Exporter Petitions CAFC to Hear Issue on Service of Foreign Firm Through Its US Counsel
German exporter Koehler petitioned the U.S. Court of Appeals for the Federal Circuit for a writ of mandamus on Oct. 31 to settle the question of whether the company can be served via its U.S. counsel after the Court of International Trade refused to certify the issue for intermediate appeal. Koehler said the issue of whether CIT rules allow service on a foreign dependent through its U.S. counsel "is a basic, undecided question in this Circuit that is likely to recur" (Koehler Oberkirch GmbH v. United States, Fed. Cir. # 25-106).
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The Federal Circuit ordered the U.S. to respond to the petition within seven days.
The issue arose out of the government's customs penalty suit against Koehler, alleging that the company failed to pay over $193 million in antidumping duties with interest on paper entries during 2009-2011. The U.S. initially tried to serve the exporter by sending a request for Hague Convention service to a German court, though the foreign court rejected this attempt and requested that service be effected through diplomatic channels.
The trade court instead allowed the U.S. to serve the company through its U.S. counsel (see 2408210016). CIT then denied Koehler's attempt to certify that decision for interlocutory appeal, finding that the intermediary appeal wouldn't "materially advance" and would actually delay the "ultimate termination of the litigation" (see 2410100018). The court said that if service couldn't be carried out via the company's U.S. counsel, it could be conducted through other means, including through diplomatic channels.
With interlocutory appeal no longer an option, Koehler filed a petition for a writ of mandamus, which is an order compelling the lower court to take certain action. Mandamus is considered a last resort and requires the right to issue the writ to be "clear and indisputable," the party to have no alternative means to attain the sought-after relief, and the writ to be "appropriate under the circumstances."
Koehler argued that "CIT clearly abused its discretion in granting the Government’s motion for alternative service because there is no basis under the USCIT Rules or the Federal Rules of Civil Procedure for serving a foreign defendant through U.S. counsel." The U.S. also failed to show the "need for judicial intervention or for contravening principles of international comity," the brief said.
Service on U.S. counsel isn't allowed by CIT or federal rules, the exporter argued. CIT Rule 4(e) specifies that service must take place "at a place not within any judicial district of the United States"; the rule "refers to the place of service itself" and not the presence of an entity outside the U.S., Koehler claimed. Despite acknowledging this, the trade court said service on U.S. counsel complies with the rule since such service generally takes place in a foreign country. Given that the foreign company is the ultimate recipient of service, the court said service doesn't actually take place until the firm receives the documents.
Koehler said the trade court's "reasoning is entirely divorced from the text of USCIT Rule 4." The rule doesn't say where a defendant must actually receive the service documents. The trade court "erroneously conflated service of documents on counsel in the United States with Petitioners’ actual receipt of the documents in Germany," the brief said.
The company defended its petition on the basis that it has "no adequate alternative method of obtaining relief." Koehler emphasized the foundational nature of service, noting that it's essential to establish jurisdiction over the company.