Supreme Court of the United States
Decided June 15, 1988
Justice O’Connor, For the Court
|Topic: Due Process*||Court vote: 9–0|
Click any Justice for detailJoining O'Connor opinion: Justice KENNEDY Chief Justice REHNQUIST Justice SCALIA Justice STEVENS Justice WHITE
|Citation: 486 U.S. 694||Docket: 86–1052||Audio: Listen to this case's oral arguments at Oyez|
* As categorized by the Washington University Law Supreme Court Database
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JUSTICE O'CONNOR delivered the opinion of the Court.
This case involves an attempt to serve process on a foreign corporation by serving its domestic subsidiary which, under state law, is the foreign corporation's involuntary agent for service of process. We must decide whether such service is compatible with the Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, Nov. 15, 1965 (Hague Service Convention),  20 U.S.T. 361, T.I.A.S. No. 6638.
The parents of respondent Herwig Schlunk were killed in an automobile accident in 1983. Schlunk filed a wrongful death action on their behalf in the Circuit Court of Cook County, Illinois. Schlunk alleged that Volkswagen of America, Inc. (VWoA), had designed and sold the automobile that his parents were driving, and that defects in the automobile caused or contributed to their deaths. Schlunk also alleged that the driver of the other automobile involved in the collision was negligent; Schlunk has since obtained a default judgment against that person, who is no longer a party to this lawsuit. Schlunk successfully served his complaint on VWoA, and VWoA filed an answer denying that it had designed or assembled the automobile in question. Schlunk then amended the complaint to add as a defendant Volkswagen Aktiengesellschaft (VWAG), which is the petitioner here. VWAG, a corporation established under the laws of the Federal Republic of Germany, has its place of business in that country. VWoA is a wholly owned subsidiary of VWAG. Schlunk attempted to serve his amended complaint on VWAG by serving VWoA as VWAG's agent.
VWAG filed a special and limited appearance for the purpose of quashing service. VWAG asserted that it could be served only in accordance with the Hague Service Convention, and that Schlunk had not complied with the Convention's requirements. The Circuit Court denied VWAG's motion. It first observed that VWoA is registered to do business in Illinois and has a registered agent for receipt of process in Illinois. The court then reasoned that VWoA and VWAG are so closely related that VWoA is VWAG's agent for service of process as a matter of law, notwithstanding VWAG's failure or refusal to appoint VWoA formally as an agent. The court relied on the facts that VWoA is a wholly owned subsidiary of VWAG, that a majority of the members of the board of directors of VWoA are members of the board of VWAG, and that VWoA is by contract the exclusive importer and distributor of VWAG products sold in the United States. The court concluded that, because service was accomplished within the United States, the Hague Service Convention did not apply.
The Circuit Court certified two questions to the Appellate Court of Illinois. For reasons similar to those given by the Circuit Court, the Appellate Court determined that VWoA is VWAG's agent for service of process under Illinois law, and that the service of process in this case did not violate the Hague Service Convention. 145 Ill.App.3d 594, 503 N.E.2d 1045 (1986). After the Supreme Court of Illinois denied VWAG leave to appeal, 112 Ill.2d 595 (1986), VWAG petitioned this Court for a writ of certiorari to review the Appellate Court's interpretation of the Hague Service Convention. We granted certiorari to address this issue, 484 U.S. 895 (1987), which has given rise to disagreement among the lower courts. Compare Ex parte Volkswagenwerk A.G., 443 So.2d 880, 881 (Ala.1983) (holding that the Hague Service Convention does not apply if a foreign national is served properly through its agent in this country); Zisman v. Sieger, 106 F.R.D.194, 199-200 (ND Ill.1985) (same); Lamb v. Volkswagenwerk A.G., 104 F.R.D. 95, 97 (SD Fla.1985) (same); McHugh v. International Components Corp., 118 Misc.2d 489, 491-492, 461 N.Y.S.2d 166, 167-168 (1983) (same), with Cippolla v. Picard Porsche Audi, Inc., 496 A.2d 130, 131-132 (R. I.1985) (holding that the Hague Service Convention is the exclusive means of serving a foreign corporation); Wingert v. Volkswagenwerk A.G., Civ. Action Nos. 3:86-2994-16 and 3:86-2995-16 (S.C. May 19, 1987), slip op. at 3-4 (same).
The Hague Service Convention is a multilateral treaty that was formulated in 1964 by the Tenth Session of the Hague Conference of Private International Law. The Convention revised parts of the Hague Conventions on Civil Procedure of 1905 and 1954. The revision 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. 3 1964 Conference de la Haye de Droit International Prive, Actes et Documents de la Dixieme Session (Notification) 75-77, 363 (1965) (3 Actes et Documents); 1 B. Ristau, International Judicial Assistance (Civil and Commercial) § 4-1 (1984 and 1 Supp.1986) (1 Ristau). Representatives of all 23 countries that were members of the Conference approved the Convention without reservation. Thirty-two countries, including the United States and the Federal Republic of Germany, have ratified or acceded to the Convention. Brief for United States as Amicus Curiae 2, n. 2 (filed Sep. 12, 1987).
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. 20 U.S.T. 362, T.I.A.S. 6638, Art. 2. 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. Art. 5. The central authority must then provide a certificate of service that conforms to a specified model. Art. 6. A state also may consent to methods of service within its boundaries other than a request to its central authority. Arts. 8-11, 19. The remaining provisions of the Convention that are relevant here limit the circumstances in which a default judgment may be entered against a defendant who had to be served abroad and did not appear, and provide some means for relief from such a judgment. Arts. 15, 16.
Article 1 defines the scope of the Convention, which is the subject of controversy in this case. It says:
The present Convention shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad.
20 U.S.T. at 362. The equally authentic French version says,
La presente Convention est applicable, en matiere civile ou commerciale, dans tous les cas ou un acte judiciaire ou extrajudiciaire doit etre transmis a l'etranger pour y etre signifie ou notifie.
Ibid. This language is mandatory, as we acknowledged last Term in Societe Nationale Industrielle Aerospatiale v. United States District Court, 482 U. S. 522, 482 U. S. 534, n. 15 (1987). By virtue of the Supremacy Clause, U.S.Const., Art. VI, the Convention preempts inconsistent methods of service prescribed by state law in all cases to which it applies. Schlunk does not purport to have served his complaint on VWAG in accordance with the Convention. Therefore, if service of process in this case falls within Article I of the Convention, the trial court should have granted VWAG's motion to quash.
When interpreting a treaty, we "begin with the text of the treaty and the context in which the written words are used.'" Societe Nationale, supra, at 482 U. S. 534 (quoting Air France v. Saks, 470 U. S. 392, 470 U. S. 397 (1985)). Other general rules of construction may be brought to bear on difficult or ambiguous passages.
'Treaties are construed more liberally than private agreements, and, to ascertain their meaning, we may look beyond the written words to the history of the treaty, the negotiations, and the practical construction adopted by the parties.'
Air France v. Saks, supra, at 470 U. S. 396 (quoting Choctaw Nation of Indians v. United States, 318 U. S. 423, 318 U. S. 431 -432 (1943)).
The 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. 1 Ristau § 4-5(2), p. 123 (interpreting the Convention); Black's Law Dictionary 1227 (5th ed.1979); see 4 C. Wright & A. Miller, Federal Practice and Procedure § 1063, p. 225 (2d ed.1987). 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 transmitter of documents abroad, then the Hague Service Convention applies.
The negotiating history supports our view that Article I refers to service of process in the technical sense. The committee that prepared the preliminary draft deliberately used a form of the term "notification" (formal notice), instead of the more neutral term "remise" (delivery), when it drafted Article 1. 3 Actes et Documents at 78-79. Then, in the course of the debates, the negotiators made the language even more exact. The preliminary draft of Article 1 said that the present Convention shall apply in all cases in which there are grounds to transmit or to give formal notice of a judicial or extrajudicial document in a civil or commercial matter to a person staying abroad. Id. at 65 ("La presente Convention est applicable dans tous les cas ou il y a lieu de transmettre ou de notifier un acte judiciaire ou extrajudiciaire en matiere civile ou commerciale a une personne se trouvant a l'etranger") (emphasis added). To be more precise, the delegates decided to add a form of the juridical term "signification" (service), which has a narrower meaning than "notification" in some countries, such as France, and the identical meaning in others, such as the United States. Id. at 152-153, 155, 159, 366. The delegates also criticized the language of the preliminary draft because it suggested that the Convention could apply to transmissions abroad that do not culminate in service. Id. at 165-167. The final text of Article 1, supra, eliminates this possibility and applies only to documents transmitted for service abroad. The final report ( Rapport Explicatif ) confirms that the Convention does not use more general terms, such as delivery or transmission, to define its scope because it applies only when there is both transmission of a document from the requesting state to the receiving state and service upon the person for whom it is intended. Id. at 366.
The negotiating history of the Convention also indicates that whether there is service abroad must be determined by reference to the law of the forum state. The preliminary draft said that the Convention would apply "where there are grounds" to transmit a judicial document to a person staying abroad. The committee that prepared the preliminary draft realized that this implied that the forum's internal law would govern whether service implicated the Convention. Id. at 80-81. The reporter expressed regret about this solution, because it would decrease the obligatory force of the Convention. Id. at 81. Nevertheless, the delegates did not change the meaning of Article 1 in this respect.
The Yugoslavian delegate offered a proposal to amend Article 1 to make explicit that service abroad is defined according to the law of the state that is requesting service of process. Id. at 167. The delegate from the Netherlands supported him. Ibid. The German delegate approved of the proposal in principle, although he thought it would require a corresponding reference to the significance of the law of the state receiving the service of process, and that this full explanation would be too complicated. Id. at 168. The President opined that there was a choice to be made between the phrase used by the preliminary draft, "where grounds exist," and the Yugoslavian proposal to modify it with the phrase, "according to the law of the requesting state." Ibid. This prompted the Yugoslavian delegate to declare that the difference was immaterial, because the phrase "where grounds exist" necessarily refers to the law of the forum. Ibid. The French delegate added that, in his view, the law of the forum, in turn, is equivalent to the law of the requesting state. Id. at 169. At that point, the President recommended entrusting the problem to the drafting committee.
The drafting committee then composed the version of Article 1 that ultimately was adopted, which says that the Convention applies "where there is occasion" to transmit a judicial document for service abroad. Id. at 211. After this revision, the reporter again explained that one must leave to the requesting state the task of defining when a document must be served abroad; that this solution was a consequence of the unavailability of an objective test; and that, while it decreases the obligatory force of the Convention, it does provide clarity. Id. at 254. The inference we draw from this history is that the Yugoslavian proposal was rejected because it was superfluous, not because it was inaccurate, and that "service abroad" has the same meaning in the final version of the Convention as it had in the preliminary draft.
VWAG protests that it is inconsistent with the purpose of the Convention to interpret it as applying only when the internal law of the forum requires service abroad. One of the two stated objectives of the Convention is
to create appropriate means to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time.
20 U.S.T. at 362. The Convention cannot assure adequate notice, VWAG argues, if the forum's internal law determines whether it applies. VWAG warns that countries could circumvent the Convention by defining methods of service of process that do not require transmission of documents abroad. Indeed, VWAG contends that one such method of service already exists, and that it troubled the Conference: notification au parquet.
Notification au parquet permits service of process on a foreign defendant by the deposit of documents with a designated local official. Although the official generally is supposed to transmit the documents abroad to the defendant, the statute of limitations begins to run from the time that the official receives the Documents, and there allegedly is no sanction for failure to transmit them. 3 Actes et Documents at 167-169; S.Exec.Rep. No. 6, 90th Cong., 1st Sess., 12 (1967) (statement of Philip Amram, member of the United States delegation); 1 Ristau § 4-33, p. 172. At the time of the 10th Conference, France, the Netherlands, Greece, Belgium, and Italy utilized some type of notification au parquet. 3 Actes et Documents at 75.
There is no question but that the Conference wanted to eliminate notification au parquet. Id. at 75-77. It included in the Convention two provisions that address the problem. Article 15 says that a judgment may not be entered unless a foreign defendant received adequate and timely notice of the lawsuit. Article 16 provides means whereby a defendant who did not receive such notice may seek relief from a judgment that has become final. 20 U.S.T. at 364-365. Like Article 1, however, Articles 15 and 16 apply only when documents must be transmitted abroad for the purpose of service. 3 Actes et Documents at 168-169. VWAG argues that, if this determination is made according to the internal law of the forum state, the Convention will fail to eliminate variants of notification au parquet that do not expressly require transmittal of documents to foreign defendants. Yet such methods of service of process are the least likely to provide a defendant with actual notice.
The parties make conflicting representations about whether foreign laws authorizing notification au parquet command the transmittal of documents for service abroad within the meaning of the Convention. The final report is itself somewhat equivocal. It says that, although the strict language of Article 1 might raise a question as to whether the Convention regulates notification au parquet, the understanding of the drafting Commission, based on the debates, is that the Convention would apply. Id. at 367. Although this statement might affect our decision as to whether the Convention applies to notification au parquet, an issue we do not resolve today, there is no comparable evidence in the negotiating history that the Convention was meant to apply to substituted service on a subsidiary like VWoA, which clearly does not require service abroad under the forum's internal law. Hence neither the language of the Convention nor the negotiating history contradicts our interpretation of the Convention, according to which the internal law of the forum is presumed to determine whether there is occasion for service abroad.
Nor are we persuaded that the general purposes of the Convention require a different conclusion. One important objective of the Convention is to provide means to facilitate service of process abroad. Thus the first stated purpose of the Convention is "to create" appropriate means for service abroad, and the second stated purpose is "to improve the organisation of mutual judicial assistance for that purpose by simplifying and expediting the procedure." 20 U.S.T. at 362. By requiring each state to establish a central authority to assist in the service of process, the Convention implements this enabling function. Nothing in our decision today interferes with this requirement.
VWAG correctly maintains that the Convention also aims to ensure that there will be adequate notice in cases in which there is occasion to serve process abroad. Thus compliance with the Convention is mandatory in all cases to which it applies, see supra, 486 U. S. 700 -701, and Articles 15 and 16 provide an indirect sanction against those who ignore it, see 3 Actes et Documents at 92, 363. Our interpretation of the Convention does not necessarily advance this particular objective, inasmuch as it makes recourse to the Convention's means of service dependent on the forum's internal law. But we do not think that this country, or any other country, will draft its internal laws deliberately so as to circumvent the Convention in cases in which it would be appropriate to transmit judicial documents for service abroad. For example, there has been no question in this country of excepting foreign nationals from the protection of our Due Process Clause. Under that Clause, foreign nationals are assured of either personal service, which typically will require service abroad and trigger the Convention, or substituted service that provides
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. Central Hanover Bank & Trust Co., 339 U. S. 306, 339 U. S. 314 (1950). *
Furthermore, nothing that we say today prevents compliance with the Convention even when the internal law of the forum does not so require. The Convention provides simple and certain means by which to serve process on a foreign national. Those who eschew its procedures risk discovering that the forum's internal law required transmittal of documents for service abroad, and that the Convention therefore provided the exclusive means of valid service. In addition, parties that comply with the Convention ultimately may find it easier to enforce their judgments abroad. See Westin, Enforcing Foreign Commercial Judgments and Arbitral Awards in the United States, West Germany, and England, Law & Policy Int'l Bus. 325, 340-341 (1987). For these reasons, we anticipate that parties may resort to the Convention voluntarily, even in cases that fall outside the scope of its mandatory application.
In this case, the Illinois long-arm statute authorized Schlunk to serve VWAG by substituted service on VWoA, without sending documents to Germany. See Ill.Rev.Stat., ch. 110, 2-209(a)(1) (1985). VWAG has not petitioned for review of the Illinois Appellate Court's holding that service was proper as a matter of Illinois law. VWAG contends, however, that service on VWAG was not complete until VWoA transmitted the complaint to VWAG in Germany. According to VWAG, this transmission constituted service abroad under the Hague Service Convention.
VWAG explains that, as a practical matter, VWoA was certain to transmit the complaint to Germany to notify VWAG of the litigation. Indeed, as a legal matter, the Due Process Clause requires every method of service to provide
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. Central Hanover Bank & Trust Co., supra, at 339 U. S. 314. VWAG argues that, because of this notice requirement, every case involving service on a foreign national will present an "occasion to transmit a judicial... document for service abroad" within the meaning of Article 1. Tr. of Oral Arg. 8. VWAG emphasizes that, in this case, the Appellate Court upheld service only after determining that
the relationship between VWAG and VWoA is so close that it is certain that VWAG 'was fully apprised of the pendency of the action' by delivery of the summons to VWoA.
145 Ill.App.3d at 606, 503 N.E.2d at 1053 (quoting Maunder v. DeHavilland Aircraft of Canada, Ltd., 102 Ill.2d 342, 353, 466 N.E.2d 217, 223, cert. denied, 469 U.S. 1036 (1984)).
We reject this argument. Where service on a domestic agent is valid and complete under both state law and the Due Process Clause, our inquiry ends and the Convention has no further implications. Whatever internal, private communications take place between the agent and a foreign principal are beyond the concerns of this case. The only transmittal to which the Convention applies is a transmittal abroad that is required as a necessary part of service. And, contrary to VWAG's assertion, the Due Process Clause does not require an official transmittal of documents abroad every time there is service on a foreign national. Applying this analysis, we conclude that 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. The judgment of the Appellate Court is
* The concurrence believes that our interpretation does not adequately guarantee timely notice, which it denominates the "primary" purpose of the Convention, albeit without authority. Post at 486 U. S. 711. The concurrence instead proposes to impute a substantive standard to the words, "service abroad." Post at 708. Evidently, a method of service would be deemed to be "service abroad" within the meaning of Article 1 if it does not provide notice to the recipient "in due time." Post at 486 U. S. 712, 486 U. S. 714. This due process notion cannot be squared with the plain meaning of the words, "service abroad." The contours of the concurrence's substantive standard are not defined, and we note that it would create some uncertainty even on the facts of this case. If the substantive standard tracks the Due Process Clause of the Fourteenth Amendment, it is not self-evident that substituted service on a subsidiary is sufficient with respect to the parent. In the only cases in which it has considered the question, this Court held that the activities of a subsidiary are not necessarily enough to render a parent subject to a court's jurisdiction, for service of process or otherwise. Cannon Mfg. Co. v. Cudahy Packing Co., 267 U. S. 333, 267 U. S. 336 -337 (1925); Consolidated Textile Corp. v. Gregory, 289 U. S. 85, 289 U. S. 88 (1933); see 18A W. Fletcher, Cyclopedia of Law of Private Corporations § 8773 pp. 250-254 (rev. ed.1988). Although the particular relationship between VWAG and VWoA might have made substituted service valid in this case, a question that we do not decide, the fact-bound character of the necessary inquiry makes us doubt whether the standard suggested by the concurrence would in fact be "remarkably easy" to apply, see post at 486 U. S. 715.
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