Source: http://openjurist.org/519/f2d/974
Timestamp: 2016-05-27 03:00:13
Document Index: 100330125

Matched Legal Cases: ['§ 18', '§ 1604', '§ 17', '§ 10', '§ 1292', '§ 1254', '§ 1292', '§ 1292', '§ 1332', '§ 27', '§ 35', '§ 35', '§ 37', '§ 37', '§ 18', '§ 37', '§ 29', '§ 4911', '§ 4911', '§ 4918', '§ 1292', '§ 1292', '§ 30', '§ 27']

519 F2d 974 Bersch v. Drexel Firestone Incorporated & Ios J H | OpenJurist
519 F. 2d 974 - Bersch v. Drexel Firestone Incorporated & Ios J H HomeFederal Reporter, Second Series 519 F.2d.
See Restatement (2d) of Foreign Relations Law § 18, "Jurisdiction to Prescribe with Respect to Effect within Territory". The statement, however, must be read in context. The indictment at issue in Strassheim v. Daily charged that Daily, in Illinois, had connived with the warden of a Michigan prison to defraud the prison's Board of Control by substituting worn and second-hand machinery for the new machinery that had been ordered, and the Court declined to upset, on a petition for habeas corpus, an order extraditing Daily from Illinois to Michigan. This principle would support subject matter jurisdiction if a defendant, even though acting solely abroad, had defrauded investors in the United States by mailing false prospectuses into this country, see ALI Proposed Federal Securities Code (Draft No. 3, April, 1974) § 1604(a) (1)(A) & Comment (3)(b) at 165-66, or if, as in Schoenbaum, the number of shares of a company traded on American exchanges was increased by a sale to insiders without adequate consideration at least when this is imperfectly disclosed, cf. Popkin v. Bishop, 464 F.2d 714 (2 Cir. 1972). But it does not support subject matter jurisdiction if there was no intention that the securities should be offered to anyone in the United States, simply because in the long run there was an adverse effect on this country's general economic interests or on American security prices. Moderation is all. This, we think, is what Judge Hand had in mind in the remarks in his Aluminum opinion quoted in the margin.33 These considerations are particularly pertinent in view of the limitations in § 17(a) of the 1933 Act to acts in "the offer or sale of any securities" and in § 10(b) of the 1934 Act to acts "in connection with the purchase or sale of any security." This means to us that there is subject matter jurisdiction of fraudulent acts relating to securities which are committed abroad only when these result in injury to purchasers or sellers of those securities34 in whom the United States has an interest, not where acts simply have an adverse affect on the American economy or American investors generally.35 Also we do not think that a combination of the district court's first and third grounds, neither sufficient in itself, supports a result different from that which would be proper if each subsisted alone.
Even if we were limited to the four corners of the certificate,44a we would not accept plaintiff's argument. The district judge must have recognized the possibility that we might decline to accept his integration theory in its fullest reach, and also his reliance on general economic effects in the United States, yet uphold subject matter jurisdiction with respect to plaintiffs who had been directly affected in this country or to American citizens who had purchased abroad. We do not believe he meant that, in that event, we should be limited to declaring our own views and be powerless to discharge the normal responsibilities of an appellate court to determine their consequences. When he said that a decision by this court would materially advance the ultimate determination of the controversy and, quoting from Bobolakis v. Compania Panamena Maritima San Gerassimo, 168 F.Supp. 236, 240 (S.D.N.Y.1958), "would save . . . the cost and delay of protracted and expensive litigation," he could hardly have been blind to the savings that would result from a ruling on our part that the action could not be maintained on behalf of the many thousands of foreign purchasers if that was our conclusion.
Moreover, as we have recently held, our powers on an appeal under § 1292(b) are not so narrowly circumscribed as to preclude consideration and resolution of questions other than those specifically regarded as controlling by the district court at the time of its certification order. See Capital Temporaries, Inc. v. Olsten Corp., 506 F.2d 658, 660 (2 Cir. 1974). See also Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3 Cir. 1974), cert. denied, 419 U.S. 885, 95 S.Ct. 152, 42 L.Ed.2d 125 (1974). Compare Hurwitz v. Directors Guild of America, Inc., 364 F.2d 67, 70 (2 Cir.), cert. denied, 385 U.S. 971, 87 S.Ct. 508, 17 L.Ed.2d 435 (1966). Perhaps in awareness of the difficulties that had arisen with respect to propounding certified questions to the Supreme Court under 28 U.S.C. §§ 1254 and 1255, see Stern & Gressman, Supreme Court Practice Ch. 9, pp. 385-89 (4th ed. 1969); Moore & Vestal, Present and Potential Role of Certification in Federal Appellate Procedure, 35 Va.L.Rev. 1, 10-25 (1949), Congress wrote § 1292(b) differently. While the district court judge is required to state what he considers to be "a controlling question of law," the appeal is from the order here an order upholding subject matter jurisdiction over a class action in which all purchasers in all three IOS offerings were the plaintiff class. See Johnson v. Alldredge, 488 F.2d 820, 823 (3 Cir. 1973), cert. denied sub nom., Cronrath v. Johnson, 419 U.S. 882, 95 S.Ct. 148, 42 L.Ed.2d 122 (1974). See also 9 Moore, Federal Practice P 110.25(1) at 269-73 (1973). This conclusion as to the broad scope of our review power under § 1292(b) is consistent with the principal purpose of that section as evidenced in its lengthy legislative history. Section 1292(b) was the result of dissatisfaction with the prolongation of litigation and with harm to litigants uncorrectable on appeal from a final judgment, sometimes resulting from strict application of the federal final judgment rule. It was thus designed to cure these difficulties by permitting speedy determination of debatable legal issues, the resolution of which might greatly advance the ultimate determination of the controversy, without requiring the parties first to participate in a trial. See 3 U.S.Code Cong. & Adm.News, 85th Cong., 2d Sess. 5255-5263 (1958); Hearings Before House Subcomm. No. 3 of the House Comm. on the Judiciary on H.R. 6238, 85th Cong., 2d Sess. (1958), H.R.Rep.No.1667, 85th Cong., 2d Sess. 1-2 (1958); S.Rep.No.2434, 85th Cong., 2d Sess. 3-4 (1958); Milbert v. Bison Laboratories, 260 F.2d 431, 433-35 (3 Cir. 1958) (en banc ); Note, Federal Appealability, 75 Harv.L.Rev. 351, 379 (1961).
In arguing against retention of foreign purchasers in the class, appellants rely heavily on Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973). At first blush the case would scarcely seem pertinent since its precise holding was merely that except when aggregation was permissible, each member of the class and not simply the named plaintiffs must have a claim exceeding $10,000 when that was required as a jurisdictional amount, and no such amount is required for an action under the securities laws. However, appellants find Zahn to have declared a more general principle, namely, "that a person who cannot sue in the federal courts as a named plaintiff because of lack of jurisdiction over his claim, may not be part of a class represented by a named plaintiff over whose claim the federal court has jurisdiction," Andersen brief at 57. The argument continues that if such jurisdiction were claimed to exist for the foreign purchasers on the basis of 28 U.S.C. § 1332, this would be destroyed by the lack of diverse citizenship as between plaintiff Bersch and some of the defendants, and that in any event it is most unlikely that each foreign purchaser has a claim exceeding $10,000.
Regrettably plaintiff has not favored us with a response, preferring to rest on his claim, with which we disagree for reasons just developed, that the issue is not before us. Although certain commentators apparently view the effect of Zahn to be limited to cases where a jurisdictional amount was required, see, e. g., Note, The Supreme Court, 1973 Term, 88 Harv.L.Rev. 40, 49 (1974), the dissents of Judge Timbers in this court, 469 F.2d 1033 at 1037-38, and Mr. Justice Brennan in the Supreme Court, 414 U.S. at 302, 94 S.Ct. 505, had pointed to possible broader implications, which have been recognized by other commentators. See, e. g., Note, Ancillary Jurisdiction and the Jurisdictional Amount Requirement, 50 Notre Dame Lawyer 346, 350-63 (1974) (potential implications for ancillary jurisdiction doctrine with respect to (1) Intervention Fed.R.Civ.P. 24; (2) Impleader id. 14(a); (3) Crossclaims id. 13(g); (4) Compulsory Counterclaims id. 13(a); (5) Interpleader id. 22). If Zahn means what appellants assert, it would run counter to the ruling in Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356, 48 S.Ct. 338, 65 L.Ed. 673 (1921), where the Court held that the complete diversity necessary under Strawbridge v. Curtiss, 3 Cranch (7 U.S.) 267, 2 L.Ed. 435 (1806), was not destroyed by the intervention as plaintiffs in a class action of a class having the same citizenship as the defendant unless this portion of Ben-Hur rests on the distinction between being originally named and later intervening as plaintiffs. Cf. Wichita R.R. & Light Co. v. Public Service Comm'n, 260 U.S. 48, 54, 43 S.Ct. 51, 67 L.Ed. 124 (1922). Appellants could respond that fragile as this distinction may seem, it is the only satisfactory basis for reconciling Ben-Hur with Zahn itself.45
We think it unnecessary to resolve this difficult issue, an attempt that might lead us into the effect of the rationale alleged to underlie Zahn upon such developments in the law of pendent jurisdiction as our decisions in Astor-Honor, Inc. v. Grosset & Dunlop, Inc., 441 F.2d 627, 629-30 (2 Cir. 1971), and Leather's Best, Inc. v. S.S. Mormaclynx, 451 F.2d 800, 809-10 (2 Cir. 1971). See Hart & Wechsler, The Federal Courts and the Federal System 1078-81 (2d ed. 1973), and D. Currie, Federal Courts: Cases and Materials 394-97, 520-22 (2d ed. 1975). Even if we were to assume that the district court has power to retain the foreign purchasers in the class and entertain the state law claims, it would be an abuse of discretion for it to do so. United Mine Workers v. Gibbs, 383 U.S. 715, 726-27, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).
Here the record contains uncontradicted affidavits that England, the Federal Republic of Germany, Switzerland, Italy, and France would not recognize a United States judgment in favor of the defendant as a bar to an action by their own citizens, even assuming that the citizens had in fact received notice that they would be bound unless they affirmatively opted out of the plaintiff class,48 and another affidavit recites that several hundred claims, including those of at least eighteen Americans, against defendant Cornfeld are pending in Switzerland49 and that at least ninety have been settled. The affidavits are consistent with the conclusion in Von Mehren and Trautman, Recognition of Foreign Adjudications: A Survey and a Suggested Approach, 81 Harv.L.Rev. 1601 (1968), that European courts are far less inclined to recognize foreign judgments than are American courts applying the principles of Hilton v. Guyot, 159 U.S. 113, 202-03, 16 S.Ct. 139, 40 L.Ed. 95 (1895). We do not find it a satisfactory answer that here the defendants may be protected by the running of the statute of limitations in foreign countries. Nothing like a complete survey has been made and apparently the statute will not run in France until 1999. Moreover, in a situation like this, defendants should be entitled to a decision concerning the claims of foreign plaintiffs early in the progress of the litigation.
Against this plaintiff urges that foreign purchasers may have abstained from bringing timely suits in their own countries because of reliance on Judge Frankel's determination.50 Whatever force this might or might not have had if plaintiff had then given notice pursuant to Fed.R.Civ.P. 23(c)(2), as we now know to be required at some stage, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 172-77, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), none was. If it had been, it would have had to disclose that the class action determination was expressly subject to reconsideration.
There are other problems concerning the future of this action which we leave to the district court since further factual inquiry is needed. The class of residents to whom sales were made in the United States may prove to be so small as to create questions whether this group meets the numerosity requirement of Fed.R.Civ.P. 23(a), particularly since some may not desire to sue,51 and whether in view of the fact that they were all or predominantly "insiders" of one sort or another, "the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3).52 There is also a question whether if plaintiff Bersch did not rely on the prospectus in making his purchase, see note 39 supra, he can properly represent them. If this is resolved favorably to Bersch, there is a further question whether he should also be allowed to represent United States citizens who purchased IOS shares abroad. Perhaps still other questions will arise.
In dealing with jurisdiction over the person of Crang, we turn, as did the district court, to Part III of our decision in Leasco, 468 F.2d at 1339-44. We there held "that Congress meant § 27 (of the Securities Exchange Act) to extend personal jurisdiction to the full reach permitted by the due process clause" and that the boundaries of this, in the case of a defendant not personally present at the time of service, were set forth in §§ 35, 36 and 37 of the Restatement (2d) of Conflict of Laws, which themselves in large part merely amplify the central idea contained in the Supreme Court's most recent statement on the subject in Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) that it is "essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."
The first of these, § 35, "Doing Business in State",53 requires little comment. It is not even contended that Crang comes within (3); although it once had a branch office in New York, this was discontinued several months prior to the IOS offering and long before process was served. Crang's current business, so far as the United States is concerned, consists of buying and selling for Americans securities traded on Canadian markets and arranging with American brokers for its Canadian customers to buy or sell securities traded in American markets.54 This is not doing business within the United States; if it were, every securities dealer of any significant size anywhere in the world would be "doing business" here.55 The situation is not changed by the fact that on one occasion in April 1969 a Crang partner visited four New York investment houses in an apparent attempt to drum up trade.56 No evidence has been adduced of any more recent solicitations of business in the United States by Crang. Even assuming representatives of Crang sporadically visit investment banks and brokerage firms in the United States to solicit the type of business discussed above, this would hardly constitute "doing business" in the sense in which that concept has been developed, even subsequent to the liberalization of personal jurisdiction principles accomplished by International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and Hanson v. Denckla, supra. See, e. g., Bryant v. Finnish Nat'l Airline, 15 N.Y.2d 426, 260 N.Y.S.2d 625, 208 N.E.2d 439 (1965). Beyond this, except when the doing of business is "so continuous and substantial as to make it reasonable" for the state to go further, see Perkins v. Benquet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952), "doing business" affords jurisdiction only for causes of action arising from the business being done.
There remains for consideration § 37 ("Causing Effects in State by Act Done Elsewhere").59 The plaintiff's argument here that, under the judge's "integration" theory, everything done by Crang with respect to the IOS underwriting was a "cause" of injuries to the plaintiffs who were residents of the United States raises again the question we did not decide in our discussion of subject matter jurisdiction. We think it unnecessary to do so in this context since, even assuming that because of the integrated nature of the underwritings Crang's acts had some causal relation to the alleged injuries to purchasers of the IOB offering who were American residents or United States citizens, we believe the test for in personam jurisdiction is somewhat more demanding. We said with respect to § 37 in Leasco, 468 F.2d at 1341, that "this is a principle that must be applied with caution, particularly in an international context", see Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121, 1127 (1966), and suggested that at minimum the effect within the state must occur "as a direct and foreseeable result of the conduct outside the territory," the language of § 18 of the Restatement (2d) of Foreign Relations Law. Indeed, § 37 itself contains the important qualification "unless the nature of the effects and of the individual's relationship to the state makes the exercise of such jurisdiction unreasonable." While Crang knew of the IOB underwriting, there is nothing to show it had knowledge that some of the purchasers would be persons residing in the United States or United States citizens residing abroad.
IOS' application also sought review of the district court's refusal to step aside with respect to it in favor of the New Brunswick liquidation. Compare Canada Southern Ry. Co. v. Gebhard, 109 U.S. 527, 3 S.Ct. 363, 27 L.Ed. 1020 (1883); Pennsylvania v. Williams, 294 U.S. 176, 55 S.Ct. 380, 79 L.Ed. 841 (1935). The district court gave no reasons for its refusal. We think it should have done so. However, it is possible that, in light of our decision, IOS may be satisfied to have this litigation proceed before the district court. If not, it should renew its application for a stay and the district judge should rule upon it, and if the ruling be adverse, IOS may apply to us again.
The liquidation proceedings against IOS were initiated on August 30, 1973, before Mr. Justice Dickson of the Supreme Court of New Brunswick, Canada, on the petition of the Public Trustee of the Province of Ontario, as creditor of IOS. Subsequently two additional petitions for the liquidation of IOS were filed, one by another creditor, and one by a shareholder. See In re I.O.S., Ltd., 7 N.B.R. (2d) 316 (S.Ct.1973), amended on appeal, 7 N.B.R. (2d) 311 (S.Ct.App.Div.1973). We are told that the filing of the first petition "followed and was in great measure the result of conferences among the governments of Canada and the Provinces of Quebec and Ontario, the regulatory authorities of Luxembourg and of the United States Securities and Exchange Commission." Affidavit of Herbert M. Wachtell, p. 4 n.*, April 16, 1974. During those conferences it was apparently agreed, inter alia, that liquidation of the various interconnected business entities that made up the multi-national IOS complex would be sought by or with the assistance of the relevant government or regulatory authorities of the corporate domiciles of the various key corporations. We are further told that it was agreed at the conference that an informal international committee made up of representatives of the various governments and regulatory authorities referred to above "would periodically meet and generally oversee the liquidation process."
Such problems are not presented when the SEC seeks to enjoin activity as in SEC v. Gulf Intercontinental Finance Corp., 223 F.Supp. 987 (S.D.Fla.1963), and SEC v. United Financial Group, Inc., 474 F.2d 354 (9 Cir. 1973), on which plaintiff relies, or when the action is by named plaintiffs, as in Leasco or in IIT v. Vencap, Ltd., --- F.2d --- (2 Cir. 1975) this day decided
However, though Securities Act registration of such an offering (an underwriting of the type described in note 12 supra ) is not required the anti-fraud provisions of the Securities Act and the Securities Exchange Act of 1934 would, in general, be applicable to the activities of a registered broker-dealer participating in such an underwriting.
Apart from the fact that both cases cited in note 26 were injunction actions by the SEC, the court in Gulf Intercontinental relied in part on misrepresentations and offers contained in advertisements in newspapers that were distributed within the United States, some of which "no doubt" had been read by American investors in this country, 223 F.Supp. at 994-95, and in United Financial the court was dealing with a scheme master-minded by a United States issuer and based in the United States. While Travis v. Anthes Imperial Ltd., supra, 473 F.2d 515, was a class action for damages, the plaintiff class was limited to American shareholders, 331 F.Supp. 797, 799, and the named plaintiffs alleged that they had been subjected to misrepresentations in the United States. Moreover, the court specifically reserved the question whether the action might proceed as a class action until after plaintiffs had completed discovery. Finch v. Marathon Securities Corp., 316 F.Supp. 1345 (S.D.N.Y.1970), and Investment Properties Int'l, Ltd. v. I.O.S., Ltd., CCH Fed.Sec.L.Rep. (1970-1971 Transfer Binder) P 93,001, aff'd without opinion (2 Cir. 1971) (unreported), both private damage suits, look in the other direction, as does the recent decision in SEC v. Kasser, 391 F.Supp. 1167 (D.N.J.1975) (Whipple, Ch. J.)
In effect this court was acting in lieu of the Supreme Court by virtue of a 1944 amendment to 15 U.S.C. § 29 (certification of appeal of Government civil antitrust action to court of appeals when no quorum of Justices in Supreme Court). See United States v. Aluminum Co. of America, 320 U.S. 708, 64 S.Ct. 73, 88 L.Ed.2d 415 (1943)
It is unclear precisely when Bersch considered his purchase to have been "completed" by which time he claims to have read all three prospectuses. Two possible dates immediately spring to mind: September 3, 1969, when he filled out his subscription; alternatively, October 15, the date when IOS accepted the subscription for final delivery of the shares. Although appellants argue for the former, it is far from certain that Bersch did not consider the latter date to be the date of purchase. Since he was an American citizen purchasing common shares of a foreign issuer, his purchase was potentially subject to the Interest Equalization Tax, which was then still in effect, and which levied a significant tax on the acquisition of such investment interests by Americans. See IRC §§ 4911, 4920(a)(4)(A). See generally IRC §§ 4911-4921; 4931; 6011(d); 6076; 6680-81; 7241. However, since Bersch was purchasing his shares as part of a secondary offering some of the sellers in which were American citizens his purchase arguably fell within the prior American holder exception to the tax. IRC § 4918. On an application form, dated January 28, 1970, to the Internal Revenue Service for a "Certificate of Prior American Ownership and Interest Equalization Tax Compliance", which had been supplied to Bersch by IOS, and was signed by him, the date of purchase was stated as October 15, 1969
44a The defendants have asked that the court's determination that it has subject matter jurisdiction and in personam jurisdiction over IOS and Cornfeld filed this day be certified for appeal to United States Court of Appeals pursuant to 28 U.S.C. § 1292(b). The issue of subject matter jurisdiction clearly meets the statutory criteria. While the jurisdictional reach of our securities laws has been settled and clarified by our Court of Appeals in Schoenbaum v. Firstbrook, 405 F.2d 215 (2d Cir. 1968) and Leasco Data Processing Corp. v. Maxwell, 468 F.2d 1326 (2d Cir. 1972), there is substantial ground for difference of opinion as to whether the ratio decidendi of those cases was properly applied in the instant case. Moreover, the question of subject matter jurisdiction is a controlling issue of law in this case. If the court is in error, the whole controversy could be terminated. The basis for the court's determination was that the tripartite offerings involved were an integrated entity and not three distinct, separate and independent transactions. An immediate appeal, if the court is in error, will materially advance the ultimate determination of the controversy and "would save * * * the cost and delay of protracted and expensive litigation." Bobolakis v. Compania Panamena Maritima San Gerassimo, 168 F.Supp. 236, 240 (S.D.N.Y.1958). Therefore, the request that the determination in respect of subject matter jurisdiction be certified for appeal pursuant to 28 U.S.C. § 1292(b) is granted.
The dissenters in Zahn strongly urged the authority of Ben-Hur, 414 U.S. at 308-10, 94 S.Ct. 505, but the majority did not respond
Counsel for plaintiff tells us that a Swiss attorney representing plaintiffs in the action then pending visited him in New York for the purpose of "intervening" these claimants in the instant action and that counsel advised this was unnecessary in light of Judge Frankel's ruling. But that ruling was stated to be subject to reconsideration, as it necessarily was under Fed.R.Civ.P. 23(a)
Plaintiff also relies on two SEC broker-dealer registrations, one in 1956 and the other in 1970, copies of which were annexed to its brief. These papers were not called to the attention of the district court and thus are not properly before us, see, e. g., Dictograph Prods. Co. v. Sonotone Corp., 231 F.2d 867 (2 Cir.), appeal dismissed per stip., 352 U.S. 883, 77 S.Ct. 104, 1 L.Ed.2d 82 (1956); Jaconski v. Avison Corp., 359 F.2d 931, 936 n.11 (3 Cir. 1966); United States v. Summit Fidelity & Surety Co., 408 F.2d 46 (6 Cir. 1969); if plaintiff considered them sufficiently important, he should have moved to reopen the record. In fact the papers do not advance plaintiff's cause. We are told by Crang that the 1956 registration related to the former New York office which was closed effective April 1, 1969 and that the 1970 registration was by a successor corporation and not by the partnership that is here being sued. Plaintiff's statement "Defendant Crang executed a consent to the service of process upon the SEC which was operative during the relevant period" is misleading both on these grounds and because the consent in the 1956 registration was only "that notice of any proceeding before the Commission in connection with the application or with registration thereunder may be given (to the person named below)." The consent in the 1970 form is similar. Neither is a general consent to service of process
In light of this holding we have no occasion to consider Crang's argument that it comes within the exemption provided in § 30(b) of the Securities Exchange Act, see note 20 supra. Compare Kook v. Crang, 182 F.Supp. 388, 390-91 (S.D.N.Y.1960)
Section 22(a) of the Securities Act of 1933 and § 27 of the Securities Exchange Act expressly authorize extra-territorial service in any district "of which the defendant is an inhabitant or wherever the defendant may be found." The manner of service is prescribed by Fed.R.Civ.P. 4(i)(l )(D) which provides for service "by any form of mail, requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the party to be served." Although Bersch filed his complaint in 1971, no attempt to serve Cornfeld was made until May 15, 1973 when a summons and complaint were made on a Ms. Diethild Gainer at a residence in Beverly Hills, California. At that time Cornfeld was being held in St. Antoine Prison, Geneva, Switzerland. In September, 1973 plaintiff obtained a summary default order against Cornfeld which was vacated in December of that year. Cornfeld was finally served by mail at St. Antoine Prison in February, 1974. Three attempts were made to serve IOS. The first was in 1972 to an English address which it apparently did not then occupy and was returned marked "Refused" along with some markings that appear to be initials. In February, 1974 two additional attempts were made to serve IOS by sending letters to its former principal executive offices in Geneva and to its New Brunswick headquarters. For several reasons not necessary to consider here IOS contends that it was not "found" at any of these addresses, and that even if it were, none of the attempted services were in conformity with the procedural requirements of Rule 4(i)(2)