Court Opinion

ID: 70282
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:58:08+00
Date Added: 2024-06-11T12:07:14.505985
License: Public Domain

United States Court of Appeals, Eleventh Circuit.

                           No. 94-8592.

                      Non-Argument Calendar.

              Owen F. SILVIOUS, Plaintiff-Appellant,

                                v.

              Ghaith R. PHARAON, Defendant-Appellee.

                           June 9, 1995.

Appeal from the United States District Court for the Southern
District of Georgia. (No. CV 492-126), John F. Nangle, Judge.

Before ANDERSON, BIRCH and CARNES, Circuit Judges.

     PER CURIAM:

     This case requires us to determine whether the 1993 revision

of Federal Rule of Civil Procedure 4 eliminated the practice of

allowing an agent in the United States to accept service of process

for a foreign defendant. The district court concluded that service

could not be effected on a foreign defendant by serving his

putative agent in the United States.   We REVERSE and REMAND.

                           I. BACKGROUND

     Plaintiff-appellant Owen Silvious filed suit against defendant

Ghaith R. Pharaon1 in May, 1992, and alleged a cause of action

under the Racketeer influenced and Corrupt Organization Act, 18

U.S.C. § 1964(c), ("RICO").    Silvious charged that Pharaon, as

owner and operator of the Bank of Credit & Commerce International

("BCCI"), defrauded Silvious of money deposited with BCCI in 1985

and due to be repaid to Silvious in October, 1990.      Allegedly,

     1
      Pharaon has never filed an answer or motion with the
district court and has not filed any briefs or other documents
with this court regarding this matter.
Pharaon has left the United States and is in Saudi Arabia.2

     In May, 1992, Silvious began his unrelenting effort to serve

Pharaon in Richmond Hill, Georgia3 and in Saudi Arabia.       Despite

the InterRedec attorney's notifying the United States Marshal's

office that Pharaon did not reside at the Richmond Hill plantation,

Silvious attempted to serve Pharaon at the Richmond Hill address

several times.

         In August, 1992, Silvious moved for a court order for service

for the second time.     He requested that the district court approve

one of the following methods of service for Pharaon:     (1) delivery

of the complaint, summons and amended pleadings to an employee of

Pharaon's, as requested in the earlier motion;           (2) physical

attachment of the documents to the Richmond Hill structure itself;4

     2
      Although Pharaon has been indicted in the Southern District
of Florida for RICO violations, in September of 1993 he remained
outside the jurisdiction of the court, "at large." United States
v. Paul, 150 F.R.D. 696, 697 (S.D.Fla.1993); accord Accused BCCI
Front Man Hit with $37 Million Fine, USA Today, Sept. 18, 1991,
at 2A [hereinafter Front Man Hit with $37 Million Fine ]; Fed
Freezes Assets of Financier Accused of Fronting for BCCI,
Investor's Bus. Daily, Sept. 18, 1991, at 25 [hereinafter Fed
Freezes Assets ].
     3
      The Richmond Hill property is alternatively known as the
old Henry Ford Plantation, Cherry Hill Plantation and Sterling
Bluffs Plantation. InterRedec, Inc., a company reputed to be
owned or controlled by Pharaon, see Maritime Transp. Overseas,
Inc. v. Saudi Research & Dev. Corp., 507 F.Supp. 701, 704-05
(S.D.Tex.1981); Front Man Hit with $37 Million Fine; Fed
Freezes Assets, has been headquartered there and InterRedec
representatives can still be contacted at the plantation, see R1-
18-2. Pharaon reportedly owns the plantation. InterRedec also
has become involved in litigation against Pharaon. Board of
Governors of Fed. Reserve Sys. v. Pharaon, 140 F.R.D. 642, 643
(S.D.N.Y.1991).
     4
      Several days prior to this motion being filed, the Bryan
County Sheriff's Department attempted service by leaving the
complaint, summons and amended pleadings "attached to [the] door
on the fountain side of the residence." R1-13-1. Additionally,
or (3) publication of notice in either the International Herald

Tribune or the Economist, publications distributed in France and

Saudi Arabia, where it was thought Pharaon might be located.                 The

magistrate judge consequently directed that the U.S. Marshal

      attempt service upon the defendant at any place that he may be
      found within the United States [as allowed by the RICO
      statute, 18 U.S.C. § 1965(d) ]. Additionally, the Marshal may
      leave a copy of the summons and complaint at Cherry Hill
      Plantation ... with a person of suitable age and discretion
      residing therein or with an agent authorized by appointment or
      by law to receive service of process. Fed.R.Civ.P. 4(d)(1) [
      (1992) ]. If the Marshal is unable to perfect service using
      these methods, the plaintiff may then urge the Court to
      consider other methods of service.

R1-15-1 to 2.      The court, however, denied Silvious's request for

service    by   publication    and    determined     that   Silvious   had   not

complied    with    Georgia's        long-arm   statute     for   service     by

publication. In September, 1992, Dooley E. Culbertson, purportedly

the   Chairman     of   the   Board    and   Chief    Executive   Officer     of

InterRedec, wrote the court a letter stating that

      Pharaon is not a resident of Sterling Bluff Plantation nor has
      he ever been a legal resident. Furthermore, Dr. Pharaon owns
      no real property in Bryan County and has never been an
      employee, officer or director of InterRedec.

           In light of the above, it is useless for the court to
      attempt to serve papers on Ghaith Pharaon at the InterRedec
      offices at Sterling Bluff Plantation.       Dr. Pharaon is
      represented by the firm of Whitman and Ransom, 200 Park
      Avenue, Suite 2800, New York, New York 10166, attention Mr.
      Berge Setrakian. I do not know, however, whether that law
      firm or any of its members serve in the capacity of agent of

a copy again was mailed. Upon learning of the attempted service,
Silvious amended his motion to request that this latest attempt
at service be deemed effective under Georgia law and that,
additionally, publication be allowed. Silvious apparently
contends that this service was proper under O.C.G.A. § 9-11-
4(d)(6). However, because service in this manner is limited to
actions in which the amount in controversy is less than $200.00,
Silvious could not have complied with Georgia's process statute
in this manner. See O.C.G.A. § 9-11-4(d)(6).
     record for Dr. Pharaon and doubt whether they can accept
     service for him.

R1-18-2.5        The magistrate judge promptly issued another order

indicating its belief that "further efforts to serve the defendant

at the Cherry Hill Plantation would be futile."               R1-19-1 to 2.        The

court instead directed that a copy of the summons and complaint be

mailed to Pharaon's counsel at the address provided by Culbertson.

A copy of the summons and complaint were mailed, but counsel never

responded.

     Silvious then endeavored to serve Pharaon by mail in Saudi

Arabia, and he again moved for a determination of sufficiency of

process.         In June, 1993, the magistrate judge concluded that

despite     Silvious's     numerous    attempts    to     effect    mail    service,

Pharaon had not been served properly yet.               By order dated November

1, 1993, the magistrate judge ruled that none of the attempts at

service     had    been   successful    but     that,   because      Silvious      was

attempting service in a foreign country, the 120 day time limit of

Fed.R.Civ.P. 4(j) (1992) did not apply to this action.                    Therefore,

instead     of    dismissing   the    action    pursuant    to     Rule    4(j),   the

magistrate       judge    allowed    Silvious    thirty    additional       days   to

complete service.          If Silvious failed to effect service, the

magistrate judge stated that he would recommend that the case be

     5
      Contrary to these statements, Silvious points out several
publications in which Pharaon is listed as or referred to as the
Chairman or owner of InterRedec, Inc. See R1-36 (United States
Commercial Center, Letter from American Consulate General,
Jeddah, Saudi Arabia, to Owen F. Silvious (undated); The
International Who's Who 1992-93, at 1278 (56th ed. 1992);
Principal International Businesses 1993: The World Marketing
Directory, at 972-73 (1992)); see also Front Man Hit with $37
Million Fine; Fed Freezes Assets.
dismissed without prejudice.

     On January 21, 1994, the Bryan County Sheriff's Department

delivered    the   summons,    complaint     and    amended    complaint    to

Kethesparan Srikanthan, allegedly an agent of Pharaon, at Sterling

Bluff Plantation.      The affidavit and certificate of service were

filed with the district court on January 24, 1994.              When Pharaon

failed to answer, Silvious moved for a default judgment.

     On March 21, 1994, the magistrate judge entered a Report and

Recommendation to the district court finding that the newly amended

Rule 4 did not allow Silvious to use substituted service on Pharaon

because Pharaon was physically outside of the United States.6

Silvious    objected    to    the    magistrate      judge's    report     and

recommendation;    he argued         inter   alia   that   Pharaon's     agent

authorized by law was properly served and, therefore, substituted

service had occurred.7       After   de novo review of the magistrate

judge's report and recommendation, the district court dismissed

Silvious's action for failure to effect service successfully. This

appeal followed.

     6
         The provisions for service of an individual found within a
            judicial district of the United States, and individuals
            in foreign countries, are found in separate parts of
            new Rule 4. Service upon individuals found within a
            judicial district of the United States may be effected
            "pursuant to the law of the state in which the district
            court is located, or in which service is effected, for
            the service of a summons upon the defendant in an
            action brought in the courts of general jurisdiction of
            the State[.]"

     R1-46-3 to 4 (citations omitted) (emphasis added)
     (alteration in original) (quoting Fed.R.Civ.P. 4(e)(1)).
     7
      Silvious's additional claims lack merit and, therefore, we
need not consider them here.
                          II. DISCUSSION

     "The starting point for an analysis of amenability to service

of process in federal court is Federal Rule of Civil Procedure 4."

Brink's Mat, Ltd. v. Diamond, 906 F.2d 1519, 1521 (11th Cir.1990).

In 1993, during the pendency of Silvious's case, the Federal Rules

of Civil Procedure were amended;   Rule 4 was revised.   Our review

of this case focuses upon the district court's conclusion that

revised Federal Rules of Civil Procedure 4(e) and (f) eliminated

the practice of allowing an agent in the United States to receive

service of process on behalf of a principal who was located in a

foreign country. See Volkswagenwerk Aktiengesellschaft v. Schlunk,

486 U.S. 694, 705, 707, 108 S.Ct. 2104, 2111, 2112, 100 L.Ed.2d 722

(1988).   We review the district court's interpretation of the

Federal Rules of Civil Procedure   de novo.   Burns v. Lawther,   44

F.3d 960, 963 (11th Cir.1995) (per curiam);   McBride v. Sharpe, 25

F.3d 962, 968 (11th Cir.) (en banc), cert. denied, --- U.S. ----,

115 S.Ct. 489, 130 L.Ed.2d 401 (1994).

      The Supreme Court's order amending the Rules stated in

pertinent part "[t]hat the foregoing amendments to the Federal

Rules of Civil Procedure shall take effect on December 1, 1993, and

shall govern all proceedings in civil cases thereafter commenced

and, insofar as just and practicable, all proceedings in civil

cases then pending."    Supreme Court Order of April 22, 1993,

reprinted in Federal Civil Judicial Procedure and Rules 17 (West

ed. 1994).    The plain language of the Supreme Court's order

indicates that the district court may apply either the rule in

effect when the complaint was filed and the case thereby commenced
pursuant to Rule 3, or the rule in effect when service was

attempted last in 1994.8      See Elkay Mfg. Co. v. Ebco Mfg. Co., No.

93 C 5106, 1995 U.S. Dist. LEXIS 473, at * 18 (N.D.Ill. Jan. 13,

1995);      Eskofot A/S v. E.I. Du Pont De Nemours & Co., 872 F.Supp.

81,   86    (S.D.N.Y.1995);     Lowe   v.   Hart,    157   F.R.D.    550,   551

(M.D.Fla.1994).      For analysis, we assume that the district court

considered application of the revised Rule 4 to Silvious's attempts

at service occurring after December 1, 1993, just and practicable.

          The district court held that because Pharaon personally could

not be found and served within the United States, Silvious must

serve Pharaon pursuant to revised Rule 4(f), which provides for

service abroad.      Revised Rule 4(e), however, clearly provides for

substituted      service.9    Prior    to   the     revisions   to   Rule   4,

      8
       The magistrate judge wrote:

                   This is not a situation in which a procedural rule
              was changed during the service attempt and service was
              commenced when the former Rule was in force and
              completed after the new one took effect. Service had
              been attempted in several different ways pursuant to
              former Rule 4. By act of Congress, Rule 4 was changed.
              The Court has no choice but to enforce the new Rule for
              all new attempts at service.

      R1-46-5 (emphasis added). The district court made no
      statement regarding its decision to apply the revised rule.
      We note, however, that the court clearly may apply former
      rules if the case is commenced thereunder.
      9
       Revised Rule 4(e) reads in pertinent part as follows:
                   (e) Service Upon Individuals Within a Judicial
              District of the United States. ... [S]ervice upon an
              individual ... may be effected in any judicial district
              of the United States:

                   (1) pursuant to the law of the state in which the
              district court is located, or in which service is
              effected, for the service of a summons upon the
substituted service did not fail merely because the principal was

outside of the United States.    Volkswagenwerk Aktiengesellschaft,

486 U.S. at 705, 108 S.Ct. at 2111 ("Under [the Due Process]

Clause, foreign nationals are assured of either personal service,

which typically will require service abroad ... or substituted

service that provides "notice reasonably calculated, under all the

circumstances, to apprise interested parties of the pendency of the

action and afford them an opportunity to present their objections.'

"   (emphasis added) (quoting    Mullane v. Central Hanover Bank &

Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865

(1950)).   "Personal service has not in all circumstances been

regarded as indispensable to the process due to residents, and it

has more often been held unnecessary as to nonresidents."   Mullane

v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct.

652, 657, 94 L.Ed. 865 (1950).

      Substituted service on an agent of the party to the action is

           defendant in an action brought in the courts of general
           jurisdiction of the State; or

                (2) by delivering a copy of the summons and of the
           complaint to the individual personally or by leaving
           copies thereof at the individual's dwelling house or
           usual place of abode with some person of suitable age
           and discretion then residing therein or by delivering a
           copy of the summons and of the complaint to an agent
           authorized by appointment or by law to receive service
           of process.

     Fed.R.Civ.P. 4(e) (emphasis added); see also 2 James W.
     Moore et al., Moore's Federal Practice § 4.10[4], at 4-183
     (2d ed. 1995) ("Rule 4(e) permits personal service upon a
     defendant to be made by delivering a copy of the summons and
     complaint to a person deemed by the common or general law,
     federal and probably state, to be authorized to accept
     service of process on behalf of the defendant.").
a common practice.     We find no indication that the amendments to

Rule 4 were intended to alter this method of service for individual

foreign defendants.    The committee notes indicate that the changes

in the Rule were intended to widen the reach of service of process,

not to restrict it.     See Fed.R.Civ.P. 4 advisory committee's note

on 1993 amendment (subdivision (e) and subdivision (f)) ("Together

with subdivision (f), [subdivision (e) ] provides for service on

persons   anywhere,    subject   to   constitutional     and   statutory

constraints....      [Subdivision (f) ] facilitate[s] the use of

federal long-arm law in actions brought to enforce the federal law

against defendants who cannot be served under any state law but who

can be constitutionally subjected to the jurisdiction of the

federal court.").

     Moreover, revised Rule 4(e) makes no reference to where the

defendant or individual is "found." We interpret the words "in any

judicial district of the United States" in Rule 4(e) to describe

the place where the personal or substituted service is "effected"

rather than the location, at the precise moment of service, of the

individual being served.     The individual and the agent need not be

in the same place.    For example, in the case of an individual who

is located in a foreign country but whose legal agent is located in

a judicial district of the United States, a plaintiff may either

personally   serve    the   individual,   per   Rule   4(f),   or   effect

substituted service through the individual's agent, per Rule 4(e).

In deciding which subsection applies, the focus is upon the place

where service is effected, not the location of the defendant at the

time of service.     This reading of Rule 4(e)(2) is consistent with
the language of subdivisions (g) and (h) which alternately refer to

service within a judicial district and to service "in a place not

within any judicial district of the United States."      Fed.R.Civ.P.

4(g), 4(h)(2) (emphasis added).     A plaintiff may effect proper

service on an agent in the United States pursuant to Rule 4(e)(2)

so long as that service complies with requirements of the Due

Process Clause and the relevant statute, even though the individual

party to be served may not be "found" personally in the United

States at the time of service.

                         III. CONCLUSION

     Silvious has appealed the district court's dismissal of his

claim for failure to effect proper service on Pharaon per Rule

4(f).   We conclude that the amendments to Rule 4 did not abolish

the practice of effecting service on an individual who resides

outside of the United States by delivering a copy of the summons

and complaint in the United States to an agent authorized by

appointment or by law to receive service of process for that

individual.    Because   we   conclude   that   the   district   court

misinterpreted the effect of the Rule 4 amendments in this case, we

REVERSE and REMAND to the district court to determine whether

Silvious properly served Pharaon under Rule 4(e)(2).