United States District Court, S.D. New York
For Defendant: Daniel Bruce Goldman, Rachel Lynn Snyder, Carla R. Walworth, PAUL HASTINGS LLP.
For Plaintiff: Edward A. Keane, Garth S. Wolfson, MAHONEY & KEANE LLP.
Lewis A. Kaplan, United States District Judge.
NYKCool has been struggling to collect a judgment previously entered against defendants-in-interest Pacific Fruit Inc. and Kelso Enterprises Ltd. -- companies owned by defendant Alvaro Fernando Noboa Ponton (" Noboa" ) -- for years. These attempts have been frustrated at every turn. Each time a judgment has been awarded against a new company in Noboa's organization, that company has transferred assets elsewhere, rendering itself judgment proof.
After several years of this, NYKCool moved for a default judgment in the amount of $6,956,036.17 against Noboa himself. Noboa moved to dismiss the complaint for lack of personal jurisdiction and alleged insufficiency of service of process and opposed NYKCool's motion for a default judgment on the same basis. Judge Peck first denied Noboa's motion to dismiss as untimely. Soon thereafter, he issued a Report and Recommendation (" R& R" ) recommending that the Court grant NYKCool's motion. Noboa objects to the R& R, arguing principally that NYKCool did not effect adequate service of process and that the Court does not have personal jurisdiction over him. He appeals also, on similar grounds, from the denial of his motion to dismiss.
I. Sufficiency of Service of Process
NYKCool filed a complaint against Noboa and several companies that he is alleged to own on July 26, 2012, seeking to pierce the corporate veil and collect from them the judgment that this Court previously had entered against Pacific and Kelso. In a hearing before Judge Peck on October 2, 2012, NYKCool expressed doubt about its ability to serve Noboa, explaining that " [w]e don't really have his address, but we are told that it would be difficult to serve him personally."  Neither NYKCool nor the defense counsel raised the fact that the complaint alleges that NYKCool's president negotiated contracts at Noboa's residence, which presumably means that he knows or knew the address. In any event, NYKCool requested permission to serve Noboa " via email or the Internet to his personal presidential Web site."  Judge Peck invited defense counsel -- who represented certain of Noboa's companies -- to seek authorization from Noboa to have someone accept service for him. He further stated his " inclination  to allow service via Mr. Noboa's Web site, subject to" objections in the event no such authorization could be obtained.
On October 12, 2012, NYKCool sent copies of the summons and complaint by e-email
to email@example.com. An affidavit of service stated that this constituted service on Noboa because this was the e-mail address set forth in the " Contact Us" section of the website for Noboa's humanitarian organization, Cruzada Nueva Humanidad, to which the " Contact Us" section of his website, www.alvaronoboa.org, directs correspondence. The director of the Fundación Cruzada Nueva Humanidad wrote to the Court and stated that the Foundation had not received any legal documents and that its website has a disclaimer which states that it " is not authorized to accept communications, message[s], or other information, and any such communications, message[s], or other information provided to the website are not monitored by or forwarded to any person." 
NYKCool subsequently amended the complaint to add Truisfruit, S.A., another Noboa company, as a defendant. Judge Peck ordered that service be made on Truisfruit at El Oro 101 Interseccion Vivero -- 5 Junio, Guayaquil, Ecuador. On October 25, 2013 the Clerk of Court certified that the amended complaint had been served on Noboa, as well, by Federal Express to " El Oro Interseccion Vivero -- 5 de Junio, Guayaquil, Ecuador."  According to the Federal Express tracking number, the package never was delivered.
B. The R& R
The R& R recommends finding that service by e-mail was permissible and adequate under Federal Rule of Civil Procedure 4(f)(3), which allows the court to order service on a foreign individual " by other means not prohibited by international agreement." The R& R reasons that " under the circumstances presented here -- i.e., years of litigation resulting form NYKCool's efforts to enforce a judgment that Noboa and his companies have made every effort to avoid and where NYKCool had no residence address for Noboa -- service on the e-mail address to which users are directed from Noboa's website, pursuant to this Court's October 2, 2012 Order, was sufficient service under Rule 4(f)(3) and was reasonably calculated to apprise Noboa of the lawsuit and give him an opportunity to respond." 
The R& R recommends finding that service of the amended complaint was insufficient, however. Although Rule 4(f)(2)(C)(ii) allows service on an individual in a foreign country " using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt,"  the address on the Federal Express label did not match the address in the Court's order regarding service on Truisfruit. There is no indication, ...