Grupo Famsa v. Eighth Jud. Dist. Ct. , 2016 NV 29 ( 2016 )

132 Nev., Advance Opinion 2.1
IN THE SUPREME COURT OF THE STATE OF NEVADA
GRUPO FAMSA, S.A. DE C.V., No. 68626
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT
COURT OF THE STATE OF NEVADA, FILED
IN AND FOR THE COUNTY OF
CLARK; AND THE HONORABLE ROB APR 2 1 2016
BARE, DISTRICT JUDGE,
Respondents,
and
B.E. UNO, LLC,
Real Party in Interest.
Original petition for a writ of prohibition challenging a district
court order denying a motion to quash service of process.
Petition granted in. part.
Fennemore Craig, P.C., and Christopher H. Byrd and Daniel Nubel, Las
Vegas; Levinson Arshonsky & Kurtz, LLP, and Richard I. Arshonsky,
Sherman Oaks, California,
for Petitioner.
Goold Patterson and Kelly J. Brinkman, Las Vegas,
for Real Party in Interest.
BEFORE HARDESTY, SAITTA and PICKERING, JJ.
OPINION
By the Court, HARDESTY, J.:
In this petition, we consider whether constitutional due process
SUPREME COURT
is satisfied when service of process on a foreign company pursuant to the
OF
NEVA0A
(0) I947A zi-11
Hague Convention on the Service Abroad of Judicial and Extrajudicial
Documents in Civil or Commercial Matters (Hague Convention) depends
solely upon a certificate of compliance issued by the foreign nation's central
authority. We hold that it is not and that the district court failed to
conduct the necessary fact-finding to determine whether service was
constitutionally sufficient in this case. Therefore, we grant the petition in
part.
FACTS AND PROCEDURAL HISTORY
Real party in interest B.E. Uno, LLC (Uno) owns a shopping
center in Las Vegas, Nevada. Famsa, Inc. (Famsa) entered into a lease
agreement for commercial retail space at the shopping center. Petitioner
Grupo Famsa, S.A. de C.V. (Grupo), a publicly traded Mexican company,
agreed to guaranty the Famsa lease. Famsa failed to comply with the
terms of the lease, and Uno filed a complaint in district court against
Famsa and Grupo for breach of the commercial lease and guaranty.
As Grupo is a Mexican company, and as the United States and
Mexico are both signatories to the Hague Convention, Uno served Grupo
through the procedures outlined in the Hague Convention. The parties do
not dispute that serving Grupo through the procedures outlined in the
Hague Convention was appropriate.
The Hague Convention requires all signatories to "designate a
'Central Authority' whose responsibility it is to accept requests of service
from any other signatory nation." 4B Charles Alan Wright et al., Federal
Practice and Procedure § 1134 (4th ed. 2015). The documents to be served
must be attached to a formal request form and sent to "the Central
Authority of the nation where service is to be carried out." Id. "If there is
no error in the documents, the Central Authority in the country of service
will then ... serve the defendant named in the documents according to its
SUPREME COURT
OF
NEVADA
2
(0) 1947A
own local laws. . . ." Id. "[O]nce service has been performed[J the Central
Authority. . . complete[s] an official form,. . certifying the time, place,
and method of service, as well as indicating on whom the documents were
served." Id.
In this case, the Mexican Central Authority issued a certificate
of proof of international service of process upon Grupo. The certificate
states that a woman named Claudia Palomo Martinez was served with
process and that she was an "employee in [Grupo's] legal department."
Grupo subsequently filed a motion to quash service of process, arguing that
Martinez was not an "employee in [Grupo's] legal department," but rather,
she was a hostess employed to greet individuals coming into the store.
Grupo submitted a declaration from its legal director stating this was
Martinez's role. Grupo argued that because Martinez was not an agent,
officer, or representative of Grupo, she had no authority to accept legal
documents on Grupo's behalf, and therefore, service of process was
constitutionally deficient. Uno argued that, even if Martinez was a
hostess, service of process nonetheless complied with Mexican law and the
Hague Convention. Uno submitted a declaration from an attorney licensed
to practice in Mexico stating he believed the service complied with Mexican
law.
During the hearing on the motion to quash, the district court
stated multiple times that it did not know whether Martinez was merely a
hostess or someone more involved with the company. Nonetheless, the
district court denied Grupo's motion to quash service of process, stating
that Grupo was properly served "under the laws of Mexico as well as the
Hague Convention and that such service efforts satisfied constitutional
standards of Due Process." Grupo now petitions this court for a writ of
SUPREME COURT
OF
NEVADA
3
(0) 1947A
prohibition, seeking to prohibit the district court from exercising
jurisdiction over Grupo due to insufficient service of process.
DISCUSSION
"It is well established that [a] writ of prohibition is the
appropriate remedy for a district court's erroneous refusal to quash service
of process." Casentini v. Ninth Judicial Dist. Court, 110 Nev. 721, 724, 877
P.2d 535, 537-38 (1994) (alteration in original) (internal quotation marks
omitted). Furthermore, given the "early stage of the proceedings and the
need for efficient judicial administration, an appeal would not be a speedy
and adequate legal remedy in this case." Loeb v. First Judicial Dist. Court,
129 Nev., Adv. Op. 62, 309 P.3d 47, 50 (2013). Therefore, we will exercise
our discretion to entertain the merits of the petition.
"This court applies a de novo standard of review to
constitutional challenges." Callie v. Bowling, 123 Nev. 181, 183, 160 P.3d
878, 879 (2007). Grupo argues that service of process was not
constitutionally effective because Martinez was not an agent, officer, or
representative so integrated with the company that she knew what to do
with the papers. Uno argues that our nation's concept of due process was
incorporated into the Hague Convention, and thus, by satisfying the
requirements of the Hague Convention, serviceS of process necessarily
satisfied constitutional due process. We reject Uno's argument; however,
we also reject Grupo's standard for what constitutes constitutional service
of process on a foreign corporation.
"An elementary and fundamental requirement of due process
in any proceeding which is to be accorded finality is notice reasonably
calculated, under all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present their
objections." Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314
SUPREME COURT
OF
NEVADA
4
(0) 1947A 0
(1950); see also Lidas, Inc. v. United States, 238 F.3d 1076, 1084 (9th Cir.
2001) ("Due process merely requires notice reasonably calculated, under all
the circumstances, to apprise interested parties of the pendency of the
action." (internal quotation marks omitted)). "[W]hether a particular
method of notice is reasonable depends on the particular [factual]
circumstances." Tulsa Prof 1 Collection Servs., Inc. v. Pope, 485 U.S. 478,
484 (1988).
Grupo cites a number of cases for the proposition that due
process requires service on an agent, officer, or representative. The cited
cases, however, do not provide a standard for what method of service
comports with constitutional due process. Rather, they discuss the
requirements of federal or state rules. See Direct Mail Specialists, Inc. v.
Eclat Computerized Techs., Inc., 840 F.2d 685, 688 (9th Cir. 1988); Tara
Minerals Corp. v. Carnegie Mining & Expl., Inc., No. 2:11-CV-01816-KJD-
GWF, 2012 WL 760653, at *1 (D. Nev. Mar. 7, 2012); R. Griggs Grp. Ltd. v.
Filanto Spa, 920 F. Supp. 1100, 1102-03 (D. Nev. 1996); Conn Convention
& Show Mgmt. v. Am. Broad. Co., 41 N.W.2d 263, 265 (Minn. 1950).
Although it is certainly relevant whether the person receiving process on a
foreign corporation's behalf is an agent, officer, or representative of that
corporation, that information is only useful insofar as it helps demonstrate
that notice was "reasonably calculated .. . to apprise interested parties of
the pendency of the action." Mullane, 339 U.S. at 314. Therefore, the fact
that Martinez may not have been an agent, officer, or representative of
Grupo does not end the analysis because service may still have been
performed in a manner reasonably calculated to apprise Grupo of the
action.
Furthermore, constitutional due process is not necessarily
satisfied merely because the foreign nation's central authority has issued a
SUPREME COURT
OF
NEVADA
5
(0) 1947A e
certificate of compliance. We recognize the Hague Convention, like our
nation's concept of due process, works to ensure judicial documents are
brought to the attention of the defendant within a reasonable time. Hague
Convention pmbl , Nov. 15, 1965, 20 U.S.T. 361, 362. However, we are not
convinced that a constitutional inquiry is inappropriate or unnecessary
where the Hague Convention applies. Indeed, a due process inquiry is
necessary to ensure the veracity of the certificate when the underlying
facts are contested.
We also acknowledge that many jurisdictions have either
explicitly or implicitly held that whether service complies with the
Constitution is a separate, albeit related, question from whether service
complies with the Hague Convention. See Burda Media, Inc. v. Viertel, 417
F.3d 292, 303 (2d Cir. 2005) ("[I]n addition to the Hague Convention,
service of process must also satisfy constitutional due process."); Lidos,
Inc., 238 F.3d at 1084 (suggesting that, although the Hague Convention
did not require actual receipt of notice of an IRS summons, a constitutional
due process inquiry was still necessary); Ackermann v. Levine, 788 F.2d
830, 838 (2d Cir. 1986) ("Service of process must satisfy both the statute
under which service is effectuated and constitutional due process. The
statutory prong is governed principally by the Hague Convention ...
Heredia v. Transp. S.A.S., Inc., 101 F. Supp. 2d 158, 162 (S.D.N.Y. 2000)
("In addition to the Hague Convention, service of process must also satisfy
constitutional due process."); Eli Lilly & Co. v. Roussel Corp., 23 F. Supp.
2d 460, 474 (D.N.J. 1998) ("Service of process must satisfy both the statute
under which service is effectuated [in this case, the Hague Convention] and
constitutional due process." (internal quotation marks omitted)); R. Griggs
Grp. Ltd., 920 F. Supp. at 1103 ("Service of process must comply with both
SUPREME COURT
OF
NEVADA
6
( 1) I947A
constitutional and statutory requirements," where the statutory
requirement referred to the Hague Convention).
As such, where the Hague Convention applies, we hold that
service of process must comply with both the Constitution and the Hague
Convention. Having so held, we further hold that the district court erred
in concluding that "such service efforts [which supposedly complied with
Mexican law] satisfied constitutional standards of Due Process" without
conducting the necessary fact-finding. Although Uno may have followed
the procedures outlined in the Hague Convention, the Mexican Central
Authority's service efforts may have amounted to no more than handing off
judicial documents to the equivalent of "a greeter at Wal-Mart"—service
efforts that, if true, would be unlikely to satisfy constitutional due process
absent extenuating circumstances. 1 Therefore, we conclude an evidentiary
hearing on the matter is appropriate to determine whether service here
was "reasonably calculated, under all the circumstances, to apprise [Grupo]
of the pendency of the action." 2 Mullane, 339 U.S. at 314.
'We note that the Hague Convention provides multiple means
through which a party may effectuate service of documents abroad;
therefore, one need not necessarily employ a foreign nation's central
authority to comply with the Hague Convention.
2Although the district court has the discretion to allow the plaintiff to
make a prima facie showing of personal jurisdiction prior to trial, in doing
so, the plaintiff would continue to carry the burden to prove jurisdiction by
a preponderance of the evidence at trial. See Trump v. Eighth Judicial
Dist. Court, 109 Nev. 687, 692-93, 857 P.2d 740, 743 44 (1993). However,
we note that the better practice with issues concerning service of process is
to resolve the matter pretrial through an evidentiary hearing, especially
where the issue is not particularly complicated.
SUPREME COURT
OF
NEVADA
7
(0) 1947A carBo.
CONCLUSION
Given the early stage of the proceedings and the nature of the
issue raised, we conclude our intervention is warranted. We hold that the
issuance of a certificate of compliance from a foreign nation's central
authority does not necessarily guarantee compliance with constitutional
due process. We further hold that the district court failed to conduct the
necessary fact-finding in determining whether service of process complied
with constitutional due process. Accordingly, we grant the petition in part
and direct the clerk of this court to issue a writ of prohibition instructing
the district court to vacate its order denying Grupo's motion to quash
service of process so that an evidentiary hearing may be held on the
matter.
J.
4
KS
r i
Pickering
SUPREME COURT
OF
NEVADA
8
(0) 1947A e