VOLKSWAGENWERK AKTIENGESELLSCHAFT v. SCHLUNK
Legal provision: Treaty
ORAL ARGUMENT BY HERBERT RUBIN, ESQ. ON BEHALF OF PETITIONER
Chief Justice William H. Rehnquist: Mr. Rubin, you may proceed whenever you are ready.
Mr. Rubin: Mr. Chief Justice, and may it please the Court:
This case arises by certiorari to the Appellate Court of Illinois.
It presents, we believe, the gravest issue regarding the continued viability of a highly successful, a real success story among treaties, the Hague Convention on Service of Process, which to date has been recognized and acknowledged to be a simple, effective device to end and remove what was a minefield for litigants, Americans abroad as well as foreign litigants in the United States.
What has happened here by the decision in this, in the court below, is that there is a suggestion which has been created, a somewhat cynical suggestion, that service on a foreign involuntary agent has been ruled out, but service on an involuntary agent in the United States is perfectly all right and not within the treaty.
Respectfully, we believe that this is a somewhat parochial and provincial approach which is inappropriate in the area of contract law which involves the world community.
Unidentified Justice: Counsel, suppose that the CEO of Volkswagen Germany were in Illinois for a business meeting for a day and he were served, what result?
Would you have to comply with the treaty?
Mr. Rubin: I think, Your Honor, that you would have to comply with the treaty.
I don't believe that the treaty contemplates that... and I don't believe that the intention of the contracting parties was that there should be a kind of a hit-or-miss situation with respect to the service of process.
Service of process is, I think, the quintessential element in the commencement, in the conduct, of a lawsuit which cries out for formality, for a sense of very definite precise kinds of procedures so that a party who is being hailed into court is informed that this is the start of a lawsuit, that this is the time when you have to begin to respond, and that any kind of actions that have to be taken are being taken, and that the idea that the president is running through an airport and some papers pushed on him should trigger that.
We respectfully submit that that was not within the contemplation of the contracting parties.
Unidentified Justice: What is the language in the treaty that you rely on in order to support your conclusion that the documents would necessarily have to be transmitted abroad as a practical matter?
Because they don't have to be transmitted as a legal matter.
Mr. Rubin: We respectfully submit that in presenting the proposition to the Senate, Mr. Carney, who was the representative of the State Department who presented it, indicated in the broadest terms how this treaty was to be administered and what it's purpose was.
He said that for the purpose, for the service of judicial documents abroad, that is, in cases where an action is commenced by a Plaintiff in one country against a Defendant who is in another country; now the juxtaposition is very clear: you have a case where you have a Plaintiff in one country and a Defendant who is in another country.
Unidentified Justice: But that's not what the treaty says.
The treaty says where there is occasion to transmit a judicial or extrajudicial documents for service abroad.
Mr. Rubin: That's right and that, too, is stated in the broadest and most embracing fashion.
It says in all cases where there is an occasion to transmit a document for service abroad.
Unidentified Justice: Even if the company does it voluntarily, not as a legal requirement?
Mr. Rubin: Your Honor, please, I believe that the intention was clear among the contracting parties.
And, indeed, it was understood by each of the courts that've had occasion to rule on it.
Unidentified Justice: Well, then are you saying that it's irrelevant that the document has to be transmitted abroad?
Mr. Rubin: It is not irrelevant at all.
Unidentified Justice: Well, then we have to focus on the language of the treaty in that clause, don't we?
Mr. Rubin: The expectation, Your Honor--
Unidentified Justice: All right.
Then, in the example I give, why is there any necessity to transmit the document abroad?
Mr. Rubin: --There is the necessity to transmit it abroad, Your Honor, because the party that's being hailed into court has a right to know precisely what the contentions are against it.
Unidentified Justice: It knows.
The president, in the hypothetical case receives the document in Illinois.
Mr. Rubin: Well, the president is receiving it, Your Honor, on the fly.
He is not someone who at that point is prepared to address that issue.
And the contemplation of the treaty was that there should be the formality.
That's instinct in every aspect of this treaty.
Unidentified Justice: Mr. Rubin, what if Volkswagen Germany had an office... that's the next question... in the state?
Mr. Rubin: I think, Your Honor, that if it had an office in the state it would have qualified in the state.
It would have designated a representative to receive service--
Unidentified Justice: No, this is a state that doesn't have such a thing.
Mr. Rubin: --If it had an office in the state--
Unidentified Justice: Just has an office in the state.
It hasn't designated anybody as an agent, but it has an office there.
Mr. Rubin: --I think in that respect, also, you have a question as to what kind of an office this is.
If this is an office where you have a freight forwarder sitting there, it's not the kind of a situation--
Unidentified Justice: No, this is a big office.
This is an office that engages in the full line of the business that the parent company does in Germany.
Mr. Rubin: --Well, that's not the situation, obviously, Your Honor.
If the corporation has proceeded into the state and set up a structure under which it is conducting... it has essentially removed itself into the state... this would be the type of case, for example, we had in Perkins v. Benquet or the type of case where perhaps you had in the Scophony case, where you now have moved the corporation into the state, you would have a different situation.
Unidentified Justice: It's not moved there.
There still is a German corporation.
They do a lot of business in Germany, most of their business in Germany, but they have a full-fledged office in the state.
Mr. Rubin: Your Honor, the expectation and intention still is that the address of the company is in Wolfsburg, Germany, and it's anticipated that service would take place at its office.
Unidentified Justice: Where it's incorporated, is that it?
It has to be at its head office?
Mr. Rubin: At its home.
Where it is.
That's where it is.
Unidentified Justice: And you find that in the language of the treaty where there is an occasion to make service abroad?
Mr. Rubin: I think, Your Honor, I find it in terms of the recital by the... in the Senate document... saying that where the action is commenced by a Plaintiff in one country against a Defendant who is in another country.
This continues to be... it is certainly, there is no suggestion in this case... that Volkswagen was in the United States with offices itself.
The only suggestion here is that somehow or other it has created an involuntary agent.
Unidentified Justice: Well, that's a dramatic departure then from the way process is ordinarily served on corporations outside of the treaty where, you know, you have to serve some human individual every time when you are serving a corporation.
And, certainly, and you say then that the treaty just has dramatically changed that.
Mr. Rubin: I say, Your Honor, that the treaty contemplates that there be a very, very significant formality in terms of service.
And, in fact, what has been created here has been a very efficient, a very simple, a very mechanical device, which was the contemplation of the parties.
Unidentified Justice: But I just don't understand the principle that you're urging on us as the determinant for when the treaty applies and when it doesn't.
You say: well, if the corporation is in Illinois.
But we know that corporations are physically present only through their agents.
You seem to assume there has to be a large manufacturing plant there and that that would do it.
This is just an unprincipled rationale that you're urging upon us.
Mr. Rubin: Respectfully, Your Honor, what we're saying is that the principle is that a formal document should be, was anticipated by the contracting parties to be, directed with a degree of formality, so that there could be certainty, so that they could put the simplicity or there can be an assurance, and that's what was achieved by the parties.
Indeed, that's the indication which is set forth expressly by the five contracting parties who are the major commercial nations in the world outside of the United States.
You have, of course, the United Kingdom, Japan, France, Belgium, and Germany, which have expressly indicated that a service on an agent outside of the nation is simply not contemplated here.
Unidentified Justice: Unless it's an agent appointed for the service of process?
Mr. Rubin: That's right.
Unidentified Justice: But in that situation, the papers still go abroad.
Mr. Rubin: But there, again, the treaty expressly provides that there can be a voluntary submission.
And this was the contemplation of the treaty.
The treaty says that if a party voluntarily submits, it's one thing.
But there is no voluntariness here.
Unidentified Justice: Well, let's assume that there's an office in the state, that the foreign corporation voluntarily set it up.
They haven't qualified to do business but they should have.
Mr. Rubin: Your Honor, if there is a voluntary submission, if there's a voluntary acceptance, certainly that is within the shared anticipation, the expectation, of the parties.
But the shared expectation here is to the contrary.
Unidentified Justice: So you suggest that if a foreign corporation sets up an office in a state or in such a way that it should have qualified but did not, that that office could be served?
It did it voluntarily.
It set it up.
And here's an office.
They're doing business.
They should have qualified and appointed an agent.
They did not.
Mr. Rubin: To the extent that there's a voluntary submission to the acceptance of process, that would be the case.
And I should point out to you, too, that this is not a case where the Petitioner is seeking to avoid amenability to litigation in this state.
This is not a case of jurisdiction.
There's no question here of avoiding in any way of being sued and responding to the issues and having a full course hearing on whatever are the basic elements to be decided substantively.
Unidentified Justice: Well, I take it you agree on my example that the foreign corporation could be served through its office in the United States.
Mr. Rubin: Well--
Unidentified Justice: Is that right or not?
Mr. Rubin: --I'm not sure, Your Honor, that I'm in a position to concede that as the intention.
We're talking now about a contract among parties and, to the extent that it has now been expressed formally and, I think, authoritatively in the notes verbal which have been filed and the amicus brief which has been filed, this is the law and this is the understanding of the contracting parties.
I'm certainly not in the position to make a concession which is contrary to their, I think, authoritative expression of what their expectation has been.
And they give reasons for it, as well.
Unidentified Justice: Mr. Rubin, that brings up an issue.
You've quoted from the Senate debate on the treaty.
What is the situation if we think the treaty is clear, that the language is clear, and let's even say all the other parties have interpreted it that way.
So, we think what the treaty really means is X.
But we find in the Senate ratification debates, that the executive has simply misrepresented the treaty, and the Senate thinks the treaty means Y, what are we bound by?
Mr. Rubin: I think, Your Honor, you're bound, you're interpreting, you're construing a contract.
This is a world contract in which the United States made representations to the other contracting parties.
The suggestion is made here that the United States, perhaps, got even the better of the bargain because it was giving up very little and getting very much.
Indeed, it got quite a bit of protection for its citizens, the businesses which do business abroad and are sued abroad.
And in terms of construing what the shared intention was, what the shared expectation is, I think that we have to understand that the interpretation given by these other contracting parties has certainly some persuasive effect.
And I think that was articulated by this Court in the Air France case.
Unidentified Justice: Are you going to answer my question?
Do we give the treaty what we think was its meaning despite what we know Congress thought it meant, or the opposite?
Mr. Rubin: I believe the Court has to give the meaning that the Court believes, because this is a federal question.
The Court is going to construe the treaty in the way in which it believes that the contracting parties intended.
Respectfully, also, Justice Scalia, I believe that there's been a patent overstatement as to what the impact was going to be on American law.
Again, looking to the Senate document, it is very clear that the statement was made that this will not make major changes in American procedures with respect to judicial assistance.
And that's all that was said.
That judicial assistance is not going to be significantly changed.
We had in place already, by that time, I think in 1963, the new Federal Rules of Civil Procedure, Rule 4(i).
We had correspondingly the Public Law 88-619, I believe it was, which became part of the U.S. Code.
And that spelled out a scheme, a mechanics, for the system of judicial assistance.
And Mr. Amram says in summary there is no change being affected here from our system of judicial assistance.
But then what was it that the other contracting nations intended and what did they carry out and what is in existence?
I think, if I may just take a moment to indicate how this works.
We say it's simple.
We say it's efficient.
We say it's uniform.
And it's striking, the way in which it works.
And there's... all that has to be done is that if Plaintiff takes his summons and complaint, if required by the foreign country, as it does in Germany... it's translated, there are standardized forms which have to be prepared which are transmitted, it's sent by ordinary mail to the central authority... and from that point on, free of charge, without worry, without care, the central authority takes it and puts it in whatever channels are necessary and affects the service, and you get this certificate--
Unidentified Justice: And your rule is that this applies to any foreign corporation that has not appointed an agent for service of process within the state.
Mr. Rubin: --Respectfully, I believe that that's what the treaty intended and that is, it was the huge mischief and evil which was sought to be overcome here is, indeed, overcome by this very, very simple procedure.
Unidentified Justice: Let me ask you one more question.
Suppose Volkswagen is physically present in, say, the state of New York, with a major corporate office and a manufacturing plant, too.
And then the state of Illinois, through service of process, serves Volkswagen in New York.
Mr. Rubin: Your Honor, again, on the basis of the formal position taken in the note verbal and the amicus brief, I think that the result would be that there would have to be service abroad unless Volkswagen was actually here.
But that isn't the case.
We're talking now about a treaty which is going to have the universal application.
We're talking about a treaty that relates, for example, to a case where there's an attempt to serve an adjuster of an insurance company where you have small companies that are going to be faced with papers which are pushed at them, and then they have to cope with them.
We're talking also, Your Honor, about a situation where, expressly, the United States and all of the other parties indicated they intended to eliminate the involuntary agent.
The notification au parquet, the Solicitor General concedes, was a major object to be removed.
This was the involuntary agent abroad.
He concedes that the Secretary of State's service, which has been so common here in the United States, is removed now and that such service has to be performed pursuant to the treaty requirements.
How is the service here any different--
Unidentified Justice: You're wrong about that, too.
Mr. Rubin: --this is an involuntary agent which is created by law.
And the court below merely makes the general statement, which I think is very difficult to understand... that it makes no difference how the agent is created.
It makes all the difference in the world how the agent is created.
If this is an involuntary agent, this involuntary agent which says that a subsidiary is an involuntary agent is no different from a Secretary of State or no different from the au parquet involuntary agent, except that it's even worse.
Because in those cases, there is at least some kind of statutory official duty on the part of those agents to forward the papers.
Here, there is no official statutory duty.
It's a kind of an inference, a guess, or a conjecture.
And, as a matter of fact, that the Solicitor General winds up in saying, is that three possible things can happen.
He says you don't have to send this paper over to Germany, because maybe the subsidiary will merely send a summary.
Or maybe the people in Germany will come over to the United States to look at it.
Or maybe the people in Germany will put everything into the lap of the lawyer and hope that the lawyer is somehow going to be able to cope with it.
That, respectfully, is totally unrealistic.
The expectation of everybody here was that the paper would be sent to Germany.
That's what was indicated by the Court in the Lamb case, that was what was indicated by the District Court in the Alabama case, it's what was indicated: that the German company would be apprised.
Unidentified Justice: But that isn't the necessary reading of that language at all, it seems to me.
Where there is occasion to transmit a judicial or extrajudicial document for service abroad.
Now, you can argue that simply doesn't deal with the situation or it is possible under standard rules to serve the person by an agent in this country.
Mr. Rubin: Your Honor, it certainly is possible.
But we're talking now, again, in terms of the contemplation, the shared expectations of the contracting parties.
Unidentified Justice: But we look for the shared expectations and the contemplation of the parties at the instrument that they adopted.
Mr. Rubin: Exactly.
Unidentified Justice: And I just quoted you language from the instrument that doesn't at all bear out what you say about it.
Mr. Rubin: Your Honor, I think we have to understand that, first of all, liberal construction is impelled because you have a world contract.
Secondly, it's a remedial contract.
Unidentified Justice: Well, just a minute, Mr. Rubin.
I'm about to ask you a question, if you'll slow down long enough for me to ask it.
Mr. Rubin: I certainly will, Your Honor.
Unidentified Justice: What is your authority for the proposition that liberal construction is impelled in this particular case?
Mr. Rubin: I think, Your Honor, that--
Unidentified Justice: I mean, a case authority.
Mr. Rubin: --The Air France case, for example.
I believe also that was indicated in the Aeorospatiale case.
And particularly where you have a remedial situation which is being addressed--
Unidentified Justice: What is a remedial situation?
Mr. Rubin: --You have a totally chaotic situation where courts are being burdened with a lot of ad hoc issues that they have to decide whether somebody is... whether this insurance adjuster or this freight forwarder or this toolmaker... an agent.
Unidentified Justice: Well, are you suggesting there is some situations where treaties are made, or laws are passed, that not, quote, remedial, close quote?
Mr. Rubin: No, Your Honor, but I'm saying--
Unidentified Justice: I mean, Congress doesn't act unless they think there's something that needs a remedy, does it?
Mr. Rubin: --I understand, Your Honor, but--
Unidentified Justice: So why is one situation different from another so that you would say one situation is a remedial situation whereby inference, perhaps, another situation is not a remedial situation?
Mr. Rubin: --Well, I think because in this particular case, all of the commentators indicated that there was in existence at that time a chaotic situation which had to be remedied, and that there was an expanding area of transnational litigation, and the burdens on the court were being very, very heavily tried, and therefore this was the quintessential situation for remedy and the remedy by this simple device and there's no counterbalancing reason why it shouldn't be used.
Unidentified Justice: May I ask you a question, Mr. Rubin?
One of the concerns was that it sometimes hard to identify an involuntary agent.
I think you have problems whether a subsidiary should be treated as an agent or not.
But even if you apply the treaty procedure for service of process purposes, aren't you still going to have that kind of issue?
For example, in this case maybe the service would have been perfectly all right if you followed the treaty procedure, but nevertheless the Defendant might have contended that it has no representation within the United States and therefore is not subject to jurisdiction in Illinois.
Mr. Rubin: That's an entirely different question, Your Honor.
Unidentified Justice: I mean, isn't it very similar in terms of what you have to litigate?
Mr. Rubin: No, I think it's totally different.
That's the Burger King case.
That, respectfully, is the Worldwide Volkswagen Woodson.
That's International Shoe.
That's a different issue.
Here we are talking about the bright line question: is there service of process or not.
Unidentified Justice: Well, I understand that.
Mr. Rubin: And here it is so simply established by a certificate which comes from the official.
It costs nothing.
Unidentified Justice: Well, I understand that but why is it so?
I know you don't challenge jurisdiction over your client, but why is it so clear that your client is doing business in Illinois and subject to the jurisdiction of Illinois courts?
Mr. Rubin: I don't think that it is clear.
Unidentified Justice: But you don't challenge that?
Mr. Rubin: No, Your Honor, please, the question of jurisdiction here is not on the basis of doing business.
The question of jurisdiction has to do with whether it's fair to be hailed into this court.
All of the tests which have been enunciated: International Shoe, the Burger King, and the Worldwide Volkswagen Woodson case--
Unidentified Justice: But if that issue had been raised, wouldn't it largely depend on whether the subsidiary was really to be regarded as an agent?
Mr. Rubin: --No, Your Honor.
Unidentified Justice: It wouldn't?
Mr. Rubin: You have a separate entity.
And this Court has indicated there's no reason to trifle with the existence of the separate entities where you have, which merely spur and increase issues which are unnecessary issues to face.
There's no reason for raising that question here where you have this very simple clear, bright line--
Unidentified Justice: Well, let me just ask one thing to be sure I have it right.
You do concede, do you not, that if proper service had been affected on the German company, it would be subject to suit in Illinois?
Mr. Rubin: --We don't challenge that, Your Honor.
There's no issue of that at all.
If I may, respectfully, I'd like to reserve whatever further time I have for rebuttal.
Chief Justice William H. Rehnquist: Very well, Mr. Rubin.
We'll hear now from you, Mr. Ring.
ORAL ARGUMENT OF JACK SAMUEL RING, ESQ. ON BEHALF OF RESPONDENT
Mr. Ring: Mr. Chief Justice, and may it please the Court:
It is the Respondent's position that the Hague Convention for service abroad does not render invalid service in a foreign corporation within the United States when such service complies with due process.
The heart of the issue before this Court is the interpretation of the Hague Convention on service abroad, regarding service in a foreign corporation doing business in Illinois, which it owned and so closely controlled.
It is, therefore, necessary to look first at the convention which is clear with regard to its scope.
Article 1 of the convention states: the present convention, and I quote, shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad.
If the drafters of this convention had intended the convention to be an exclusive method for service upon foreign nationals, regardless of their presence and their shores, then I believe Article 1 would have simply read: the present convention shall apply in all cases, in civil or commercial matters, involving foreign nationals.
Clearly, if the framers would not have intended this treaty to apply to all foreign nationals, they would never have used the clause: where there is occasion to transmit a judicial document for service abroad.
Unidentified Justice: May I interrupt you there?
Mr. Ring: Yes, Your Honor.
Unidentified Justice: What language was this treaty... what's the treaty language in?
Mr. Ring: The treaty, you mean the negotiating treaty?
Unidentified Justice: What is the official language for interpretation?
Mr. Ring: French and English.
Unidentified Justice: And the word, occasion.
There could be an occasion for a service of a document abroad, couldn't there?
What if you read the word to sort of mean opportunity, an occasion on which it might be done, or something like that?
Mr. Ring: I would say that there's an opportunity to serve abroad.
There is an opportunity to serve here.
If there is an opportunity to serve here--
Unidentified Justice: Well, if you read occasion to mean opportunity, then there sure was an opportunity here and the treaty covers everything.
Mr. Ring: --I read occasion to be necessity.
You have to look at the intent and purpose.
Unidentified Justice: So you don't rely on plain language.
You think we have to look at history, too.
Occasion means necessity.
That's how you read it.
Mr. Ring: I read it as necessity because you have to look at the negotiations, the legislative history, the intent, the purpose that--
Unidentified Justice: What's the French text?
Mr. Ring: --The French text, I think, is it would be a necessity.
I don't think... I'd say... if it's an opportunity--
Unidentified Justice: What is the French text?
What is the French word?
How does it read?
Mr. Ring: --I don't understand French, but I--
Unidentified Justice: But I do.
Does anybody have it there?
Mr. Ring: --I would assume the French interpretation might be the same as ours.
Unidentified Justice: If it says necessite, you're in good shape, aren't you?
Mr. Ring: Yeah, if it's... it would be.
I think that's close enough to English that I could understand.
Unidentified Justice: But if it says opportune... where we can find it.
Is the French text in the papers before us?
Mr. Ring: I think the French text, it says here--
Unidentified Justice: Says where?
Where are you reading?
Mr. Ring: --I'm reading, Your Honor, from the Solicitor General brief, who I believe has been able to get the French text interpreted for us.
And I think they refer there--
Unidentified Justice: What page?
Mr. Ring: --Page, Justice O'Connor, 14.
Unidentified Justice: Well, I don't want the French text interpreted.
I assume the English text interprets the French text.
Mr. Ring: Well, I hope so.
I'm relying, Justice, on matching the... Solicitor General being able to interpret the French.
The negotiations, unfortunately, were in French and--
Unidentified Justice: Transmit... it means must be transmitted, doesn't it?
Mr. Ring: --Must be transmitted?
Only for the purpose of making service when service cannot be made in our shores.
The intent of the convention, Your Honor, was to provide a method, facilitate a method, for service abroad.
Not with regard to domestic service.
We had no problem with domestic service.
It was our problem to find a method to facilitate transmitting a document overseas.
The definition of service abroad is not defined in the convention.
However, it states that it means a formal delivery of a document to a Defendant in a contracting country.
Now, if you don't have to make a transmissal of service overseas and you don't have to make it abroad, then you don't have to use the convention.
It is as clear as that.
The purpose of the convention was to facilitate a manner so that we could, in fact, serve Defendants overseas who had no presence in our shores.
Unidentified Justice: Was it to simplify?
To the rules?
Was that the purpose?
Mr. Ring: Justice, correct, in serving overseas.
Because our difficulty was not--
Unidentified Justice: I mean after forty minutes I've been worried about how--
Mr. Ring: --I didn't hear your question.
Unidentified Justice: --After forty minutes of argument, I don't understand that it was simplified.
Mr. Ring: It wouldn't simplify it.
You're right, Justice.
So the purpose, when you look at all of the... I couldn't agree more with the Petitioner... when you look at the language of the legislatures, the Senate committees, and the U.S. negotiators, it was never the intent of our country to give up the domain of the several states laws.
It was never intended to deprive our states, courts, and in federal courts, of their procedures and practice.
It was never the intent of the convention to change our American law.
It was never the intent of the convention to change our internal law.
The purpose was, in fact, to permit American litigants to serve abroad, to serve a person overseas, a corporation, entity, or individual, who had no presence here and, likewise, to give our friends in Europe and other members of the convention... which I think there are thirty... the same privilege, the same right, to sue Americans and give them notice over here of litigation when it was pending abroad.
Unidentified Justice: Mr. Ring, do you agree with the SG's position that this treaty did eliminate, however, two things: one, the... what's it called... French practice, notification au parquet, which is sort of you just serve some functionary in France and can sue anybody by doing that.
Do you agree that it eliminates that?
Mr. Ring: I agree that... I can't pronounce it as you do, Justice... but I do agree that the purpose of the convention, it was a fair... and that's why Article 15 and Article 16 were--
Unidentified Justice: Just answer.
Does it eliminate that?
Mr. Ring: --Yes.
Unidentified Justice: Does it eliminate that?
Mr. Ring: Yes.
Unidentified Justice: It does eliminate that.
Mr. Ring: Yes, it does.
Unidentified Justice: Now, how come it eliminates that?
Mr. Ring: Because prior to this time, there was no due process built into the notification au parquet as we have in Secretary of State service.
We have that embedded in our particular statute so that there would be an extra requirement of due process.
Unidentified Justice: Well, that's a good reason why it ought to be eliminated.
But why does the text of it eliminate that but not eliminate this?
Mr. Ring: Because it had no affect on our own domestic policies of service of process.
Unidentified Justice: Oh, it says somewhere in the treaty that it can affect internal French requirements as to what's needed to get proper service but not internal United States requirements?
Mr. Ring: The purpose of the notification au parquet, the purpose of the treaty for the civil law countries, was because they were fearful that unless they had some kind of protection that the French, who are using notification au parquet, might, in fact, obtain judgements without giving notification.
Unidentified Justice: I understand and I assume that we were fearful of that, too.
But I can't, for the life of me, figure out how it reaches the one but doesn't reach the other?
Mr. Ring: It would reach our Secretary of State service.
Unidentified Justice: It would reach that, too?
Mr. Ring: It would if--
Unidentified Justice: Why?
Mr. Ring: --If only... if we had a Secretary of State statute which provided for, which would have to have for due process, a requirement to give it extra step... if that extra step of mailing could not be done in our shores, yes, we would have to use the convention.
If, on the other hand, it was on our shores, I'm saying we would not have to use the convention.
If, in fact, we had a mailing required to go to a corporation at its principle place of business, or where he's incorporated, and that place was in a foreign country, yes, we would have to use the convention.
Unidentified Justice: That distinction hinges upon the assumption that the French practice requires, for its effectiveness, that the French functionary transmit the document.
And that's being contested by Mr. Rubin.
Are you certain that the French practice--
Mr. Ring: The French have recently changed their law in that they now require that there be a transmission... I'm not sure of the complete language requirements of the French law... but if there would be, in the same method, if they had to send over that transmittal to the United States, if there was no agent over there which they could serve, then, yes, it would have to go through the convention.
In the same way that our Secretary of State process would have to be through the convention if there was no way of making that second mailing on our shores.
Unidentified Justice: --Well, Mr. Ring, if your interpretation is correct, though, there would be no reason why France couldn't return to its system of notification au parquet.
Mr. Ring: Well, first of all--
Unidentified Justice: None whatsoever.
They're not bound by our due process requirement and there is no due process requirement written into the Hague Convention.
Mr. Ring: --That's true.
They could go back and do that if they wanted to.
Unidentified Justice: Yes.
And that was exactly one of the things that we had an interest in eliminating and motivated us to participate in the Hague Convention.
We didn't like that method of service of American companies in France.
Isn't that right?
Mr. Ring: That's true, Your Honor.
But the French have recently changed the notification au parquet--
Unidentified Justice: Well, all right, except if your interpretation of this treaty is correct, the French can go back to their old system.
Nothing would prevent that.
Mr. Ring: --We have no control over their internal law.
They have no control of our internal law, nor should they have a right to determine our internal law.
Unidentified Justice: But you agree that one of our goals and purposes in entering into this treaty was to eliminate that notification au parquet.
Mr. Ring: No.
Our interest, our interpretation, our desire, was to find a method where we could have service abroad because we were having difficulty finding a procedure.
Rule 4(i) started the process in our federal courts where we were trying to find a method by mailing.
Unidentified Justice: Don't you agree that we were also concerned about inadequate methods of service and notification on American companies abroad?
Mr. Ring: There's no question about it.
But the fact is there are approximately thirty countries which are members of this convention, and most of them, the majority, more than the majority entered the convention for the purpose of having this protection against notification au parquet.
That would mean, I would say, that the majority of those countries agree with us.
France would be the only one that might take your position on this.
Unidentified Justice: What can you cite to indicate that other members, signing parties to the treaty, agree with your interpretation of it?
The briefs filed with us in this case indicate they don't agree with you.
Mr. Ring: There are only four countries... there are thirty countries, I understand, who are contracting parties.
And none of them has stated any objection.
If you use that kind of logic, I would say the majority agree with us.
Unidentified Justice: Well, you can't take the failure to file a brief here as agreement with you.
I wondered if you had anything you could cite?
Mr. Ring: No, I don't, Your Honor.
All I can say is I have to use common sense, and I would say that if they really objected strongly they would have possibly also filed briefs, as some of the countries did in deciding nationale.
I also might add that because these are diplomatic notes, and I'm not an international lawyer by any means... I would say that we don't know how the courts of these countries might react.
Whether or not they would agree with the diplomatic notes.
And we also don't know, Justice, what, in fact, the German government... and I had mentioned to them as the reason for their notes... I say this because if you look at the Belgium note, they say: based on what the Federal German Republic told us about this situation.
I don't know... I'm not privy to the what the discussions were between the German embassy and the other embassies and, of course, if I had privy to that I might have a better answer for you.
I don't have any more than that.
Unidentified Justice: Mr. Ring, can I ask you kind of a common sense, practical question, and get away from the language.
What is the burden on an American Plaintiff if we should hold that the treaty... occasion means, you know... means what your opponents say and this is the way to serve foreign corporations and you have to go through this mailing procedure, is that such a big deal?
Mr. Ring: Well, if mailing was the thing that you would have to worry about alone, I think that would be fine.
But there is a problem in this case.
There was some question about my wisdom in not using the convention.
If you consider, Justice, that it cost me $42.00 to file my suit... I mean, forget service cost... on Volkswagen, if I had to get the translation, which is a requirement of Article 5 of the convention, it would have cost me, for a 42-page complaint, $2,500 to $3,000.
That's common sense to me because that's my client's money.
It's my money.
I'm trying to do the best I can for my client.
Unidentified Justice: So what's involved is the cost of translating the complaint, basically?
Mr. Ring: Very expensive.
And there's also another problem, Justice.
Let's assume that I were to use the convention... and this happened... Germany, by the way, has three central authorities.
They are the only nation that has requirements of those procedures.
Most countries don't have a central authority and some do.
There's some confusion with that.
However, if the central authority which receives your particular request determines that they can't understand the translation and because I wasn't able to get a real good interpreter, unfortunately, who didn't know law, then the fact would be that they would return it to me.
That would mean, under our Illinois law, I have a thirty-day summons life.
And that cannot be changed by a clerk, as the Petitioner suggests, or a Judge.
Because our rule and procedure do not provide for extension of the life of the summons.
That would mean that each time that it would be returned, I would have to go through the same process, more expense with translation, and have that sent back to the consular, or whoever is going to be the central authority, and see if they'll accept it this time.
There's problems that would come into a practical situation.
Unidentified Justice: I can see that theoretically, but I should think there would be competent translaters available.
Mr. Ring: Well, I can show you that we have seen documents where they have been returned.
There's nothing to stop them... any country... from rejection.
What's left for us for relief under these situations is diplomatic channels.
Now, that's going to be very intimidating to a lawyer in a small town who has all of a sudden--
Unidentified Justice: Like Chicago, you mean?
Mr. Ring: --Like Chicago, Justice.
And I think it is intimidating to us, too.
But I think that when you look at those problems, the fact that you might... you might turn this convention not into a service convention, but to a dismissal convention.
And I think that's unfair to have to use an opportunity if you have an opportunity available to you, an alternate method in your own country, a method which provides you for the tools to use to serve, they have to accept that coming to our country that they have to accept our laws.
We do that when we go over there.
Our laws are not so difficult to follow.
And I think that, basically, when you can find a Defendant, a foreign corporation, acting through an agent on our shores, which they control so completely, as was surely... if you will look at our pages on the merits, our briefing on the merits, pages 8 through 13... overwhelming basis for the control of this corporation.
Not only that, but Volkswagen has never contested agency, in the lower courts.
Never contested jurisdiction.
Never contested controlling relationship.
Or that it's amenable to our process.
Unidentified Justice: Well, they contested agency.
One of the issues before the Illinois court was whether they were an involuntary agent.
Mr. Ring: They have not contest that in the record.
Unidentified Justice: Well, there were two issues in the Illinois Appellate Court.
One was the treaty issue and the other was whether they were an agent.
Mr. Ring: Well, that's true, but--
Unidentified Justice: So they contested that.
Mr. Ring: --they have not contesting agency now, you know.
But the fact remains, that if you look at the facts, each court would look at those facts.
Each court would have those facts before them.
It has to have those facts.
They determined, the basis of that finding, as to the control that the corporation had over them, it complied with due process as far as our Illinois law was concerned.
It was recently calculated that the notice to the agent would be notice to the principal.
And why shouldn't it have been.
Unidentified Justice: Any agent?
I'm a little uncomfortable just talking about agency in the abstract.
Can't you be an agent for some purposes and not an agent for others?
Don't you have to be an agent for the purpose--
Mr. Ring: That's true.
But the court can interpret when you can be an agent by the factual setting for the acceptance of service.
Even International Shoe made that comment.
And the fact is, in this case, it wouldn't be every agency.
If they appointed an agency, even they admitted in the lower court, they said: if we had appointed the agent that we will contest the use of the convention.
On the Appellate Court level, they said: if we had appointed the agent and he was standing next door to the process server, you couldn't serve us because you have to use the Haque Convention.
My feeling is that that's inconsistent.
And it's inconsistent because it makes no difference if they appoint or we appoint the courts.
Our courts have a right and a duty to look at the facts to determine the agency.
It would not be in every agency relationship.
Of course, it would be no question if they appointed an agent for a certain purpose.
But here, I think, the facts are conclusive that they were an agent for service.
They surely were so controlled.
There was no question that they were going to get notice.
And that was due process as it's supposed to be for... applying rules which would assure the Defendant of an opportunity to be heard and getting notice of the actions pending against them in this country, or if we are beginning suit over there in that country.
Unidentified Justice: --Well, Germany takes the position, I gather, that if you don't follow the Haque service convention in your service, that even if a judgement is obtained it won't be enforceable in Germany?
Mr. Ring: Well, there are no guarantees if you use the convention, Justice, that there's no full faith and credit clause in the Hague Convention, there's no guarantee that they will enforce the convention, there's no guarantee you'll get jurisdiction in the convention.
And if a party, as myself, chooses to sue them, based on the finding that there may be joint and several liability here anyway, there may be sufficient assets of Volkswagen in this country where I wouldn't be worried about that.
I think it's a case by case basis.
That would be the judgement of the lawyer.
And I don't think that interpretation of enforcement should be a basis for interpretation of a treaty.
Chief Justice William H. Rehnquist: Thank you, Mr. Ring.
We'll hear now from you, Mr. Minear.
ORAL ARGUMENT BY JEFFREY P. MINEAR, ESQ. AS AMICUS CURIAE, SUPPORTING RESPONDENT.
Mr. Minear: Mr. Chief Justice, and may it please the Court:
Volkswagen is fundamentally mistaken in arguing that the Hague Service Convention gives foreign corporations blanket immunity from local service rules.
Article 1 states the convention comes into play only when there is occasion to transmit a judicial document for service abroad.
Unidentified Justice: Well, that isn't the French language exactly, is it?
Mr. Minear: That is correct, Your Honor.
The French language is even stricter than that.
And it says, essentially, that the convention is applicable only when the document must be transmitted abroad to be served there.
Unidentified Justice: It says: doit, which is from devoir.
Meaning should or ought, not must.
Mr. Minear: Yes.
In this context, it would be.
I think the best interpretation would be must or is to be transmitted.
In any event, it seems quite clear that it does not leave much room for the interpretation that Petitioner's suggest, namely, that whenever there is an opportunity to transmit the document abroad.
This is, of course, the most natural reading of Article 1.
And it is fully supported by the negotiating history which indicates the drafters left to each state responsibility for determining when a document must be served abroad.
The reporter specifically explained in the debates that, quote: one must leave to the requesting state the task of defining when a document must be served abroad.
This appears at Negotiating History, page 254.
Unidentified Justice: When the French do that... how can you strike down the French practice?
That is what troubles me.
Mr. Minear: The notification au parquet practice?
Unidentified Justice: Yes.
Mr. Minear: That, in fact, was clarified in the report that was prepared by the reporter of the convention.
In this report, the reporter noted, and I quote: While the strict language of Article 1 might raise the question whether or not the convention regulates notification au parquet, the understanding of the drafting commission based on the debates is that the convention would apply... close quote.
Unidentified Justice: Well, that's nice.
What do you mean based on the debates.
Is it in the--
Mr. Minear: On the debates... what the reporter, at this point, this appears at Negotiating History, page 367.
At that same page, there is also a footnote back to the debates.
What the reporter's relying on is on statements from the French and Dutch delegations that au parquet service does include an obligation to transmit the document abroad as part of the service procedure.
For example, Mr. Lef of The Netherlands explained, and this is at page 169 of the Negotiating History, translated, quote: There is in The Netherlands a real obligation on the part of the Public Prosecutor's Office and the Ministry of Foreign Affairs to transmit abroad... close quote.
He also indicated the situation in The Netherlands is, therefore, quote: almost identical... close quote, to that of France.
Indeed, shortly after signing the convention, France amended its Code of Civil Procedure, Article 684 through 686, to eliminate any doubt that documents served through this method must be transmitted abroad.
Unidentified Justice: --So your position is that it covers any situation in which under the domestic law the document must be transmitted abroad.
Mr. Minear: That is correct, Your Honor.
Unidentified Justice: And you assert that there is no necessity under the domestic law of Illinois here for the agent to transmit the complaint to his principal?
Mr. Minear: That is also correct, Your Honor.
That is our position.
Unidentified Justice: What if Illinois simply says: you can serve this... when you want to serve Volkswagen Germany, you can serve the Secretary of State right here in Springfield?
Mr. Minear: Illinois, in fact, does leave open that opportunity under its corporation law.
I believe that's Section 5.25 of the Illinois Code.
But what it also indicates is that if one serves the Secretary of State, the Secretary of State is under an obligation to transmit those documents abroad.
Unidentified Justice: What if Illinois says, hypothetically, you may serve the Secretary of State here in Springfield and he'll post a notice on the door.
Mr. Minear: That would probably be unconstitutional under Wuchter v.... Wuchter.
I don't recall the last name of the party, but that's cited in our brief.
Unidentified Justice: But it's a matter of due process and not of service?
Mr. Minear: Yes, and that simply indicates that, in fact, Volkswagen has two levels of protection here.
First, Illinois statutory law and, second, the due process clause.
In short, there's ample protection.
Unidentified Justice: Due process isn't going to protect American companies abroad from other state's, member state's, rules.
Mr. Minear: Yes, that's right, Your Honor.
But I also, respectfully, submit that interpreting the convention in the way that Petitioner suggests will not protect American corporations, either.
The foreign corporations are not obligated to follow our interpretation of the convention, and they are not obligated to follow this Court's interpretation of the convention.
In fact, it appears that some of the foreign governments' positions are somewhat inconsistent with their own law.
For instance, in Illinois, under the Illinois Companies Act of 1985, Section 695 does provide for service upon an unregistered foreign corporation at its place of business in England.
That, under Petitioner's position, would be inconsistent with the convention but, nevertheless, is allowed.
Likewise, the French's new Code of Civil Procedure, of Section 690, also provides for service at a place of business or upon any qualified member of the corporation.
Now, we don't know how the French or the English courts might ultimately interpret the convention.
We're not aware of any decisions from those courts that have interpreted the convention.
However, we believe, that given, in particular, with France, the language of Article 1 the most likely interpretation would be the interpretation that we, in fact, advance here.
Now, I would like to return to the notification au parquet again to clarify another matter of confusion.
The convention does not eliminate or remove the notification au parquet.
That method of service still exists in the French Civil Code, of Section 684 through 686.
What it does do is regulate that method of service.
In particular, it regulates it under Article 15 of the convention.
Now that also explains why there might be some confusion about this question of where there is occasion.
If you look at Article 15, it says: where a writ of summons, or an equivalent document--
Unidentified Justice: Where are you reading?
Mr. Minear: --This is page 32A of the Petition Appendix.
And again: where a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service.
In other words, they go on to say that judgement shall not be given unless certain conditions are met.
Now, Article 15 does seem to cover notification au parquet, here.
But, again, it depends on whether or not a document had to be transmitted abroad for the purpose of service.
Unidentified Justice: Could you... I don't know whether you have it handy now, but I'd be curious to whether the phrase: had to be transmitted abroad, there is in the French, using the verb devoir.
Mr. Minear: I don't have it here, but I believe that is the past tense of the verb devoir.
We note, further, that there are no substantial policy reasons for rewriting the Hague Convention to protect Volkswagen from the service method employed here.
It is certainly not unfair to serve Volkswagen through instate delivery of a summons to wholly-owned and closely controlled subsidiary that conducts Volkswagen's affairs in the foreign state.
First, Volkswagen is subject to the Illinois court's jurisdiction, precisely because it does business in Illinois through that subsidiary and, in fact, the Illinois Appellate Court's decision reflects this in Pages 8 through Page 18 of the Petition Appendix.
Second, Volkswagen has complete control over that subsidiary and, therefore, can, and we believe, has, taken the necessary steps to assure that it will receive prompt notice of suit.
Third, this service method does not discriminate against foreign corporations because it subjects them to precisely the same requirements as any domestic out-of-state corporation.
And, fourth, Volkswagen receives all the protections associated with the due process clause.
This is as much, or more, protection than U.S. corporations receive when they do business overseas.
Unidentified Justice: For what purpose are they an agent?
Suppose I appoint someone an agent and I say: you're an agent for everything except receipt of service of process.
I do not want you to be an agent for that and I forbid you to transmit to me any process you receive on my behalf?
Would this Illinois provision--
Mr. Minear: Effectively, that is what Volkswagen has said here, with respect to its wholly-owned subsidiary.
Our position is that a state is in a position to identify that agent as an agent for service of process, and that is a matter of state law.
Some states do allow that.
I think that one thing that is clear, however, is that the requirements to become an agent for that purpose are, in fact, very strict.
Here, the Illinois court went on at some length to identify all the factors that indicate the substantial identity between Volkswagen of Germany and Volkswagen of America.
I'd like to address a few other points that have arisen here.
Petitioners have pointed out the importance of formality of service.
However, I think it's important to note that a German court's jurisdiction does not depend on service.
Those formalities are primarily common law formalities.
This point is made in Kaplan and Von Merin, in 71 Harvard Law Review, at 1203 through 1204.
Professor Smith's book on international service of process also indicates this at some length.
I've already mentioned that, with respect to Justice Scalia's office of the state hypothetical, that that situation is covered under the English law, and apparently under the French law as well.
While Volkswagen says that the convention is--
My time has expired.
Chief Justice William H. Rehnquist: Thank you, Mr. Minear.
Mr. Rubin, you have four minutes remaining.
ORAL ARGUMENT BY HERBERT RUBIN, ESQ. ON BEHALF OF PETITIONER -- REBUTTAL
Mr. Rubin: If Your Honor, please:
The question was raised as to what is simpler?
Where is the simplification?
That really is a question which has been answered by the Solicitor General.
He concedes that it is simpler.
We have shown that it is inexpensive.
There's a reference to the cost of translation.
I think that Your Honors will have a better idea as to what the opportunities are for translation, even in Chicago, and what costs could be.
The fact is that the Solicitor General has conceded that in 1986 alone, there were 5,000 occasions where service was made on American companies under the treaty.
And in 1986 alone, there were approximately, or up to, 700 cases where service as made from the United States to Germany.
So that this is a treaty which is working.
In terms, now, of trying to weigh why now... what disadvantage, what real disadvantage is there to changing the system which is stated by these five major powers... major commercial, contracting countries... as the system which should be working.
You have, apart from anything else, you have the considerations of comity.
This Court in Aerospatiale made the point about providing for a smoothly operating legal regime.
You have here a smoothly operating legal regime.
The reference has been made to the jurisdictional basis for the action in illinois.
That jurisdictional action was not based on doing business and the court didn't find any doing business.
It was based on the long arm statute.
It was a long arm type of situation.
But, again, we respectfully submit that's not relevant to the issue of service of process which is conceded by the Solicitor General to be a question of federal law in terms of interpretation.
Unidentified Justice: But isn't the long arm issue one of service of process?
Mr. Rubin: Pardon me?
Unidentified Justice: But isn't the long arm issue one of service of process?
It's a long arm statute--
Mr. Rubin: Long arm has to do with amenable--
Unidentified Justice: --The question there was whether the service of process was valid as a matter of Illinois law, under the Illinois long arm statute.
Mr. Rubin: --That's right, Your Honor.
But the question here of service is a federal question.
It's a question of contractual intent and that's conceded by the Solicitor General.
In terms of contractual intent, the intent was to go to create a bright line.
And there's no reason which has been advanced here, there's nothing which weighs on the other side, to depart from the bright line which is feasible, which has worked as we see here by these statistics, and which was the specific intention of the parties.
The indication to the Senate at the time that the Senate was presented with this treaty... the Senate was told that this doesn't essentially change, there's no major change, with respect to judicial assistance.
And that's what Mr. Amram said.
He didn't say anything more than that.
Chief Justice William H. Rehnquist: Thank you, Mr. Rubin.
Your time is expired.
The case is submitted.