United States Court of Appeals, Eleventh Circuit.
No. 94-8592.
Non-Argument Calendar.
Owen F. SILVIOUS, Plaintiff-Appellant,
v.
Ghaith R. PHARAON, Defendant-Appellee.
June 9, 1995.
Appeal from the United States District Court for the Southern
District of Georgia. (No. CV 492-126), John F. Nangle, Judge.
Before ANDERSON, BIRCH and CARNES, Circuit Judges.
PER CURIAM:
This case requires us to determine whether the 1993 revision
of Federal Rule of Civil Procedure 4 eliminated the practice of
allowing an agent in the United States to accept service of process
for a foreign defendant. The district court concluded that service
could not be effected on a foreign defendant by serving his
putative agent in the United States. We REVERSE and REMAND.
I. BACKGROUND
Plaintiff-appellant Owen Silvious filed suit against defendant
Ghaith R. Pharaon1 in May, 1992, and alleged a cause of action
under the Racketeer influenced and Corrupt Organization Act, 18
U.S.C. § 1964(c), ("RICO"). Silvious charged that Pharaon, as
owner and operator of the Bank of Credit & Commerce International
("BCCI"), defrauded Silvious of money deposited with BCCI in 1985
and due to be repaid to Silvious in October, 1990. Allegedly,
1
Pharaon has never filed an answer or motion with the
district court and has not filed any briefs or other documents
with this court regarding this matter.
Pharaon has left the United States and is in Saudi Arabia.2
In May, 1992, Silvious began his unrelenting effort to serve
Pharaon in Richmond Hill, Georgia3 and in Saudi Arabia. Despite
the InterRedec attorney's notifying the United States Marshal's
office that Pharaon did not reside at the Richmond Hill plantation,
Silvious attempted to serve Pharaon at the Richmond Hill address
several times.
In August, 1992, Silvious moved for a court order for service
for the second time. He requested that the district court approve
one of the following methods of service for Pharaon: (1) delivery
of the complaint, summons and amended pleadings to an employee of
Pharaon's, as requested in the earlier motion; (2) physical
attachment of the documents to the Richmond Hill structure itself;4
2
Although Pharaon has been indicted in the Southern District
of Florida for RICO violations, in September of 1993 he remained
outside the jurisdiction of the court, "at large." United States
v. Paul, 150 F.R.D. 696, 697 (S.D.Fla.1993); accord Accused BCCI
Front Man Hit with $37 Million Fine, USA Today, Sept. 18, 1991,
at 2A [hereinafter Front Man Hit with $37 Million Fine ]; Fed
Freezes Assets of Financier Accused of Fronting for BCCI,
Investor's Bus. Daily, Sept. 18, 1991, at 25 [hereinafter Fed
Freezes Assets ].
3
The Richmond Hill property is alternatively known as the
old Henry Ford Plantation, Cherry Hill Plantation and Sterling
Bluffs Plantation. InterRedec, Inc., a company reputed to be
owned or controlled by Pharaon, see Maritime Transp. Overseas,
Inc. v. Saudi Research & Dev. Corp., 507 F.Supp. 701, 704-05
(S.D.Tex.1981); Front Man Hit with $37 Million Fine; Fed
Freezes Assets, has been headquartered there and InterRedec
representatives can still be contacted at the plantation, see R1-
18-2. Pharaon reportedly owns the plantation. InterRedec also
has become involved in litigation against Pharaon. Board of
Governors of Fed. Reserve Sys. v. Pharaon, 140 F.R.D. 642, 643
(S.D.N.Y.1991).
4
Several days prior to this motion being filed, the Bryan
County Sheriff's Department attempted service by leaving the
complaint, summons and amended pleadings "attached to [the] door
on the fountain side of the residence." R1-13-1. Additionally,
or (3) publication of notice in either the International Herald
Tribune or the Economist, publications distributed in France and
Saudi Arabia, where it was thought Pharaon might be located. The
magistrate judge consequently directed that the U.S. Marshal
attempt service upon the defendant at any place that he may be
found within the United States [as allowed by the RICO
statute, 18 U.S.C. § 1965(d) ]. Additionally, the Marshal may
leave a copy of the summons and complaint at Cherry Hill
Plantation ... with a person of suitable age and discretion
residing therein or with an agent authorized by appointment or
by law to receive service of process. Fed.R.Civ.P. 4(d)(1) [
(1992) ]. If the Marshal is unable to perfect service using
these methods, the plaintiff may then urge the Court to
consider other methods of service.
R1-15-1 to 2. The court, however, denied Silvious's request for
service by publication and determined that Silvious had not
complied with Georgia's long-arm statute for service by
publication. In September, 1992, Dooley E. Culbertson, purportedly
the Chairman of the Board and Chief Executive Officer of
InterRedec, wrote the court a letter stating that
Pharaon is not a resident of Sterling Bluff Plantation nor has
he ever been a legal resident. Furthermore, Dr. Pharaon owns
no real property in Bryan County and has never been an
employee, officer or director of InterRedec.
In light of the above, it is useless for the court to
attempt to serve papers on Ghaith Pharaon at the InterRedec
offices at Sterling Bluff Plantation. Dr. Pharaon is
represented by the firm of Whitman and Ransom, 200 Park
Avenue, Suite 2800, New York, New York 10166, attention Mr.
Berge Setrakian. I do not know, however, whether that law
firm or any of its members serve in the capacity of agent of
a copy again was mailed. Upon learning of the attempted service,
Silvious amended his motion to request that this latest attempt
at service be deemed effective under Georgia law and that,
additionally, publication be allowed. Silvious apparently
contends that this service was proper under O.C.G.A. § 9-11-
4(d)(6). However, because service in this manner is limited to
actions in which the amount in controversy is less than $200.00,
Silvious could not have complied with Georgia's process statute
in this manner. See O.C.G.A. § 9-11-4(d)(6).
record for Dr. Pharaon and doubt whether they can accept
service for him.
R1-18-2.5 The magistrate judge promptly issued another order
indicating its belief that "further efforts to serve the defendant
at the Cherry Hill Plantation would be futile." R1-19-1 to 2. The
court instead directed that a copy of the summons and complaint be
mailed to Pharaon's counsel at the address provided by Culbertson.
A copy of the summons and complaint were mailed, but counsel never
responded.
Silvious then endeavored to serve Pharaon by mail in Saudi
Arabia, and he again moved for a determination of sufficiency of
process. In June, 1993, the magistrate judge concluded that
despite Silvious's numerous attempts to effect mail service,
Pharaon had not been served properly yet. By order dated November
1, 1993, the magistrate judge ruled that none of the attempts at
service had been successful but that, because Silvious was
attempting service in a foreign country, the 120 day time limit of
Fed.R.Civ.P. 4(j) (1992) did not apply to this action. Therefore,
instead of dismissing the action pursuant to Rule 4(j), the
magistrate judge allowed Silvious thirty additional days to
complete service. If Silvious failed to effect service, the
magistrate judge stated that he would recommend that the case be
5
Contrary to these statements, Silvious points out several
publications in which Pharaon is listed as or referred to as the
Chairman or owner of InterRedec, Inc. See R1-36 (United States
Commercial Center, Letter from American Consulate General,
Jeddah, Saudi Arabia, to Owen F. Silvious (undated); The
International Who's Who 1992-93, at 1278 (56th ed. 1992);
Principal International Businesses 1993: The World Marketing
Directory, at 972-73 (1992)); see also Front Man Hit with $37
Million Fine; Fed Freezes Assets.
dismissed without prejudice.
On January 21, 1994, the Bryan County Sheriff's Department
delivered the summons, complaint and amended complaint to
Kethesparan Srikanthan, allegedly an agent of Pharaon, at Sterling
Bluff Plantation. The affidavit and certificate of service were
filed with the district court on January 24, 1994. When Pharaon
failed to answer, Silvious moved for a default judgment.
On March 21, 1994, the magistrate judge entered a Report and
Recommendation to the district court finding that the newly amended
Rule 4 did not allow Silvious to use substituted service on Pharaon
because Pharaon was physically outside of the United States.6
Silvious objected to the magistrate judge's report and
recommendation; he argued inter alia that Pharaon's agent
authorized by law was properly served and, therefore, substituted
service had occurred.7 After de novo review of the magistrate
judge's report and recommendation, the district court dismissed
Silvious's action for failure to effect service successfully. This
appeal followed.
6
The provisions for service of an individual found within a
judicial district of the United States, and individuals
in foreign countries, are found in separate parts of
new Rule 4. Service upon individuals found within a
judicial district of the United States may be effected
"pursuant to the law of the state in which the district
court is located, or in which service is effected, for
the service of a summons upon the defendant in an
action brought in the courts of general jurisdiction of
the State[.]"
R1-46-3 to 4 (citations omitted) (emphasis added)
(alteration in original) (quoting Fed.R.Civ.P. 4(e)(1)).
7
Silvious's additional claims lack merit and, therefore, we
need not consider them here.
II. DISCUSSION
"The starting point for an analysis of amenability to service
of process in federal court is Federal Rule of Civil Procedure 4."
Brink's Mat, Ltd. v. Diamond, 906 F.2d 1519, 1521 (11th Cir.1990).
In 1993, during the pendency of Silvious's case, the Federal Rules
of Civil Procedure were amended; Rule 4 was revised. Our review
of this case focuses upon the district court's conclusion that
revised Federal Rules of Civil Procedure 4(e) and (f) eliminated
the practice of allowing an agent in the United States to receive
service of process on behalf of a principal who was located in a
foreign country. See Volkswagenwerk Aktiengesellschaft v. Schlunk,
486 U.S. 694, 705, 707, 108 S.Ct. 2104, 2111, 2112, 100 L.Ed.2d 722
(1988). We review the district court's interpretation of the
Federal Rules of Civil Procedure de novo. Burns v. Lawther, 44
F.3d 960, 963 (11th Cir.1995) (per curiam); McBride v. Sharpe, 25
F.3d 962, 968 (11th Cir.) (en banc), cert. denied, --- U.S. ----,
115 S.Ct. 489, 130 L.Ed.2d 401 (1994).
The Supreme Court's order amending the Rules stated in
pertinent part "[t]hat the foregoing amendments to the Federal
Rules of Civil Procedure shall take effect on December 1, 1993, and
shall govern all proceedings in civil cases thereafter commenced
and, insofar as just and practicable, all proceedings in civil
cases then pending." Supreme Court Order of April 22, 1993,
reprinted in Federal Civil Judicial Procedure and Rules 17 (West
ed. 1994). The plain language of the Supreme Court's order
indicates that the district court may apply either the rule in
effect when the complaint was filed and the case thereby commenced
pursuant to Rule 3, or the rule in effect when service was
attempted last in 1994.8 See Elkay Mfg. Co. v. Ebco Mfg. Co., No.
93 C 5106, 1995 U.S. Dist. LEXIS 473, at * 18 (N.D.Ill. Jan. 13,
1995); Eskofot A/S v. E.I. Du Pont De Nemours & Co., 872 F.Supp.
81, 86 (S.D.N.Y.1995); Lowe v. Hart, 157 F.R.D. 550, 551
(M.D.Fla.1994). For analysis, we assume that the district court
considered application of the revised Rule 4 to Silvious's attempts
at service occurring after December 1, 1993, just and practicable.
The district court held that because Pharaon personally could
not be found and served within the United States, Silvious must
serve Pharaon pursuant to revised Rule 4(f), which provides for
service abroad. Revised Rule 4(e), however, clearly provides for
substituted service.9 Prior to the revisions to Rule 4,
8
The magistrate judge wrote:
This is not a situation in which a procedural rule
was changed during the service attempt and service was
commenced when the former Rule was in force and
completed after the new one took effect. Service had
been attempted in several different ways pursuant to
former Rule 4. By act of Congress, Rule 4 was changed.
The Court has no choice but to enforce the new Rule for
all new attempts at service.
R1-46-5 (emphasis added). The district court made no
statement regarding its decision to apply the revised rule.
We note, however, that the court clearly may apply former
rules if the case is commenced thereunder.
9
Revised Rule 4(e) reads in pertinent part as follows:
(e) Service Upon Individuals Within a Judicial
District of the United States. ... [S]ervice upon an
individual ... may be effected in any judicial district
of the United States:
(1) pursuant to the law of the state in which the
district court is located, or in which service is
effected, for the service of a summons upon the
substituted service did not fail merely because the principal was
outside of the United States. Volkswagenwerk Aktiengesellschaft,
486 U.S. at 705, 108 S.Ct. at 2111 ("Under [the Due Process]
Clause, foreign nationals are assured of either personal service,
which typically will require service abroad ... 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.'
" (emphasis added) (quoting Mullane v. Central Hanover Bank &
Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865
(1950)). "Personal service has not in all circumstances been
regarded as indispensable to the process due to residents, and it
has more often been held unnecessary as to nonresidents." Mullane
v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct.
652, 657, 94 L.Ed. 865 (1950).
Substituted service on an agent of the party to the action is
defendant in an action brought in the courts of general
jurisdiction of the State; or
(2) by delivering a copy of the summons and of the
complaint to the individual personally or by leaving
copies thereof at the individual's dwelling house or
usual place of abode with some person of suitable age
and discretion then residing therein or by delivering a
copy of the summons and of the complaint to an agent
authorized by appointment or by law to receive service
of process.
Fed.R.Civ.P. 4(e) (emphasis added); see also 2 James W.
Moore et al., Moore's Federal Practice § 4.10[4], at 4-183
(2d ed. 1995) ("Rule 4(e) permits personal service upon a
defendant to be made by delivering a copy of the summons and
complaint to a person deemed by the common or general law,
federal and probably state, to be authorized to accept
service of process on behalf of the defendant.").
a common practice. We find no indication that the amendments to
Rule 4 were intended to alter this method of service for individual
foreign defendants. The committee notes indicate that the changes
in the Rule were intended to widen the reach of service of process,
not to restrict it. See Fed.R.Civ.P. 4 advisory committee's note
on 1993 amendment (subdivision (e) and subdivision (f)) ("Together
with subdivision (f), [subdivision (e) ] provides for service on
persons anywhere, subject to constitutional and statutory
constraints.... [Subdivision (f) ] facilitate[s] the use of
federal long-arm law in actions brought to enforce the federal law
against defendants who cannot be served under any state law but who
can be constitutionally subjected to the jurisdiction of the
federal court.").
Moreover, revised Rule 4(e) makes no reference to where the
defendant or individual is "found." We interpret the words "in any
judicial district of the United States" in Rule 4(e) to describe
the place where the personal or substituted service is "effected"
rather than the location, at the precise moment of service, of the
individual being served. The individual and the agent need not be
in the same place. For example, in the case of an individual who
is located in a foreign country but whose legal agent is located in
a judicial district of the United States, a plaintiff may either
personally serve the individual, per Rule 4(f), or effect
substituted service through the individual's agent, per Rule 4(e).
In deciding which subsection applies, the focus is upon the place
where service is effected, not the location of the defendant at the
time of service. This reading of Rule 4(e)(2) is consistent with
the language of subdivisions (g) and (h) which alternately refer to
service within a judicial district and to service "in a place not
within any judicial district of the United States." Fed.R.Civ.P.
4(g), 4(h)(2) (emphasis added). A plaintiff may effect proper
service on an agent in the United States pursuant to Rule 4(e)(2)
so long as that service complies with requirements of the Due
Process Clause and the relevant statute, even though the individual
party to be served may not be "found" personally in the United
States at the time of service.
III. CONCLUSION
Silvious has appealed the district court's dismissal of his
claim for failure to effect proper service on Pharaon per Rule
4(f). We conclude that the amendments to Rule 4 did not abolish
the practice of effecting service on an individual who resides
outside of the United States by delivering a copy of the summons
and complaint in the United States to an agent authorized by
appointment or by law to receive service of process for that
individual. Because we conclude that the district court
misinterpreted the effect of the Rule 4 amendments in this case, we
REVERSE and REMAND to the district court to determine whether
Silvious properly served Pharaon under Rule 4(e)(2).