The opinion of the court was delivered by: Hon. Harold Baer, Jr., District Judge:
Plaintiff MWH International, Inc. ("MWH") brought this interpleader action pursuant to Federal Rule of Civil Procedure ("FRCP") 22 against defendants Energoprojekt Holding Company ("EP-Holding") and Energoprojekt hidroinzenjering co., ltd ("EP-Hidro") (collectively "Energo") and Inversora Murten S.A. ("Inversora"). MWH has since deposited the disputed funds with the Court and was dismissed from the case. Previously, I denied without prejudice a motion by Energo to dismiss the interpleader complaint and Inversora's answer, and I ordered limited discovery into the relationship among the Energo entities. See MWH Int'l, Inc. v. Inversora Murten S.A., 11 Civ. 2444(HB), 2012 WL 12886 (S.D.N.Y. Jan. 3, 2012). Familiarity with that Opinion will be assumed. Since that time, Inversora amended its answer and added a cross-claim against Energoprojekt Holding a.d. ("EP-Holding a.d."), identifying EP-Holding a.d. as the same entity as, or the successor-in-interest to, EP-Holding. None of the limited discovery has taken place, and I allowed Energo to file the present motion.
EP-Holding a.d. has filed a special appearance and moves to dismiss Inversora's cross-claim due to a lack of personal jurisdiction and inadequate service of process. Additionally, EPHidro renews its earlier motion to dismiss and raises the additional arguments that Inversora lacks the capacity to sue and failed to adequately allege EP-Hidro's successor liability for EPHolding's debts. Finally, an Energo entity (it is unclear which one) argues that the original default judgment (the "1996 judgment") obtained by Inversora in the district court in New Jersey is void because the court there lacked personal jurisdiction over the defendant (it is also unclear to me whether the judgment debtor is EP-Holding or the subsidiary Energoprojekt Holding Guinee). This is all a long-winded way of saying that nothing has happened for seven months.
I have struggled to find an issue that can be meaningfully resolved at this juncture. For the following reasons, and for the same reason as stated in my January Opinion, EP-Holding a.d.'s motion and EP-Hidro's renewed motion are DENIED without prejudice to renew. Let me emphasize, however, that I will consider renewed motions only after the parties can return to me with the ability to adequately address those issues I outline below.
This is an interpleader action to determine EP-Hidro's and Inversora's right to the res. EP-Hidro's claim is obvious and uncontested; EP-Hidro was in a direct contractual relationship with MWH. Inversora's claim, by contrast, is indirect and dependent on the nature of the relationship between EP-Hidro and other Energo affiliates. The interpleader defendants share a long and troubled history that begins sometime in the early nineties and involves countless subsidiaries of companies from around the world. Starting at least with the 1996 judgment in the District of New Jersey, the parties have continued their dispute in multiple courts throughout the country.*fn1
I.Inversora's Cross-Claim Against EP-Holding a.d.
Inversora amended its answer and included a cross-claim against EP-Holding a.d., an entity that was not named originally. Inversora's cross-claim is a continuation of its claim to the res, which is predicated on the 1996 judgment against EP-Holding, as well as a claim of alter-ego liability and veil piercing against EP-Holding a.d. Because Inversora served MWH with a garnishment subpoena seeking partial satisfaction of the 1996 judgment, which was against EP-Holding and not EP-Holding a.d., the cross-claim against EP-Holding a.d. is "an independent controversy with a new party in an effort to shift liability." Epperson v. Entm't Express, Inc., 242 F.3d 100, 106 (2d Cir. 2001). While "the Court here has subject matter jurisdiction over [the 1996 judgment] through ancillary jurisdiction to enforce the judgment," Weininger v. Castro, 462 F. Supp. 2d 457, 489 (S.D.N.Y. 2006), the more appropriate basis for subject matter jurisdiction over the cross-claim is FRCP 13.
In order for the Court to assert supplemental jurisdiction over the cross-claim against EP-Holding a.d., the claim must "arise out of the transaction or occurrence that is the subject matter of the [interpleader] action . . . , or . . . relate to any property that is the subject matter of the [interpleader] action." Fed. R. Civ. Pro. 13(g). In interpleader actions, cross-claims are generally permitted "when they are asserted against the common fund or subject of the main action." 6 Charles Alan Wright et al., Fed. Prac. & Proc. Civ. § 1432 (revised 3d ed. 2012). Here, the cross-claim "represents in substance [Inversora]'s claim in the second stage of any interpleader action." Priority Records, Inc. v. Bridgeport Music, Inc., 907 F. Supp. 725, 732 (S.D.N.Y. 1995) (finding supplemental jurisdiction in a statutory interpleader action). A determination of the claimants' rights to the res will necessarily relate to the dispute over the corporate relationship of the Energo entities. The cross-claim is therefore an "integral part of the interpleader action", id., and the Court has supplemental jurisdiction over it.
II.Personal Jurisdiction Over EP-Holding a.d.
The relationship of EP-Holding a.d. to this case can be described in
at least three different ways: (1) as the alleged alter-ego of
EP-Hidro, an interpleader defendant with a competing claim to the res;
(2) as the alleged judgment debtor with an interest in EP-Hidro's
property, a party that should be joined pursuant to FRCP 19*fn2
or a party over which the Court has jurisdiction by virtue of
EP-Holding a.d.'s corporate relationship with EP-Hidro; or (3) as the
alleged successor-in-interest to or alter-ego of
EP-Holding,*fn3 a defendant to Inversora's cross-claim
seeking partial enforcement of the 1996 judgment. As was the case in January, I lack
sufficient information to say in precise terms what EP-Holding a.d.'s
relationship to this litigation actually is, and I will unfortunately
revisit the topic a third time in the near future.
a.EP-Holding a.d. Does Not Fall Within the State's Long-Arm Statute Three elements must be met in order for a court to exercise personal jurisdiction over a non-domiciliary defendant. First, the service of process must be procedurally sound and effective. Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012). Second, there must be a statutory basis that confers personal jurisdiction. Id. Where the claim does not arise from a federal statute that extends personal jurisdiction through service of process, the long-arm statute of the forum state-in this case New York's long-arm statute N.Y. C.P.L.R. § 302(a)-applies. Id. at 59--60. Finally, personal jurisdiction must align with constitutional due process principles. Id. at 60.*fn4 The complainant "bears the burden of demonstrating personal jurisdiction over a person or entity against whom it seeks to bring suit," Penguin Group (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d Cir. 2010) (internal citations omitted), and "must make a prima facie showing that jurisdiction exists." Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir. 2006). However, "[p]rior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction." Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 566 (2d Cir. 1996) (internal citations omitted). In their inquiry, courts will "construe the pleadings and affidavits in the light most favorable to [complainant], resolving all doubts in [its] favor." Porina v. Marward Shipping Co., 521 F.3d 122, 126 (2d Cir. 2008).
EP-Holding a.d. raises two issues with respect to service: (1) Inversora failed to attempt service of its amended answer and cross-claim on EP-Holding a.d.; and (2) the service of the original interpleader complaint by MWH was invalid. MWH sent its interpleader complaint via FedEx to EP-Holding on or about July 11, 2011. Brooks Decl. Ex. 2 (May 29, 2012). Inversora contends that EP-Holding a.d. was the only business operating from the address at the time the interpleader complaint arrived on July 18, 2011. Inversora Am. Answer ¶¶ 36--38. With respect to the cross-claim, Inversora states that it served EP-Holding a.d. through its counsel when Inversora filed its cross-claim on ECF. Inversora alleges that this method of service is permissible and is supported by both case law and Serbian civil procedure. Inversora points to KPN B.V. v. Corcyra D.O.O., No. 08 CIV. 1549 (JGK), 2009 WL 690119 (S.D.N.Y. Mar. 16, 2009), as support for the proposition that service via ECF was proper. In KPN, Plaintiffs sought the court's permission pursuant to FRCP 4(f)(3) to serve Defendants through their counsel (the same attorney) after its repeated attempts at service had been thwarted-intentionally, in some instances-by the defendants. The court granted permission. Id. at *2.
The parties dispute the proper means of service under Serbian law, and they even cite completely different laws. It is my understanding that service of process is governed by Chapter 11 of Serbia's Civil Procedure Code.*fn5 At oral argument, Energo argued that service must be effected through the Serbian courts and must be in Serbian. See Tr. at 10:8--24, June 21, 2012. The parties' briefs and my limited understanding of Serbian law at this time provide me with an insufficient basis to decide whether service on EP-Holding a.d. was proper. More importantly, I need not ...