Opinion
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS; VACATING HEARING
MAXINE CHESNEY, District Judge.
Before the Court is defendant Fuji Electric Systems Co., Ltd.'s ("Fuji Japan") motion to dismiss the above-entitled action for insufficiency of service of process and lack of personal jurisdiction, pursuant to Rules 12(b)(5) and 12(b)(2) of the Federal Rules of Civil Procedure. Plaintiff Fireman's Fund Insurance Company ("Fireman's Fund") has filed opposition to the motion, to which Fuji Japan has replied. Having considered the papers filed in support of and in opposition to the motion, the Court finds the motion appropriate for decision without oral argument, see Civil L.R. 7-1(b), and hereby, VACATES the March 11, 2005 hearing. For the reasons set forth below, the motion to dismiss for insufficient service of process is GRANTED, with leave to effect service on Fuji Japan pursuant to the Hague Convention and the Federal Rules of Civil Procedure, and the motion to dismiss for lack of personal jurisdiction is DENIED without prejudice.
BACKGROUND
On February 9, 2001, in San Francisco, Fireman's Fund issued an insurance policy ("the policy") to Cottonwood Technology Partners LP and Bechtel Power Corporation ("Bechtel"). (See Declaration of Eunice Lyons ("Lyons Decl.") ¶ 2.) The policy covers "Cottonwood Technology Partners LP, as Owner, Bechtel Power Corporation and/or associated/affiliated companies and/or sub-contractors and/or co-contractors, as Contractors..." and others "as their respective rights at interest appear...." (See First Amended Complaint ("FAC"), Ex. A; see also Lyons Decl. ¶ 2.) On August 28, 2001, Bechtel purchased three transformers from Fuji Electric Corp. of America ("Fuji America"), to be shipped to the Bechtel jobsite at the Cottonwood Power Project, Deweyville, Texas. (See Declaration of Teiichi Kojima ("Kojima Decl.") ¶ 20 and Ex. A.) Fireman's Fund alleges that on or about December 21, 2001, Fuji Japan shipped from its factory in Japan three GSU transformers destined for Bechtel's jobsite at the Cottonwood Power Project in Texas. (See FAC at ¶ 15.) On March 9, 2002, according to Fireman's Fund, one of the transformers ("the subject transformer") was opened for assembly, and damage was first observed. (See id. ¶ 23.) Fireman's Fund concedes that Fuji Japan and Fuji America were each an "assured" under the policy, and entitled to claim against Fireman's Fund. (See id. ¶ 11.) Fuji Japan has made a claim under the policy, alleging the subject transformer was damaged due to an external cause while in transit, and seeking payment under the policy in the amount of more than $1.6 million. (See id. ¶ 26; Lyons Decl. ¶ 7 and Ex. A.) Beginning on July 25, 2002, and several times thereafter, Fuji Japan has contacted Fireman's Fund by letter and email seeking payment. (See Lyons Decl. ¶ 7 and Exs. A-C, F.)
Fireman's Fund objects to admission of Exhibit A, the purchase order, on the ground that it has not been properly authenticated. There is no dispute, however, as to Fuji Japan's role in transporting the transformers from Japan to Texas pursuant to the purchase order. Kojima, the General Manager of the International Sales Group for Fuji Japan, can testify to the authenticity of the purchase order Fuji Japan received and that, based on his personal knowledge, Fuji Japan is not a party to that purchase order. Accordingly, Fireman's Fund's objection is overruled.
Fireman's Fund has declined Fuji Japan's claim, on the ground that Fuji Japan had not demonstrated "that the damage was due to an external cause occurring during the transit covered under the policy." (See id. ¶ 29.) Fireman's Fund prays for a declaratory judgment that neither Fuji Japan nor Fuji America is entitled to payment under the policy, that Fireman's Fund is not obligated to make any payment under the policy, and that Fireman's Fund be awarded its costs of suit and other relief as may be just and proper. (See id. at 6:7-12.)
Fireman's Fund alleges that on February 10, 2005, it received its first notice of claim from Fuji America in the form of a copy of a summons and complaint in an action filed on February 4, 2005 in the United States District Court for the Eastern District of Texas. (See FAC ¶ 27; see also Declaration of Kent J. Clancy ("Clancy Declaration") Ex. E.) Fuji America's complaint in the Texas action alleges that Fuji America is an assured under the policy, that it has made a claim to Fireman's Fund, and that Fireman's Fund has failed to pay Fuji America the amount due under the policy. (See Clancy Decl., Ex. E.) Fuji America, in the Texas action, prays that it recover the full amount of the damage and losses sustained in the shipment of the subject transformer. (See id.)
DISCUSSION
Fuji Japan argues that Fireman's Fund's complaint should be dismissed pursuant to Rules 12(b)(5) and 12(b)(2) of the Federal Rules of Civil Procedure. Fuji Japan argues that it has not been properly served in this action and that personal jurisdiction is lacking.
A. Service of Process
1. The Hague Convention
The Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("the Hague Convention") is a multilateral treaty, formulated in 1964, that applies, between signatory countries, "in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad." See Volkswagenwerk Aktiengesellschaft v. Schlunk , 486 U.S. 694, 698-99 (1988). The Hague Convention "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." See id. As a result, "the Convention pre-empts inconsistent methods of service prescribed by state law in all cases to which it applies." See id. at 699. Japan and the United States are both signatories to the Hague Convention. See Hague Convention. Fireman's Fund's service upon Fuji Japan thus is controlled by the Hague Convention because the service of process was attempted in Japan. Article 2 of the Hague Convention "requires each state to establish a central authority to receive requests for service of documents from other countries." See id. The Hague Convention, however, also provides that it does not "interfere with" other methods of serving documents in international civil suits. See Hague Convention, art. 10.
Specifically, Article 10(a) of the Hague 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." See Hague Convention, art. 10(a). The Ninth Circuit has held that "the freedom to send judicial documents" pursuant to Article 10(a) includes service of such documents. See Brockmeyer v. May , 383 F.3d 798, 804 (9th Cir. 2004). The Ninth Circuit, in Brockmeyer, concluded that Article 10(a) permits and does not interfere with service of process by international mail, provided the receiving country does not object. See id. at 803.
Japan has explicitly stated its objection to Articles 10(b) and 10(c), but has not stated any objection to Article 10(a). See Hague Convention at n.9(4); see also Brockmeyer , 383 F.3d at 803; Fireman's Fund Opposition ("Opp.") Ex. A., U.S. Dep't. of State, Circular: Service of Process in Japan. Consequently, in that Japan has not stated any objection to Article 10(a), service of process by international mail to Japan is allowed under the Hague Convention.
Fuji Japan further asserts that service was ineffective under the Hague Convention because Fireman's Fund did not transmit the documents in Japanese. Fireman's Fund, however, was not required to translate its summons into Japanese to satisfy Article 10(a) of the Hague Convention. See Hague Convention art. 10 (setting forth no requirement of translation when documents are served by mail); see also Weight v. Kawasaki Heavy Industries , 597 F.Supp. 1082, 1086 (E.D. Va. 1984 (stating a "Japanese translation is required only when service of process is transmitted through the Central Authority' pursuant to Article 5 of the Convention"); Lemme v. Wine of Japan Import, Inc. , 631 F.Supp. 456, 464 (E.D. NY 1986) (stating "the translation requirement' is triggered only when it is the Central Authority that serves the document").
2. Federal Rule of Civil Procedure 4(f)(2)(c): "Service Upon Individuals in a Foreign Country"
The Ninth Circuit has held that because Article 10(a) does not itself affirmatively authorize international mail service, a court "must look outside the Hague Convention for affirmative authorization of the international mail service that is merely not forbidden by Article 10(a)." See Brockmeyer , 383 F.3d at 804. Any affirmative authorization of service by international mail, and the requirements thereof, "must come from the law of the forum in which the suit is filed." See id. at 804. Such "[e]xplicit, affirmative authorization for service by international mail is found only in Rule 4(f)(2)(C)(ii)." See id. at 804. That rule provides, in relevant part:
(f) [S]ervice... may be effected in a place not within any judicial district of the United States:
...
(2) if there is no internationally agreed means of service or the applicable international agreement allows other means of service, provided that service is reasonably calculated to give notice:
...
(C) unless prohibited by the law of the foreign country, by
...
(ii) any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the party to be served[.]
See Fed.R.Civ.P. 4(f)(2)(C)(ii).
Fireman's Fund's service of process on Fuji Japan is proper if Fireman's Fund has fully complied with Rule 4(f)(2)(C)(ii). In that regard, Fireman's Fund hired Legal Language Services ("LLS") to effect service upon Fuji Japan. (See Opp. Ex. B, Declaration of Cara LaForge ("LaForge Decl.") ¶ 2.) Cara LaForge ("LaForge"), a process server for LLS, attests that she prepared "Hague Convention forms including a Warning Notice' and Summary of Document to be Served' as recommended under Article 10(a) along with copies of the documents to be served, and forwarded these documents to the Clerk of the Court for the Northern District of California." (See LaForge Decl. ¶ 7.) LaForge attests that she requested that the Clerk serve the documents by Federal Express and that the Clerk effected service on Teiichi Kojima, a general manager at Fuji Japan, via Federal Express. (See id. ¶ 8-10.) LaForge submits a Federal Express tracking report that indicates Kojima signed for the package, as required by Rule 4(f)(2)(C)(ii). (See id. ¶10 and Ex. A.)
Additionally, as noted, for Fireman's Fund's service of process to be proper, the manner of service (here, Federal Express delivery) must not be "prohibited by the law" of Japan. See Fed.R.Civ.Pro. 4(f)(2)(C)(ii). One line of cases interprets this phrase as barring all means of service not expressly allowed by the domestic law of the foreign country. See e.g., Graval v. P.T. Bakrie & Bros. , 986 F.Supp. 1326, 1329 (C.D. Cal 1996); Procter & Gamble Cellulose Co. v. Viskoza-Loznica , 33 F.Supp.2d 644, 664-65 (W.D.Tenn. 1998). Other courts have interpreted "prohibited by" to bar only those types of service that are expressly disallowed by the domestic law of the foreign country. See e.g., Dee-K Enterprises, Inc. v. Heveafil Sdn. Bhd. , 174 F.R.D. 376, 379-80 (E.D.Va. 1997); Resource Ventures, Inc. v. Resources Management Int'l, Inc. , 42 F.Supp.2d 423, 429-30 (D.Del. 1999). It is undisputed that the law of Japan forbids service of process by Federal Express delivery. (See Declaration of Yaeko Hodaka ("Hodaka Decl.") ¶¶ 5-11.) Thus, under either line of authority, service by Federal Express was improper under Rule 4(f)(2)(C)(ii).
Evidence as to service of process in Japan under Japanese law is considered by this Court pursuant to Rule 44.1 of the Federal Rules of Civil Procedure, which, in relevant part, provides: "The court, in determining foreign law, may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence." See Fed.R.Civ.P. 44.1.
Accordingly, Fuji Japan's motion to dismiss will be granted, and Fireman's Fund will be afforded leave to serve Fuji Japan in accordance with the Hague Convention and Rule 4 of the Federal Rules of Civil Procedure.
B. Personal Jurisdiction
Although Fireman's Fund's failure to serve Fuji Japan provides grounds for granting Fuji Japan's motion to dismiss, the Court also will consider Fuji Japan's motion to dismiss for lack of personal jurisdiction, as there is no point in permitting Fireman's Fund to reattempt service if the Court, in any event, lacks personal jurisdiction over Fuji Japan.
The plaintiff bears the burden of establishing that a district court has personal jurisdiction over nonresident defendants. See FDIC v. British-American Ins. Co. , 828 F.2d 1439, 1441 (9th Cir. 1987). Where a defendant supports its motion to dismiss with evidence contradicting allegations in the plaintiff's complaint, the plaintiff's allegations are not assumed to be true. See Data Disc Inc. v. Systems Technology Associates, Inc. , 557 F.2d 1280, 1284 (9th Cir. 1977). Rather, the plaintiff, to defeat the motion, must submit evidence sufficient to set forth "a prima facie showing of [the] jurisdictional facts." See id. at 1285. If the plaintiff makes the requisite prima facie showing, the plaintiff retains the burden of proving personal jurisdiction by a preponderance of the evidence at a later stage of the proceedings, either at an evidentiary hearing or at trial. See id.
"Due process requires that nonresident defendants have certain minimum contacts with the forum so that maintenance of a suit does not offend traditional notions of fair play and substantial justice." See FDIC , 828 F.2d at 1441-1442. "If the nonresident defendant's activities within a state are substantial' or continuous and systematic, ' there is a sufficient relationship between the defendant and the state to support jurisdiction even if the cause of action is unrelated to the defendant's forum activities." See Data Disc , 557 F.2d at 1287. "If, however, the defendant's activities are not so pervasive as to subject him to general jurisdiction, the issue whether jurisdiction will lie turns on an evaluation of the nature and quality of the defendant's contacts in relation to the cause of action." See id.
1. General Jurisdiction
"General jurisdiction exists when the nonresident has substantial or continuous and systematic contacts with the forum state." See FDIC , 828 F.2d at 1442. "The standard for establishing general jurisdiction is fairly high, and requires that the defendant's contacts be of the sort that approximate physical presence." See Bancroft & Masters, Inc. v. Augusta National, Inc. , 223 F.3d 1082, 1086 (9th Cir. 2000). Factors to be considered are "whether the defendant makes sales, solicits or engages in business in the state, serves the state's markets, designates an agent for service of process, holds a license, or is incorporated there." See id.
Fuji Japan, in support of its motion to dismiss for lack of general jurisdiction, relies on the declaration of Teiichi Kojima ("Kojima"), a general manager of Fuji Japan. (See Kojima Decl. ¶ 1.) Kojima attests that Fuji Japan is a Japanese corporation headquartered in Tokyo, Japan. (See id. ¶ 2.) He further attests that Fuji Japan does not solicit or engage in business with California residents, nor has it ever had an office or place of business in California, (see id. ¶¶ 3-4); Fuji Japan has never been licensed or authorized to do business in California, nor has it operated or managed any business in California, or had an authorized agent to accept service of process in California, (see id. ¶¶ 5-7); Fuji Japan has never consented to jurisdiction in a California court, nor has it ever waived service of process in California, (see id. ¶¶ 8-9); Fuji Japan has not used, owned, leased, rented or possessed real property in California, nor has it paid taxes in California, (see id. ¶¶ 10-11); and Fuji Japan has not maintained books or records in California, nor has it ever had a bank account or telephone number in California. (See id. ¶¶ 12-14.) Kojima also attests that "Fuji America is not a sales representative' for Fuji Japan." (See Kojima Decl. ¶ 19.)
Fireman's Fund argues that Fuji Japan "may" be subject to this Court's general jurisdiction. (See Opp. at 13:18.) Kent Clancy, counsel for Fireman's Fund, attaches to his declaration a copy of the "Corporate Information" page from Fuji Japan's website. (See Clancy Decl. ¶ 5 and Ex. C.) This webpage contains a list of Fuji companies worldwide, and, under the heading "North America, " lists Fuji America, next to the following description: "Marketing of power distributors, control equipment and air blowers." (See id.) Below this description are listed Fuji America's four United States offices, including two in California. Additionally, Fireman's Fund points to Fuji America's website, which, according to Fireman's Fund, states that Fuji America is responsible for the "sale, marketing, and distribution throughout North America of products manufactured by Fuji Electric Group companies in Japan." (See Clancy Decl. ¶ 6 and Ex. D.) Based thereon, Fireman's Fund argues "there is reason to believe that Fuji Japan's contacts with California are so extensive and wide-ranging that it is subject to this Court's general jurisdiction." (See Opp. 14:11-13.)
The copy submitted to the Court is incomplete.
As noted, Fuji Japan, in support of its opening brief, submitted a declaration, stating, inter alia, that Fuji America "is not a sales representative' for Fuji Japan." (See Kojima Decl. ¶ 19.) In its reply, however, Fuji Japan fails to address, let alone explain, the description of Fuji America on its own website, which description, at a minimum, raises questions about the extent of the relationship between the two entities. Although the description on Fuji Japan's website about the relationship between Fuji Japan and Fuji America is not sufficiently clear to establish a prima facie case of general jurisdiction, the Court agrees with Fireman's Fund that it does suggest that the Court "may" have general jurisdiction over Fuji Japan. See Asahi Metal Indus. Co., Ltd. v. Super. Ct. of Cal., Solano County , 480 U.S. 102, 112 (1987) (O'Connor, J., plurality opinion) (stating that marketing products through a third party who has agreed to serve as a sales agent in the forum state may indicate an intent or purpose to serve the market in the forum state); see also Chan v. Society Expeditions, Inc. , 39 F.3d 1398, 1405 (9th Cir. 1994) (stating that a plaintiff can show a foreign defendant is subject to a court's general jurisdiction if the plaintiff proves that a domestic company, over whom the court does have personal jurisdiction, was acting as the foreign defendant's agent).
Fireman's Fund states in its opposition that "[i]n the case that this Court is inclined to grant Fuji Japan's motion, Fireman's Fund asks that it be allowed to conduct jurisdictional discovery." (See Opp. 10 n.5.) A court may permit discovery to aid in determining whether it has personal jurisdiction. See Wells Fargo & Co. v. Wells Fargo Express Co. , 556 F.2d 406, 430 n.24 (9th Cir. 1977). In granting such discovery, the trial court is vested with broad discretion. See Data Disc , 557 F.2d at 1285 n.1. Discovery "should be granted where pertinent facts bearing on the question of jurisdiction are controverted... or where a more satisfactory showing of the facts is necessary." See id. In particular, the Ninth Circuit has noted that "discovery has been allowed... where there was a question as to whether jurisdiction could be established over an alien corporation through the employment of another as agent." See Wells Fargo , 556 F.2d at 430 n.24. This is precisely the issue presented in the instant case.
The Court cannot grant additional discovery pertaining to personal jurisdiction at this time, however, because Fireman's Fund has not effected service of process on Fuji Japan. A request for discovery on that issue will be considered if and when service is accomplished and dismissal is again sought on jurisdictional grounds.
As the issue of whether Fuji Japan is subject to specific jurisdiction similarly appears to depend on the nature of Fuji Japan's relationship with Fuji America, the Court does not address specific jurisdiction at this time.
CONCLUSION
For the reasons set forth above, Fuji Japan's motion to dismiss for insufficient service of process is GRANTED, and Fuji Japan's motion to dismiss for lack of personal jurisdiction is DENIED, without prejudice to refiling if service on said defendant is accomplished. Fireman's Fund is granted leave to serve Fuji Japan in accordance with the Hague Convention and the Federal Rules of Civil Procedure.
This order terminates Docket No. 10.
IT IS SO ORDERED.