Freedom Watch, Inc. v. Organization of the Petroleum Exporting Countries
FREEDOM WATCH, INC., Appellant v. ORGANIZATION OF THE PETROLEUM EXPORTING COUNTRIES (OPEC), Appellee
Attorneys
Larry Klayman argued the cause and filed the briefs for appellant., Carolyn B. Lamm argued the cause for appellee. With her on the brief were Hansel T. Pham and Anne D. Smith., Thomas G. Corcoran Jr. was on the brief for amicus curiae Republic of Austria in support of appellee.
Full Opinion (html_with_citations)
Opinion for the Court filed by Circuit Judge SRINIVASAN.
Opinion concurring in part and dissenting in part filed by Circuit Judge WILKINS.
Freedom Watch, Inc. filed an action against the Organization of the Petroleum Exporting Countries alleging that OPEC violates United States antitrust law by fixing the price of gasoline. The district court dismissed the complaint for insufficient service of process. The court held that Freedom Watch had failed to effectuate valid service on OPEC, and it declined Freedom Watchâs request to authorize service through alternative means pursuant to Federal Rule of Civil Procedure 4(f)(3). We agree with the district court that the methods of service attempted by Freedom Watch failed to satisfy the federal rules. We remand, however, for the district court to reconsider Freedom Watchâs request under Rule 4(f)(3) to authorize alternative methods of serving process on OPEC.
I.
OPEC is an intergovernmental organization whose membership consists of twelve petroleum-exporting nations. As set out in its governing statute, OPECâs âprincipal aimâ is âthe coordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively.â OPEC Stat. art. 2(A) (2000). The organization is headquartered in Vienna, Austria. Its relationship with its host nation is governed by a âHeadquarters Agreement,â formally entitled the Agreement Between the Organization of the Petroleum Exporting Countries and the Republic of Austria Regarding the Headquarters of the Organization of the Petroleum Exporting Countries, Austrian Official Gazette [BGBL] No. 379/1985 (bilateral agreement codified into Austrian law).
On May 7, 2012, Freedom Watch filed suit against OPEC, alleging violations of section 1 of the Sherman Act, 15 U.S.C. § 1, and sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15, 26. The complaint asserts that OPEC and its member nations engage in an international conspiracy to âraise, fix and stabilize the price of gasoline and other petroleum products in the United Statesâ through the use of production quotas and price-fixing agreements. J.A. 8-9,12-13. Freedom Watch contends that it attempted to serve process on OPEC in two ways: (i) by delivering a copy of the summons and complaint by hand to OPEC headquarters in Vienna, where an individual ostensibly accepted service, and (ii) by sending a copy of the documents via Austrian mail to OPEC headquarters. Freedom Watch filed a proof of service confirming the first of those methods.
On August 21, 2012, after successfully moving to bifurcate its service-of-process objection from the rest of its potential defenses, OPEC moved to dismiss the complaint for insufficient service of process. OPEC argued that neither of Freedom Watchâs attempts at service met the requirements of United States (or Austrian) law for effective service. It also asserted that no means of service could be validly effectuated without the express consent of OPECâs Secretary General.
In opposing dismissal, Freedom Watch argued that its attempts to serve process
On September 4, 2013, the district court granted OPECâs motion to dismiss. See Freedom Watch, Inc. v. OPEC, 288 F.R.D. 230, 231 (D.D.C.2013). The court determined that Freedom Watch had failed to establish that it validly served process on OPEC under Rule 4. The court also declined to authorize any alternative form of service of process on OPEC pursuant to Rule 4(f)(3). Freedom Watch appeals.
II.
We review de novo the district courtâs determination that Freedom Watch has failed to effectuate valid service of process on OPEC. Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 509 (D.C.Cir.2002). We review for abuse of discretion the district courtâs denial of Freedom Watchâs request to authorize alternative methods of service pursuant to Rule 4(f)(3). See Prewitt Enters., Inc. v. OPEC, 353 F.3d 916, 921 (11th Cir.2003); Rio Props., Inc. v. Rio Intâl Interlink, 284 F.3d 1007, 1014 (9th Cir.2002). Applying those standards, we agree with the district court that Freedom Watch has not validly served process on OPEC. But we vacate the judgment and remand the case to enable the district court to exercise its discretion under Rule 4(f)(3) to consider Freedom Watchâs suggestion that service could be effectuated on OPEC through OPECâs United States counsel.
A.
A federal court may assert personal jurisdiction over a defendant only if â âthe procedural requirements of effective service of process are satisfied.â â Mann v. Castiel, 681 F.3d 368, 372 (D.C.Cir.2012) (quoting Gorman, 293 F.3d at 514); see Omni Capital Intâl, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987). Service of process â ânotifies] a defendant of the commencement of an action against himââ and â âmarks the courtâs assertion of jurisdiction over the lawsuit.â â Mann, 681 F.3d at 372 (quoting Okla. Radio Assocs. v. FDIC, 969 F.2d 940, 943 (10th Cir.1992)). Federal Rule of Civil Procedure 4 generally âgoverns the form, issuance, and service of summons in federal civil actions.â Eades v. Clark Distrib. Co., 70 F.3d 441, 442 n. 1 (6th Cir.1995). If a defendant challenges the validity of service of process, the plaintiff bears the burden to â âdemonstrate that the procedure employed to deliver the papers satisfies the requirements of the relevant portions of Rule 4.â â Mann, 681 F.3d at 372 (quoting 4A Wright & Miller, Federal Practice and Procedure § 1083 (3d ed. 2002 & Supp. 2012)).
Freedom Watch contends that it satisfied Rule 4 by serving process on OPEC at its headquarters in Vienna via personal delivery and Austrian mail. The district court, relying on the Eleventh Circuitâs decision in Prewitt Enterprises, Inc. v. OPEC, supra, concluded that neither of those methods passes muster under Rule 4. Prewitt, like this case, addressed the validity of attempted service of process on OPEC. There, the plaintiff asked the clerk of the court to send a copy of the summons and complaint to OPEC by international registered mail, return receipt requested. 353 F.3d at 919. The clerk did so, mailing
Rule 4(h) governs service of process on OPEC, a foreign unincorporated association. Under Rule 4(h), â[u]nless federal law provides otherwise or the defendantâs waiver [of service] has been filed,â service abroad on a foreign business entity must be effectuated âin any manner prescribed by Rule 4(f) for serving an individual, except personal delivery under (f)(2)(C)(i).â Fed.R.CivJP. 4(h)(2). Here, because OPEC has not filed any waiver of service, and because federal law does not âprovide[ ] otherwise,â we look to Rule 4(f). Freedom Watch belatedly argues in this court, despite having made no such argument in the district court, that federal law does âprovide[] otherwiseâ: according to Freedom Watch, OPEC is a âpolitical subdivision of a foreign state,â and service on OPEC thus can be effectuated under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. § 1608(a). But it â âis well settled that issues and legal theories not asserted at the District Court level ordinarily will not be heard on appeal.â â Potter v. District of Columbia, 558 F.3d 542, 550 (D.C.Cir.2009) (quoting District of Columbia v. Air Fla., Inc., 750 F.2d 1077, 1084 (D.C.Cir.1984)). In any event, OPEC is not a political subdivision of a foreign state subject to service under § 1608 of the FSIA. See Prewitt, 353 F.3d at 922 n. 9. OPEC instead is an intergovernmental organization whose members are foreign sovereign states. Id. at 919. The propriety of Freedom Watchâs efforts to serve process on OPEC therefore turns on the provisions of Rule 4(f).
Rule 4(f)(1) provides for service of process âby 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.â Fed.R.Civ.P. 4(f)(1). As the Eleventh Circuit explained in Prewitt, there is no âinternationally agreed means of serviceâ applicable in this case. See 353 F.3d at 922. The evidence submitted by OPEC confirms the point. See Expert Decl. of Wolfgang Hahnkamper ¶ 12, ECF No. 7, J.A. 143. Although Austria is a party to the Hague Convention on Civil Procedure, the United States is not. Hahnkamper Decl. ¶ 12. Conversely, although the United States is a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents, Austria is not. Hahnkamper Deck ¶ 12; Prewitt, 353 F.3d at 922 n. 10. And in a diplomatic note, the Austrian government confirmed the absence of any treaty between the European Union and United States that could supersede the requirements of Austrian law for serving process on OPEC. Note Verbale from the Austrian Fed. Ministry for European & Intâl Affairs, to OPEC 2 (June 21, 2012). Because Freedom Watchâs attempts to serve process on OPEC cannot be sustained under Rule 4(f)(1), we turn to Rule 4(f)(2).
Rule 4(f)(2) states that, âif there is no internationally agreed means, or if an international agreement allows but does not specify other means,â process may be
(A) as prescribed by the foreign countryâs law for service in that country in an action in its courts of general jurisdiction;
(B) as the foreign authority directs in response to a letter rogatory or letter of request; or
(C) unless prohibited by the foreign countryâs law, by:
(i) delivering a copy of the summons and of the complaint to the individual . personally; or
(ii) using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt. ...
OPECâs unchallenged evidence of Austrian law demonstrates the inapplicability of Rule 4(f)(2)(A) here. Austrian law considers service of process to be a sovereign act. Hahnkamper Decl. ¶ 13. In Austria, unlike the United States, âservice of a complaint (regardless of the sender) is a judicial act that may be exerted only by a court ... unless an international convention provides specifically for the opposite.â Id. ¶ 13; see also id. ¶ 15; Austrian Service of Documents Act §§ 1, 12(1). Here, no such international convention exists. Hahnkamper Decl. ¶ 15. And because Austrian courts had no involvement with either of Freedom Watchâs attempts to serve OPEC in Austria, those efforts were not âprescribed byâ Austrian law governing service of process. Fed.R.Civ.P. 4(f)(2)(A). Freedom Watchâs attempts in fact violated Austrian law. Austria prohibits service of process on an international organization holding privileges and immunities under international law (which OPEC does) without the involvement of the Austrian Federal Ministry. Hahnkam-per Decl. ¶ 16; Austrian Service of Documents Act § 11(2). In addition, the OPEC Headquarters Agreement, a part of Austrian law, bars service of legal process within the headquarters seat without the express consent of OPECâs Secretary General. Prewitt, 353 F.3d at 925. Freedom Watch does not contend that it sought the involvement of the Austrian Federal Ministry or received consent from OPECâs Secretary General.
The remainder of Rule 4(f)(2) is equally unhelpful to Freedom Watch. Freedom Watch makes no suggestion that there was any âletter rogatory or letter of requestâ here â or any response thereto â as would be required for service under Rule 4(f)(2)(B). As for Rule 4(f)(2)(C), its provisions are inapplicable to methods of service, like those attempted by Freedom Watch, âprohibited by the foreign countryâs law.â In any event, personal delivery under Rule 4(f)(2)(C)(i) is unavailable for an unincorporated association like OPEC. See Fed.R.Civ.P. 4(h)(2). And there is no evidence of compliance with the requirements of 4(f)(2)(C)(ii) â i.e., that a clerk of the court addressed and dispatched the mailing or that it required a signed receipt.
The final provision of Rule 4(f) allows service âby other means not prohibited by international agreement, as the court orders.â Fed.R.Civ.P. 4(f)(3) (emphasis added). To validly effectuate service under Rule 4(f)(3), a plaintiff therefore must affirmatively seek and obtain the district courtâs authorization for a particular means of service. See, e.g., Rio Props., 284 F.3d at 1013. Here, however, Freedom Watch neither sought nor secured the district courtâs authorization to serve OPEC through personal delivery or Austrian mail. As a result, Freedom Watchâs attempts to effectuate service of process on OPEC through those means failed to satisfy Rule 4(f)(3), or Rule 4(f) more generally.
B.
There remains the question whether the district court abused its discretion in declining to authorize alternative means of service on OPEC. Rule 4(f)(3) permits service of process âby other means not prohibited by international agreement, as the court orders.â Fed.R.Civ.P. 4(f)(3). The parties agree that â[t]he decision whether to allow alternative methods of serving process under Rule 4(f)(3) is committed to the âsound discretion of the district court.â â Brockmeyer v. May, 383 F.3d 798, 805 (9th Cir.2004) (quoting Rio Props., 284 F.3d at 1016).
Rule 4(f)(3) contemplates a district court âorder[]â authorizing alternative means of service. Fed.R.Civ.P. 4(f)(3). Generally, under the Federal Rules of Civil Procedure and the applicable local rules, a party seeking a district court order would file a formal motion and include a proposed order apprising the court of its request and specifying the relief sought. See Fed.R.Civ.P. 7(b) (âIn General. A request for a court order must be made by motion.â); D.D.C. R. 7(c) (âEach motion and opposition shall be accompanied by a proposed order.â). Here, however, Freedom Watch did not file a motion or submit a proposed order. Instead, it requested the district court to authorize alternative means of service in its memorandum in response to OPECâs motion to dismiss. But insofar as Freedom Watch should have perfected its request through a separate motion and proposed order, OPEC made no objection in the district court to the manner in which Freedom Watch sought authorization under Rule 4(f)(3). OPEC instead fully engaged on the merits of Freedom Watchâs request. And the district court, following OPECâs lead, squarely addressed (and rejected) Freedom Watchâs Rule 4(f)(3) request in its opinion. OPEC waited until oral argument in this court to object to the manner in which Freedom Watch made its Rule 4(f)(3) request, but âoral argument is
Freedom Watch proposed three alternative methods of serving process on OPEC: email, fax, and service through OPECâs United States counsel. For each of those methods, Freedom Watch expressly invoked the district courtâs power under Rule 4(f)(3) to authorize alternative means of service. See Pl.âs Opp. to Def.âs Mot. to Dismiss at 7 (âEmail and fax have frequently been approved to effectuate service pursuant to Rule 4(f)(3).â); id. at 8 (âAnother common method of service pursuant to Rule 4(f)(3) is service on a defendantâs United States-based attorney.â). Yet in addressing Freedom Watchâs request that the court âpermit alternative methods for service of process pursuant to Rule 4(f)(3),â the district court appeared to focus solely on the initial two methods. Freedom Watch, 288 F.R.D. at 233 (citing page in Freedom Watchâs opposition in which it proposed service via email and fax, but not page in which it proposed service through counsel). Recognizing that the plaintiff in Prewitt had made âidentical argumentsâ concerning those two methods, the court saw no reason âto stray from Prewittâs reasoning here.â Id. (citing Prewitt, 353 F.3d at 928).
We perceive no basis for disturbing that conclusion. The plaintiff in Prewitt did suggest that service could be effectuated on OPEC via the alternative means of email and fax. 353 F.3d at 927. The Eleventh Circuit rejected those arguments, noting that the Advisory Committee Notes for Rule 4(f)(3) state that â âan earnest effort should be made to devise a method of communication that is consistent with due process and minimizes offense to foreign law.â â 353 F.3d at 927 (emphases added by the Eleventh Circuit). In the view of the Eleventh Circuit, service on OPEC via email or fax, without OPECâs consent and in violation of the OPEC Headquarters Agreement, âwould constitute a substantial affront to Austrian law.â Id. As a result, âthe district court did not abuse its discretion in denying Prewittâs motion to authorize alternative means of service.â Id. at 928. The district court here, while engaging in no extended discussion of the matter, considered Freedom Watchâs request for service on OPEC via email and fax and rejected it for the reasons set forth in Prewitt. We see no abuse of discretion in that ruling.
We reach a contrary conclusion concerning the district courtâs consideration of Freedom Watchâs third proposed method: service through OPECâs United States counsel, the law firm of White & Case. As the district court noted, Prewitt gave no consideration to that alternative means. The district court examined it under the criteria set out in Rule 4(h)(1), making no reference to Rule 4(f)(3) in its analysis. The former provision allows for service of process on an unincorporated association in the United States âby delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service.â Fed.R.Civ.P. 4(h)(1)(B). The district court ruled that OPEC âcould not have been validly served through its counselâ under Rule 4(h)(1). The court reasoned that White & Case had not been âauthorized by appointment or by law to receive service on [OPECâs] behalf,â and also observed that Freedom Watch had
Although there is no basis for questioning the district courtâs conclusion as a matter of interpreting Rule 4(h)(1), Freedom Watch relied solely on Rule 4(f)(3) â not Rule 4(h)(1) â in seeking authorization to serve OPEC through its United States counsel. And the district courtâs stated reasons for rejecting service through counsel would not preclude authorization of such service under Rule 4(f)(3). The requirements of Rule 4(h)(1) do not carry over to Rule 4(f)(3). A number of courts thus have sanctioned service on United States counsel as an alternative means of service under Rule 4(f)(3) without requiring any specific authorization by the defendant for the recipient to accept service on its behalf. See U.S. Commodity Futures Trading Commân v. Aliaga, 272 F.R.D. 617, 619-20 (S.D.Fla.2011) (authorizing service on foreign defendants through local counsel who stated that âhe is not authorized to accept service of process on behalf of either defendantâ); In re Potash Antitrust Litig., 667 F.Supp.2d 907, 931-32 (N.D.Ill.2009) (permitting substituted service on U.S. attorneys retained by Russian defendants without requiring specific authorization); LG Elecs., Inc. v. ASKO Appliances, Inc., No. 08-828(JAP), 2009 WL 1811098, at *4 (D.Del. June 23, 2009) (similar); RSM Prod. Corp. v. Fridman, No. 06 CIV. 11512(DLC), 2007 WL 2295907, at *1-6 (S.D.N.Y. Aug. 10, 2007) (similar); Brookshire Bros. v. Chiquita Brands Int% No. 05-CIV-21962, 2007 WL 1577771, at *2 (S.D.Fla. May 31, 2007) (similar).
Additionally, while the district court relied on Freedom Watchâs failure to file proof of service on OPECâs attorneys, the absence of proof of service poses no inflexible barrier to the prospective authorization of such service under Rule 4(f)(3). As a general matter, â[fjailure to prove service does not affect the validity of service. The court may permit proof of service to be amended.â Fed.R.Civ.P. 4 (l )(3). Freedom Watch, moreover, volunteered to re-serve OPEC through any of the methods it proposed in its brief. Courts disagree on whether alternative means of service undertaken without court order may be authorized retroactively under Rule 4(f)(3). Compare Brockmeyer, 383 F.3d at 806 (Under Rule 4(f)(3), plaintiffs âmust obtain prior court approval for the alternative method.â), with Marks v. Alfa Grp., 615 F.Supp.2d 375, 379-80 (E.D.Pa.2009) (retroactively authorizing plaintiffsâ attempted service via FedEx). Here, in light of Freedom Watchâs failure to file proof of service on OPECâs counsel, there was no reason for the district court to authorize such service retroactively. But as a prospective matter, the district court presumably could have elected to grant Freedom Watchâs Rule 4(f)(3) request by ordering service on White & Case within a specified time period and requiring proof of that subsequent service. See Kaplan v. Hezbollah, 715 F.Supp.2d 165, 167 (D.D.C.2010) (refusing to authorize previous attempt at service retroactively, but authorizing prospective service via publication); see also Fed.R.Civ.P. 4(m) (120-day time limit for service of process âdoes not apply to service in a foreign country under Rule 4(f)â).
The district courtâs apparent consideration of service through OPECâs United States counsel under Rule 4(h)(1) â in lieu of Rule 4(f)(3) â is understandable: it was fully in keeping with OPECâs approach to
On remand, the district court retains discretion under Rule 4(f)(3) to authorize service even if the alternative means would contravene foreign law. See Rio Props., 284 F.3d at 1014 (â[A]s long as court-directed and not prohibited by an international agreement, service of process ordered under Rule 4(f)(3) may be accomplished in contravention of the laws of the foreign country.â); cf. Prewitt, 353 F.3d at 928 n. 21. In contrast to the Advisory Committee Notes for Rule 4(f)(2), which state that â[s]ervice by methods that would violate foreign law is not generally authorized,â the Rule 4(f)(3) Advisory Notes state only that âan earnest effort should be made to devise a method of communication that is consistent with due process and minimizes offense to foreign law.â Fed. R.Civ.P. 4 Notes of Advisory Comm, on Rulesâ1993 Amendments (emphasis added). Accordingly, even if service cannot be effectuated on OPEC through United States counsel without violating Austrian law, the district court could still authorize such service if it would âminimizeâ offense to Austrian law. And while Rule 4(f)(3) addresses service only âat a place not within any judicial district of the United States,â Fed.R.Civ.P. 4(f), arguably, when a court orders service on a foreign entity through its counsel in the United States, the attorney functions as a mechanism to transmit the service to its intended recipient abroad. The parties do not address that issue and we have no occasion to resolve it.
Our decision to remand should' not be mistaken for agreement with Freedom Watch that the district court must authorize some method of serving process on OPEC as a matter of due process, public policy, or enforcement of United States antitrust law. Freedom Watch identifies no authority obligating a district court to authorize an alternative method of service under Rule 4(f)(3) when there is no other available method to serve the defendant without its consent. Indeed, this court has made clear that, insofar as the formal requirements of service of process give rise to a âloopholeâ enabling a defendant to evade service of process, âthe legislature can, of course, remove it by amending [the statute] to provide an alternative method of service.â Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 516 (D.C.Cir.2002) (emphasis added). But the district court must at least exercise its discretion under Rule 4(f)(3), which it can now do on remand.
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For the foregoing reasons, we vacate the district courtâs order of dismissal and remand for further proceedings consistent with this opinion. Freedom Watch also raises arguments entirely unrelated to OPECâs service-of-process objections. Those arguments are not properly before this court at this time. The district court
So ordered.