authority was unable to complete 23 service of process. Id. at 2. On April 1, 2019, after locating an alternative address, Rang Dong 24 again authorized its outside vendor to serve Blue Eagle under the Hague Convention. Id.; Tran 25 Decl. ¶ 4, Ex. C (April 1, 2019 email authorizing service). On July 22, 2019, the Central 26 Authority once again notified Rang Dong it was unable to complete service of process. Id. 27 28 1 The court is satisfied Rang Dong has diligently attempted to serve Blue Eagle 2 under the Hague Convention to no avail, even if it need not make such a finding. Cf. U.S. 3 Aviation Underwriters, Inc. v. Nabtesco Corp., No. C07-1221RSL, 2007 WL 3012612, at *2 4 (W.D. Wash. Oct. 11, 2007) (denying motion for alternative service where plaintiff’s only 5 contention was that service under Rule 4(f)(3) would “be much faster”). 6 Importantly at this juncture, the Hague Convention does not prohibit Rang Dong’s 7 proposed method of service. In Volkswagenwerk Aktiengesellschaft v. Schlunk, the Supreme 8 Court addressed the applicability of the Hague Convention when attempting to serve a foreign 9 corporation through domestic channels. 486 U.S. 694 (1988). The Court explained, “[t]he only 10 transmittal to which the Convention applies is a transmittal abroad that is required as a necessary 11 part of service.” Id. at 707; CJ E&M Am., Inc. v. iQiyi, Inc., No. CV 18-5771 PA (JEMx), 2018 12 WL 6380751, at *3 (C.D. Cal. Aug. 13, 2018) (“[B]ecause the Convention applies only where 13 documents for service are ‘transmitted abroad,’ service effected within the United States does not 14 implicate the Convention.” (citing Schlunk, 486 U.S. at 707)); Brown v. China Integrated Energy, 15 Inc., 285 F.R.D. 560, 564 (C.D. Cal. 2012) (“If valid service occurs in the United States . . . the 16 Convention is not implicated regardless of the location of the party.”). Hillebrand does not 17 contend otherwise. See generally Opp’n to Mot. for Service. Because Rang Dong now seeks to 18 serve Blue Eagle through its U.S.-based counsel, the Hague Convention is inapplicable, and thus 19 does not prohibit this proposed method of service. 20 b) Rang Dong’s Proposed Method of Service is Reasonably Calculated to Apprise Blue Eagle of this Action 21 22 Alternative service under Rule 4(f)(3) must also “comport with constitutional 23 notions of due process,” meaning “the method of service crafted by the district court must be 24 ‘reasonably calculated . . . to apprise interested parties of the pendency of the action and afford 25 them an opportunity to present their objections.’” Rio Props., 284 F.3d at 1016–17 (quoting 26 Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). Here, Rang Dong’s 27 proposed method of service satisfies due process. 28 1 The facts of Rio Properties are sufficiently analogous to those of this case to 2 support this conclusion. In Rio Properties, plaintiff, a hotel and casino operator, sued defendant, 3 a foreign internet company, for trademark infringement. 284 F.3d at 1012. Plaintiff first 4 attempted to effectuate service of process at a Miami, Florida address registered to defendant. Id. 5 at 1013. That address, however, actually housed defendant’s international courier, IEC, which 6 was not authorized to accept service on defendant’s behalf but did agree to forward the summons 7 and complaint to defendant’s Costa Rican courier. Id. After receiving the summons and 8 complaint from IEC, defendant consulted a Los Angeles-based attorney about how to respond. 9 Id. When the attorney contacted plaintiff about the suit, plaintiff asked him to accept service on 10 defendant’s behalf. Id. He declined, but asked plaintiff to notify him when service was 11 completed. Id. After exhausting conventional means, and unable to serve defendant in Costa 12 Rica, plaintiff moved for alternative service of process. Id. The district court granted the motion, 13 authorizing service by mail to the Los Angeles-based attorney and IEC, and by email to defendant 14 directly. Id. 15 In affirming the district court’s authorization of this manner of service, the Ninth 16 Circuit found, as pertinent here, service upon the Los Angeles-based attorney was “appropriate 17 because he had been specifically consulted by [defendant] regarding this lawsuit.” Id. at 1017. 18 He “knew of [defendant’s] legal positions . . . [and] was in contact with [defendant] in Costa 19 Rica.” Id. The court also blessed service by email, and, weighing the novelty of the proposition, 20 reasoned that “the Constitution does not require any particular means of service of process, only 21 that the method selected be reasonably calculated to provide notice and an opportunity to be 22 heard.” Id. (citing Mullane, 339 U.S. at 314). The court further explained, “this broad 23 constitutional principle unshackles the federal courts from anachronistic methods of service and 24 permits them entry into the technological renaissance.” Id. 25 Given the circumstances in Rio Properties, and the reasoning underlying the Ninth 26 Circuit’s decision, the court’s responsibility under Rule 4(f)(3) is to ensure Rang Dong’s 27 proposed method of service is reasonably calculated to put Blue Eagle on notice of the suit 28 against it. In acting upon this responsibility, the court is not, as Hillebrand asserts, restrained by 1 traditional notions of agency because Rule 4(f)(3) provides for the exercise of judicial discretion 2 that takes account of all available, meaningful contemporary means of service. In Brown v. 3 China Integrated Energy, Inc., the court considered the foreign defendant’s contention that 4 neither its counsel nor its registered agent were permissible channels of service because neither 5 had been authorized to accept service on defendant’s behalf. 285 F.R.D. at 562. In rejecting this 6 argument and granting plaintiff’s proposed method of service, the court explained: 7 Due process does not require that the individuals served on behalf of foreign defendants have represented them or been authorized to 8 accept service on their behalf. Instead, “[t]he reasonableness and hence the constitutional validity of any chosen method may be 9 defended on the ground that it is in itself reasonably certain to inform those affected.” 10 11 Id. at 565 (alteration in original) (quoting Mullane, 339 U.S. at 315). Because of this, “[s]ervice 12 upon a foreign defendant’s United States-based counsel is a common form of service ordered 13 under Rule 4(f)(3).” Richmond Techs., Inc. v. Aumtech Bus. Sols., No. 11-CV-02460-LHK, 2011 14 WL 2607158, at *13 (N.D. Cal. July 1, 2011); see also Knit With v. Knitting Fever, Inc., No. 15 CIV.A. 08-4221, 2010 WL 4977944, at *4 (E.D. Pa. Dec. 7, 2010) (“Repeatedly, courts around 16 the country have found that service upon a foreign defendant through counsel is appropriate ‘to 17 prevent further delays in litigation.’” (citation omitted)); Latinamerican Theatrical Grp., LLC v. 18 Swen Int’l Holding, No. CV 13-1270 CAS (RNBx), 2013 WL 3357650, at *1 (C.D. Cal. July 2, 19 2013) (authorizing service of foreign defendant through U.S.-based counsel because he was “in 20 contact with [defendant] and [was] familiar with [the] case.”). 21 Evaluated in light of the core principles of ensuring service reasonably calculated 22 to give notice so as to satisfy due process, Hillebrand’s contention that Rang Dong’s proposed 23 method of service is impermissible under Rule 4(e)(1) lacks merit. Opp’n to Mot. for Service at 24 2. Rule 4(e)(1) provides permissible means of serving individuals within a judicial district of the 25 United States. Fed. R. Civ. P. 4(e)(1). Rule 4(e)(1) does not, however, limit the reach Rule 26 4(f)(3), expressly or impliedly. Hillebrand provides no authority to the contrary. 27 Hillebrand’s citation to Khachatryan v. Toyota Motor Sales, U.S.A., Inc., 578 F. 28 Supp. 2d 1224 (C.D. Cal. 2008), is unavailing. Opp’n to Mot. for Service at 2. Khachatryan 1 involved service of an international defendant under Rule 4(h)(1), which requires compliance 2 under Rule 4(e)(1) with the rules of the state in which service is attempted. Khachatryan contains 3 no discussion of the proposition Hillebrand advances here; in fact, it makes no reference to Rule 4 4(f) at all, or the purported conflict between Rule 4(f)(3) and 4(e)(1). 5 The case of Nuance Commc’ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 6 1240 (Fed. Cir. 2010), gives the lie to Hillebrand’s argument. In Nuance, the foreign defendant 7 argued plaintiff failed to comply with California law when attempting to serve its U.S.-based 8 subsidiary, located in California. Id. Rejecting this argument, the court explained: 9 This argument confuses service of process under Rule 4(f)(3), which provides for court-directed service “by any means not prohibited by 10 international agreement,” with service under Rule 4(e)(1), which does not require a court-order and provides for service by “following 11 state law.” Under California law, a foreign corporation may be served by serving that corporation's “general manager in [the] state.” 12 See Gray v. Mazda Motor of Am., 560 F. Supp. 2d 928, 929–30 (C.D.Cal.2008). However, this does not foreclose substituted service 13 on others under Rule 4(f)(3). See Rio Props., 284 F.3d at 1017 (“Without hesitation, we conclude that each alternative method of 14 service of process ordered by the district court was constitutionally acceptable.”). 15 16 626 F.3d 1222, 1240. Moreover, the circumstances of Rio Properties appear to foreclose 17 Hillebrand’s argument: in authorizing service upon the foreign defendant’s California-based 18 counsel, the court made no reference to compliance with California law under Rule 4(e)(1). Rio 19 Props., 284 F.3d at 1014–16; see, e.g., Latinamerican, 2013 WL 3357650, *1–2 (providing no 20 discussion of Rule 4(e)(1). 21 Finally, the limitation Hillebrand reads into the Rule produces an absurd result. If 22 Rule 4(f)(3) were limited by California’s service rules, as required by Rule 4(e)(1), then Blue 23 Eagle would essentially be immune from service because it has no U.S.-based entity or agent 24 authorized to accept service on its behalf and attempts under the Hague Convention have been 25 futile. These circumstances provide the very reason Rule 4(f)(3) exists: to allow courts, upon 26 request, to craft a method of service consistent with due process and reasonably calculated to 27 provide notice to the defending party. See Brockmeyer, 383 F.3d at 805 (“The decision whether 28 1 to allow alternative methods of serving process under Rule 4(f)(3) is committed to the ‘sound 2 discretion of the district court.’” (quoting Rio Props., 284 F.3d at 1016)). 3 The service plan Rang Dong proposes here is reasonably calculated to give Blue 4 Eagle notice of the pending suit and opportunity to respond. Although Messrs. Stroud and Danas 5 are not authorized to accept service on Blue Eagle’s behalf, Opp’n to Mot. for Service at 1–2, 6 they are nonetheless counsel of record for Blue Eagle and best positioned to facilitate service. In 7 a December 26, 2018 email exchange with Rang Dong’s counsel, Mr. Danas stated: “We do 8 represent Blue Eagle. However, at this time we are not authorized to accept service on their 9 behalf.” Tran Decl. ¶ 7, Ex. F. Documents filed with the court also reflect the relationship 10 between counsel and Blue Eagle. The January 3, 2019 stipulation to extend time to respond to the 11 complaint, ECF No. 7, the January 17, 2019 motion to dismiss, ECF No. 9, and the April 5, 2019 12 joint status report, ECF No. 14, all list Mr. Stroud as the attorney of record for Hillebrand and 13 Blue Eagle. And Mr. Stroud was retained by Blue Eagle and Hillebrand as local counsel in this 14 matter. Tran Decl. ¶ 7, Ex. F. 15 Also, on August 8, 2019, Mr. Danas sent a meet and confer letter discussing a 16 potential motion to dismiss the first amended complaint. Tran Decl. ¶ 9, Ex. H. The letter’s 17 opening line states: “As you know, this law firm represents Defendant J.F. Hillebrand USA, Inc. 18 [] and Blue Eagle Consolidation Services in the above-referenced matter.” Id. The letter is 19 signed by Mr. Danas and copied to Mr. Stroud and his co-counsel. Id. Based on this record and 20 the representations made at hearing, Messrs. Stroud and Danas are well-positioned to facilitate 21 service upon Blue Eagle. 22 Finally, service on Blue Eagle through Messrs. Stroud and Danas is reasonably 23 calculated to apprise Blue Eagle of this action because counsel are aware of the procedural 24 posture of this action and the substantive issues related to Blue Eagle’s status as a named party. 25 Counsel is familiar with the pleadings, see, e.g., ECF Nos. 7, 9, 14, and the history of 26 communication with Rang Dong’s counsel, see Tran Decl. ¶¶ 6–11. 27 Given this conclusion, the court need not reach the merits of Rang Dong’s 28 argument that Hillebrand lacks standing to oppose the motion, see Reply to Mot. for Service at 2, 1 nor Hillebrand’s argument that Rang Dong has unclean hands by virtue of having taken 2 contradictory positions regarding Hillebrand’s agency status under the bill of lading, Opp’n to 3 Mot. for Service at 3–4. 4 3. Conclusion 5 The court finds Rang Dong’s proposed alternative method of service is not 6 prohibited by international agreement and is reasonably calculated to apprise Blue Eagle of this 7 action and afford Blue Eagle an opportunity to be heard. Therefore, the court exercises its 8 discretion under Rule 4(f)(3) and orders service of process upon Blue Eagle through its U.S.- 9 based counsel, Andrew Stroud and Andrew Danas. 10 III. CONCLUSION 11 For the foregoing reasons, plaintiff’s motion to amend the complaint, ECF No. 30, 12 is GRANTED. Plaintiff shall file its second amended complaint within fourteen (14) days of this 13 order. In light of the court’s granting plaintiff’s motion to amend, defendant’s motion to dismiss, 14 ECF No. 25, is DENIED as moot. 15 Plaintiff’s motion for alternative service, ECF No. 26, is GRANTED. Under 16 Federal Rule of Civil Procedure 4(f)(3), plaintiff may effectuate service on foreign defendant, 17 Blue Eagle Consolidation Services, through its U.S.-based counsel Andrew Stroud and Andrew 18 Danas. 19 IT IS SO ORDERED. 20 DATED: July 7, 2020. 21 22 23 24 25 26 27 28