John Mann v. David Castiel , 681 F.3d 368 ( 2012 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 14, 2012 Decided June 1, 2012
No. 10-7109
JOHN B. MANN, ET AL.,
APPELLANTS
v.
DAVID CASTIEL, ET AL.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:09-cv-02137)
Robert B. Patterson, pro se, argued the cause for appellants.
With him on the briefs was Ronald B. Patterson.
David G. Wilson argued the cause and filed the brief for
appellees.
Before: HENDERSON, ROGERS and BROWN, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: On the basis of Rule 4(m) of the
Federal Rules of Civil Procedure, the district court dismissed
plaintiffs’ case without prejudice for failure to prove proper
service of three defendants or to show cause therefor. See Mann
2
v. Castiel, 729 F. Supp. 2d 191, 202 (D.D.C. 2010). On appeal,
plaintiffs contend that this was error because their failure to
timely file proof of service pursuant to Rule 4(l) did not
invalidate good service pursuant to Rule 4(m); the three
defendants waived any objections to service by failing to object
in what plaintiffs characterize as their initial responsive pleading;
and it was an abuse of discretion to deny additional time to effect
service on other defendants.
Because plaintiffs failed to demonstrate a waiver by
defendants pursuant to Rule 4, they offer no basis on which this
court can conclude that the district court clearly erred in finding
plaintiffs failed to prove proper service. Plaintiffs rely on
defendants’ acknowledgment of being served without
considering defendants’ suggestion of improper service.
Plaintiffs also confuse defendants’ motion for a stay of the case,
and to dismiss the case in its entirety, with a responsive pleading
joining issue with plaintiffs’ claims. The record further
demonstrates plaintiffs failed to show cause, much less good
cause, for their failure to effect timely service and thus the
district court acted within its discretion in denying additional
time to effect service. Accordingly, we affirm the dismissal of
the case without prejudice.
I.
On November 13, 2009, John Mann, Robert Patterson, and
their two wholly owned companies sued 31 defendants alleging
various violations of federal and state law, including
racketeering, larceny, negligence, unjust enrichment, and unfair
trade practices in connection with defendants’ involvement in the
satellite communications industry. Complaint ¶¶ 199-382; see
Ellipso, Inc. v. Mann, et al., No. 1:05-cv-01186 (D.D.C. 2008).
On March 9, 2010 – 116 days after the complaint was filed – the
district court notified plaintiffs of the requirements of Rule 4(m)
3
and ordered them to file proof of service by March 22, 2010 or
to “show cause why this case should not be dismissed.” Order,
Mar. 9, 2010.
On February 12, 2010, three defendants – David Castiel,
Cameran Castiel, and Ambassador (Ret.) Gerald Helman –
moved for a stay of the case pending the conclusion of a pending
bankruptcy proceeding, In re Ellipso, Inc., No. 1:09-00148
(Chap. 11) (Bankr. D.C. 2009). They acknowledged that
summonses had been issued for some defendants and that they
had been “served” in January 2010. Defs.’ Mot. for Stay or,
Alternatively, Mot. for Enlargement of Time in which to File
Answer (“Stay Motion”) ¶ 6 (Feb. 12, 2010). On March 25,
2010, plaintiffs belatedly responded to the district court’s order,
stating that both Castiels, Ambassador Helman, and a fourth
defendant had been served, and requesting a 60-day extension to
effect service on the remaining defendants; they provided no
proof of service or explanation for their tardy response. Pls.’
Resp. to Court’s Order Concerning Service of Process Entered
Mar. 12, 2010 (“Response”) ¶¶ 1, 8 (Mar. 25, 2010). On April
7, 2010, the three defendants moved to dismiss the case pursuant
to Rule 4(m). They acknowledged receiving the summons and
a copy of the complaint from “some person” but questioned
whether they had been properly served, noting that “[n]o proofs
of service have been submitted as required by . . . [the] March 9
Order,” and that plaintiffs had failed, “even at this late date,” to
produce returns of service sworn to by a process server. Jt. Mot.
of Defs. to Reject Pls.’ Late Resp. to Court’s Order Concerning
Service of Process Entered Mar. 12, 2010 and to Dismiss Action
(“Motion to Dismiss”) ¶¶ 21–22 (Apr. 7, 2010). Plaintiffs did
not file a response to the Motion to Dismiss.
The district court dismissed plaintiffs’ case without
prejudice pursuant to Rule 4(m) on August 3, 2010, because
plaintiffs failed “to establish that any of the named defendants
4
were served within 120 days of filing their complaint” or offer
an adequate excuse for their failure to do so. Mann, 729 F. Supp.
2d at 196. Declining to entertain plaintiffs’ untimely Response,
the district court noted that they had not filed a motion for an
extension of time to respond to the March 9, 2010 Order, despite
two opportunities to do so. Id. at 195. Even if it had entertained
the Response, the district court explained that “it would still find
that plaintiffs have not carried their burden” to show “good
cause” warranting an extension of time to effect service pursuant
to Rule 4(m), id. at 197, or even “some cause” warranting a
discretionary extension, id. at 200.
II.
“Service of process, under longstanding tradition in our
system of justice, is fundamental to any procedural imposition on
a named defendant.” Murphy Bros., Inc. v. Michetti Pipe
Stringing, Inc., 526 U.S. 348, 350 (1999). Under the federal
rules enacted by Congress, federal courts lack the power to assert
personal jurisdiction over a defendant “unless the procedural
requirements of effective service of process are satisfied.”
Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 514 (D.C.
Cir. 2002); see Omni Capital Int’l, Ltd. v. Rudolf Wolff & Co.,
Ltd., 484 U.S. 97, 104 (1987); Miss. Publ’g Corp. v. Murphee,
326 U.S. 438, 444–45 (1946). Service is therefore not only a
means of “notifying a defendant of the commencement of an
action against him,” but “a ritual that marks the court’s assertion
of jurisdiction over the lawsuit.” Okla. Radio Assocs. v. FDIC,
969 F.2d 940, 943 (10th Cir. 1992). Consequently, courts have
“uniformly held . . . a judgment is void where the requirements
for effective service have not been satisfied.” Combs v. Nick
Garin Trucking, 825 F.2d 437, 442 & n.42 (D.C. Cir. 1987)
(collecting cases); cf. Cambridge Holdings Grp., Inc. v. Federal
Ins. Co., 489 F.3d 1356, 1360 (D.C. Cir. 2007).
5
Rule 4(c) of the Federal Rules of Civil Procedure provides,
in relevant part, that “[a] summons must be served with a copy
of the complaint. The plaintiff is responsible for having the
summons and complaint served within the time allowed by Rule
4(m).” Rule 4(m) provides, in relevant part:
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.
FED. R. CIV. P. 4(m). Rule 4 further specifies who may make
service, see FED. R. CIV. P. 4(c)(2) & (3), and how a waiver of
service may be proved, see FED. R. CIV. P. 4(d). “Unless service
is waived, proof of service must be made to the [district] court.”
FED. R. CIV. P. 4(l)(1). “[P]roof must be by the server’s
affidavit,” unless service is made by the United States marshal
(or deputy marshal). Id.
By the plain text of Rule 4, the plaintiff has the burden to
“demonstrate that the procedure employed to deliver the papers
satisfies the requirements of the relevant portions of Rule 4.” 4A
C. WRIGHT & A. MILLER, FEDERAL PRACTICE AND PROCEDURE
§ 1083 (3d ed. 2002 & Supp. 2012); see Light v. Wolfe, 816 F.2d
746, 751 (D.C. Cir. 1987); Grand Entm’t Grp., Ltd. v. Star
Media Sales, Inc., 988 F.2d 476, 488 (3d Cir. 1993); Aetna Bus.
Credit, Inc., v. Universal Decor & Interior Design, Inc., 635
F.2d 434, 435 (5th Cir. 1981). Seeking to demonstrate
compliance with Rule 4, plaintiffs rely on Rule 4(l)(3) and
defendants’ waiver by pleading as well as cause for delay in
6
effecting proof of service. None of their contentions is
persuasive.
A.
Rule 4(l)(3) provides: “Failure to prove service does not
affect the validity of service. The court may permit proof of
service to be amended.” FED. R. CIV. P. 4(l)(3). Although the
district court cannot be assured that it has jurisdiction over a
defendant until the plaintiff files proof of service, the defendant
“becomes a party officially, and is required to take action in that
capacity . . . upon service.” Murphy Bros., 526 U.S. at 350. That
is, a defendant must answer the complaint “within 21 days after
being served,” FED. R. CIV. P. 12(a)(1)(A), even if the plaintiff
fails timely to prove service by filing a server’s affidavit or files
defective proof of service, for the district court “may permit
proof of service to be amended,” FED. R. CIV. P. 4(l)(3); see
O’Brien v. R.J. O’Brien & Assocs., Inc., 998 F.2d 1394, 1402
(7th Cir. 1993) (interpreting FED. R. CIV. P. 4(g), the precursor
of current Rule 4(l)).
Plaintiffs offered no evidence to the district court to show
that the three defendants had been served, much less properly
served. Rule 4(l)(3) may prevent a defendant from avoiding the
obligation to respond to a summons or from filing an untimely
answer on the grounds that the plaintiff delayed filing proof of
service or filed defective proof of service that had to be
amended, but it does not excuse the plaintiff’s failure to file any
proof of service. See WRIGHT & MILLER § 1130. The plaintiff
must either make proof of service or come within an exception
provided by the rule.
B.
Rule 4(d) contains a procedure for establishing waiver of
service of a summons. It requires the plaintiff to make an
unequivocal request for a waiver in writing, the defendant to
7
return the waiver form within a reasonable time, and the plaintiff
to file the waiver. The plaintiff must “notify . . . a defendant that
an action has been commenced and request that the defendant
waive service of a summons.” FED. R. CIV. P. 4(d)(1). The
notice and waiver request must be accompanied by “two copies
of a waiver form.” FED. R. CIV. P. 4(d)(1)(C). If the defendant
signs and timely returns the waiver form and the plaintiff files it,
“proof of service is not required” and it is “as if a summons and
complaint had been served.” FED. R. CIV. P. 4(d)(4). Waiving
service of a summons does not waive any objection to personal
jurisdiction or to venue. FED. R. CIV. P. 4(d)(5).
Plaintiffs do not claim to have followed this waiver
procedure, and a defendant’s knowledge that a complaint has
been filed is not sufficient to establish that the district court has
personal jurisdiction over the defendant. See, e.g., Bridgeport
Music, Inc. v. Rhyme Syndicate Music, 376 F.3d 615, 623 (6th
Cir. 2004); McMasters v. United States, 260 F.3d 814, 817 (7th
Cir. 2001). Instead, plaintiffs rely on the defendants’ statement
in their Stay Motion that they had been “served.” The question
presented is whether this acknowledgment sufficed to show a
waiver and barred the three defendants from challenging the
validity of service by moving for dismissal pursuant to Rule
4(m). Assuming a waiver could be accomplished other than as
prescribed in Rule 4(d), cf. FED. R. CIV. P. 12(h), the district
court properly concluded plaintiffs failed to show a waiver of
service pursuant to Rule 4 by the three defendants. See Mann,
729 F. Supp. 2d at 196.
First, in focusing on defendants’ Stay Motion, plaintiffs
ignore defendants’ Motion to Dismiss in which they questioned
whether they had been properly served. In that motion
defendants clarified that while they had received a copy of the
summons and complaint from “some person,” it was “unknown”
whether this person was qualified to serve process. Stay Motion
8
¶ 6; see FED. R. CIV. P. 4(c)(2). Further, defendants argued that
it was “very suspicious” that plaintiffs “even at this late date and
under Court order, did not produce any returns of service sworn
to by a process server.” Stay Motion ¶ 6.
Second, plaintiffs’ alternative suggestion of waiver is based
on a flawed premise. Plaintiffs maintain the three defendants
waived any objections to the service of process by failing to
argue that the service of process was defective in their “initial
responsive pleading”: the Stay Motion. Appellants’ Br. 12.
Plaintiffs mischaracterize the Stay Motion. That motion was
neither a responsive pleading, such as an answer or third party
complaint addressing the allegations of the complaint, see FED.
R. CIV.P. 8(b); WRIGHT & MILLER § 1348, nor a dispositive
motion raising a defense listed in Rule 12(b), see Glater v. Eli
Lilly & Co., 712 F.2d 735, 738 (4th Cir. 1983) (citing FED. R.
CIV. P. 12(h)). As our sister circuits explain, a motion to stay a
case or for an extension of time to answer the complaint is hardly
a “defensive move” under Rule 12. See Conrad v. Phone
Directories Co., Inc., 585 F.3d 1376, 1383 n.2 (10th Cir. 2009);
Aetna Life Ins. Co. v. Alla Med. Serv., Inc., 855 F.2d 1470, 1475
(9th Cir. 1988); see generally WRIGHT & MILLER § 1386. It is
true that “when ‘a party seeks affirmative relief from a court, it
normally submits itself to the jurisdiction of the court with
respect to the adjudication of claims arising from the same
subject matter,’” PaineWebber Inc. v. Chase Manhattan Private
Bank, 260 F.3d 453, 460–61 (5th Cir. 2001) (quoting Bel-Ray
Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 443 (3d Cir. 1999)),
but a motion to stay proceedings (or to extend the time to
answer) “signals only that a defendant wishes to postpone the
court’s disposition of a case. Far from indicating that a
defendant intends to defend a suit on the merits, a motion to stay
can serve to indicate the opposite – that a defendant intends to
seek alternative means of resolving a dispute, and avoid litigation
in that jurisdiction.” Gerber v. Rordan, 649 F.3d 514, 519 (6th
9
Cir. 2011); see PaineWebber, 260 F.3d at 461; United States v.
51 Pieces of Real Property, 17 F.3d 1306, 1314 (10th Cir. 1994).
C.
Plaintiffs’ contentions that the district court abused its
discretion in denying an extension of time to effect service on
other defendants fare no better.
1. Rule 4(m) provides that the district court “must extend”
the 120-day deadline for service “if the plaintiff shows good
cause for the failure” to meet the deadline. FED. R. CIV. P. 4(m).
Good cause exists “when some outside factor . . . rather than
inadvertence or negligence, prevented service,” Lepone-Dempsey
v. Carroll Cnty. Com’rs, 476 F.3d 1277, 1281 (11th Cir. 2007),
for example, a defendant’s intentional evasion of service, see
H.R. 7152 Amendments to Federal Rules of Civil Procedure,
1982 U.S. Code Cong. & Admin. News 4434, 4446 n.25, or the
plaintiff proceeds in forma pauperis and was entitled to rely on
the United States marshal (or deputy marshal) to effect service,
see Dumaguin v. Sec’y of Health and Human Servs., 28 F.3d
1218, 1221 (D.C. Cir. 1994); Rance v. Rocksolid Granit USA,
Inc., 583 F.3d 1284, 1287–88 (11th Cir. 2009) (collecting cases).
In Moore v. Agency for International Development, 994 F.2d
874, 877 (D.C. Cir. 1993), this court concluded a pro se plaintiff,
who had made two attempts to serve the defendants shortly after
filing the complaint but had done so improperly, had shown
“good cause” where the defendants long delayed in responding
to the complaint and were represented by counsel who repeatedly
asked for extensions of time, causing the pro se plaintiff to “no
doubt believe[] the defendants had been properly served.” In
sum, “[g]ood cause means a valid reason for delay.” Coleman v.
Milwaukee Bd. of Sch. Dirs., 290 F.3d 932, 934 (7th Cir. 2002).
10
Plaintiffs offer no “valid reason” but suggest an institutional
consideration, namely that the district court should have granted
them additional time because postponing this litigation until the
close of the bankruptcy proceedings was in the interests of all
parties and judicial economy. Apparently plaintiffs filed the
instant lawsuit as a protective measure in the event their creditor
claims were not resolved to their satisfaction in bankruptcy and
so made minimal, and ultimately insufficient, efforts to preserve
their right to continue to litigate their district court claims based
on the November 13, 2009 complaint. In any event, the
institutional argument appeared only in their untimely Response,
which the district court refused to consider in the absence of a
request in their Response or in a separate motion for an extension
of time to respond to the March 9, 2010 Order. Mann, 729 F.
Supp. 2d at 195. Although “[i]n the absence of any motion for
an extension, the trial court ha[s] no basis on which to exercise
its discretion” to grant an extension after a filing deadline has
passed, Smith v. District of Columbia, 430 F.3d 450, 457 (D.C.
Cir. 2005); see FED. R. CIV. P. 6(b), we need not decide if this
principle applies here, where a rule mandated that the district
court exercise its discretion. The district court in fact considered
the arguments in the Response and found them to lack merit.
In their Response, plaintiffs claimed that nine corporate
defendants involved in the ongoing bankruptcy proceeding
would be served “promptly” after that proceeding concluded
“within the next few weeks.” Response ¶ 2. The district court
found that it was unclear any of these nine defendants were
involved in the bankruptcy proceeding. Mann, 729 F. Supp. 2dat 197. On appeal, plaintiffs do not challenge this finding.
Plaintiffs also claimed in their Response that summonses had
been issued for four other defendants. Response ¶ 6. The district
court noted that the case docket showed that a summons had
been issued for only one of the four. Mann, 729 F. Supp. 2d at
197. Again, plaintiffs do not challenge this finding on appeal.
11
Rather than convince the district court that plaintiffs had good
cause for failing to effect service, their Response unsurprisingly
convinced the district court “that plaintiffs have been careless at
best or untruthful at worst.” Id. Plaintiffs thus can show no
abuse of discretion by the district court in denying a extension of
time on the basis of good cause shown.
2. The Advisory Committee note for Rule 4(m) instructs
that the district court has discretion to extend the time for
effecting and filing proof of service even if the plaintiff fails to
show “good cause.” FED. R. CIV. P. 4, Advisory Committee
Note to 1993 Amendments, Subdivision (m). Other circuits to
consider the issue have held, with one exception, that Rule 4(m)
allows the district court to grant discretionary extensions. See
Coleman, 290 F.3d at 934; Horenkamp v. Van Winkle & Co.,
Inc., 402 F.3d 1129, 1132 (11th Cir. 2005) (collecting cases); but
see Mendez v. Elliot, 45 F.3d 75, 78 (4th Cir. 1995); see
generally WRIGHT & MILLER § 1137. They relied on the textual
reference in Rule 4(m) to the district court’s ability to “order that
service be made within a specified time,” FED. R. CIV. P. 4(m),
and the observation of the Supreme Court in Henderson v.
United States, 517 U.S. 654 (1996), that under Rule 4(m) district
courts have “discretion to enlarge the 120-period ‘even if there
is no good cause shown,’” id. at 662–63 (quoting FED. R. CIV. P.
4, Advisory Committee Note to 1993 Amendments, Subdivision
(m)); see id. at 658 n.5. In view of this authority and in the
absence of instruction from this court, the district court
concluded that Rule 4(m) required it to consider whether it
would grant, as a matter of discretion, an extension of time to
effect service. In that regard, the district court observed “no hard
list of considerable factors exist,” and looked to the Advisory
Committee’s suggestions of equitable factors. Mann, 729 F.
Supp. 2d at 198.
12
Whether the district court’s exercise of its discretion
pursuant to Rule 4(m) is cabined by Rule 6(b)(2)’s requirement
that “excusable neglect” be found, or by equitable factors,
compare Turner v. City of Taylor, 412 F.3d 629, 650 (6th Cir.
2005), with United States v. McLaughlin, 470 F.3d 698, 700 (7th
Cir. 2006); see generally WRIGHT & MILLER, § 1166, dismissal
of a case pursuant to Rule 4(m) is appropriate when the
plaintiff’s failure to effect proper service is the result of
inadvertence, oversight, or neglect, see Wei v. Hawaii, 763 F.2d
370, 372 (9th Cir. 1985), and dismissal leaves the plaintiff “in
the same position as if the action had never been filed,” H.R.
7152 Amendments to Federal Rules of Civil Procedure, 1982
U.S. Code Cong. & Admin. News 4434, 4442. The district court
found that plaintiffs had not shown that there was “some cause”
for an extension of time on the grounds that the statute of
limitations would bar refiling the complaint, their service
deficiencies existed for only a limited period of time, or they
were unsophisticated pro se litigants as to whom latitude should
be given to correct their mistakes. Mann, 729 F. Supp. 2d at
198–200. Plaintiffs fail to show the district court’s factual
findings with respect to these equitable factors are clearly
erroneous, see Anderson v. Bessemer City, 470 U.S. 564, 573–74
(1985); FED. R. CIV. P. 52(a)(6), or that the district court failed to
consider a relevant factor, see Kickapoo Tribe of Indians v.
Babbitt, 43 F.3d 1491, 1497 (D.C. Cir. 1995), or that the district
court otherwise abused its discretion in refusing to extend the
time to effect service.
Specifically, the district court found that plaintiffs had failed
to provide enough information to gauge the legitimacy of their
concern that they would be unable to refile their complaint if it
were dismissed. Plaintiffs stated in their Response that they had
filed their complaint “inter alia, because of statute of limitations
considerations,” Response ¶ 7, but did not identify any particular
statute of limitations that would bar refiling much less “which –
13
if any – of their numerous claims would be time barred,” Mann,
729 F. Supp. 2d at 199. Plaintiffs provide no further information
on appeal. The district court also found that plaintiffs had not
been diligent in correcting the service deficiencies; although
alerted to their non-compliance with Rule 4(m) and the potential
for dismissal of the case nearly five months earlier, plaintiffs had
taken no action to remedy their non-compliance and had not
responded to the Motion to Dismiss. See id. (citing D.D.C. LcvR
7(b)). (During oral argument in this court plaintiffs stated, for
the first time, that they did not file proofs of service because the
process server they hired using the website “Craigslist” had
disappeared, Oral Arg. Tape 1:55-2:13, but offered no
explanation for failing to proceed with a new process server or
seek a Rule 4(d) waiver.) The district court further found that
the additional latitude it “typically affords pro se litigants” to
correct defects in service of process was unwarranted; the two
pro se plaintiffs had been notified of the requirements of Rule
4(m) and appeared “not [to] be typical, unsophisticated pro se
litigants” but businessmen with extensive litigation experience,
one of whom had formal legal training, and both of whom
worked in tandem with counsel for the corporate plaintiffs.
Mann, 729 F. Supp. 2d at 199–200 (citing Moore v. Agency for
Int’l Dev., 994 F.2d 874, 876 (D.C. Cir. 1993)).
Accordingly, we affirm the order dismissing the case
without prejudice.