New World TMT Limited v. Intellambda Systems, Inc. et al
Filing
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ORDER GRANTING IN PART PLAINTIFF'S EX PARTE APPLICATION FOR ORDER AUTHORIZING SERVICE BY ALTERNATIVE METHODS 79 80 (Illston, Susan) (Filed on 3/14/2013)
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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United States District Court
For the Northern District of California
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No. C 06-05564 SI
NEW WORLD TMT LIMITED,
ORDER GRANTING IN PART
PLAINTIFF’S EX PARTE APPLICATION
FOR ORDER AUTHORIZING SERVICE
BY ALTERNATIVE METHODS
Plaintiff,
v.
INTELLAMBDA SYSTEMS, INC.,
Defendant.
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On September 11, 2006, plaintiff New World TMT Limited filed this lawsuit against defendants
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Intellambda Systems, Inc., Welltime Industries, Ltd., and Jianpian “Tony” Qu alleging securities fraud
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and common law fraud. See Complaint. After defendants Intellamdba and Qu defaulted, the Court
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entered a default judgment (“Judgment”) against them on October 19, 2007. See Judgment (Dkt. 75).
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Plaintiffs have since attempted, unsuccessfully, to satisfy that $97 million Judgment.
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In anticipation of filing their forthcoming motion to amend the Judgment to include additional
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judgment debtors, plaintiff has filed an ex parte application for an order authorizing service via mail on
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the proposed additional judgment debtors’ last known addresses and by personal service. See Ex Parte
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Application (Dkt. 80), at 15. On March 6, 2013, the Court held a telephonic conference with plaintiff’s
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counsel fto discuss the application. Plaintiff argues that a court order authorizing service is appropriate
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under either Federal Rule of Civil Procedure (“Rule”) 5(a) or Rule 4(f)(3), and is necessary given the
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unique circumstances and facts of this case.
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First, Rule 5 generally requires that written motions be served on every party, see Fed. R. Civ.
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P. 5(a)(1), but notes that service is not required “on a party who is in default for failing to appear,” id.
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at 5(a)(2). Nonetheless, plaintiff has requested that the Court specifically authorize service on the
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additional judgment debtors under Rule 5. In a related California state court proceeding, in which
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plaintiff also seeks to satisfy a judgment against many of the same proposed judgment debtors as here,
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some judgment debtors have contested enforcement of that judgment on the grounds that they were not
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properly given notice or an opportunity to oppose their addition as debtors. See Appl. at 7 (Dkt. 80);
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Murray Decl., ¶ 7, Ex. A, New World TMT Ltd. v. PrediWave Corp., Case No. 1-04-CV-020369 (Santa
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Clara County Court). Plaintiff has apparently had difficulty completing service in that case. However,
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plaintiff has not actually attempted service in this case on these additional judgment debtors.
The Court is without authority to preemptively issue an order approving of a method of service
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prior to the service or contestation of service under Rule 5. Indeed, to do so would likely amount to an
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United States District Court
For the Northern District of California
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unconstitutional advisory opinion. The United States Constitution limits the jurisdiction of the federal
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courts to the adjudication of actual “cases” or “controversies.” U.S. Const., Art. III, § 2. Federal courts
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must refrain from deciding abstract or hypothetical controversies and from rendering impermissible
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advisory opinions with respect to such controversies. Flast v. Cohen, 392 U.S. 83, 88 (1968); see also
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Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240-41 (1937). “[A] federal court has neither the power
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to render advisory opinions nor to decide questions that cannot affect the rights of litigants in the case
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before them. Its judgment must resolve a real and substantial controversy admitting of specific relief
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through a decree of a conclusive character, as distinguished from an opinion advising what the law
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would be upon a hypothetical state of facts.” Preiser v. Newkirk, 422 U.S. 395, 401 (1975).
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Accordingly, because plaintiff has not yet served the additional judgment creditors, and there is no basis
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in Rule 5 for the Court to issue an order finding the method of service appropriate, the Court rejects
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plaintiff’s request for such an order.
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Next, plaintiff argues that Rule 4(f)(3) authorizes the Court to issue an order authorizing service
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on the additional judgment debtors. Plaintiff seeks to serve its motion to amend the Judgment on eight
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proposed individuals judgment debtors and eighteen so-called “shell companies, of which three – Able
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Well Holdings Limited, Fudosan Investment Limited and Logihigh Investments Limited – are located
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in the Marshall Islands and not subject to the Hague Convention on the Service Abroad of Judicial and
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Extrajudicial Documents (“Hague Convention”).
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Rule 4(f) governing service of summon on an individual in a foreign country, provides:
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Unless federal law provides otherwise, an individual—other than a minor, an
incompetent person, or a person whose waiver has been filed—may be served at a place
not within any judicial district of the United States:
(1) by 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;
(2) if there is no internationally agreed means, or if an international agreement allows
but does not specify other means, by a method that is reasonably calculated to give
notice:
(A) as prescribed by the foreign country's law for service in that country in an
action in its courts of general jurisdiction;
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United States District Court
For the Northern District of California
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(B) as the foreign authority directs in response to a letter rogatory or letter of
request; or
(c) unless prohibited by the foreign country's 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; or
(3) by other means not prohibited by international agreement, as the court orders.
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The Ninth Circuit has said that Rule 4(f) provides three independent and equally permissible grounds
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for serving foreign defendants. See Rio Properties, Inc. v. Rio Intern. Interlink, 284 F.3d 1007, 1015
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(9th Cir. 2002). That is, “Rule 4(f)(3) is merely one means among several which enables service of
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process on an international defendant.” Id. Rule 4(f) should not be read to create a hierarchy where
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4(f)(3) is seen as either as last resort or extraordinary relief. Id. at 1015. Whether to authorize service
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under 4(f)(3) is left to the “sound discretion” of the trial court, when it determines that the
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“particularities and necessities of a given case” require alternative service. Id. at 1016.
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Plaintiff argues that time is of the essence due to a pending proceeding in Tokyo, Japan, yet
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plaintiff also admits that nearly all of the proposed judgment debtors are located in Hague Convention
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countries, where plaintiff has made no attempt to serve them in this case. Nineteen are located in the
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British Virgin Islands: Accuremark International Limited; All Top Investments Limited; Ample Up
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Investments Limited; Ever Promise Investments Limited; Getway Investments Limited; Lautrey
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Management Limited; Newbest Properties Limited; Peak Ally Investments Limited; Precious Success
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Investments Limited; Reach Delight Investments Limited; Ryehill Investments Limited; Shining Palace
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Investments Limited; Starsign Investments Limited; Uptrade Investments Limited; Plentiworth Limited;
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Summitmark; Proper Win Development Limited; Abulgd Management Limited; Evergold Management
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Limited. An additional three are located in Japan – Chi-Ping Chang, Jianli Qu, and Wei Wang – and
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two are located in China – Tong Danyuan and Liu Xiu Qing. Two proposed judgment debtors are
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located in Canada – Khoi Hoang and Ngo Duc Le – and one is located in San Jose, California – Wen
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Jun Shi. Defendants have made no showing that the “particularities and necessities” warrant alternative
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service, especially whether they have admittedly not attempted Hague Convention compliant service
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on any of the proposed judgment debtors in this case. Accordingly, the Court declines to specifically
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authorize service with respect to the Hague Convention proposed judgment debtors.
However, three proposed judgment debtors are located in the Marshall Islands, a non-signatory
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United States District Court
For the Northern District of California
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to the Hague Convention: Able Well Holdings Limited, Fudosan Investment Limited and Logihigh
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Investments Limited. Given the difficulty of serving those defendants and the unique timing issues
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identified in plaintiff’s application, the Court finds that alternate service on these three proposed debtors
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is warranted. See Appl. at 17-18. Plaintiff proposes to serve these proposed judgment debtors via mail
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on their last known addresses. Such service, at their last known addresses, has been said to comport
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with due process because it would be reasonably calculated to provide the judgment debtors with notice
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and an opportunity to respond. See Rio Properties, Inc., 284 F.3d at 1017 (citing Mullane v. Cent.
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Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950). Accordingly, the Court hereby authorizes service
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by mail under Rule 4(f)(3) on the last known addresses of the Marshall Island proposed judgment
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debtors.1
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IT IS SO ORDERED.
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Dated: March 14, 2013
SUSAN ILLSTON
United States District Judge
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While Rule 4 generally pertains to service of summons on parties to a lawsuit, plaintiff has
requested to serve a post-trial motion, not a summons. The Court notes, although it does not hold, that
plaintiff’s forthcoming motion to amend the judgment is similar to a summons, in that it would bring
these entities into the lawsuit. This order authorizing alternative service is without prejudice to
proposed judgment debtors’ contestation of the service authorized herein.
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