McCurdy v. Amer Bd Plastic ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
9-22-1998
McCurdy v. Amer Bd Plastic
Precedential or Non-Precedential:
Docket 97-1971
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1998
Recommended Citation
"McCurdy v. Amer Bd Plastic" (1998). 1998 Decisions. Paper 232.
http://digitalcommons.law.villanova.edu/thirdcircuit_1998/232
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 1998 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
Filed September 22, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 97-1971
JOHN A. MCCURDY, JR., M.D.;
JOHN A. MCCURDY, JR., M.D., FACS, INC.,
Appellants
v.
AMERICAN BOARD OF PLASTIC SURGERY
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 97-cv-03047)
Submitted Pursuant to Third Circuit LAR 34.1(a)
July 13, 1998
Before: SLOVITER and ROTH, Circuit Judges, and
FEIKENS,* District Judge
(Filed September 22, 1998)
Robert A. Smith
Kaneohe, HI 96744
Attorney for Appellants
Gabriel L. Bevilacqua
Saul, Ewing, Remick & Saul
Philadelphia, PA 19102
Attorney for Appellee
_________________________________________________________________
* Hon. John Feikens, Senior District Judge, United States District Court
for the Eastern District of Michigan, sitting by designation.
OPINION OF THE COURT
SLOVITER, Circuit Judge.
This appeal requires us to consider the intersection of
Rules 4(m) and 12(h) of the Federal Rules of Civil
Procedure, in particular whether an objection to service of
process as untimely under Rule 4(m) may be waived under
12(h) if not made in compliance with Rule 12(g).
Surprisingly, it is an issue we have not previously
addressed.
I.
Appellant John A. McCurdy, Jr., M.D., is a licensed
physician practicing cosmetic surgery in the State of Hawaii
through the professional corporation of John A. McCurdy,
Jr., M.D., FACS, Inc., wholly owned by McCurdy
(collectively referred to as "McCurdy"). McCurdy filed for
bankruptcy after a jury awarded a former patient $2 million
in her malpractice suit against him. Thereafter, on June 10,
1996, McCurdy filed a complaint in the United States
District Court for the District of Hawaii against the
American Board of Plastic Surgery ("ABPS") (the appellee
here), the Hawaii Plastic Surgery Society, the American
Society of Plastic and Reconstructive Surgeons, Inc., seven
individual plastic surgeons, and two professional medical
corporations. McCurdy alleged unfair competition, unlawful
restraint of trade and various antitrust violations in the
field of cosmetic plastic surgery under the Clayton Act, 15
U.S.C. S 15 (1994), the Sherman Act, 15 U.S.C.SS 1-2
(1994), and Haw. Rev. Stat. S 480-13(a)(1). Among the overt
acts alleged was the testimony of a California plastic
surgeon on behalf of the plaintiff in the malpractice suit.
On October 4, 1996, McCurdy filed an amended complaint,
pursuant to Fed. R. Civ. P. 15(a), naming an additional
defendant, the American Board of Medical Specialties
("ABMS").
The instant appeal involves only defendant ABPS, which
was served with both the original and amended complaints
2
on October 28, 1996, 20 days after the expiration of the
original 120-day period provided for under Fed. R. Civ. P.
4(m). McCurdy claims that he failed to serve ABPS during
the 120-day period because counsel had used that time to
make his Rule 11 inquiry, concluding by October 4, 1996,
that a factual and legal basis for suit existed. Although
service had been initially mailed to ABPS on October 4,
1996, it was directed to William D. Morain, M.D., who was
no longer employed by ABPS. Consequently, McCurdy re-
served ABPS on October 24, 1996. This time, service was
directed to Constance Hanson, an ABPS administrator, who
accepted it on October 28, 1996.
On January 17, 1997, ABPS moved to dismiss McCurdy's
claims under Rules 12(b)(2) and 12(b)(3) of the Federal
Rules of Civil Procedure, asserting that Hawaii lacked
personal jurisdiction over it and that venue was improper.
ABPS did not allege a defect in the October 28 service of
process pursuant to Rules 12(b)(4) or 12(b)(5).
On January 27, 1997, the Hawaii district court granted
a motion to dismiss for lack of personal jurisdiction and
improper venue filed by defendant ABMS. The court
reasoned that under Hawaii's long-arm statute, Hawaii had
no jurisdiction over ABMS and that even if it did,
McCurdy's claims with respect to ABMS were barred by the
statute of limitations.
McCurdy anticipated that the court would apply the
same reasoning to ABPS, which like ABMS had been served
under Hawaii's long-arm statute. Therefore, McCurdy
sought to moot the issue of personal jurisdiction under the
state long-arm statute by re-serving ABPS under the
Clayton Act, which provides that process on a corporate
defendant "may be served in the district of which it is an
inhabitant, or wherever it may be found." 15 U.S.C. S 22
(1994). McCurdy believed that the October 4 filing of the
first amended complaint initiated a new 120-day time
period in which to serve ABPS, but even that period would
have expired on February 3, 1997. On February 5, 1997,
McCurdy filed an ex parte motion requesting the court to
exercise its discretion under Fed. R. Civ. P. 4(m) to extend
the 120-day period by nine days. On February 7, 1997,
while the ex parte motion was pending, the amended
3
complaint was personally served on ABPS. Although the
first service was designated in counsel's cover letter as
under the Hawaii long-arm statute, the February service
was ostensibly under the nationwide service provision of
the Clayton Act. A week later, the Hawaii magistrate judge
denied without prejudice McCurdy's ex parte motion to
enlarge the time in which to serve. On February 27, 1997,
ABPS moved to quash the February 7, 1997 service on the
ground that it was untimely under Rule 4(m). The record
contains no indication of any ruling on that motion.
On April 11, 1997, the Hawaii district court, ruling on
ABPS's January 17 motion to dismiss, held that it lacked
personal jurisdiction over ABPS and that venue was
improper. Nonetheless, the court then transferred
McCurdy's suit against ABPS to the Eastern District of
Pennsylvania "in the interest of justice," as it would have
otherwise been time-barred as of that time. McCurdy never
re-served ABPS.
On May 13, 1997, following the transfer, ABPS filed a
motion to dismiss arguing that the original October 28,
1996, service was untimely. McCurdy opposed the motion
and filed a cross-motion for an extension of time to effect
service. McCurdy argued that ABPS had waived any
challenges to the timeliness of the October service because
its motion to dismiss the action in the District of Hawaii
listed as grounds only lack of personal jurisdiction and
venue. On November 12, 1997, the Pennsylvania district
court granted ABPS's motion on the ground that McCurdy
had failed to effect service within 120 days of either the
original or first amended complaints. The court read the
language of Rule 4(m) that requires that service of process
be made within 120 days to be mandatory, and not subject
to waiver. Thereafter, the court determined that McCurdy
had not been diligent in attempting to serve ABPS and
declined to find good cause for extending the time for
service. Accordingly, the district court dismissed McCurdy's
complaint against ABPS. McCurdy now appeals that
dismissal.
II.
McCurdy argues on appeal that the district court erred in
determining that failure to effect service in compliance with
4
Rule 4(m) requires dismissal and is not subject to waiver by
the defendant. He claims that ABPS waived any challenge
to the October 28 service by not raising it in the Rule 12
motion filed in Hawaii on January 17, 1997. In that motion,
ABPS moved to dismiss based on lack of personal
jurisdiction and venue but not on the ground that service
had been untimely. Issues concerning the propriety of
service under Rule 4 are subject to plenary review. See
Grand Entertainment Group, Ltd. v. Star Media Sales, Inc.,
988 F.2d 476, 481 (3d Cir. 1993).
Rule 12(g) provides that "[i]f a party makes a motion
under this rule but omits therefrom any defense or
objection then available to the party which this rule permits
to be raised by motion, the party shall not thereafter make
a motion based on the defense or objection so omitted."
Fed. R. Civ. P. 12(g).
The Rule "contemplates the presentation of an omnibus
pre-answer motion in which defendant advances every
available Rule 12 defense and objection he may have that
is assertable by motion." 5A Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure: Civil 2d S 1384 at
726 (1990). Thus, if a defendant seeks dismissal of the
plaintiff 's complaint pursuant to Rule 12(b)(5) on the
ground that service of process was insufficient or
ineffective, it must include that defense either in its answer
or together with any other Rule 12 defenses raised in a pre-
answer motion. See generally 2 James Wm. Moore et al.,
Moore's Federal Practice, S 12.21 (3d ed. 1997).
In turn, Rule 12(h) provides:
A defense of lack of jurisdiction over the person,
improper venue, insufficiency of process, or
insufficiency of service of process is waived (A) if
omitted from a motion in the circumstances described
in subdivision (g), or (B) if it is neither made by motion
under this rule nor included in a responsive pleading
or an amendment thereof permitted by Rule 15(a) to be
made as a matter of course.
Fed. R. Civ. P. 12(h)(1) (emphasis added).
Thus, if a Rule 12 motion is made and the defendant
omits its objection to the timeliness or effectiveness of
5
service under Rule 12(b)(5), that objection is waived. This
court has long recognized that objections to service of
process are waived if not timely raised. See, e.g.,
Government of the Virgin Islands v. Sun Island Car Rentals,
Inc., 819 F.2d 430, 433 (3d Cir. 1987) (defective service
waived if not challenged in first defensive pleading);
Konigsberg v. Shute, 435 F.2d 551, 551-52 (3d Cir. 1970)
(per curiam) (finding defendant waived right to assert
defenses of lack of personal jurisdiction and insufficiency of
process where these objections were not raised in first
responsive pleading); Zelson v. Thomforde, 412 F.2d 56, 58-
59 & n.8 (3d Cir. 1969) (per curiam) (deeming defendants'
objection to service of process waived where defendants
initially moved to dismiss only on statute of limitations
grounds).
The courts of appeals in our sister circuits have reached
the same conclusion. See Armstrong v. Sears, 33 F.3d 182,
188 (2d Cir. 1994) (noting that Fed. R. Civ. P. 12(g) requires
consolidation of defenses and Fed. R. Civ. P. 12(h)(1)
requires that objections to service be included infirst Fed.
R. Civ. P. 12 motion); Golden v. Cox Furniture Mfg. Co., 683
F.2d 115, 118 (5th Cir. 1982) (stating challenges to service
of process must be included at time of first Rule 12
motion); O'Brein v. R.J. O'Brein & Assocs., 998 F.2d 1394,
1399-1401 (7th Cir. 1993) (party must include defense of
insufficiency of process in its first Rule 12 motion, or its
ability to do so is waived); United States v. One 1978 Piper
Cherokee Aircraft, 91 F.3d 1204, 1208 (9th Cir. 1994)
(objection to sufficiency of process waived if not made in
motion pursuant to Rule 12); Sanderford v. Prudential Ins.
Co., 902 F.2d 897, 900 (11th Cir. 1990) (recognizing that
insufficiency of process defense is waiveable); cf. RTC v.
Starkey, 41 F.3d 1018, 1021 (5th Cir. 1995) (affirming
district court's denial of motion for leave to file motion to
dismiss where defendant waived insufficiency of process by
failing to raise it in answer).
On its face, the language of Rule 4(m) appears to be
inconsistent with Rule 12's waiver scheme. It provides that
where service is not effected on a defendant within 120
days of the filing of the complaint, the court"upon motion
or on its own initiative . . . shall dismiss the action without
6
prejudice as to that defendant." Fed. R. Civ. P. 4(m). The
district court here concluded that an objection to the
timeliness of service was governed by the "clear, mandatory
time requirements set forth in the Rule," so that Rule 4(m)
effectively overrides the waiver provisions of Rule 12(h). See
Dist. Ct. Op. at 5 n.2. Though an arguably plausible
resolution, courts and commentators addressing the
apparent tension between Rules 4(m) and 12(h) have
unanimously concluded that Rule 4(m) does not trump
Rule 12(h) and that an objection that service is untimely
under Rule 4(m) is subject to waiver by the defendant if not
made in compliance with Rule 12. See 4A Wright & Miller,
Federal Practice and Procedure: Civil 2d S 1137 at 81 (Supp.
1998) ("the mandatory-sounding language of Rule 4(m),
stating that a court `shall dismiss' an action if service is not
effected within 120 days, does not affect waiver under Rule
12(h)(1)(B) if a defendant files a responsive pleading that
omits insufficiency of service as a defense"); Starkey, 41
F.3d at 1021 (objections to untimely service are waiveable
pursuant to Rule 12 notwithstanding Rule 4's mandatory
language); Pusey v. Dallas Corp., 938 F.2d 498, 500-01 (4th
Cir. 1991) (failure to include defense of untimely service of
process in pre-answer motion waived defense under Rule
12(h)); Pardazi v. Cullman Med. Ctr., 896 F.2d 1313, 1317-
18 (11th Cir. 1990) (same); Kersh v. Derozier, 851 F.2d
1509, 1511-12 (5th Cir. 1988) (applying Rule 12 waiver
provision to defense that service was perfected within 120
days of filing the complaint); United States v. Gluklick, 801
F.2d 834, 836-37 (6th Cir. 1986) (same).
We agree that Rule 12 "purports to have universal
application, and we see no reason to deviate from its plain
language." Kersh, 851 F.2d at 1512. One court has
commented that to hold otherwise "would lead to the
indefensible proposition" that a defendant, who voluntarily
waives an objection to a Rule 4(j) (now Rule 4(m)) violation,
can be precluded from doing so by a requirement that the
court dismiss the action. Pardizi, 896 F.2d at 1316-17 n.2.
Once it is recognized that the mandatory language of Rule
4(m) is applicable until occurrence of one of the
circumstances covered by Rule 12(h), which governs
thereafter, any facial tension between the two rules is
avoided. We hold, therefore, that a defense that service of
7
process was untimely under Rule 4(m) is subject to Rule
12's waiver provisions and may be waived if not raised in
compliance with that rule. Accordingly, ABPS waived its
objection to the timeliness of the October 28, 1996, service
when it omitted that defense from its January 17, 1997,
motion to dismiss for lack of personal jurisdiction pursuant
to Rule 12(b)(2), and for improper venue pursuant to Rule
12(b)(3).
Our conclusion that ABPS waived its objection to the
October 28, 1996, service as untimely does not end our
inquiry. The question remains, wholly apart from
McCurdy's failure to comply with Rule 4(m) with respect to
the October 28 service, whether either of McCurdy's
attempts at service on ABPS was effective. ABPS argues
that the original service made pursuant to the Hawaii long-
arm provision was ineffective because the district court in
Hawaii lacked personal jurisdiction over it. We agree.
Under Hawaii law, a defendant served pursuant to the
state's long-arm provision must be subject to the
jurisdiction of the Hawaii courts. See Haw. Rev. Stat. S 634-
35 (1996). Given the determination of the district court in
Hawaii that it lacked personal jurisdiction over ABPS, it
necessarily follows that the October 28, 1996, service made
pursuant to Hawaii law did not effectively invoke the
jurisdiction of the Hawaii court. Therefore, once the case
was transferred, McCurdy was required to invoke the
jurisdiction of the Pennsylvania court by re-serving ABPS
with service issued by that court.
In a similar situation in Buggs v. Ehrnschwender, 968
F.2d 1544 (2d Cir. 1992), plaintiff, a Pennsylvania citizen
who was injured in an automobile accident in New York,
sued a New York citizen in a federal court in Pennsylvania
and served defendant by certified mail. The case was
transferred to the federal court in New York and was
dismissed for improper service. The court noted that the
service of the complaint before transfer of the case was
ineffective because defendant had insufficient contacts to
fall within Pennsylvania's long-arm statute. Therefore,
plaintiff "was obligated to effect service in the new forum"
following the transfer and his failure to do so before the
statute of limitations ran resulted in dismissal. Id. at 1548;
8
see also 5A Wright & Miller, Federal Practice and Procedure:
Civil 2d S 1353 at 279 (1990) ("service of process is . . . the
means by which a court gives notice to defendant and
asserts jurisdiction over him") (emphasis added).
Accordingly, in order to invoke the jurisdiction of the
Pennsylvania court, McCurdy was required to timely re-
serve ABPS in Pennsylvania, which he failed to do.
Finally, we note that, having objected pursuant to Rule
12(b)(2) on the ground that Hawaii lacked personal
jurisdiction over it, ABPS effectively preserved the defense
that the October 28, 1996, service of process was
insufficient on the ground that personal jurisdiction was
lacking. ABPS was not required to make the identical
objection twice -- once under Rule 12(b)(2) and again under
Rule 12(b)(5). Where personal jurisdiction is lacking,
"[c]learly, a Rule 12(b)(2) motion . . .[is] more appropriate"
than one under Rule 12(b)(5). 5A Wright & Miller, S 1353 at
278-79.
We turn then to consider the possible effectiveness of
McCurdy's February 7, 1997, service under the Clayton
Act. McCurdy concedes that the February 1997 service was
untimely by four days. In fact, he further concedes that if
his first attempt at service was ineffective, then his filing of
the amended complaint would not have commenced a new
120-day time period in which to perfect service. See
Appellants' Br. at 17. Thus, the 120-day period, which
commenced on June 10, 1996, expired on October 8, 1996,
and McCurdy's second attempt at service was four months,
as opposed to four days, late.
With this in mind, we examine whether the district court
properly refused to grant McCurdy an extension of time in
which to serve nunc pro tunc.1 We review the district court's
denial of McCurdy's cross-motion for an extension of time
_________________________________________________________________
1. We note initially that ABPS's objection to the timeliness of the
February service was not waived by its failure to include the objection in
its January 17, 1997, motion to dismiss. At the time ABPS filed its
motion to dismiss, the second service had not yet been attempted. Thus,
the objection was not available as of the time the motion was filed. See
Fed. R. Civ. P. 12(g) (requiring that a defendant's Rule 12 motion include
all Rule 12 defenses "then available").
9
to serve for abuse of discretion. See Boley v. Kaymark, 123
F.3d 756, 758 (3d Cir. 1997).
This court has developed a two-pronged inquiry to
determine whether the grant of an extension of time in
which to serve is proper under Rule 4(m). First, the court
must determine whether good cause exists for the failure to
have effected service in a timely manner. If so, the
extension must be granted. If good cause has not been
shown, however, the court still may grant the extension in
the sound exercise of its discretion. See MCI Telecomm.
Corp. v. Teleconcepts, Inc., 71 F.3d 1086, 1098 (3d Cir.
1995); Petrucelli v. Bohringer & Ratzinger, 46 F.3d 1298,
1305 (3d Cir. 1995).
In the case at bar, the district court found that
McCurdy's efforts at perfecting timely service had been
"half-hearted and dilatory." Dist. Ct. Order at 7. It
concluded therefore that good cause for the delay had not
been shown. Id. Moving to the next step of the analysis, the
court recognized that the statute of limitations had run on
McCurdy's claims against ABPS thus barring the refiling of
his complaint. Nevertheless, the court insightfully
commented that "the running of the statute on the date the
original complaint was filed causes me to view that factor in
a light less favorable to plaintiff than might otherwise be
the case." Id. at 8. In the end, the court characterized
McCurdy's attempts at service as "too little, too late" and
concluded that he had demonstrated no basis to justify the
exercise of the court's discretion to grant an extension of
time in which to serve. Id.
Our own review of the record satisfies us that the district
court did not err in refusing to grant the extension that
McCurdy sought. None of McCurdy's attempts at service
was timely. Nor at any time did McCurdy ask any court for
an extension of time before the time allotted under the
Rules had lapsed. As the district court stated,"once the
matter was transferred to [Pennsylvania], counsel did not
even attempt to move to extend the deadline for service
until after the defendant moved to dismiss." Id. at 6.
Indeed, at the time the district court ruled, the statute of
limitations on McCurdy's claims had expired almost
eighteen months prior. We are well aware that the Federal
10
Rules are meant to be applied in such a way as to promote
justice. See Fed. R. Civ. P. 1. Often that will mean that
courts should strive to resolve cases on their merits
whenever possible. However, justice also requires that the
merits of a particular dispute be placed before the court in
a timely fashion so that the defendant is not forced to
defend against stale claims. Here, McCurdy failed to do just
that at every opportunity, and the district court was well
within its authority to deny McCurdy the extension he
sought.
III.
For the reasons stated above, the order of the district
court dismissing McCurdy's complaint will be affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
11