Court Opinion

ID: 3196582
Source: CourtListenerOpinion
Date Created: 2016-04-21 17:05:02.081132+00
Date Added: 2024-06-11T13:16:55.286327
License: Public Domain

132 Nev., Advance Opinion    2.1
                        IN THE SUPREME COURT OF THE STATE OF NEVADA

                GRUPO FAMSA, S.A. DE C.V.,                             No. 68626
                Petitioner,
                vs.
                THE EIGHTH JUDICIAL DISTRICT
                COURT OF THE STATE OF NEVADA,                               FILED
                IN AND FOR THE COUNTY OF
                CLARK; AND THE HONORABLE ROB                                APR 2 1 2016
                BARE, DISTRICT JUDGE,
                Respondents,
                   and
                B.E. UNO, LLC,
                Real Party in Interest.

                            Original petition for a writ of prohibition challenging a district
                court order denying a motion to quash service of process.
                            Petition granted in. part.

                Fennemore Craig, P.C., and Christopher H. Byrd and Daniel Nubel, Las
                Vegas; Levinson Arshonsky & Kurtz, LLP, and Richard I. Arshonsky,
                Sherman Oaks, California,
                for Petitioner.

                Goold Patterson and Kelly J. Brinkman, Las Vegas,
                for Real Party in Interest.

                BEFORE HARDESTY, SAITTA and PICKERING, JJ.

                                                  OPINION
                By the Court, HARDESTY, J.:
                            In this petition, we consider whether constitutional due process

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                is satisfied when service of process on a foreign company pursuant to the
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                Hague Convention on the Service Abroad of Judicial and Extrajudicial
                Documents in Civil or Commercial Matters (Hague Convention) depends
                solely upon a certificate of compliance issued by the foreign nation's central
                authority. We hold that it is not and that the district court failed to
                conduct the necessary fact-finding to determine whether service was
                constitutionally sufficient in this case. Therefore, we grant the petition in
                part.
                                  FACTS AND PROCEDURAL HISTORY
                            Real party in interest B.E. Uno, LLC (Uno) owns a shopping
                center in Las Vegas, Nevada. Famsa, Inc. (Famsa) entered into a lease
                agreement for commercial retail space at the shopping center. Petitioner
                Grupo Famsa, S.A. de C.V. (Grupo), a publicly traded Mexican company,
                agreed to guaranty the Famsa lease. Famsa failed to comply with the
                terms of the lease, and Uno filed a complaint in district court against
                Famsa and Grupo for breach of the commercial lease and guaranty.
                            As Grupo is a Mexican company, and as the United States and
                Mexico are both signatories to the Hague Convention, Uno served Grupo
                through the procedures outlined in the Hague Convention. The parties do
                not dispute that serving Grupo through the procedures outlined in the
                Hague Convention was appropriate.
                            The Hague Convention requires all signatories to "designate a
                'Central Authority' whose responsibility it is to accept requests of service
                from any other signatory nation." 4B Charles Alan Wright et al., Federal
                Practice and Procedure § 1134 (4th ed. 2015). The documents to be served
                must be attached to a formal request form and sent to "the Central
                Authority of the nation where service is to be carried out." Id. "If there is
                no error in the documents, the Central Authority in the country of service
                will then ... serve the defendant named in the documents according to its
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                own local laws. . . ." Id. "[O]nce service has been performed[J the Central
                Authority. . . complete[s] an official form,. . certifying the time, place,
                and method of service, as well as indicating on whom the documents were
                served." Id.
                               In this case, the Mexican Central Authority issued a certificate
                of proof of international service of process upon Grupo. The certificate
                states that a woman named Claudia Palomo Martinez was served with
                process and that she was an "employee in [Grupo's] legal department."
                Grupo subsequently filed a motion to quash service of process, arguing that
                Martinez was not an "employee in [Grupo's] legal department," but rather,
                she was a hostess employed to greet individuals coming into the store.
                Grupo submitted a declaration from its legal director stating this was
                Martinez's role. Grupo argued that because Martinez was not an agent,
                officer, or representative of Grupo, she had no authority to accept legal
                documents on Grupo's behalf, and therefore, service of process was
                constitutionally deficient. Uno argued that, even if Martinez was a
                hostess, service of process nonetheless complied with Mexican law and the
                Hague Convention. Uno submitted a declaration from an attorney licensed
                to practice in Mexico stating he believed the service complied with Mexican
                law.
                               During the hearing on the motion to quash, the district court
                stated multiple times that it did not know whether Martinez was merely a
                hostess or someone more involved with the company. Nonetheless, the
                district court denied Grupo's motion to quash service of process, stating
                that Grupo was properly served "under the laws of Mexico as well as the
                Hague Convention and that such service efforts satisfied constitutional
                standards of Due Process." Grupo now petitions this court for a writ of

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                 prohibition, seeking to prohibit the district court from exercising
                 jurisdiction over Grupo due to insufficient service of process.
                                                 DISCUSSION
                              "It is well established that [a] writ of prohibition is the
                 appropriate remedy for a district court's erroneous refusal to quash service
                 of process." Casentini v. Ninth Judicial Dist. Court, 110 Nev. 721, 724, 877
                 P.2d 535, 537-38 (1994) (alteration in original) (internal quotation marks
                 omitted). Furthermore, given the "early stage of the proceedings and the
                 need for efficient judicial administration, an appeal would not be a speedy
                 and adequate legal remedy in this case." Loeb v. First Judicial Dist. Court,
                 129 Nev., Adv. Op. 62, 309 P.3d 47, 50 (2013). Therefore, we will exercise
                 our discretion to entertain the merits of the petition.
                             "This court applies a de novo standard of review to
                 constitutional challenges." Callie v. Bowling, 123 Nev. 181, 183, 160 P.3d
                 878, 879 (2007). Grupo argues that service of process was not
                 constitutionally effective because Martinez was not an agent, officer, or
                 representative so integrated with the company that she knew what to do
                 with the papers. Uno argues that our nation's concept of due process was
                 incorporated into the Hague Convention, and thus, by satisfying the
                 requirements of the Hague Convention, serviceS of process necessarily
                 satisfied constitutional due process. We reject Uno's argument; however,
                 we also reject Grupo's standard for what constitutes constitutional service
                 of process on a foreign corporation.
                             "An elementary and fundamental requirement of due process
                 in any proceeding which is to be accorded finality is 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." Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314
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                 (1950); see also Lidas, Inc. v. United States, 238 F.3d 1076, 1084 (9th Cir.
                 2001) ("Due process merely requires notice reasonably calculated, under all
                 the circumstances, to apprise interested parties of the pendency of the
                 action." (internal quotation marks omitted)). "[W]hether a particular
                 method of notice is reasonable depends on the particular [factual]
                 circumstances." Tulsa Prof 1 Collection Servs., Inc. v. Pope, 485 U.S. 478,
                 484 (1988).
                               Grupo cites a number of cases for the proposition that due
                 process requires service on an agent, officer, or representative. The cited
                 cases, however, do not provide a standard for what method of service
                 comports with constitutional due process. Rather, they discuss the
                 requirements of federal or state rules.   See Direct Mail Specialists, Inc. v.
                 Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988); Tara
                 Minerals Corp. v. Carnegie Mining & Expl., Inc., No. 2:11-CV-01816-KJD-
                 GWF, 2012 WL 760653, at *1 (D. Nev. Mar. 7, 2012); R. Griggs Grp. Ltd. v.
                 Filanto Spa, 920 F. Supp. 1100, 1102-03 (D. Nev. 1996); Conn Convention
                 & Show Mgmt. v. Am. Broad.        Co., 41 N.W.2d 263, 265 (Minn. 1950).
                 Although it is certainly relevant whether the person receiving process on a
                 foreign corporation's behalf is an agent, officer, or representative of that
                 corporation, that information is only useful insofar as it helps demonstrate
                 that notice was "reasonably calculated .. . to apprise interested parties of
                 the pendency of the action." Mullane, 339 U.S. at 314. Therefore, the fact
                 that Martinez may not have been an agent, officer, or representative of
                 Grupo does not end the analysis because service may still have been
                 performed in a manner reasonably calculated to apprise Grupo of the
                 action.
                               Furthermore, constitutional due process is not necessarily
                 satisfied merely because the foreign nation's central authority has issued a
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                certificate of compliance. We recognize the Hague Convention, like our
                nation's concept of due process, works to ensure judicial documents are
                brought to the attention of the defendant within a reasonable time. Hague
                Convention pmbl , Nov. 15, 1965, 20 U.S.T. 361, 362. However, we are not
                convinced that a constitutional inquiry is inappropriate or unnecessary
                where the Hague Convention applies. Indeed, a due process inquiry is
                necessary to ensure the veracity of the certificate when the underlying
                facts are contested.
                            We also acknowledge that many jurisdictions have either
                explicitly or implicitly held that whether service complies with the
                Constitution is a separate, albeit related, question from whether service
                complies with the Hague Convention. See Burda Media, Inc. v. Viertel, 417
                F.3d 292, 303 (2d Cir. 2005) ("[I]n addition to the Hague Convention,
                service of process must also satisfy constitutional due process."); Lidos,
                Inc., 238 F.3d at 1084 (suggesting that, although the Hague Convention
                did not require actual receipt of notice of an IRS summons, a constitutional
                due process inquiry was still necessary); Ackermann v. Levine, 788 F.2d
                830, 838 (2d Cir. 1986) ("Service of process must satisfy both the statute
                under which service is effectuated and constitutional due process. The
                statutory prong is governed principally by the Hague Convention ...
                Heredia v. Transp. S.A.S., Inc., 101 F. Supp. 2d 158, 162 (S.D.N.Y. 2000)
                ("In addition to the Hague Convention, service of process must also satisfy
                constitutional due process."); Eli Lilly & Co. v. Roussel Corp., 23 F. Supp.
                2d 460, 474 (D.N.J. 1998) ("Service of process must satisfy both the statute
                under which service is effectuated [in this case, the Hague Convention] and
                constitutional due process." (internal quotation marks omitted)); R. Griggs
                Grp. Ltd., 920 F. Supp. at 1103 ("Service of process must comply with both

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                      constitutional and statutory requirements," where the statutory
                      requirement referred to the Hague Convention).
                                   As such, where the Hague Convention applies, we hold that
                      service of process must comply with both the Constitution and the Hague
                      Convention. Having so held, we further hold that the district court erred
                      in concluding that "such service efforts [which supposedly complied with
                      Mexican law] satisfied constitutional standards of Due Process" without
                      conducting the necessary fact-finding. Although Uno may have followed
                      the procedures outlined in the Hague Convention, the Mexican Central
                      Authority's service efforts may have amounted to no more than handing off
                      judicial documents to the equivalent of "a greeter at Wal-Mart"—service
                      efforts that, if true, would be unlikely to satisfy constitutional due process
                      absent extenuating circumstances. 1 Therefore, we conclude an evidentiary
                      hearing on the matter is appropriate to determine whether service here
                      was "reasonably calculated, under all the circumstances, to apprise [Grupo]
                      of the pendency of the action." 2 Mullane, 339 U.S. at 314.

                            'We note that the Hague Convention provides multiple means
                      through which a party may effectuate service of documents abroad;
                      therefore, one need not necessarily employ a foreign nation's central
                      authority to comply with the Hague Convention.

                            2Although    the district court has the discretion to allow the plaintiff to
                      make a prima facie showing of personal jurisdiction prior to trial, in doing
                      so, the plaintiff would continue to carry the burden to prove jurisdiction by
                      a preponderance of the evidence at trial. See Trump v. Eighth Judicial
                      Dist. Court, 109 Nev. 687, 692-93, 857 P.2d 740, 743 44 (1993). However,
                      we note that the better practice with issues concerning service of process is
                      to resolve the matter pretrial through an evidentiary hearing, especially
                      where the issue is not particularly complicated.

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                                                CONCLUSION
                             Given the early stage of the proceedings and the nature of the
                 issue raised, we conclude our intervention is warranted. We hold that the
                 issuance of a certificate of compliance from a foreign nation's central
                 authority does not necessarily guarantee compliance with constitutional
                 due process. We further hold that the district court failed to conduct the
                 necessary fact-finding in determining whether service of process complied
                 with constitutional due process. Accordingly, we grant the petition in part
                 and direct the clerk of this court to issue a writ of prohibition instructing
                 the district court to vacate its order denying Grupo's motion to quash
                 service of process so that an evidentiary hearing may be held on the
                 matter.

                                                                                     J.

                 4
                  KS
                  r  i
                 Pickering

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