NEW HAVEN (LN) — U.S. District Judge Robert N. Chatigny on Wednesday vacated a default judgment against Trade Channel LLC, ruling that service of process on the foreign limited liability company via a commercial mailbox in Florida was invalid because it did not comply with Florida statutes requiring service on the Secretary of State.
The dispute centered on whether Federal Rule of Civil Procedure 4(h)(1)(A) allowed a plaintiff to serve a foreign LLC by following a Florida statute that permits substituted service on an individual at a private mailbox when no other address is discoverable.
Trade Channel LLC, a foreign entity doing business in Florida, argued that the plaintiff, Victorinox Swiss Army Inc., failed to serve the Florida Secretary of State as required by the state’s long-arm statute and its Revised Limited Liability Company Act.
Victorinox had served the defendant by leaving a copy of the summons and complaint with the manager of a commercial mail delivery service in Orlando, relying on Fla. Stat. Ann. § 48.031(6)(a), which allows service at a private mailbox for individuals.
Chatigny rejected this approach, noting that while Rule 4(h)(1)(A) incorporates Rule 4(e)(1) to allow service on business entities " prescribed by Rule 4(e)(1) for serving an individual," this does not authorize using state laws designed for individuals to serve corporations or LLCs.
"Plaintiff's reading of Rule 4(h)(1)(A) is contrary to this understanding and has a paradoxical effect: it would allow a party choosing to follow state law... to serve process in a manner state law does not permit," Chatigny wrote.
The judge explained that when a plaintiff opts to follow state law for service, that state law is controlling. In Florida, the relevant statute for a foreign LLC transacting business without a certificate of authority is Fla. Stat. Ann. § 605.0904(6), which appoints the Department of State as the agent for service of process.
Because the plaintiff did not serve the Secretary of State, the court lacked personal jurisdiction over Trade Channel LLC. Under Rule 60(b)(4), a default judgment is void if the court lacks jurisdiction, leaving the judge with no discretion to deny the motion to vacate even if vacating it would be inequitable to the plaintiff, Victorinox.
"The motion to vacate the default judgment is granted," Chatigny ordered, noting that a telephone conference will be held to discuss further proceedings.