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United States District Court, Southern District of New York

May 30, 2003


The opinion of the court was delivered by: Loretta A. Preska, District Judge:


Plaintiff moves to remand this action to the State Court, and the issue presented is: when did defendant's time to remove the case begin to run? On or about August 26, 2002, plaintiff Northrup Grumman Overseas Service Corporation ("NGOS") filed a summons and complaint in the Supreme Court of the State of New York, County of New York, and submitted ex parte an order to show cause for a preliminary injunction with an application for a TRO. The State Court, the Honorable Herman Cahn, granted the TRO application on August 26, set September 6 as the return date for the order to show cause and ordered "that personal service of a copy of this order [the order to show cause for a preliminary injunction, including a TRO] and the papers upon which it is based be made on Defendant on or before August 28, 2002 by fax, followed by expeditious service by applicable convention; and that such service shall be deemed good and sufficient notice of this application. . . ." (Ex. B to the declaration of Eileen C. Visco, sworn to April 1, 2003 ("Visco Decl.")). On or about August 28, 2002, NGOS served by fax upon defendant Banco Wiese Sudameris ("BW") the order to show cause, the summons and complaint and the papers upon which the order to show cause was based. (See Ex. C to Visco Decl.).

On or about September 5, 2002, counsel for both parties met and agreed to extend the return date of the order to show cause. At that time, defendant's counsel acknowledged receipt of the faxed documents. On or about September 10, plaintiff moved the State Court ex parte for issuance of letters rogatory noting that Justice Cahn had directed plaintiff to serve BW "by expeditious service by applicable convention" and represented that the Inter-American Convention on Letters Rogatory (the "Convention") "is the applicable convention in this matter". (Ex. B to the affidavit of Thomas H. Golden, sworn to on April 22, 2003 ("Golden Aff."), at 3). On September 20, 2002, the return date of the order to show cause, the Honorable Karla Moskowitz held a hearing on the preliminary injunction motion. At that hearing, defendant's counsel noted that defendant expressly reserved its jurisdictional objections on the basis that service pursuant to the Convention had not been effected. (See Ex. I to Visco Decl. at 106-108). Justice Moskowitz granted NGOS' motion for a preliminary injunction and continued the TRO. (Ex. J to Visco Decl.).

On February 17, 2003, the summons and complaint were served on BW pursuant to the Convention. (See Golden Aff. ¶ 6 and Ex. E). On March 11, 2003, BW filed its Notice of Removal. (See Visco Decl. ¶ 22 and Ex. T). Thereafter, plaintiff moved to remand.

In Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999), the Supreme Court noted that "one becomes a party [to an action] officially, and is required to take action in that capacity, only upon service of a summons or other authority-asserting measure stating the time within which the party served must appear and defend." Id. at 350. The Court concluded that the time within which a defendant was obligated to remove an action should run from that same jurisdiction-asserting event. Id. at 356. Indeed, in requiring formal service as opposed to mere receipt of the summons and complaint, the Court foresaw part of the situation here. The Court stated:

[T]he so-called "receipt rule" — starting the time to remove on receipt of a copy of the complaint, however informally, despite the absence of any formal service — could, as the District Court recognized, operate with notable unfairness to individuals and entities in 2 foreign nations. Because facsimile machines transmit instantaneously, but formal service abroad may take much longer than 30 days, plaintiffs "would be able to dodge the requirements of international treaties and trap foreign opponents into keeping their suits in state courts."
Id. (citations and footnote omitted).

Here, plaintiff argues that defendant's time to remove should run from the date of fax service of the summons and complaint. The problem, however, is that such fax service alone was not sufficient as an authority-asserting measure. First, in the order to show cause, Justice Cahn specifically ordered "service by applicable convention." Plaintiff did not request an alternative means of service (see Exs. B and D to Visco Decl.), and, as noted, none was approved. Second, although a court may direct service upon a corporation by alternative means under CPLR § 311(b), it is without power to do so absent a showing that service is impracticable under the normal service provisions. See CPLR § 311(b) (corporations); see also 305(5) (individuals); see, e.g., Corbo v. Stephens, 272 A.D.2d 502, 709 N.Y.S.2d 99 (2d Dept. 2000). Because plaintiff never made the appropriate showing pursuant to CPLR § 311(b), namely that service under subdivision (a)(1) of § 311 was impracticable, Justice Cahn would have lacked authority to order service by fax in any event. Third, had plaintiff believed that service had been effected by fax, and thus the Court's authority over the defendant asserted, there would have been no reason to pursue service under the Convention. Thus, based on the Court's reasoning in Murphy Brothers, I find that defendant's time to remove did not begin to run until authority-asserting service was effected on it under the Convention, that is, on February 17, 2003. Accordingly, its removal on March 11, 2003 was timely. Plaintiff's motion to remand is denied.

Counsel shall appear on July 10, 2003 at 9:30 a.m. in Courtroom 12A, 500 Pearl Street for an initial pretrial conference.



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