UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK
November 20, 2006
UNIVERSITY OF PITTSBURGH, PLAINTIFF,
MARC H. HEDRICK, PROSPER BENHAIM, HERMANN PETER LORENZ, AND MIN ZHU DEFENDANTS.
The opinion of the court was delivered by: Matsumoto, United States Magistrate Judge
By order dated April 25, 2006, this patent inventorship dispute was referred to the undersigned magistrate judge for a decision regarding plaintiff's motion to compel. This Order addresses a motion brought by the University of Pittsburgh ("plaintiff" or "UPitt") requesting that the Court compel responses to its subpoenas duces tecum on third-parties Olympus Corporation, a Japanese entity, and Olympus America, Inc., a domestic entity. Both subpoenas are addressed to "Olympus Corporation c/o Olympus America." (Docket nos. 57, 58.)
The Court first addresses UPitt's attempted service on Olympus Corporation through its American subsidiary, Olympus America. Service of subpoenas on a foreign corporation is governed by 28 U.S.C. § 1783(b), which provides that service "shall be effected in accordance with the provisions of the Federal Rules of Civil Procedure relating to service of process on a person in a foreign country." The Federal Rules of Civil Procedure, in turn, provide, "[S]ervice upon a . . . foreign corporation . . . that is subject to suit under a common name, and from which a wavier of service has not been obtained and filed, shall be effected . . . in a place not within any judicial district of the United States in any manner prescribed for individuals by subdivision (f) . . . ." Fed. R. Civ. P. 4(h)(2). Rule 4(f) states that service "may be effected in a place not within any judicial district of the United States . . . by any internationally agreed means reasonably calculated to give notice, such as those means authorized by the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents." Fed. R. Civ. P. 4(f)(1).
The Hague Convention "requires each signatory to create a central authority to receive requests for service of judicial documents." Casio Computer Co., Ltd. v. Sayo, No. 98CV3772, 2000 WL 1877516, *28 (S.D.N.Y. Oct. 13, 2000); see also Volkswagenwerk Aktiengesellschaft v. Schlunk., 486 U.S. 694, 698 (1988). Japan is a signatory to the Hague Convention, but has objected to service via mail under Hague Convention Article 10. Casio Computer, 2000 WL 1877516 at *29. Therefore, service upon a Japanese corporation must be made through the Japanese central authority. See Casio Computer, 2000 WL 1877516 at *28.
In lieu of following the Hague Convention, parties may serve a foreign corporation through its American subsidiary, if the subsidiary is an agent or "mere department" of the foreign parent. Kwon v. Yun, No. Civ.1142, 2006 WL 416375, *2 (S.D.N.Y. Feb. 21, 2006). To establish that a subsidiary is an agent, the party seeking service must show that the subsidiary "does all the business which [the parent corporation] could do were it here by its own officials." Jazini v. Nissan Motor Corp., Ltd., 148 F.3d 181, 184 (2d Cir. 1998). To establish that a subsidiary is a "mere department," the party seeking service must show that "the activities of the parent show a disregard for the separate corporate existence of the subsidiary." Volkswagenwerk Aktiengesellschaft v. Beech Aircraft Corp., 751 F.2d 117, 120 (2d Cir. 1984).
The court considers four factors in determining whether the parent disregarded its subsidiary's independent corporate identity: (1) common ownership, which is "the most essential factor;" (2) financial dependency of the subsidiary on the parent; (3) the "degree to which the parent corporation interferes in the selection and assignment of the subsidiary's executive personnel and fails to observe corporate formalities;" and (4) the parent's degree of control over the subsidiary's marketing and operational policies. Id. at 120-22.
When a party seeking discovery has failed to meet those factors and demonstrate the parent's control over its subsidiary, a court may order limited discovery relating only to jurisdiction. See Filus v. Lot Polish Airlines, 907 F.2d 1328, 1332 (2d Cir. 1990) (stating, "[G]enerally a plaintiff may be allowed limited discovery with respect to the jurisdictional issue . . ."). Contrary to Olympus Corporation's claim, a party seeking discovery need not make a prima facie showing of jurisdiction in order for a court to order jurisdictional discovery. See In re Magnetic Audiotape Antitrust Litig., 334 F.3d 201, 208 (2d Cir. 2003); see also Ayyash v. Bank Al-Madina, No. 04 Civ. 9201, 2006 WL 587342, *5, n. 7 (S.D.N.Y. March 9, 2006).
In this case, UPitt has failed to introduce any evidence that it attempted to serve Olympus Corporation through the Hague Convention, and, if it did not, why such service would be inappropriate. The Court notes that service through the Hague Convention is more efficient and economical than conducting extensive jurisdictional discovery and motion practice before this Court.
In addition, UPitt has also failed to demonstrate that Olympus America is an agent or "mere department" of Olympus Corporation. UPitt asserts that the two corporations are under similar ownership, but offers no factual support for the allegation. (See Plaintiff's Memorandum of Law in Support of its Motion to Compel, p. 4.) Likewise, UPitt notes that an officer of Olympus America sits on the Board of Directors of Olympus-Cytori, but fails to explain how that is relevant to the relationship between Olympus America and Olympus Corporation. (See Olympus Corporation's Memorandum of Law in Support of its Opposition to Plaintiff's Motion to Compel, p. 7). Thus, plaintiff has failed to present any allegations sufficient to demonstrate Olympus Corporation's complete disregard of its subsidiary's independent corporate identity. Cf. Beech Aircraft Corp., 751 F.2d at 120-22 (finding sufficient allegations of fact under each of the four factors to demonstrate that the American subsidiary was a mere department of its foreign corporation). Furthermore, despite ample opportunities to do so, Olympus Corporation has failed to present any evidence refuting plaintiff's claim that Olympus America is an agent or mere department of the foreign corporation. Therefore, if plaintiff demonstrates good reasons why it has not sought service of process through the Hague Convention, the Court would be inclined to order jurisdictional discovery.*fn1 See id.; see also Filus, 907 F.2d at 1332. Plaintiff shall submit an explanation why it did not attempt service pursuant to the Hague Convention no later than November 28, 2006.
Next, regarding Olympus America, Inc., a domestic corporation registered with the New York Department of State, the Court finds that service was properly effectuated when plaintiff served its subpoenas at the company's address listed with the New York Department of State. (See Awad Aff., Exh. B; Declaration of Kirk W. Mackey in Support of Olympus Corporation's Supplemental Memorandum, Exh. D.) The Court further finds that plaintiff's document requests are relevant to the underlying inventorship dispute, as Olympus Corporation and Olympus America, Inc. may have received information regarding the invention and ownership of U.S. Patent 6,777,231 ("the '231 Patent"). In a letter annexed to its Supplemental Memo of Law, plaintiff agreed to narrow the scope of its third category of requests solely to communications between Dr. Hedrick and Olympus "relating to the '231 Patent." (Affidavit of Jennifer A. Klear in Support of Plaintiff's Supplemental Memorandum of Law, Exh. B.) The Court directs plaintiff to similarly limit category number eight.
In addition, by November 28, 2006, plaintiff must clarify with the Court which subpoenas are directed to which entity. In its affidavit of service to Olympus Corporation, plaintiff mentions a Schedule A and a Schedule B. (See docket 57, 58.) Yet in its exhibits in support of its motion to compel, plaintiff attaches two subpoenas addressed to both Olympus Corporation and Olympus America, Inc., and containing only Schedule As, one of which contains seven requested items while the other contains eight. (See Awad Aff., Exh. B.) It is therefore unclear which documents plaintiff seeks from each company.
Once plaintiff narrows and refines its subpoenas, the Court hereby orders Olympus America, Inc. to produce all documents responsive to plaintiff's subpoenas by December 18, 2006. The parties shall file a status report with the Court concerning the state of discovery by December 20, 2006.
KIYO A. MATSUMOTO United States Magistrate Judge