Gloria Lozano v. Julie Bosdet , 693 F.3d 485 ( 2012 )

Case: 11-60736 Document: 00511972340 Page: 1 Date Filed: 08/31/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 31, 2012
No. 11-60736 Lyle W. Cayce
Clerk
GLORIA LOZANO,
Plaintiff - Appellant
v.
JULIE BOSDET; JENNIFER PARRY; GLEN PARRY,
Defendants - Appellees
Appeal from the United States District Court
for the Northern District of Mississippi
Before WIENER, ELROD, and SOUTHWICK, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
A Mississippi citizen brought suit against the driver of a rental car, her
passengers, and Enterprise Rent-A-Car for a traffic accident. The defendants
who are individuals are foreign nationals, believed to be from Great Britain.
Various attempts at service were made, but all failed. After granting two
extensions of time, the district court dismissed the suit for lack of service. This
circuit has yet to address what timing requirement Rule 4 places on foreign
service of process. Today we adopt a flexible due-diligence standard. We also
conclude that because Mississippi’s statute of limitations likely bars refiling, this
suit should not have been dismissed. We REVERSE and REMAND.
Case: 11-60736 Document: 00511972340 Page: 2 Date Filed: 08/31/2012
No. 11-60736
FACTUAL AND PROCEDURAL BACKGROUND
This case arises out of an automobile accident in Horn Lake, Mississippi
on February 23, 2006.1 Gloria Lozano was a passenger in a vehicle that was
struck by a truck rented from Enterprise and driven by Julie Bosdet.2 Bosdet
was listed on the police accident report as residing in Ontario, Canada, but now
is believed to live in England. Her passengers, Jennifer and Glen Parry, are
believed to be British citizens living in London, who own or operate a seasonal
bed and breakfast in Horn Lake called “Gracepines.” The business caters to
tourists interested in Elvis Presley, as Horn Lake is a short distance from
Memphis where the Mississippi native moved as a teenager and would find some
musical success.
Lozano filed suit on February 23, 2009, in the Circuit Court of DeSoto
County, Mississippi. The court clerk issued a summons for each defendant.
Mail service under the Mississippi Rules of Civil Procedure was attempted.
Enterprise then removed to federal court on March 9. The district court later
granted Enterprise summary judgment. It found that Bosdet’s liability could not
run to the company because the rental contract was only with Jennifer Parry,
who had not designated Bosdet as an authorized driver.
Lozano hired a private process server who communicated with the
manager of the Parrys’ business on June 6, 2009. The manager indicated that
the Parrys would return to Mississippi from Great Britain that August. As to
Bosdet, Lozano attempted service by restricted delivery mail at the Canadian
address. All these efforts were within 120 days of the complaint’s filing, which
1
These facts are drawn from the complaint and the plaintiff’s motions concerning
service in the district court. They are taken as true. See D.J. Invs., Inc. v. Metzeler Motorcycle
Tire Agent Gregg, Inc., 754 F.2d 542, 546-47 (5th Cir. 1985).
2
For clarity we refer to the two corporate defendants, Enterprise Rent-A-Car (a
Missouri corporation) and Enterprise Rent-A-Car of Tennessee, collectively as “Enterprise.”
2
Case: 11-60736 Document: 00511972340 Page: 3 Date Filed: 08/31/2012
No. 11-60736
is a time period relevant for service. See Fed. R. Civ. P. 4(m). Whether it is
relevant in the context of these facts is the issue in this case.
At the end of that period, on June 23, 2009, Lozano moved for and received
an additional 120 days until November 17, 2009.3 The deadline passed, and the
clerk of court notified Lozano that service was incomplete, prompting a second
motion for additional time. Enterprise was the only defendant to have made an
appearance. It objected, prompting the magistrate judge to grant only an
additional 30 days, as opposed to the 120 requested, as well as to state a
reluctance to grant further extensions.
On the last day of the extension, Lozano sought more time. She explained
that steps were underway to accomplish service according to Rule 4’s provisions
for service of process outside the United States. See Fed. R. Civ. P. 4(f)(1).
Finding Enterprise’s objections to additional time to be valid, the district court
dismissed the suit. Yet, instead of dismissing with prejudice as the defendants
requested, the late Judge Pepper deemed it appropriate to “confine [his] Order
to a dismissal without prejudice.” Lozano appeals that disposition. Her notice
of appeal also challenged the grant of summary judgment to Enterprise. Later,
though, we granted Lozano’s subsequent motion to dismiss Enterprise from the
appeal.
DISCUSSION
Review is de novo for the threshold issue in this case because it concerns
the interpretation of a Federal Rule of Civil Procedure. Romaguera v.
Gegenheimer, 162 F.3d 893, 895 (5th Cir. 1998). A failure to comply with Rule
4(m)’s time requirement authorizes a district court to dismiss an action without
prejudice, except upon a showing of good cause. See Millan v. USAA Gen.
Indem. Co., 546 F.3d 321, 325 (5th Cir. 2008). After determining the parameters
3
In this and her subsequent motions, Lozano preserved the argument we analyze below
that Rule 4 did not impose the ordinary 120-day timeline in the case of foreign service.
3
Case: 11-60736 Document: 00511972340 Page: 4 Date Filed: 08/31/2012
No. 11-60736
of Rule 4, in Part II of the opinion, we address the district court’s dismissal of
Lozano’s action.
I. Foreign Service under Rule 4(f)
The Hague Convention is a 1965 multinational treaty that sought to
“simplify and expedite international service of process.” Nuovo Pignone, SpA v.
STORMAN ASIA M/V, 310 F.3d 374, 383 (5th Cir. 2002). The federal rules,
though, did not expressly validate this means of service until 1993, when
Federal Rule of Civil Procedure 4(f) in its present form came into effect. See
David D. Siegel, Practice Commentary on Fed. R. Civ. P. 4, C4-24, reprinted at
28 U.S.C.A. Fed. R. Civ. P.4 at 172 (West 2008).4 Rule 4(f) provides that an
individual defendant
may be served at a place not within any judicial district of the
United States:
(1) by any internationally agreed means of service that is reasonably
calculated to give notice, such as those authorized by the Hague
Convention on the Service Abroad of Judicial and Extrajudicial
Documents;
(2) if there is no internationally agreed means, or if an international
agreement allows but does not specify other means, by a method
that is reasonably calculated to give notice . . . .
An example of another “internationally agreed means” is the Inter-
American Convention on Letters Rogatory. See generally Kreimerman v. Casa
4
The prior rule only discussed service as “permitted by foreign law, as directed by a
foreign authority pursuant to letter rogatory [(a letter of request between courts)], by delivery
to an individual personally or to an appropriate corporate representative, by mail, or as
directed by court order.” Gary B. Born & Andrew N. Vollmer, The Effect of the Revised Federal
Rules of Civil Procedure on Personal Jurisdiction, Service and Discovery in International
Cases, 150 F.R.D. 221, 236 (1993). A form of each of these methods can be found in
subsections (2)(A)-(C) & (3) of today’s Rule 4(f).
4
Case: 11-60736 Document: 00511972340 Page: 5 Date Filed: 08/31/2012
No. 11-60736
Veerkamp, S.A. de C.V., 22 F.3d 634, 636 (5th Cir. 1994). Rule 4 also contains
a time limit for service:
If a defendant is not served within 120 days after the complaint is
filed, the court – on motion or on its own after notice to the plaintiff
– must dismiss the action without prejudice against that defendant
or order that service be made within a specified time. But if the
plaintiff shows good cause for the failure, the court must extend the
time for service for an appropriate period. This subdivision (m) does
not apply to service in a foreign country under Rule 4(f) or 4(j)(1).
Fed. R. Civ. P. 4(m).
The final sentence makes clear that the 120-day requirement does not
apply to service of individuals abroad such as under the Hague Convention, or
service of a foreign state under subsection (j)(1). See 4B Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 1134 (3d ed. 2008). As a
result, one circuit has indicated that when the defendants are foreign, an
unlimited window-of-opportunity for service under Rule 4(f) exists. Lucas v.
Natoli, 936 F.2d 432 (9th Cir. 1991) (per curiam).5
Rather differently, the Second Circuit only allows plaintiffs to avoid the
120-day period if they “attempt to serve the defendant in the foreign country”
within that time. USHA (India), Ltd. v. Honeywell Int’l, Inc., 421 F.3d 129, 133-
34 (2d Cir. 2005); Montalbano v. Easco Hand Tools, Inc., 766 F.2d 737, 740 (2d
Cir. 1985). We decline to require this approach for two reasons. First, to do so
would effect a rewrite of Rule 4. The rule states that “subdivision (m) does not
apply to service in a foreign country,” not that a litigant has 120 days in which
to initiate foreign service. Cf. Lucas, 936 F.2d at 432.
Second, that interpretation would make it difficult for plaintiffs to use the
less costly and potentially more efficient methods of serving foreign defendants.
5
See also Rudolph v. UT Starcom, Inc., No. 07-04578, 2009 WL 248370, at *3 & n.1.
(N.D. Cal. Feb. 2, 2009) (following Lucas, and explaining that Rule 4(j) originally contained
the limitation now expressed in subsection (m)).
5
Case: 11-60736 Document: 00511972340 Page: 6 Date Filed: 08/31/2012
No. 11-60736
One such example is Rule 4(d). That subdivision permits the use of the mail to
reach individuals and corporations outside the United States who fall under
Rule 4(f). See Fed. R. Civ. P. 4(d), (h); Born & Vollmer, Service and Discovery,
150 F.R.D. at 232-34; Wright & Miller, supra, § 1134. Moreover, “very often
service abroad [will] prove[] unnecessary because the foreign defendant has a
local presence or a local agent for service.” Siegel, Practice Commentary, C4-24,
at 174.6
Our conclusion that the rules do not require immediate resort to the
Hague Convention or other international methods does not, however, lead us to
agree with the Ninth Circuit that unlimited time exists. Lucas, 936 F.2d at 432.
“[M]ost courts faced with a challenge to the timeliness of foreign service have
applied a ‘flexible due diligence’ standard to determine whether the delay should
be excused.” 1 Steven S. Gensler, Federal Rules of Civil Procedure: Rules and
Commentary 60 (2012 ed.). This view has been endorsed by the Seventh Circuit,
by the First Circuit in an opinion authored by retired Justice Souter, as well as
by many district courts. Nylok Corp. v. Fastener World Inc., 396 F.3d 805, 807
(7th Cir. 2005); Feliz v. MacNeill, Nos. 10-1549, 11-1308, 2012 WL 3590807, at
*3 (1st Cir. Aug. 22, 2012).7 Judging it the most sound interpretation, we
expressly adopt it.
Following Supreme Court guidance, this court has recognized “that
statutory interpretation is a ‘holistic endeavor.’” United States v. Johnson, 632
F.3d 912, 923 (5th Cir. 2011) (quoting United Sav. Ass’n of Tex. v. Timbers of
Inwood Forest Assocs., Ltd., 484 U.S. 365, 371 (1988)). We applied this maxim
6
See Fed. R. Civ. P. 4(e); Burnham v. Superior Court, 495 U.S. 604 (1990) (holding that
personal service of foreign individuals satisfies due process).
7
See, e.g., Feliz v. United States, 272 F.R.D. 299, 301 (D. Mass. 2011) (First Circuit);
Mapping Your Future, Inc. v. Mapping Your Future Servs., Ltd., 266 F.R.D. 305, 308-09
(D.S.D. 2009) (Eighth Circuit); Lewis v. Vollmer of Am., No. 05-1632, 2007 WL 1545661, at
*1-2 (W.D. Pa. May 25, 2007) (Third Circuit).
6
Case: 11-60736 Document: 00511972340 Page: 7 Date Filed: 08/31/2012
No. 11-60736
in the class-action context to discern the meaning of Rule 23(b)(2). Allison v.
Citgo Petroleum Corp., 151 F.3d 402, 412 (5th Cir. 1998). We determined that
Rule 23’s underlying “principles and assumptions,” along with a comparison of
subparts (1), (2), and (3), gave “substance” to (b)(2)’s literal terms. Id. at 412-15.
So too here. We have already discussed that Rule 4 contemplates other avenues
for reaching foreign defendants. See Fed. R. Civ. P. 4(d), (e). Those options are
subject to the 120-day time limit imposed by Rule 4(f). Another manner of
reaching the same defendants is exempted, namely service abroad through an
internationally agreed means. Given the mandatory requirement to dismiss for
untimely service under the other subparts of Rule 4, we conclude that when
subpart (f) applies, a district court is not “left helpless when it wants to move a
case along.” O’Rourke Bros. Inc. v. Nesbitt Burns, Inc., 201 F.3d 948, 952 (7th
Cir. 2000). We also agree that the ability of the court to dismiss an action for
failure to prosecute under Rule 41(b) strengthens the interpretation of Rule 4
that we adopt today. See id.Because “district courts need to be able to control their dockets,” Rule 4(f)
authorizes a without-prejudice dismissal when the court determines in its
discretion that the plaintiff has not demonstrated reasonable diligence in
attempting service. Nylok, 396 F.3d at 807. Though we do not insist that
foreign service always be the first step, or that it be attempted within the first
120 days, in some cases that will be the only reasonable course. Good faith and
reasonable dispatch are the proper yardsticks.8
This appeal does not call on us to decide whether a without-prejudice
dismissal would have been warranted in this case under the flexible due
8
We understand this principle of reasonableness, not a rigid rule, to have been what
the Seventh Circuit meant when it wrote that when “a plaintiff made no attempt to begin the
process of foreign service within 120 days, it might be proper for a court to dismiss the claim.”
Nylok, 396 F.3d at 807.
7
Case: 11-60736 Document: 00511972340 Page: 8 Date Filed: 08/31/2012
No. 11-60736
diligence standard. That is so, because a more exacting standard of review than
is usual applies to this dismissal. It is to that issue we now turn.
II. Dismissal of Lozano’s Suit
When “the applicable statute of limitations likely bars future litigation,”
we review a district court’s dismissal under Rule 4(m) by applying the standard
applicable to a with-prejudice dismissal. Millan, 546 F.3d at 326. Lozano is
suing the foreign defendants for the tort of negligence, which carries a three-year
statute of limitations. Jenkins v. Pensacola Health Trust, Inc., 933 So. 2d 923,
926 (Miss. 2006). She filed suit precisely three years after the accident, on
February 23, 2009. Thus, a new suit would be susceptible to this affirmative
defense were it to be raised. See id. at 926-27. In light of this likely legal bar to
suit, we find that the rule of Millan applies.
Judge Pepper correctly recognized that the with-prejudice dismissal that
Enterprise requested for the claims against Bosdet and the Parrys was too
severe a sanction. Dismissal with prejudice “is an extreme sanction that
deprives a litigant of the opportunity to pursue his claim.” Gonzalez v. Firestone
Tire & Rubber Co., 610 F.2d 241, 247 (5th Cir. 1980). These dismissals should
be in the interest of justice; they require “a clear record of delay or contumacious
conduct by the plaintiff.” Millan, 546 F.3d at 326 (quotation marks and citation
omitted). We have generally only affirmed them when the delay: (1) was caused
by the plaintiff himself, as opposed to by counsel; (2) resulted in actual prejudice
to the defendants; or (3) was caused by intentional conduct. Id.There is no record of contumacious conduct by Lozano. Her attorney can
be faulted for waiting until notified by the court after the first extension of time
for service elapsed. Not only is there no indication Lozano was personally to
blame, but this fact is insufficient in another respect. “[I]t is not a party’s
negligence – regardless of how careless, inconsiderate, or understandably
8
Case: 11-60736 Document: 00511972340 Page: 9 Date Filed: 08/31/2012
No. 11-60736
exasperating – that makes conduct contumacious; instead, it is the ‘stubborn
resistance to authority’ which justifies a dismissal with prejudice.” Id. at 327.
(quotation marks and citation omitted). Lozano demonstrated signs of good faith
in her escalating efforts to serve (mail, personal service, and now the Hague
mechanism) and with her willingness to move for additional time “out of
caution,” despite correctly maintaining that Rule 4(m)’s time limit did not apply.
We perceive no evidence of intentional delay or actual prejudice. The
district court faulted Lozano for not pursuing Hague service until her third
request for time. As already discussed, district courts are free to consider that
as one factor concerning whether plaintiffs demonstrate diligence in attempting
service. The facts as alleged indicate that the Parrys have actual knowledge of
the suit. In February 2010, after the process-server visited Gracepines, Glen
Parry telephoned the server seeking information about the lawsuit. Prejudice
is thus not a concern as to them, and Lozano avers that they have a social
relationship with the driver, Bosdet.
Several reasonable efforts have been made to reach Bosdet as well. At
present, Hague Convention service is underway in Great Britain. Plaintiff’s
counsel, a local Mississippi practitioner, has hired a firm specializing in foreign
service and has taken “affirmative steps” to transmit the documents through the
British Central Authority, a valid option under the Convention. See Convention
on Service Abroad of Judicial and Extrajudicial Documents in Civil and
Commercial Matters arts. 2-6, Nov. 15, 1965, 20 U.S.T. 361. Counsel for Lozano
has also expressed willingness to retain a London attorney to effectuate personal
service should difficulties arise with the Central Authority. Cf. Nylok, 396 F.3d
at 807.
Lozano first attempted to serve Bosdet at the Canadian address listed on
the police report. That mail was returned before the initial 120 days elapsed.
In her first request for time, Lozano explained her intention to subpoena the
9
Case: 11-60736 Document: 00511972340 Page: 10 Date Filed: 08/31/2012
No. 11-60736
Horn Lake Police Department for “any additional information regarding the
home address of Defendant Julie Bosdet.” Later, Lozano’s counsel learned from
the department that Bosdet lived in England, not Ontario, Canada.
All these considerations lead us to conclude that a litigation-ending
dismissal with prejudice at this time is not in the interest of justice for Lozano’s
suit. The judgment of the district court is REVERSED and REMANDED,
subject to that court’s oversight and ultimate determination of whether or when
to dismiss the case for failure to accomplish service. That decision should be
informed by the flexible due diligence standard announced today.
10