Rockefeller Technology etc. v. Changzhou SinoType Technology etc. ( 2020 )

IN THE SUPREME COURT OF
CALIFORNIA
ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII,
Plaintiff and Respondent,
v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.,
Defendant and Appellant.
S249923
Second Appellate District, Division Three
B272170
Los Angeles County Superior Court
BS149995
April 2, 2020
Justice Corrigan authored the opinion of the Court, in which
Chief Justice Cantil-Sakauye and Justices Chin, Liu, Cuéllar,
Kruger, and Groban concurred.
ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII
v. CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
S249923
Opinion of the Court by Corrigan, J.
The parties here, sophisticated business entities, entered
into a contract wherein they agreed to submit to the jurisdiction
of California courts and to resolve disputes between them
through California arbitration. They also agreed to provide
notice and “service of process” to each other through Federal
Express or similar courier. The narrow question we address is
whether the Convention on the Service Abroad of Judicial and
Extrajudicial Documents in Civil or Commercial Matters,
November 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638 (Hague
Service Convention or “the Convention”) preempts such notice
provision if the Convention provides for a different method of
service. Consistent with United States Supreme Court
authority, we conclude that the Convention applies only when
the law of the forum state requires formal service of process to
be sent abroad. We further conclude that, because the parties’
agreement constituted a waiver of formal service of process
under California law in favor of an alternative form of
notification, the Convention does not apply. We reverse the
Court of Appeal’s contrary decision.
I. BACKGROUND
Changzhou SinoType Technology Co., Ltd. (SinoType) is
based in China and specializes in developing Chinese graphical
fonts. During 2007 and 2008, its chairman, Kejian “Curt”
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
Huang, discussed forming a new company with Faye Huang,
president of Rockefeller Technology Investments (Asia) VII
(Rockefeller).1 In February 2008, they signed a Memorandum
of Understanding (MOU). The MOU reflected an intent to form
the new company, allocate interests and responsibilities
between the two existing companies and transfer assets to the
new entity. The MOU provided that the parties would, “with all
deliberate speed, within 90 days if possible,” attempt to draft
“long form agreements carrying forth the agreements made” in
the MOU. The MOU also stated, “this Agreement shall be in
full force and effect and shall constitute the full understanding
of the Parties that shall not be modified by any other
agreements, oral or written.” The MOU provided:
“6. The Parties shall provide notice in the English
language to each other at the addresses set forth in the
Agreement via Federal Express or similar courier, with copies
via facsimile or email, and shall be deemed received 3 business
days after deposit with the courier.
“7. The Parties hereby submit to the jurisdiction of the
Federal and State Courts in California and consent to service of
process in accord with the notice provisions above.
“8. In the event of any disputes arising between the
Parties to this Agreement, either Party may submit the dispute
to the Judicial Arbitration & Mediation Service in Los Angeles
for exclusive and final resolution pursuant to according to [sic]
its streamlined procedures before a single arbitrator who shall
have ten years judicial service at the appellate level, pursuant
1
Because Curt Huang and Faye Huang have the same
surname, we refer to them by their first names.
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Opinion of the Court by Corrigan, J.
to California law, and who shall issue a written, reasoned
award. The Parties shall share equally the cost of the
arbitration. Disputes shall include failure of the Parties to come
to Agreement as required by this Agreement in a timely
fashion.”
Eventually, negotiations broke down and the “long form
agreements” were never finalized. In February 2012,
Rockefeller sought arbitration. The arbitrator2 found that
SinoType received notice on numerous occasions and “all
materials were sent both by email and Federal Express” to the
Chinese address listed for it in the MOU.3 SinoType neither
responded nor appeared. In November 2013, the arbitrator
concluded Rockefeller was entitled to an award of $414,601,200.
His written decision was sent to SinoType by Federal Express
and e-mail.
2
Richard C. Neal, former justice of the Court of Appeal,
Second Appellate District, Division Seven, served as arbitrator.
3
Specifically, the arbitrator found: “Written proofs of
service in the JAMS [Judicial Arbitration and Mediation
Service] file, prepared and signed by JAMS Case Managers,
confirm that Respondent was given due written notice of all of
the events mentioned above, including submission of the
demand for arbitration, commencement of the arbitration,
appointment of the Arbitrator, the preliminary telephone
conference, the hearing scheduled for September 14, 2012,
continuance of the hearing to February 4, 2013, and the Interim
Order requiring additional submissions. Notices and copies of
all materials were sent both by email and Federal Express to
Respondent’s Chairman Kejiang ‘Curt’ Huang, Changzhou
Sinotype [sic] Technology Co.[,] Ltd[.], Niutang Town,
Changzhou, Jiangsu 213168, China.”
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
Rockefeller petitioned to confirm the award (Code Civ.
Proc., § 1285), and transmitted the petition and summons to
SinoType through Federal Express and e-mail. SinoType did
not appear and the award was confirmed in October 2014. In
November 2015, Rockefeller sought assignment of various
future royalty payments that several companies owed to
SinoType. (See Code Civ. Proc., § 708.510.) SinoType specially
appeared and moved “to quash and to set aside default judgment
for insufficiency of service of process.” (See Code Civ. Proc.,
§ 473, subd. (b).) SinoType asserted that it did not receive actual
notice of any proceedings until March 2015 and argued that
Rockefeller’s failure to comply with the Hague Service
Convention rendered the judgment confirming the arbitration
award void. In a declaration supporting the motion, chairman
Curt acknowledged that, in January 2012, he had received a
letter from Faye that “mentioned arbitration.” He further
declared that “[s]ince Faye Huang and others had harassed me
previously, and because I did not believe there was any binding
agreement between SinoType and [Rockefeller], I decided to
ignore the letter and subsequent FedEx packages and emails. I
did not open them.” Curt claimed that he only opened the
Federal Express packages in March 2015 after a client told him
Rockefeller claimed SinoType owed it money. The motion to set
aside the judgment was denied,4 but the Court of Appeal
reversed. (See Rockefeller Technology Investments (Asia) VII v.
Changzhou SinoType Technology Co., Ltd. (2018)
4
Los Angeles County Superior Court Judge Randolph M.
Hammock ruled on the motion.
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CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
24 Cal.App.5th 115, review granted Sept. 26, 2018, S249923
(Rockefeller Technology Investments).)
II. DISCUSSION
A. The Hague Service Convention
As to the superior court proceeding to confirm the
arbitration award, SinoType argues the Hague Service
Convention applies because notice of the proceeding was sent
abroad to China, where defendant is based. Mirroring the Court
of Appeal’s reasoning below, SinoType contends that China’s
objection to Article 10 of the Convention precludes service in
China through Federal Express. SinoType was never properly
served, and the judgment confirming the arbitration award is
void for lack of personal jurisdiction. (See Rockefeller
Technology Investments, supra, 24 Cal.App.5th at pp. 133-135.)
To address this contention, we examine the language of the
Hague Service Convention and pertinent United States
Supreme Court authority.
The Convention is “a multilateral treaty that was
formulated in 1964 by the Tenth Session of the Hague
Conference of Private International Law . . . [and] was intended
to provide a simpler way to serve process abroad, to assure that
defendants sued in foreign jurisdictions would receive actual
and timely notice of suit, and to facilitate proof of service
abroad.” (Volkswagenwerk Aktiengesellschaft v. Schlunk (1988)
486 U.S. 694, 698 (Volkswagenwerk).) The United States was
an original signatory, and China adopted it in 1992. (Kott v.
Superior Court (1996) 45 Cal.App.4th 1126, 1134-1135 (Kott);
Hyundai Merchant Marine v. Grand China Shipping (S.D.Ala.
2012) 878 F.Supp.2d 1252, 1262, fn. 5; see also Volkswagenwerk,
at p. 698.)
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Opinion of the Court by Corrigan, J.
Article 1 of the Convention states it “shall apply in all
cases, in civil and commercial matters, where there is occasion
to transmit a judicial or extrajudicial document for service
abroad.” (Hague Service Convention, supra, 20 U.S.T. at p. 362.)
The Convention requires each member state to “designate a
Central Authority which will undertake to receive requests for
service coming from other contracting States and to proceed in
conformity with the provisions of articles 3 to 6.” (Ibid.) “The
Central Authority of the State addressed shall itself serve the
document or shall arrange to have it served by an appropriate
agency, either— [¶] (a) by a method prescribed by its internal
law for the service of documents in domestic actions upon
persons who are within its territory, or [¶] (b) by a particular
method requested by the applicant, unless such a method is
incompatible with the law of the State addressed.” (Ibid.) “The
primary innovation of the Convention is that it requires each
state to establish a central authority to receive requests for
service of documents from other countries. [Citation.] Once a
central authority receives a request in the proper form, it must
serve the documents by a method prescribed by the internal law
of the receiving state or by a method designated by the requester
and compatible with that law. [Citation.] The central authority
must then provide a certificate of service that conforms to a
specified model.”5 (Volkswagenwerk, supra, 486 U.S. at pp. 698-
699.)
5
“Submitting a request to a central authority is not,
however, the only method of service approved by the
Convention. For example, Article 8 permits service through
diplomatic and consular agents; Article 11 provides that any two
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
As relevant here, article 10 of the Convention states:
“Provided the State of destination does not object, the present
Convention shall not interfere with— [¶] (a) the freedom to send
judicial documents, by postal channels, directly to persons
abroad, [¶] (b) the freedom of judicial officers, officials or other
competent persons of the State of origin to effect service of
judicial documents directly through the judicial officers, officials
or other competent persons of the State of destination, [¶] (c) the
freedom of any person interested in a judicial proceeding to
effect service of judicial documents directly through the judicial
officers, officials or other competent persons of the State of
destination.” (Hague Service Convention, supra, 20 U.S.T. at
p. 363, italics added.) “Each signatory nation may ratify, or
object to, each of the articles” of the Convention. (Honda Motor
Co. v. Superior Court (1992) 10 Cal.App.4th 1043, 1045 (Honda
Motor).) When it adopted the Convention, China objected to
article 10.6 (See Zhang v. Baidu.com Inc. (S.D.N.Y. 2013) 932
states can agree to methods of service not otherwise specified in
the Convention; and Article 19 clarifies that the Convention
does not preempt any internal laws of its signatories that permit
service from abroad via methods not otherwise allowed by the
Convention.” (Water Splash, Inc. v. Menon (2017) 581 U.S.__, __
[137 S.Ct. 1504, 1508] (Water Splash).)
6
The objection has been noted by the Hague Conference on
Private International Law, which administers the Convention.
(Hague Conference on Private International Law,
Declaration/Reservation/Notification
[as of April 2, 2020];
the Internet citation in this opinion is archived by year, docket
number, and case name at .)
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
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Opinion of the Court by Corrigan, J.
F.Supp.2d 561, 567.) By its objection, the nation of China
declined to embrace article 10’s alternative service methods.
The question here is whether China’s objection estops its
citizens from agreeing to notification arguably covered by
article 10. Two United States Supreme Court cases inform the
application of the Convention. In Volkswagenwerk, the high
court addressed whether a foreign corporation could properly be
served through a wholly-owned domestic subsidiary. The court
acknowledged that article 1 of the Convention stated it “ ‘shall
apply in all cases, in civil or commercial matters, where there is
occasion to transmit a judicial or extrajudicial document for
service abroad.’ ” (Volkswagenwerk, supra, 486 U.S. at p. 699.)
However, the high court observed that “[t]he Convention does
not specify the circumstances in which there is ‘occasion to
transmit’ a complaint ‘for service abroad.’ But at least the term
‘service of process’ has a well-established technical meaning.
Service of process refers to a formal delivery of documents that
is legally sufficient to charge the defendant with notice of a
pending action. [Citations.] The legal sufficiency of a formal
delivery of documents must be measured against some
standard. The Convention does not prescribe a standard, so we
almost necessarily must refer to the internal law of the forum
state. If the internal law of the forum state defines the
applicable method of serving process as requiring the
transmittal of documents abroad, then the Hague Service
Convention applies.” (Id. at p. 700.) Volkswagenwerk relied
upon the negotiating history of the Convention to support its
view that “Article 1 refers to service of process in the technical
sense” (ibid.), and “whether there is service abroad must be
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
determined by reference to the law of the forum state” (id. at p.
701).
While noting that “compliance with the Convention is
mandatory in all cases to which it applies” (Volkswagenwerk,
supra, 486 U.S. at p. 705), and “the Convention pre-empts
inconsistent methods of service prescribed by state law in all
cases to which it applies” (id. at p. 699), the high court concluded
the Illinois long-arm statute at issue authorized service of a
foreign corporation through a domestic subsidiary. (Id. at p.
706.) As such, under the law of the forum state, “this case does
not present an occasion to transmit a judicial document for
service abroad within the meaning of Article 1. Therefore the
Hague Service Convention does not apply, and service was
proper.” (Id. at pp. 707-708.)
Water Splash resolved “a broader conflict among courts as
to whether the Convention permits service through postal
channels.” (Water Splash, supra, 581 U.S. at p. __ [137 S.Ct. at
p. 1508].) The court concluded that article 10(a) does not
preclude service by mail but warned: “To be clear, this does not
mean that the Convention affirmatively authorizes service by
mail. Article 10(a) simply provides that, as long as the receiving
state does not object, the Convention does not ‘interfere with . . .
the freedom’ to serve documents through postal channels. In
other words, in cases governed by the Hague Service
Convention, service by mail is permissible if two conditions are
met: first, the receiving state has not objected to service by mail;
and second, service by mail is authorized under otherwise-
applicable law.” (Id. at p. __ [137 S.Ct. at p. 1513], second italics
added.)
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
We discern three relevant principles. First, the Hague
Service Convention applies only to “service of process in the
technical sense” involving “a formal delivery of documents.”
(Volkswagenwerk, supra, 486 U.S. at p. 700.) The distinction
between formal service and mere notice appears consistent with
the Practical Handbook on the Operation of the Service
Convention, published by the Permanent Bureau of the Hague
Conference on Private International Law for guidance regarding
the Convention’s application. “[T]he Convention cannot—and
does not—determine which documents need to be served. It is a
matter for the lex fori to decide if a document needs to be served
and which document needs to be served. Thus, if the law of the
forum states that a notice is to be somehow directed to one or
several addressee(s), without requiring service, the Convention
does not have to be applied.” (Practical Handbook on the
Operation of the Service Convention (4th ed. 2016) par. 54, p.
23, fn. omitted; see Denlinger v. Chinadotcom Corp. (2003) 110
Cal.App.4th 1396, 1402 [the Convention involves “the concept of
formal service of process”].)
Second, whether “there is occasion to transmit a judicial or
extrajudicial document for service abroad” (Hague Service
Convention, supra, 20 U.S.T. at p. 362) is determined by
reference to the law of the sending forum, in this case California.
(Volkswagenwerk, supra, 486 U.S. at pp. 700-701.)
Volkswagenwerk concluded there that the sending forum,
Illinois, did not require service abroad because its long-arm
statute authorized domestic service through a subsidiary. (Id.
at pp. 706-708.) Thus, because international service was not
required, the Hague Service Convention did not apply.
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Opinion of the Court by Corrigan, J.
Third, if formal service of process is required under the
law of the sending forum, international transmission of service
documents must comply with the Convention. “[T]he
preemptive effect of the Hague Convention as to service on
foreign nationals is beyond dispute.” (Honda Motor, supra, 10
Cal.App.4th at p. 1049.) Thus, if the Convention applied here,
and assuming service by Federal Express constitutes a species
of service by mail,7 China’s objection to foreign mail service
under article 10(a) would preclude direct service via Federal
Express, regardless of whether California law authorized such
service.8 (See Water Splash, supra, 581 U.S. at p. __ [137 S.Ct.
at p. 1513].) “Failure to comply with the Hague Service
Convention procedures voids the service even though it was
made in compliance with California law. [Citation.] This is true
even in cases where the defendant had actual notice of the
lawsuit.” (Kott, supra, 45 Cal.App.4th at p. 1136.)
For the reasons discussed below, we conclude that the
parties’ agreement constituted a waiver of formal service of
process under California law. The parties waived formal service
7
Many of the cases refer to postal or mail service, while the
agreement here provided for service through Federal Express, a
private courier company. The parties do not argue that there is
any relevant difference between a governmental postal service
or private courier company. For purposes of this dispute, we
assume the Convention’s mail service provisions would apply in
the same manner to both.
8
At least one case has suggested that service via Federal
Express does not comport with California law because it does
not require a signed return receipt. (See Inversiones Papaluchi
S.A.S. v. Superior Court (2018) 20 Cal.App.5th 1055, 1066-
1067.)
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Opinion of the Court by Corrigan, J.
in favor of informal notification through Federal Express or
similar courier. Accordingly, the Convention does not apply in
this case.
B. Jurisdiction, Service of Process and Waiver
As we recognized over 160 years ago: “To sustain a
personal judgment the Court must have jurisdiction of the
subject-matter, and of the person. [Citation.] Where the
jurisdiction of the Court as to the subject-matter has been
limited by the Constitution or the statute, the consent of parties
cannot confer jurisdiction. But when the limit regards certain
persons, they may, if competent, waive their privilege, and this
will give the Court jurisdiction.” (Gray v. Hawes (1857) 8 Cal.
562, 568.) “Jurisdiction of the subject matter cannot be given,
enlarged or waived by the parties. . . . However, if the court has
jurisdiction of the subject matter, the rule is otherwise, and a
party may voluntarily submit himself to the jurisdiction of the
court, or may, by failing to seasonably object thereto, waive his
right to question jurisdiction over him. Process is waived by a
general appearance, in person or by attorney, entered in the
action, or by some act equivalent thereto, such as the filing of a
pleading in the case or by otherwise recognizing the authority of
the court to proceed in the action.” (Harrington v. Superior Court
(1924) 194 Cal. 185, 188-189, italics added.)
“ ‘Process’ signifies a writ or summons issued in the course
of a judicial proceeding.” (Code Civ. Proc., § 17, subd. (b)(7).)
“ ‘Service of process is the means by which a court having
jurisdiction over the subject matter asserts its jurisdiction over
the party and brings home to him reasonable notice of the
action.’ ” (Kappel v. Bartlett (1988) 200 Cal.App.3d 1457, 1464,
quoting Judicial Council of Cal., com., reprinted at 14 West’s
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Ann. Code Civ. Proc. (1973 ed.) foll. § 413.10, p. 541; cf. Meza v.
Portfolio Recovery Associates, LLC (2019) 6 Cal.5th 844, 854.)
Thus, formal service of process performs two important
functions. From the court’s perspective, service of process
asserts jurisdiction over the person. “Unless a named defendant
agrees to waive service, the summons continues to function as
the sine qua non directing an individual or entity to participate
in a civil action or forgo procedural or substantive rights.”
(Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc. (1999)
526 U.S. 344, 351.) “The consistent constitutional rule has been
that a court has no power to adjudicate a personal claim or
obligation unless it has jurisdiction over the person of the
defendant.” (Zenith Corp. v. Hazeltine (1969) 395 U.S. 100, 110.)
From the defendant’s perspective, “[d]ue notice to the defendant
is essential to the jurisdiction of all courts, as sufficiently
appears from the well-known legal maxim, that no one shall be
condemned in his person or property without notice, and an
opportunity to be heard in his defence.” (Earle et al. v. McVeigh
(1875) 91 U.S. 503, 503-504.) Service of process thus protects a
defendant’s due process right to defend against an action by
providing constitutionally adequate notice of the court
proceeding.
Cases have recognized that one may waive both personal
jurisdiction and notice aspects of service. “[I]t is settled . . . that
parties to a contract may agree in advance to submit to the
jurisdiction of a given court, to permit notice to be served by the
opposing party, or even to waive notice altogether.” (National
Rental v. Szukhent (1964) 375 U.S. 311, 315-316.)
With respect to personal jurisdiction, “ ‘ “[d]ue process
permits the exercise of personal jurisdiction over a nonresident
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defendant . . . ,” ’ inter alia, when the defendant consents to
jurisdiction. [Citations.] ‘A party, even one who has no
minimum contacts with this state, may consent to jurisdiction
in a particular case.’ [Citations.] . . . [¶] Agreeing to resolve a
particular dispute in a specific jurisdiction, for example, is one
means of expressing consent to personal jurisdiction of courts in
the forum state for purposes of that dispute.” (Szynalski v.
Superior Court (2009) 172 Cal.App.4th 1, 7-8.) “While subject
matter jurisdiction cannot be conferred by consent, personal
jurisdiction can be so conferred, and consent may be given by a
contract provision.” (Berard Construction Co. v. Municipal
Court (1975) 49 Cal.App.3d 710, 721.) As the high court has
recognized: “Because the requirement of personal jurisdiction
represents first of all an individual right, it can, like other such
rights, be waived. . . . A variety of legal arrangements have been
taken to represent express or implied consent to the personal
jurisdiction of the court. In National [] Rental[] v. Szukhent,
[supra,] 375 U.S. [at p.] 316 [], we stated that ‘parties to a
contract may agree in advance to submit to the jurisdiction of a
given court,’ and in Petrowski v. Hawkeye-Security Co., 350 U.S.
495 (1956), the Court upheld the personal jurisdiction of a
District Court on the basis of a stipulation entered into by the
defendant. In addition, lower federal courts have found such
consent implicit in agreements to arbitrate. [Citations.]
Furthermore, the Court has upheld state procedures which find
constructive consent to the personal jurisdiction of the state
court in the voluntary use of certain state procedures.”
(Insurance Corp. v. Compagnie Des Bauxites (1982) 456 U.S.
694, 703-704; see also Burger King Corp. v. Rudzewicz (1985)
471 U.S. 462, 472, fn. 14.)
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Similarly with respect to notice, it has long been settled
that “[t]he due process rights to notice and hearing prior to a
civil judgment are subject to waiver.” (D. H. Overmyer Co. v.
Frick Co. (1972) 405 U.S. 174, 185.) The high court in Overmyer
affirmed the constitutionality of cognovit clauses, “the ancient
legal device by which the debtor consents in advance to the
holder’s obtaining a judgment without notice or hearing” (id. at
p. 176). Overmyer reasoned that, “[e]ven if, for present
purposes, we assume that the standard for waiver in a
corporate-property-right case of this kind is the same standard
applicable to waiver in a criminal proceeding, that is, that it be
voluntary, knowing, and intelligently made, [citations], or ‘an
intentional relinquishment or abandonment of a known right or
privilege,’ [citations], and even if, as the Court has said in the
civil area, ‘[w]e do not presume acquiescence in the loss of
fundamental rights,’ [citation], that standard was fully satisfied
here.” (Id. at pp. 185-186.) California courts have since applied
the voluntary, knowing, and intelligent standard to similar
waiver provisions. (See Isbell v. County of Sonoma (1978) 21
Cal.3d 61, 70; Capital Trust, Inc. v. Tri-National Development
Corp. (2002) 103 Cal.App.4th 824, 829-831; Commercial Nat.
Bank of Peoria v. Kermeen (1990) 225 Cal.App.3d 396, 401.)
C. California Statutes Regarding Service of Process
“A court of this state may exercise jurisdiction on any basis
not inconsistent with the Constitution of this state or of the
United States.” (Code Civ. Proc., § 410.10; see Cal. Const., art.
VI, § 10; Donaldson v. National Marine, Inc. (2005) 35 Cal.4th
503, 512.) Generally, “[e]xcept as otherwise provided by statute,
the court in which an action is pending has jurisdiction over a
party from the time summons is served on him as provided by
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Chapter 4 (commencing with Section 413.10).” (Code Civ. Proc.,
§ 410.50, subd. (a).) Code of Civil Procedure 9 section 413.10
provides that “[e]xcept as otherwise provided by statute, a
summons shall be served on a person: [¶] . . . [¶] (c) Outside the
United States, as provided in this chapter or as directed by the
court in which the action is pending, or, if the court before or
after service finds that the service is reasonably calculated to
give actual notice, as prescribed by the law of the place where
the person is served or as directed by the foreign authority in
response to a letter rogatory. These rules are subject to the
provisions of the Convention on the ‘Service Abroad of Judicial
and Extrajudicial Documents’ in Civil or Commercial Matters
(Hague Service Convention).” (§ 413.10, subd. (c).) “A summons
may be served on a person outside this state in any manner
provided by this article or by sending a copy of the summons and
of the complaint to the person to be served by first-class mail,
postage prepaid, requiring a return receipt.” (§ 415.40; see
§ 415.30 [service by mail].) Other prescribed statutory methods
of service include personal service (§ 415.10) and leaving
documents at an office, dwelling, or mailing address (combined
with a subsequent mailing) (§ 415.20). A corporation may be
served by presenting documents to its president or chief
executive officer, among others. (§ 416.10, subd. (b).)
The present case arises out of Rockefeller’s attempt to
confirm an arbitration award. “Any party to an arbitration in
which an award has been made may petition the court to
confirm, correct or vacate the award. The petition shall name
9
Subsequent statutory references are to the Code of Civil
Procedure unless otherwise noted.
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
as respondents all parties to the arbitration and may name as
respondents any other persons bound by the arbitration award.”
(§ 1285; see §§ 1288 [time limits for serving and filing petitions],
1290 [“A proceeding under this title in the courts of this State is
commenced by filing a petition”].) “If a petition or response
under this chapter is duly served and filed, the court shall
confirm the award as made, whether rendered in this state or
another state, unless in accordance with this chapter it corrects
the award and confirms it as corrected, vacates the award or
dismisses the proceeding.” (§ 1286.) “A petition under this title
shall be heard in a summary way in the manner and upon the
notice provided by law for the making and hearing of
motions . . . .” (§ 1290.2; see § 1005, subd. (b) [service of
motions].)
Of particular relevance here are sections 1290.4 and 1293.
Section 1290.4, subdivision (a) requires that “[a] copy of the
petition and a written notice of the time and place of the hearing
thereof and any other papers upon which the petition is based
shall be served in the manner provided in the arbitration
agreement for the service of such petition and notice.” (Italics
added.) Subdivision (b) provides that if an arbitration
agreement “does not provide the manner in which such service
shall be made and the person upon whom service is to be made
has not previously appeared in the proceeding,” a person in
California shall be served “in the manner provided by law for
the service of summons in an action,” or upon a person outside
the state “by mailing the copy of the petition and notice and
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
other papers by registered or certified mail.”10 (§ 1290.4, subd.
(b).)
Under section 1293, “[t]he making of an agreement in this
State providing for arbitration to be had within this State shall
be deemed a consent of the parties thereto to the jurisdiction of
the courts of this State to enforce such agreement by the making
of any orders provided for in this title and by entering of
judgment on an award under the agreement.” This statute
codified our decision in Frey & Horgan Corp. v. Superior Court
(1936) 5 Cal.2d 401, which involved a California corporation’s
attempt to enforce a contractual arbitration agreement against
an out-of-state corporation. Frey reasoned: “The contracts
having been made with direct affirmative reference to the right
of arbitration, and particularly with reference to the laws of
California, the provisions of [former] section 1282 of the Code of
Civil Procedure [pertaining to petitions to compel arbitration]
should be read into the contracts as part thereof. The agreement
to submit the dispute to the arbitration committee is an
agreement to cooperate in that proceeding. It is presumed that
the contract was made in good faith. Therefore it was an
agreement to submit to the jurisdiction within which the
arbitration must operate in order to give it the effect
contemplated by the contract and by the law.” (Frey & Horgan
Corp., at pp. 404-405.) A later case clarified that Frey’s
reasoning applied to proceedings to confirm an arbitration
award: “That ‘effect’ [noted in Frey], we are satisfied, includes
10
Section 1290.4, subdivision (c) concerns service where an
arbitration agreement does not specify a method of service but
the person has previously made an appearance or been served.
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
not only the enforcement of arbitration agreements and the
conduct of arbitration proceedings, but the enforcement of the
award resulting from such arbitration in the manner provided
by California law. To hold otherwise would be tantamount to a
refutation of the principle of the Frey & Horgan case, and would
amount to an emasculation and frustration of the purpose and
objectives of the arbitration laws of this state.” (Atkins, Kroll &
Co. v. Broadway Lbr. Co. (1963) 222 Cal.App.2d 646, 653.)
D. The Parties Waived Formal Service of Process Under
California Law
As discussed ante, formal service of process involves two
aspects: service as a method of obtaining personal jurisdiction
over a defendant and formalized notification of court
proceedings to allow a party to appear and defend against the
action. For the reasons discussed below, we conclude the parties
here, by agreeing to the MOU, waived both aspects.
With respect to personal jurisdiction, paragraph 7 of the
MOU expressly stated “[t]he Parties hereby submit to the
jurisdiction of the Federal and State Courts in California . . . .”
Further, in paragraph 8, the parties agreed to submit all
disputes “to the Judicial Arbitration & Mediation Service in Los
Angeles for exclusive and final resolution . . . pursuant to
California law . . . .” “Code of Civil Procedure section 1293 . . .
gives California courts personal and subject matter jurisdiction
to enforce arbitration agreements formed in California.”
(Boghos v. Certain Underwriters at Lloyd’s of London (2005) 36
Cal.4th 495, 504.) The parties’ agreement to exclusively
arbitrate any disputes in California constituted consent to
submit to the jurisdiction of California courts to enforce that
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
agreement, including “by entering of judgment on an award
under the agreement.” (§ 1293.)
With respect to notice, paragraph 6 of the MOU stated the
parties “shall provide notice in the English language to each
other at the addresses set forth in the Agreement via Federal
Express or similar courier,” while paragraph 7 clarified the
parties “consent to service of process in accord with the notice
provisions above.” Construed in tandem, these provisions leave
little doubt the parties intended to supplant any statutory
service procedures with their own agreement for notification via
Federal Express. Section 1290.4, subdivision (a) gives effect to
such an agreement by requiring that documents “be served in
the manner provided in the arbitration agreement for the
service of such petition and notice.” That is, section 1290.4,
subdivision (a) authorizes parties to an arbitration agreement
to waive otherwise applicable statutory requirements for service
of summons in connection with a petition to confirm an
arbitration award and agree instead to an alternative form of
notification, which is exactly what the parties did in paragraph
6 of the MOU.
The MOU’s language confirms the parties’ intent to
replace “service of process” with the alternate notification
method specified in the agreement. This circumstance
distinguishes Abers v. Rohrs (2013) 217 Cal.App.4th 1199,
which construed section 1290.4, subdivision (a). Abers involved
leases with arbitration clauses that included a provision stating
notices could be sent by mail. The homeowners in that case filed
a petition to vacate an arbitration award and mailed it to the
opposing party. Abers rejected the homeowners’ claim that the
mailing satisfied section 1290.4, subdivision (a): “Their
20
ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
argument fails because it conflates the concept of providing
notice with the concept of serving process.” (Abers, at p. 1206.)
“Because paragraph 16 of the parties’ leases governs only notice,
and not service, it does not qualify as a provision which specifies
the manner in which a petition to vacate an arbitration award
may be served. Consequently, the homeowners’ reliance on
those notice provisions as a means of demonstrating proper
service of the petition necessarily fails.” (Id. at pp. 1206-1207.)
By contrast here, the MOU not only contemplated that
notifications be sent via Federal Express, but also that such
notifications would take the place of formal service of process.
It is true that section 1290.4, subdivision (a) refers to
“service,” but we do not agree the mere use of that word controls
whether the statute is referencing formal service of process. In
re Jennifer O. (2010) 184 Cal.App.4th 539 (Jennifer O.), which
involved a juvenile dependency proceeding, faced an analogous
issue. The father, who lived in Mexico, was mailed a notice of a
hearing. Noting that Welfare and Institutions Code section 293,
subdivision (e) required “[s]ervice of the notice,” the father
argued compliance with the Hague Service Convention was
required. Jennifer O. rejected the claim, observing that the high
court in Volkswagenwerk “held that despite the provision’s
broad language, the Convention applied only to service of
process in the technical sense . . . .” (Jennifer O., at p. 549.)
Noting that the father had already made a general appearance
in the case, Jennifer O. concluded that, notwithstanding the
statutory language, “[s]ervice of notice on appellant of the six-
month review hearing by first-class mail fully complied with
California law . . . .” (Id. at p. 550; see Kern County Dept. of
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
Human Services v. Superior Court (2010) 187 Cal.App.4th 302,
308-311 (Kern County).)
Our conclusions as to California law are narrow. When
parties agree to California arbitration, they consent to submit to
the personal jurisdiction of California courts to enforce the
agreement and any judgment under section 1293. When the
agreement also specifies the manner in which the parties “shall
be served,” consistent with section 1290.4, subdivision (a), that
agreement supplants statutory service requirements and
constitutes a waiver of formal service in favor of the agreed-upon
method of notification. If an arbitration agreement fails to
specify a method of service, the statutory service requirements
of section 1290.4, subdivisions (b) or (c) would apply, and those
statutory requirements would constitute formal service of
process. We express no view with respect to service of process
in other contexts.
E. The Hague Service Convention Does Not Apply
As the high court clarified, “[t]he only transmittal to which
the Convention applies is a transmittal abroad that is required
as a necessary part of service.” (Volkswagenwerk, supra, 486
U.S. at p. 707.) Whether transmittal abroad is required as a
necessary part of service depends on state law. Because the
parties agreed to waive formal service of process under
California law in favor of informal notification, “this case does
not present an occasion to transmit a judicial document for
service abroad within the meaning of Article 1” of the Hague
Service Convention. (Id. at pp. 707-708; see Kern County, supra,
187 Cal.App.4th at pp. 308-311; Jennifer O., supra, 184
Cal.App.4th at pp. 549-550.)
22
ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
Contrary to SinoType’s arguments, this conclusion does
not authorize circumventing the Hague Convention where the
Convention would otherwise apply. We merely recognize that
this case falls “outside the scope of its mandatory application,”
as the Convention has been interpreted in Volkswagenwerk.
(Volkswagenwerk, supra, 486 U.S. at p. 706.) SinoType’s
arguments are similar to the arguments for broader mandatory
application of the Convention made in Volkswagenwerk. The
high court rejected those arguments, as do we. (See id. at pp.
702–705.)
Holding that the Convention does not apply when parties
have agreed to waive formal service of process in favor of a
specified type of notification serves to promote certainty and
give effect to the parties’ express intentions. Conversely, to
apply the Convention under such circumstances would sow
confusion and encourage gamesmanship and sharp practices.
As one court observed, “precluding a contractual waiver of the
service provisions of the Hague Convention would allow people
to unilaterally negate their clear and unambiguous written
waivers of service by the simple expedient of leaving the
country.” (Alfred E. Mann Living Trust v. ETIRC Aviation
S.A.R.L. (N.Y.App.Div. 2010) 78 A.D.3d 137, 141; see Masimo
Corp. v. Mindray DS USA Inc. (C.D.Cal. Mar. 18, 2013, No.
SACV 12-02206- CJC(JPRx)) 2013 U.S.Dist.LEXIS 197706, at
pp. *13-14.) Nothing in the language or history of the
Convention suggests any intent for the treaty to be abused in
such a manner.
Likewise, our conclusion promotes California’s “long-
established and well-settled policy favoring arbitration as a
speedy and inexpensive means of settling disputes. [Citation.]
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ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
This policy is reflected in the comprehensive statutory scheme
set out in the California Arbitration Act. (§ 1280 et seq.) The
purpose of the act is to promote contractual arbitration, in
accordance with this policy, as a more expeditious and less
expensive means of resolving disputes than by litigation in
court. [Citation.] ‘Typically, those who enter into arbitration
agreements expect that their dispute will be resolved without
necessity for any contact with the courts.’ ” (Hightower v.
Superior Court (2001) 86 Cal.App.4th 1415, 1431; see Mercury
Ins. Group v. Superior Court (1998) 19 Cal.4th 332, 342.)
Requiring formal service abroad under California law where
sophisticated business entities have agreed to arbitration and a
specified method of notification and document delivery would
undermine the benefits arbitration provides. Uncertainty with
respect to service would require court intervention to resolve,
increase the time and cost of dispute resolution, and potentially
call into question long-final arbitration awards. Such a result
appears contrary to the Legislature’s attempts to position
California as a center for international commercial arbitration.
(See Credit Lyonnais Bank Nederland, N.V. v. Manatt, Phelps,
Rothenberg & Tunney (1988) 202 Cal.App.3d 1424, 1434.)
24
ROCKEFELLER TECHNOLOGY INVESTMENTS (ASIA) VII v.
CHANGZHOU SINOTYPE TECHNOLOGY CO., LTD.
Opinion of the Court by Corrigan, J.
III. DISPOSITION
The judgment of the Court of Appeal is reversed. The
matter is remanded for the resolution of unadjudicated issues.
CORRIGAN, J.
We Concur:
CANTIL-SAKAUYE, C. J.
CHIN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.
25
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.
Name of Opinion Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Technology
Co., Ltd.
__________________________________________________________________________________
Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 24 Cal.App.5th 115Rehearing Granted
__________________________________________________________________________________
Opinion No. S249923
Date Filed: April 2, 2020
__________________________________________________________________________________
Court: Superior
County: Los Angeles
Judge: Randolph M. Hammock
__________________________________________________________________________________
Counsel:
Law Offices of Steve Qi and Associates, Steve Qi, May T. To; Law Offices of Steven L. Sugars and Steven
L. Sugars for Defendant and Appellant.
Paul Hastings, Thomas P. O'Brien, Katherine F. Murray, Nicole D. Lueddeke; Blum Collins, Steve A.
Blum and Chia Heng Ho for Plaintiff and Respondent.
Gibson, Dunn & Crutcher and Daniel M. Kolkey for California International Arbitration Council as
Amicus Curiae on behalf of Plaintiff and Respondent.
Benson K. Lau and Adam M. Satnick for Pacific Rim Cultural Foundation as Amicus Curiae on behalf of
Plaintiff and Respondent.
Covington & Burling, David B. Goodwin and Peter Trooboff for Professors of International Litigation as
Amici Curiae.
Counsel who argued in Supreme Court (not intended for publication with opinion):
Chia Heng (Gary) Ho
Blum Collins, LLP
707 Wilshire Boulevard, Suite 4880
Los Angeles, CA, 90017
(213) 572-0400
Steven L. Sugars
Law Offices of Steven L. Sugars
388 E. Valley Blvd., Suite 200
Alhambra, CA 91801
(626) 243-3343