Federal Trade Commission v. PCCare247 Inc. et al

Filing 87

OPINION & ORDER re: 82 MOTION Requesting Permission to Serve Defendants Through Alternative Means. filed by Federal Trade Commission. The FTC's motion to serve defendants through alternative means, to wit, email and Facebook, is granted. The FTC is granted leave to serve motions and other post-complaint documents in this case on defendants in the manner specified herein. The Clerk of Court is directed to terminate the motion pending at docket number 82. (Signed by Judge Paul A. Engelmayer on 3/7/2013) (djc)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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:
FEDERAL TRADE COMMISSION,
:
:
Plaintiff,
:
-v:
:
PCCARE247 INC., et al.,
:
:
Defendants.
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:
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12 Civ. 7189 (PAE)
OPINION & ORDER

PAUL A. ENGELMAYER, District Judge:
Plaintiff the Federal Trade Commission moves for leave to effect service of documents
other than the Summons and Complaint by alternative means on the following defendants, all
located in India: Vikas Agrawal (“Vikas”), Anuj Agrawal (“Anuj”), Parmeshwar Agrawal
(“Parmeshwar”), PCCare247 Solutions Pvt. Ltd., and Connexxions IT Services Private Limited
(collectively, “defendants”). The FTC proposes to do so by means of both email and Facebook.
For the reasons that follow, the motion is granted.
I.

Background1
On September 24, 2012, the FTC brought this action ex parte seeking a temporary

restraining order and an order to show cause why a preliminary injunction should not be granted
against nine defendants. These include the five India-based defendants to whom this motion

1

The facts which form the basis of this Opinion are drawn from the parties’ submissions over the
course of this matter, including the Complaint (Dkt. 8); the FTC’s submissions in support of its
motion for a temporary restraining order and preliminary injunction (Dkt. 10–12); the
defendants’ submissions in support of their motion to dismiss (Dkt. 38–42); the FTC’s
submissions in opposition to the motion to dismiss (Dkt. 56), including the Declaration of Sheryl
Novick (“Novick Decl.”); and the FTC’s submissions in support of the instant motion (Dkt. 82–
83, 86). Unless otherwise noted, the facts are not disputed.

relates. The FTC alleges that the defendants operated a scheme that tricked American consumers
into spending money to fix non-existent problems with their computers.
As alleged, this scheme was operated in large part out of call centers located in India.
Vikas is alleged to have been the scheme’s mastermind, running day-to-day operations and
handling wire transfers and bank accounts. Anuj is also alleged to have played a major role in
day-to-day operations, including managing advertising accounts and corresponding with web
hosting services. Parmeshwar is alleged to have played a more limited role, including serving as
a director of a defendant corporate entity and establishing a PayPal account for it. Vikas, Anuj,
and Parmeshwar are each alleged to have been directors of PCCare247 Solutions Pvt. Ltd., and
Vikas and Anuj are alleged to have been directors of Connexxions IT Services Private Limited.
On September 25, 2012, this Court entered a temporary restraining order, which, inter
alia, enjoined defendants’ business practices and froze various assets of the defendants.
On September 27, 2012, the FTC submitted the Summons, Complaint, and related
documents to the Indian Central Authority for service on defendants, in accordance with Federal
Rule of Civil Procedure 4(f)(1) and The Hague Convention on the Service Abroad of Judicial
and Extrajudicial Documents in Civil or Commercial Matters (the “Hague Service Convention”
or “Convention”). The FTC also sent these documents to defendants by three alternative means:
(1) by email to defendants’ known email addresses; (2) by Federal Express (“FedEx”); and (3)
by personal service via a process server.
By October 4, 2012, FedEx had confirmed delivery for most defendants, and the process
server had personally delivered the Summons and Complaint to all five defendants. To date,
however, the Indian Central Authority has not formally served defendants pursuant to the
Convention, and it has not responded to the FTC’s inquiries regarding service of defendants. On

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October 9, 2012, Vikas was personally served with the Summons and Complaint in the United
States. 2 See Dkt. 69.
Defendants, having received actual notice of this action, retained counsel—Jack Wenik,
Esq. and Marc Ullman, Esq. On November 13, 2012, these attorneys represented defendants in a
preliminary injunction hearing before this Court. On November 16, 2012, the Court issued a
preliminary injunction against defendants. That injunction continued most of the terms of the
temporary restraining order, but, significantly, it exempted certain assets from the asset freeze to
enable defendants to pay attorneys’ fees. See Dkt. 65.
Despite the Court’s unfreezing of assets for that purpose, defendants did not pay their
attorneys. Accordingly, on January 14, 2013, the Court granted Mr. Wenik and Mr. Ullman’s
motions to withdraw as counsel. Dkt. 81.
To date, defendants have failed to comply with the terms of the preliminary injunction.
However, at least one defendant, Vikas, has remained in some contact with the FTC and the
Court: On January 3 and January 6, 2013, Vikas sent four emails to the FTC, blind carbon
copying the Court’s chambers email address. See Dkt. 84.
On February 11, 2013, the FTC filed this motion. Dkt. 82. On the same date, the FTC
served defendants with this motion via email and overnight mail. Dkt. 82, at 3.
On March 1, 2013, this Court issued an Order directing the FTC to file a supplementary
letter, providing more specifics regarding the proposed means of service: namely, which email
addresses, social media accounts, and publications the FTC proposed to utilize. Dkt. 85. On

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This service was made the same day that Vikas appeared in this Court to attend a preliminary
injunction hearing pertaining to Navin Pasari, another defendant in this case. Pasari is not
relevant to this motion.
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March 5, 2013, the FTC submitted a responsive letter. Dkt. 86. Defendants have not responded
to the FTC’s motion.
II.

Applicable Legal Standard
Under Federal Rule of Civil Procedure 4(f)(3), “a Court may fashion means of service on

an individual in a foreign country, so long as the ordered means of service (1) is not prohibited
by international agreement; and (2) comports with constitutional notions of due process.” SEC v.
Anticevic, No. 05 Civ. 6991 (KMW), 2009 WL 361739, at *3 (S.D.N.Y. Feb. 13, 2009) (citations
omitted).3 Under Rule 4(f), service of process on foreign corporations may be made in the same
manner as on individual defendants. See Fed. R. Civ. P. 4(h)(2).
“Service of process under Rule 4(f)(3) is neither a last resort nor extraordinary relief. It
is merely one means among several which enables service of process on an international
defendant.” Madu, Edozie & Madu, P.C. v. SocketWorks Ltd. Nigeria, 265 F.R.D. 106, 115
(S.D.N.Y. 2010) (citation omitted). “The decision of whether to order service of process under
Rule 4(f)(3) is ‘committed to the sound discretion of the district court.’” United States v.
Lebanese Canadian Bank, 285 F.R.D. 262, 266 (S.D.N.Y. 2012) (quoting Madu, 265 F.R.D. at
115); see also In re S. African Apartheid Litig., 643 F. Supp. 2d 423, 433 (S.D.N.Y. 2009) (“A
court is afforded wide discretion in ordering service of process under Rule 4(f)(3).” (citation

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Significantly, the FTC is proposing to use alternative means of service as to documents other
than the Summons and Complaint. The FTC apparently also intends to serve defendants with
such documents through the means provided in Rule 5, relating to service of non-case-initiating
documents. See Fed. R. Civ. P. 5(b)(2)(C) (service by mail). As the FTC explains, it is covering
its bases in pursuing service by the means for which it seeks approval here: A court in this
district has held that the Hague Service Convention only applies to the initial service of process,
not subsequent documents. See SEC v. Credit Bankcorp., Ltd., No. 99 Civ. 11395 (RWS), 2011
WL 666158, at *4 (S.D.N.Y. Feb. 14, 2011) (citing Volkswagenwerk Aktiengesellschaft v.
Schlunk, 486 U.S. 694, 700 (1988)). In the interest of caution, the FTC proposes to serve
defendants under both Rules 5 and 4(f)(3). For purposes of the ensuing discussion, the Court
assumes, purely arguendo, that Rule 5 service would not be available.
4

omitted)); Antisevic, 2009 WL 361739, at *3 (“[Rule 4(f)(3)] provides the Court with flexibility
and discretion empowering courts to fit the manner of service utilized to the facts and
circumstances of the particular case.” (citation omitted)).
“A plaintiff is not required to attempt service through the other provisions of Rule 4(f)
before the Court may order service pursuant to Rule 4(f)(3), [but] [a] district court may
nonetheless require parties to show that they have reasonably attempted to effectuate service on
the defendant(s) and that the circumstances are such that the district court’s intervention is
necessary.” Antisevic, 2009 WL 361739, at *3 (citation omitted) (emphasis in original); see also
Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1015 (9th Cir. 2002) (“[T]he advisory notes
[to Rule 4] suggest that in cases of ‘urgency,’ Rule 4(f)(3) may allow the district court to order a
‘special method of service,’ even if other methods remain incomplete or unattempted.”); Madu,
265 F.R.D. at 115 (“[D]istrict courts may impose a threshold requirement for parties to meet
before seeking the court’s assistance.” (citation omitted)).
III.

Discussion
Although the FTC’s motion initially proposed to effect service by each of email, social

networking sites, and publication, the FTC’s supplemental letter has narrowed its request. Citing
the costs of service by publication, the FTC requests, in the first instance, leave to serve the
defendants through email and Facebook. See Dkt. 86, at 2. In the event such means are
unsuccessful, the FTC represents, it will renew its motion to serve by publication. Id.
Accordingly, the Court here considers only the request to serve by means of email and Facebook.
A. The Proposed Means of Service Are Not Prohibited By International
Agreement
The United States and India are signatories to the Hague Service Convention. See Status
Table, Members of the Organisation, Hague Conference on Private International Law, http://

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www.hcch.net/index_en.php?act=conventions.status&cid=17 (last visited Feb. 27, 2013).
Article 2 of the Convention provides that “[e]ach contracting State shall designate a Central
Authority which will undertake to receive requests for service coming from other contracting
States.” Hague Convention on Service Abroad of Judicial and Extrajudicial Documents art. 2,
Nov. 15, 1965, 20 U.S.T. 361, 658 U.N.T.S. 163.
Article 10, in turn, allows for service of process through alternative means such as “postal
channels” and “judicial officers,” provided that the destination state does not object to those
means. Id. art. 10. India has objected to the means listed in Article 10,4 although that objection
is specifically limited to the means of service enumerated in Article 10. See Gurung v.
Malhotra, 279 F.R.D. 215, 219 (S.D.N.Y. 2011). And “[w]here a signatory nation has objected
to only those means of service listed in Article [10], a court acting under Rule 4(f)(3) remains
free to order alternative means of service that are not specifically referenced in Article [10].” Id.;
see also Anticevic, 2009 WL 361739, at *4 (permitting service by alternative means where
signatory nation did not “explicitly object[]” to such means in its declaration pursuant to the
Convention); In re S. African Apartheid Litig., 643 F. Supp. 2d at 434, 437 (requiring express
objection to alternative means of service in reservation as to Article 10).
Service by email and Facebook are not among the means listed in Article 10, and India
has not specifically objected to them. Numerous courts have held that service by email does not
violate any international agreement where the objections of the recipient nation are limited to
those means enumerated in Article 10. See, e.g., Gurung, 279 F.R.D. at 220; Philip Morris USA
Inc. v. Veles Ltd., No. Civ. 2988 (GBD), 2007 WL 725412, at *3 (S.D.N.Y. Mar. 12, 2007)

4

See Declarations, Reservations, Hague Conference on Private International Law, http://
www.hcch.net/index_en.php?act=status.comment&csid=984&disp=resdn (last visited Feb. 27,
2013).
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(collecting cases authorizing email service). But see Agha v. Jacobs, No. C 07-1800 RS, 2008
WL 2051061, at *2 (N.D. Cal. May 13, 2008) (reference to “postal channels” in Article 10 may
include emails). Service by Facebook is clearly outside the scope of Article 10. India has not
objected to service by Facebook, and the Court knows of no international treaty prohibiting such
means. Therefore, service by means of email and Facebook is not prohibited by international
agreement. The Court, in its discretion, is therefore at liberty to authorize service by such means,
provided that due process is also satisfied.
B. The Proposed Means of Service Comport With Due Process
“Constitutional notions of due process require that any means of service be ‘reasonably
calculated, under all circumstances, to apprise interested parties of the pendency of the action
and afford them an opportunity to present their objections.’” Antisevic, 2009 WL 361739, at *4
(quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). Here, service
by email and Facebook are reasonably calculated to provide defendants with notice of future
filings in this case.
Service by email alone comports with due process where a plaintiff demonstrates that the
email is likely to reach the defendant. Gurung, 279 F.R.D. at 220; see also Philip Morris, 2007
WL 725412, at *3 (authorizing service by email where “defendants conduct business extensively
. . . through their Internet websites and correspond regularly with customers via email” and
rejecting “[d]efendants’ objections about theoretical reliability of email service” where plaintiff
“amply demonstrated the high likelihood that defendants would receive and respond to email
communications”); Williams-Sonoma Inc. v. Friendfinder Inc., No. C 06-06572 JSW, 2007 WL
1140639, at *2 (N.D. Cal. Apr. 17, 2007) (authorizing service by email where plaintiff “has
established that the email accounts [it has] for defendants have been effective means of

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communicating with defendants”). Here, defendants ran an internet-based business and used
email frequently for communication. See, e.g., Novick Decl. Ex. 31, Att. A at 10–25. The FTC
has identified email addresses for each individual defendant, and these defendants serve as
directors of the defendant corporations.5 The email addresses specified for Vikas and Anuj were
demonstrably used for various tasks involved in the alleged scheme, such as setting up merchantbanking accounts and advertising accounts.6 See, e.g., Novick Decl. ¶¶ 40, 56, 59, 61, 66; see
also id. Ex. 27 Atts. V, Y. And the Court has independent confirmation that at least one of these
email accounts was recently in use by the specified defendant: Vikas Agrawal used the address
[e-mail] to email the Court on four occasions on January 3 and 6, 2013.
See Dkt. 84. The FTC has, therefore, demonstrated a high likelihood that defendants will receive
and respond to emails sent to these addresses. Service by email alone, therefore, would comport
with due process. See Gurung, 279 F.R.D. at 220; Phillip Morris, 2007 WL 725412, at *3.
For the sake of thoroughness, however, the FTC also proposes to serve the defendants by
means of Facebook. For the uninitiated, such service would work as follows: The FTC would
send a Facebook message, which is not unlike an email, to the Facebook account of each
individual defendant, attaching the relevant documents. Defendants would be able to view these

5

Those emails addresses are as follows. Vikas Agrawal: [e-mail] and
[e-mail]. Anuj Agrawal: [e-mail] and
[e-mail]. Parmeshwar Agrawal: [e-mail].
6

As noted in the Court’s bench opinion regarding the FTC’s motion for a preliminary injunction,
the evidence of Parmeshwar’s involvement in the scheme is more limited than that of Vikas and
Anuj. However, the relevant inquiry for purposes of this motion is whether Parmeshwar is likely
to receive emails at the specified address. The FTC has made such a showing. See, e.g., Novick
Decl. Ex. 31, Att. A at 19 (emails copying [e-mail] regarding
PCCare247 customer service issues); id. Ex. 27, Att. Y (same email address used to register
Parmeshwar’s Facebook account).
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messages when they next log on to their Facebook accounts (and, depending on their settings,
might even receive email alerts upon receipt of such messages).
To be sure, if the FTC were proposing to serve defendants only by means of Facebook, as
opposed to using Facebook as a supplemental means of service, a substantial question would
arise whether that service comports with due process. As one court in this district has observed,
“anyone can make a Facebook profile using real, fake, or incomplete information, and thus, there
is no way for the Court to confirm” whether the Facebook page belongs to the defendant to be
served. See Fortunato v. Chase Bank USA, No. 11 Civ. 6608 (JFK), 2012 WL 2086950, at *2
(S.D.N.Y. June 7, 2012). In Fortunato, the court denied authorization for service by Facebook
because it found that plaintiff “has not set forth any facts that would give the Court a degree of
certainty that the Facebook profile [plaintiff’s] investigator located is in fact maintained by
[defendant] or that the email address listed on the Facebook profile is operational and accessed
by [defendant].” Id.
The proposed Facebook service in this case does not suffer from that defect. The FTC
has set forth facts that supply ample reason for confidence that the Facebook accounts identified
are actually operated by defendants. Anuj and Parmeshwar each registered their Facebook
accounts with the email addresses cited above, and Vikas registered his account using the same
email address used to register iConnexxions.com, one of the websites that was germane to
defendants’ scheme. See Novick Decl. Ex. 27, Atts. V, Y. Further, on Facebook, Vikas and
Anuj both list their job titles at the defendant companies as their professional activities, and both
are “friends” with Parmeshwar. Id. Thus, the FTC has demonstrated a likelihood that service by
Facebook message would reach defendants.

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The Court acknowledges that service by Facebook is a relatively novel concept, and that
it is conceivable that defendants will not in fact receive notice by this means. But, as noted, the
proposed service by Facebook is intended not as the sole method of service, but instead to
backstop the service upon each defendant at his, or its, known email address. And history
teaches that, as technology advances and modes of communication progress, courts must be open
to considering requests to authorize service via technological means of then-recent vintage,
rather than dismissing them out of hand as novel. See, e.g., New England Merch. Nat’l Bank v.
Iran Power Generation and Transmission Co., 495 F. Supp. 2d 73, 81 (S.D.N.Y. 1980)
(authorizing service by Telex, and noting that courts “cannot be blind to changes and advances in
technology. No longer do we live in a world where communications are conducted solely by
mail carried by fast sailing clipper or steam ships.”); Rio Props., 284 F.3d at 1017 (authorizing
service by email, while “acknowledg[ing] that we tread upon untrodden ground”). As the Ninth
Ciruit has stated, the due process reasonableness inquiry “unshackles the federal courts from
anachronistic methods of service and permits them entry into the technological renaissance.” Rio
Props., 284 F.3d at 1017. Particularly where defendants have “zealously embraced” a
comparatively new means of communication, it comports with due process to serve them by
those means. Id. at 1018 (recognizing the limitations of service of process by new means, such
as email, but leaving it to the discretion of the district court “to balance the limitations of email
service against its benefits in any particular case”). Service by alternative means is all the more
reasonable where, as here, the defendants demonstrably already have knowledge of the lawsuit.
See SEC v. Tome, 833 F.2d 1086, 1093 (2d Cir. 1987). Cf. Smith v. Islamic Emirate of Afg., No.
01 Civ. 10132 (HB), 2001 WL 1658211, at *3 (S.D.N.Y. Dec. 26, 2001).

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For these reasons, the FTC’s proposal to serve defendants by both email and Facebook
satisfies the due process inquiry. Where defendants run an online business, communicate with
customers via email, and advertise their business on their Facebook pages, service by email and
Facebook together presents a means highly likely to reach defendants.
C. Service By the Proposed Means Is Warranted Here
The Court, finally, also considers the FTC’s good faith efforts to serve defendants by
other means. See Anticevic, 2009 WL 361739, at *4. Pursuant to the Convention, the FTC has
attempted to serve the Summons and Complaint on the India-based defendants via the Indian
Central Authority. Despite having submitted these documents to the Indian Central Authority on
September 27, 2012—more than five months ago—the FTC has received no indication that
defendants have been served. Nor has the Indian Central Authority responded to the FTC’s
inquiries. Nevertheless, as a result of the FTC’s efforts to serve defendants through various
informal means, defendants have notice of these proceedings, as evidenced by their appearance
through counsel.
Before counsel withdrew from the case, the FTC might have been able to serve
defendants with motions and other documents via counsel. However, counsel’s withdrawal—
due to defendants’ failure to pay their attorney’s fees, despite this Court’s decision to grant an
exemption from the asset freeze for that singular purpose—has eliminated that option. The FTC
has made ample attempts to serve defendants by other means, but it is now left with no way to do
so except by the Indian Central Authority, which to date has not shown a disposition to act—or
even to respond to the FTC’s queries. This litigation must move forward, and it is not tolerable
to wait five months (or more) for every motion in this case to be served by the Central Authority.
See Richmond Techs., Inc. v. Aumtech Business Solutions, No. 11-CV-02460-LHK, 2011 WL

11

2607158, at *13 (N.D. Cal. July 1,2011) (authorizing alternative service where service via
Indian Central Authority would take 6-8 months). The Court's intervention is warranted here.
CONCLUSION
The FTC's motion to serve defendants through alternative means, to wit, email and
Facebook, is granted. The FTC is granted leave to serve motions and other post-complaint
documents in this case on defendants in the manner specified herein:
1. Defendant Vikas Agrawal at [e-mail], [e-mail],
and by message to his Facebook account.
2. Defendant Anuj Agrawal at anuj [e-mail],

[e-mail], and by message to his Facebook account.

3. Defendant Parmeshwar Agrawal at [e-mail], and by message
to his Facebook account.
4. Defendant PCCare247 Solutions Pvt. Ltd. through its directors, Vikas, Anuj, and
Parmeshwar Agrawal, at the email addresses and Facebook accounts listed above.
5. Defendant Connexxions IT Services Private Limited through its directors, Vikas and
Anuj Agrawal, at the email addresses and Facebook accounts listed above.

The Clerk of Court is directed to terminate the motion pending at docket number 82.

SO ORDERED.

~A.b*
Paul A. Engelmayer
United States District Judge

Dated: March 7, 2013
New York, New York

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