UNITED STATES COURT OF APPEALS FOR THE NINTH · PDF file989 F.2d 572 (2d Cir. 1993 ......

Case No. 09-56629

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

HUBEI GEZHOUBA SANLIAN INDUSTRIAL, CO., LTD., etc.; HUBEI PINGHU CRUISE CO., LTD., etc.,

Plaintiffs and Appellees,

v.

ROBINSON HELICOPTER COMPANY, a California corporation,

Defendant and Appellant.

Appeal from a Judgment of the United States District Court,Central District of California (Case No CV 06-01798-FMC)

Honorable Florence Marie Cooper, Judge Presiding

APPELLANT’S OPENING BRIEF

Stephen E. Ronk (SBN 114333) Tim A. Goetz (SBN 119749)Gary J. Lorch (SBN 119989) Attorney at LawGordon & Rees LLP 2901 Airport Drive633 West Fifth Street, Suite 4900 Torrance, CA 90505Los Angeles, CA 90071 Telephone: (310) 539-0508Telephone: (213) 576-5000 Facsimile: (310) 539-5198Facsimile: (213) 680-4470

Edward J. Horowitz (SBN 39688)P. O. Box 967

Pacific Palisades, CA 90272Telephone: (310) 826-6619

Facsimile: (310) 459-8161

Attorneys for Appellant Robinson Helicopter Company, Inc.

Case: 09-56629 04/06/2010 Page: 1 of 62 ID: 7290790 DktEntry: 9

i

CORPORATE DISCLOSURE STATEMENT

(F.R.A.P. 26.1)

Appellant Robinson Helicopter Company, Inc., is a California

corporation. It has no parent corporation, and no publicly held corporation

owns ten percent or more of its stock.

/s/ Edward J. Horowitz

Edward J. Horowitz


ii

TABLE OF CONTENTS

Page:

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

STATEMENT OF JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ISSUES PRESENTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

A. Background – prior to the first appeal . . . . . . . . . . . . . . . . . . . 4

B. This Court’s decision on the first appeal, including itsdirections to the district court on remand . . . . . . . . . . . . . . . 10

C. The proceedings on remand to the district court . . . . . . . . . . 11

STATEMENT OF THE FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

A. RHC’s actions after receiving the documents servedon it on February 17, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . 14

B. The experts’ testimony concerning the timeliness of the enforcement action in the district court . . . . . . . . . . . . . . 18

PRESERVATION OF ISSUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

THE STANDARDS OF REVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

LEGAL DISCUSSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

I. APPELLEES’ ATTEMPT TO SERVE RHC WITH PROCESS FOR THEIR ACTION IN THE PRC WAS INEFFECTIVE FORFAILURE TO SERVE ALL THE DOCUMENTS REQUIRED BY THE HAGUE CONVENTION. THE PRC COURT THUS DID NOT ACQUIRE JURISDICTION OVER RHC . . . . . . . . . . . . . 22


iii

A. Compliance with the Hague Convention is “mandatory” where service of process is sought by one signatory country on a defendant in another signatory country . . . . . . 22

B. Inclusion of the Request and Summary documents withthe other documents served is mandatory to accomplisheffective service under the Hague Convention . . . . . . . . . . . 25

1. The mechanics of service under the Convention . . . . . 26

2. Provisions of the Hague Convention andsubsequent reports of the Convention’s PermanentBureau and its Special Commission verify thatthe Request and Summary documents must beincluded with any service of a summons andcomplaint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

3. The purposes of the Request and Summarydocuments cannot be met unless they are servedon the defendant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

4. Additional equitable considerations support thesame mandatory requirement . . . . . . . . . . . . . . . . . . . 32

C. In view of the compulsory effect of ineffective service under the Convention, it is immaterial whether the service on RHC otherwise met minimum federal and California due process requirements concerning notice. In any event, and in light of the entire record, due process requirements were not met . . . . . . . . . . . . . . . . . . . 34

D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

II. APPELLEES MAY NOT SEEK ENFORCEMENT OF THEIRPRC JUDGMENT IN THE PRESENT DISTRICT COURTACTION BECAUSE THE JUDGMENT WAS NO LONGERENFORCEABLE IN THE PRC AT THE TIME THE PRESENTACTION WAS FILED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37


iv

A. The relevant PRC and California statutes show that the PRC’s six-month statute of limitations for enforcementcontrols the result here . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

1. The PRC’s statutes: Articles 219 and 266 . . . . . . . . . 37

2. Upon receipt of a request for enforcement of ajudgment from the PRC, California would applethe PRC’s six-month limitation period . . . . . . . . . . . . . 38

3. Rules of statutory construction also supportthis result . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

B. An inequitable precedent would ensue if the district court’s decision on the enforcement issue is upheld . . . . . . . 48

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

CERTIFICATE OF COMPLIANCE WITH RULE 32(a)(7) . . . . . . . . . . . . 51

STATEMENT OF RELATED CASES . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

//////


v

TABLE OF AUTHORITIES

Cases: Page(s):

Arias v. Superior Court,46 Cal.4th 969, 95 Cal.Rptr.3d 588 . . . . . . . . . . . . . . . . . . . . . . . . 47

Brockmeyer v. May,383 F.3d 796 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 26

Burda Media, Inc. v. Viertel,417 F.3d 292 (2d Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Direct Mail Specialists, Inc. v. Eclat Computerized Tech,840 F.2d 685 (9th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 34

Disability Law Center of Alaska, Inc. v. Anchorage School Dist., 581 F.3d 936 (9th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Dupree v. Holman Professional Counseling Centers, 572 F.3d 1094 (9th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Federal Trade Com. v. Mandel Brothers, Inc.,359 U.S. 385, 79 S.Ct. 878, 3 L.Ed.2d 893 (1959) . . . . . . . . . . . . . 30

Fleming v. Pickard, 581 F.3d 922 (9th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21

Guiness PLC v. Ward, 955 F.2d 875 (4th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Honda Motor Co. v. Superior Court,10 Cal.App.4th 1043, 12 Cal.Rptr. 861 (1992) . . . . . . . 23, 24, 31, 36

Hubei v. Robinson Helicopter Company, Inc.,2008 WL 2873355 (9th Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . 52


vi

In re Northern Illinois Development Corp.,324 F.2d 104 (7th Cir. 1963), cert. den. 376 U.S. 938 . . . . . . . . . . . 4

Island Territory of Curacao v. Solitron Devices, Inc., 489 F.2d 1313 (2d Cir. 1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Jorge G. v. Maria G.,164 Cal.App.4th 125, 79 Cal.Rptr.3d 562 (2008) . . . . . . . . . . . . . . 36

Lundgren v. Deukmejian. 45 Cal.3d 727, 248 Cal.Rptr. 115 (1988) . . . . . . . . . . . . . . 28, 45, 47

Manco Contracting Co. (W.L.L.) v. Bezdikian,45 Cal.4th 192, 85 Cal.Rptr. 233 (2008) . . . . . . . . . . . 42, 44, 45, 48

Renee v. Duncan, 573 F.3d 903 (9th Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . 20, 21

Seetransport Wiking Trader Schiffahrtsgesellschaft MBH & Co.Kommanditgesellschaft v. Navimpex Centrala Navala,

989 F.2d 572 (2d Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Societe Nationale Industrielle Aerospatiale v.United States District Court,

482 U.S. 522, 107 S.Ct. 461, 96 L.Ed.2d 461 (1987) . . . . . . . . . . . 27

V. Corp. Ltd. v. Redi Corporation (USA), 2004 WL 2290491 (S.D.N.Y. 2004) . . . . . . . . . . . . . . . . . . . . . . . 41

Volkswagenwerk Aktiengesell-Schaft v. Schlunk, 486 U.S. 695, 699-700, 108 S.Ct. 2104, 100 L.Ed.2d 722 (1988) . . . . . . . . . . . . . . . . . . . . . 20, 23, 26, 27, 35

//////


vii

Statutes, Rules, Treaties and Constitutions:

California Code of Civil Procedure section 337.5 . . . . . . . . . . . . . . . 43, 44

California Code of Civil Procedure section 343 . . . . . . . . . . . . . . . . . . . . 44

California Code of Civil Procedure section 413.10 . . . . . . . . . . . . . . 23, 31

California Code of Civil Procedure, (Uniform Foreign Money-Judgments Recognition Act (“UFMJRA”),

(former) section 1713 . . . . . . . . . . . . . . . . . . . . . . . 39, 43, 44, 46, 48

California Code of Civil Procedure, (Uniform Foreign CountryMoney Judgments Recognition Act (“UFCMJRA”),section 1713 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 42, 43, 46, 48

California Code of Civil Procedure, UFMJRA,(former) section 1713.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 40, 45

California Code of Civil Procedure, UFMJRA,(former) section 1713.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

California Welfare & Institutions Code section 300 . . . . . . . . . . . . . . . . . 36

Federal Rules of Civil Procedure, Rule 4 . . . . . . . . . . . . . . . . . . . 3, 34, 35

Hague Convention on Service Abroad of Judicial andExtrajudicial Documents (“Hague Convention”) . . . . . . . . . . . . . . . passim

Hague Convention, Article 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Hague Convention, Article 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Hague Convention, Article 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 29, 30

Hague Convention, Article 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 29, 31


viii

People’s Republic of China Civil Procedure Law,Article 141 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40


People’s Republic of China Civil Procedure Law, Article 219 . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19, 37, 38, 40, 41, 43


People’s Republic of China Civil Procedure Law, Article 266 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 37, 38, 44

United States Constitution, Art. VI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

28 U.S.C. section 1332(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Miscellaneous:

Kuslan, AsiaBizBlog (August 24, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Report of the Special Commission on the Practical Operation of the Hague Convention, ¶ 29 (Feb. 2009) . . . . . . . . . . . . . . . . . . . . . . 29

The Random House Dictionary of the English Language,(2d ed., unabr.), p. 83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

The Random House Dictionary of the English Language,(2d ed., unabr.), pp. 424, 644, 718 . . . . . . . . . . . . . . . . . . . . . . . . 45


1 Plaintiff-appellees are two companies located in the PRC: Hubei Gezhouba Sanlian Industrial Co., Ltd.; and Hubei Pinghu CruiseCo., Ltd. For convenience, we will refer to them simply as “appellees.”

1

INTRODUCTION

On March 22, 1994, a helicopter manufactured by Robinson

Helicopter Company, a California corporation (“RHC”), crashed into the

Yangtze River in the People’s Republic of China (the “PRC”). Since the

crash, plaintiff-appellees1 have sought to obtain damages from RHC for

loss of property and profits, claiming a manufacturing defect caused the

crash rather than a violent storm, as asserted by RHC.

From 1994 through 2001, appellees pursued their claims

without success with a lawsuit in California’s Superior Court, motions and

an appeal in California, a lawsuit in the PRC, and a request for arbitration

before an international arbitration tribunal that was rejected because RHC

had never agreed to arbitrate any dispute with either of the appellees. In

2001, appellees filed a second lawsuit in the PRC, which resulted in a

multi-million dollar judgment that appellees now seek to enforce through an

action filed in the district court.

This is the second appeal from judgments of the district court in

the enforcement action. The first (summary) judgment was in favor of


2

RHC, based on a finding that the second PRC action had been untimely

filed. On appellees’ appeal, this Court reversed, finding that the PRC

action had been timely filed. This Court then remanded to the district court

with directions to make findings on other legal issues raised by RHC that

the district court had not reached.

On remand, the district court: conducted a bench trial; made

factual and legal findings in an attempt to comply with this Court’s

directions; rejected the grounds asserted by RHC that had not been

reached in the first judgment; and entered a new, multi-million dollar

judgment enforcing the PRC judgment against RHC.

RHC now appeals the new judgment on two independent legal

grounds:

! Appellees attempted to serve RHC with process for their

most recent PRC action by the mandated procedure of the Hague

Convention on Service Abroad of Judicial and Extrajudicial Documents (the

“Hague Convention” or the “Convention”). However, the service on RHC

did not include documents required by the Convention and was therefore

ineffective to confer jurisdiction on the PRC court. The district court erred

in concluding otherwise.


3

! The district court also erred in concluding that appellees

could seek to enforce their PRC judgment here, under a 10-year California

statute of limitations, although it was undisputed that appellees could no

longer enforce their PRC judgment in the PRC because of that country’s

six-month statute.

As we explain in the remainder of this brief, the new judgment

must be reversed as a matter of law on either or both of the above grounds

and this matter should finally become final.

STATEMENT OF JURISDICTION

The district court heard this action on the basis of diversity of

citizenship. (28 U.S.C. sec. 1332(a)(2) .)

This appeal is from a final judgment that disposed of all claims,

following a prior appeal and a remand from the Ninth Circuit Court of

Appeals in Case No. 07-55649. (ER 58-60; 28 U.S.C. sec. 1291.)

The district court entered the present judgment on August 12,

2009. (ER 14-16, 70-71.) RHC filed a timely Notice of Appeal on October

8, 2009, within 30 days of the September 25, 2009 order denying RHC’s

timely motion for new trial. (ER 1-3; F.R.A.P. sec. 4(a)(4)(A)(v).)


4

ISSUES PRESENTED

This appeal presents two issues, each of which independently

supports reversal of the district court’s judgment:

1. Was appellees’ attempt to serve RHC with process for their

second action in the PRC, pursuant to the Hague Convention, ineffective

for failure to serve documents required by the Convention?

2. May appellees enforce their PRC judgment in their present

district court action even though the PRC judgment was no longer

enforceable in the PRC at the time the present action was filed?

STATEMENT OF THE CASE

A. Background – prior to the first appeal.

(We recite the case’s history prior to the first appeal, based on

the district court’s fact findings (see ER 18-22) and on appellees’ summary

of the Excerpts of Record from that appeal (Case No. 07-55649). We

request this Court to take judicial notice of those excerpts. (See In re

Northern Illinois Development Corp., 324 F.2d 104, 106 (7th Cir. 1963),

cert. den. 376 U.S. 938 [“...we do accede to appellants’ requests that we


2 References to the Excerpts of Record on this appeal will bedenoted as “ER.” References to excerpts from the prior appeal will bedenoted as “Prior ER.” References to the two-volume Reporter’sTranscript will be denoted, for example, as “1 RT [page number(s)].

3 Appellees have not contended and the district court made nofinding or conclusion that the latter part of RHC’s agreement constituted awaiver of or an estoppel to assert either of the issues presented on thisappeal. RHC’s general counsel specifically testified there was no suchwaiver in connection with the motion or otherwise. (See 1 RT 65-67.)

5

take judicial notice of the record in the previous appeal in our consideration

of the issues now presented.”])2

On March 14, 1995, appellees filed an action in the Los

Angeles Superior Court against RHC, alleging that “RHC had designed and

manufactured a model R-44 helicopter that crashed into the Yangtze River

in the PRC on March 22, 1994.” Appellees sought damages “based on

theories of negligence, strict liability, and breach of implied warranty.” (ER

17, Finding No. 3.)

“RHC moved to stay or dismiss the California State Action on

the ground of forum non conveniens. In support of its motion, RHC argued

the PRC was a more suitable and convenient forum for the litigation ....

RHC agreed to submit to the jurisdiction of the appropriate court in China,

toll the statute of limitations during the pendency of the California State

Action, and to abide by any final judgment rendered in China.3 The motion


6

was granted [on November 8, 1995] and the California State Action was

stayed.” (ER 18, Finding No. 4.) Appellees appealed the decision. (Prior

ER 41, 241-243.)

In December 1995, while their appeal from the Los Angeles

Superior Court’s stay order was still pending, appellees filed their first

action against RHC in the PRC. (Prior ER 114-117.)

On December 27, 1995, The PRC court dismissed the action

on the ground that the purchase agreement for the helicopter contained a

provision requiring arbitration. (Prior ER 244.) Appellees then filed a

motion in the Los Angeles Superior Court to lift the stay on the ground

there was no available court in the PRC. (Prior ER 110, 112.) On

February 25, 1997, the motion was denied “pending the outcome of

[appellees] appeal.” (Prior ER 112.)

On July 7, 1997, the California Court of Appeal filed its decision

affirming the stay order. (Prior ER 112.) On November 26, 1997, after the

Court of Appeal’s decision had become final, appellees filed a second

motion in the Los Angeles Superior Court to lift the stay. (Prior ER 113-

114.) The motion was denied. (Prior ER 127.)

Appellees next initiated an arbitration against RHC before an


7

international arbitration tribunal in Los Angeles. (Prior ER 234.) On

January 27, 2000, the arbitrator ruled that he lacked jurisdiction because

RHC was not a party to the helicopter’s purchase agreement. Rather, the

agreement was made with and the helicopter sold by an independent

dealer in the PRC. (Prior ER 239.)

Next, on January 14, 2001, appellees filed their second PRC

lawsuit against RHC. (ER 18, Finding No. 5; Prior ER 266-277.)

In July 2001, appellees attempted unsuccessfully to initiate

service on RHC under the Hague Convention. Separately, they sought

unsuccessfully to make service by publication in the PRC and by a posting

on the PRC court’s bulletin board. (Prior ER 245, 256-259.)

Then, a year later in July 2002, appellees again sought to serve

RHC under the Hague Convention. (Prior ER 260-262.) On August 5,

2002, the U. S. Department of Justice, Office of Foreign Litigation, Civil

Division, reported that service had not been made because RHC had

moved “over six years ago.” (Prior ER 246-247.)

Over a year later, on September 2, 2003, the PRC court

initiated another (third) attempt at service under the Convention. (Prior ER

263-265.) Months later, on February 10, 2004, an official process service


8

contractor to the U. S. Department of Justice received a request from the

PRC Ministry of Justice to serve RHC with a summons, complaint and

other documents that included a Request for Service Abroad and a

Summary of the Document to be Served. (Prior ER 278, 280-281.)

On February 17, 2004, an unidentified person “served” the

summons and complaint and other documents on RHC at its facility in

Torrance, California. (ER 19, Finding No. 6.) The papers “notified RHC of

a trial or hearing set for 9:00 a.m. on March 25, 2004, before the [PRC]

Higher Court.” (ER 19, Finding No. 6, lines 7-8.) However, as found by the

district court in response to RHC’s new trial motion, the documents served

did not include the Request for Service Abroad or the Summary of the

Document to be Served.” (ER 6, lines 25-27.)

“The process server, through the United States Department of

Justice’s Office of International Judicial Assistance, completed and

returned to the [PRC] Court the Certificate (Ex. 19-5) showing compliance

with [the Hague Convention].” (ER 19, line 28 - 20, line 5. See also, ER

55 [copy of Ex. 19-5].)

RHC’s general counsel, Mr. Goetz (see 1 RT 43), sent copies

of the documents served on RHC inter alia to RHC’s Chinese dealer, who


9

told him they would send a representative to the March 25, 2004

proceeding. (ER 19, Finding No. 6d, lines 23-26.) “The representative was

barred from the hearing because she was not a party.” (ER 19, Finding

No. 6d, lines 26-27.)

RHC did not attend the March 25, 2004 proceeding or request

a continuance. (ER 20, Finding No. 7.)

The March 25, 2004 proceeding was a trial based on evidence

submitted by appellees that resulted in a December 10, 2004 multi-million

dollar judgment – stated in Chinese Yuan – against RHC. (ER 20-21,

Findings Nos 7a-f.)

“RHC did not challenge personal jurisdiction or the adequacy of

service of process. RHC did not appeal from the PRC judgment.” (ER 21,

Finding No. 8.)

“On April 20, 2005, RHC was served with Chinese and English

translations of the PRC Judgment.” (ER 21, Finding No. 9.)

“On March 24, 2006, [appellees] filed their complaint in this

[district court ] action seeking to enforce the PRC Judgment against RHC

pursuant to the Uniform Foreign Money-Judgments Recognition Act

(“UFMJRA”), codified at former California Code of Civil Procedure sections


10

1713-1713.8" (ER 22, Finding No. 11.)

“On March 22, 2007, [the district court] granted Summary

Judgment in favor of [RHC] on the grounds that the statute of limitations

had expired before the Chinese lawsuit was filed.” (ER 22, Finding No.

12.)

B. This Court’s decision on the first appeal, including its

directions to the district court on remand.

This Court reversed the above judgment, in a memorandum

decision filed July 22, 2008, holding that “the tolling provision [of the Los

Angeles Superior Court’s stay order] remained in place” when appellees

filed their action in the PRC in January 2001 and “there was no basis for

finding that enforcement of the PRC judgment would violate California’s

public policy against stale claims.” (ER 58-60; quotations at p. 59.)

The decision also recited that the service of process issue

could not provide a separate basis for the summary judgment because

material issues of fact needed to be determined. (ER 59.)

This Court thus remanded the case to the district court with

directions to make findings on three fact issues and one legal issue


11

relating to appellees’ attempt at service of process in this matter: (1) the

fact issue “whether Elizabeth Rougeau [an RHC employee] was authorized

to receive service for RHC”; (2) the fact issue “whether [Rougeau] was

given a ‘Summary of the Document to be served’ or a ‘Request for Service

Abroad”; (3) the fact issue “whether RHC received adequate notice of the

PRC action”; and (4) the legal issue whether service of process under the

Hague Convention must also strictly comply with federal or state rules of

service so that the foreign judgment may be enforced under California

statutes or whether “a more general due process concept of notice is

sufficient.” (ER 59-60.)

C. The proceedings on remand to the district court.

On remand, the district court conducted a bench trial, heard

evidence and arguments, and ordered and received post-trial briefing.

(See ER 17, lines 22-25.) After making the fact findings and conclusions

of law discussed below, the court entered a judgment in favor of appellee

Hubei Gezhouba Sanlian Industrial Co., Ltd., totaling $1,912, 294.03, and

in favor of appellee Hubei Pinghu Cruise Co., Ltd., totaling $4,531,569.02.,

plus costs and post-judgment interest to each. (ER 14-16.)


12

Answering this Court’s remand directions, the district court

found that Ms. Rougeau was impliedly authorized to receive service on

behalf of RHC and that the documents left at RHC’s receptionist’s desk

were “served” on her. The court also found that Mr. Goetz actually

received those documents later. (ER 19, ¶ 6, 23, ¶ 3a.) The findings

about Ms. Rougeau were disputed by RHC at the trial. However, although

not conceded by RHC, these findings are not challenged on this appeal.

The district court also addressed the remanded fact issue

“whether RHC received adequate notice of the PRC action” and this

Court’s question whether service under the Convention “must strictly

comply with federal or state rules of service ... or whether a more general

due process concept of notice is sufficient.” The court concluded,

“Service of process in this case was sufficient to satisfy Federal Rule of

Civil Procedure 4(d)(3) as interpreted in Direct Mail Specialists, Inc. v.

Eclat Computerized Tech., 840 F.2d 685, 688 (9th Cir. 1988).” (ER 23,

lines 10-12.) The court also concluded, “Service of process was proper

under Federal Rule 4, the 9th Circuit Direct Mail ruling, and the Hague

Convention.” (ER 29, lines 17-18.) However, as we explain in Argument I

below, the ineffective service under the Convention renders these findings


13

and conclusions both erroneous and moot.

Finally, after RHC pointed out in its new trial motion that the

district court had omitted a finding directed by this Court, the district court

found “that neither the ‘Summary of the Documents to be Served’ nor the

‘Request for Service Abroad’ was served on [RHC] in this case,” but that

this fact “does not alter” the result reached by the court. (ER 6, lines 26-

27; 7, line 12.) As we further explain in Argument I below, this finding

actually compels the conclusion that service under the Convention was

ineffective, which in turn requires reversal of the present judgment entered

by the district court.

On the issue whether appellees timely filed their present

enforcement action, the district court concluded California’s 10-year statute

of limitations would apply, thus rendering the filing timely. (ER 9, line 18 -

10, line 3.) This conclusion is legally erroneous, based on a correct

interpretation and application of California’s law and PRC’s six-month

statute of limitations for enforcement of judgments against foreign entities.

(See Argument II, below.)

///

///


4 This summary is based largely on testimony given by TimGoetz, RHC’s general counsel. The district court made no specific factfindings concerning much of it, although the record, including argument byappellee’s counsel, shows there was no dispute as to the facts recited byMr. Goetz. Rather, the debate was about the impact of those facts on theissues before the district court.

14

STATEMENT OF THE FACTS

Some of the facts relevant to the issues on this appeal are

contained in the district court’s findings recited above. We recite here

testimony and other evidence adduced at the trial conducted after the first

appeal and related to the issues presented on this appeal.

A. RHC’s actions after receiving the documents served on it

on February 17, 2004.4

Tim Goetz, RHC’s general counsel testified at length

concerning why RHC did not appear at the March 25, 2004 proceeding in

the PRC or take any formal action afterwards, until the present

enforcement action was filed in the district court. (1 RT 42-85.)

For example, Goetz described several concerns he had about

the legitimacy and legal effect of the documents served on RHC on

February 17, 2004. “... I didn’t know who left [the documents] in the


15

receptionist’s area, on whose behalf they were left at the reception area.

There was no indication of who the documents were to be delivered to....

[I]t was very unusual to get documents of that nature.” (1 RT 50, lines 1-5.)

Goetz was also concerned because RHC is frequently involved

in lawsuits filed overseas and “in all those other cases where we have

been involved in litigation in ... foreign countries we have received the

Hague [Request and Summary] documents ....” (1 RT 65, lines 19-21.

See also 1 RT 73, lines 11-14 [“... I was accustomed to seeing the Hague

documents in any litigation that was filed in foreign countries, and I was

concerned whether or not things were being done properly.”])

Goetz also noted that, although one of the served documents

indicated there would be a court trial on the March date, other documents

such as the summons merely described the proceeding as a court

session.” (1 RT 45-46.)

Goetz contacted a law firm, Dorsey & Whitney, with offices in

the United States and in Hong Kong and with expertise in Chinese law, and

gave them copies of the served document. He was told the firm was not

sure what the documents meant or what the nature of the proceeding on

March 25, 2004 would be. (1 RT 46-47.) They did not advise him that


16

RHC should appear at the proceeding or take any affirmative action in the

PRC to protect its interests. (1 RT 75.) Instead, based on the documents,

they advised “that there was no way that that could be proper service of

process.” (1 RT 75; quotation at lines 24-25.)

Goetz also sent copies of the documents to RHC’s dealer in the

PRC, “particularly because the dealer in China had been a defendant in

the case that was filed in California.” (1 RT 48-49; quotation at 48, lines

21-22.) The dealer told him they would send someone to the hearing and

later informed him the person was not allowed in. (1 RT 49. See also ER

19, Finding No. 6d, lines 23-27.)

Goetz’s concern was also based on the fact that the

documents served revealed “something had been going on purportedly in

China since 2001 and we had not been a party to anything, we were very

concerned why we would be receiving something as late as February of

2004, or why someone left something in the reception area in February of

2004 for some type of court session a month later.” (1 RT 48, line 24 - 49,

line 4. See also 1 RT 73.)

Goetz’s suspicions were also aroused because, at the time of

appellees’ motion in 2000 to lift the Los Angeles Superior Court stay order,


5 Separately, RHC entered into modest settlements of a LosAngeles Superior Court action filed on behalf of two of the three helicopterpassengers who died as a result of the crash.

17

appellees’ motion papers recited their unsuccessful attempts to file an

action in the PRC. (1 RT 67.) Consequently, Goetz requested that

appellees’ counsel advise him should they ever intend to file another action

in the PRC. (1 RT 68-69.) Appellees’ counsel, who were not appellees’

present counsel, never contacted Goetz about any such intent or, prior to

the service on RHC on February 17, 2004, that they had actually filed such

an action on January 21, 2001. (1 RT 69-70.)

Nor did appellees or their attorneys or anyone from the PRC

court contact RHC to inquire whether RHC intended to appear at the

March 25, 2004 proceeding or to advise that the proceeding would be a

trial that could take place in RHC’s absence. (1 RT 70-71.)

Goetz did not know whether a trial had in fact been held in

March 2004, and he and RHC heard nothing further about the proceeding

in the PRC until April 20, 2005, when RHC received in the mail a copy of

the PRC judgment. (ER 21, Finding No. 9; 1 RT 51, 53, 78.)

After the 1994 helicopter crash, RHC intended to present a

defense in a proper action by appellees.5 Goetz and RHC’s president,


18

Frank Robinson, had gathered evidence to show the helicopter crash had

not been caused by a manufacturing defect but rather by violent weather.

These efforts included interviewing the helicopter pilot and obtaining his

declaration, obtaining statements from eyewitnesses, and obtaining

information from the PRC government’s investigative agency that it could

not determine the cause of the crash. (1 RT 71-72, 184-186.)

B. The experts’ testimony concerning timeliness of the

enforcement action in the district court.

RHC’s expert on PRC law, Mr. Shen, testified (by means of his

report and deposition admitted in evidence) that the PRC judgment was

“final” and “conclusive,” but not “enforceable,” when appellee filed their

present district court action. Shen relied primarily on Article 219 of the

PRC’s civil procedure law that provided a six-month period of enforceability

of judgments against a foreign entity. (See 1 RT 123.)

Appellee’s expert on PRC law, deLisle, agreed with Shen that

the judgment was final and conclusive when the present action was filed,

but opined that the judgment was also still “enforceable” at that time. (1

RT 122.) DeLisle agreed that Article 219 “provides that in the case of


19

parties who are not natural persons – organizations, enterprises

corporations – there is a six-month period during which a party is to seek

enforcement of a Chinese court’s judgment in a Chinese court, which is

what article 219 speaks to; that is, it speaks to questions of going to a

Chinese court to seek enforcement of a judgment.” (1 RT 123, lines 14-

20.)

However, in answer to the question whether Article 219 should

apply “to efforts to enforce a Chinese judgment in another country such as

in this action,” deLisle responded, “My view is that it does not. There are

special provisions at the end of the civil procedure law, a chapter on cases

involving a foreign interest .... And most of those provisions deal with

matters of litigation involving foreign parties being brought in Chinese

courts .... [¶] ... but there is also an article 266 provision that refers to the

enforcement of judgments, and that provision does not state a time limit.”

(1 RT 123, line 24 - 124, line 13.) DeLisle then opined that it would be

“likely” that “Chinese law would regard this question ... to be governed by

the ... enforcing state court’s rules on such matters.” (1 RT 124, lines 19-

23.

(For convenience, additional facts on this issue, including the


20

relevant provisions of the PRC civil procedure law articles, and the district

court’s conclusions of law, will be stated in Argument II, below.)

PRESERVATION OF ISSUES

Each issue presented here was raised by RHC prior to the first

judgment (see ER 58-61 [Memorandum decision on first appeal discusses

both issues]) and before, during and after the trial that followed this Court’s

remand order (see ER 38-40 [RHC’s trial brief], RT 12-21, 220-241 [RHC’s

counsel’s opening statement and closing argument], ER 11-13 [RHC’s

Motion for New Trial]).

THE STANDARDS OF REVIEW

The service of process issue (Argument I) is reviewed de novo

because it presents a legal question involving interpretation of an

international treaty, the Hague Convention, based on facts found by the

district court. (See Volkswagenwerk Aktiengesell-Schaft v. Schlunk, 486

U.S. 695, 699-700, 108 S.Ct. 2104, 100 L.Ed.2d 722 (1988). See also,

Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009); Renee v. Duncan,

573 F.3d 903, 908 (9th Cir. 2009).)


21

The enforceability issue (Argument II) is also reviewed de novo

because it presents a legal question involving interpretation and application

of PRC and California statutes. (Fleming v. Pickard, supra, 581 F.3d 922,

925; Renee v. Duncan, supra, 573 F.3d 903, 908.) Even if this issue is

viewed as a mixed question of law and fact, because expert testimony was

introduced concerning PRC law, review is de novo because California law

controls the outcome – as we explain in Argument II below. (Cf. Disability

Law Center of Alaska, Inc. v. Anchorage School Dist., 581 F.3d 936, 938

(9th Cir. 2009); Dupree v. Holman Professional Counseling Centers, 572

F.3d 1094, 1097 (9th Cir. 2009) [Court of Appeals reviews district court’s

interpretation of a statute de novo and court’s factual findings for clear

error].)

///

///


22

LEGAL DISCUSSION

I. APPELLEES’ ATTEMPT TO SERVE RHC WITH PROCESS FOR

THEIR ACTION IN THE PRC WAS INEFFECTIVE FOR FAILURE

TO SERVE ALL THE DOCUMENTS REQUIRED BY THE HAGUE

CONVENTION. THE PRC COURT THUS DID NOT ACQUIRE

JURISDICTION OVER RHC.

A. Compliance with the Hague Convention is “mandatory”

where service of process is sought by one signatory

country on a defendant in another signatory country.

The Hague Convention was adopted in 1965. (See, e.g., ER

42.) There is no dispute that both the PRC and the United States are

signatories to the Convention.

Article 1 of the Convention provides:

“The present Convention shall apply in all cases, in civil

or commercial matters, where there is occasion to transmit a judicial

or extrajudicial document for service abroad.” (Emphasis added.)

The Supreme Court, this Circuit and California courts have thus


23

held that “compliance with the Convention is mandatory in all cases to

which it applies.” (Emphasis added.)

The United States Supreme Court: “[C]ompliance with the

Convention is mandatory in all cases to which it applies ....”

(Volkswagenwerk Aktiengesell-Schaft v. Schlunk, supra, 486 U.S. 694,

705; emphasis added. )

The Ninth Circuit: “Because service of process was attempted

abroad, the validity of that service is controlled by the Hague Convention,

to the extent that the Convention applies.” (Brockmeyer v. May, 383 F.3d

798, 801 (9th Cir. 2004).)

California case law: “Plaintiff argues that the Hague

Convention is not controlling over California statutes.... However, this

argument is entirely without support; the preemptive effect of the Hague

Convention as to service on foreign nationals is beyond dispute.” (Honda

Motor Co. v. Superior Court, 10 Cal.App.4th 1043, 1049, 12 Cal.Rptr. 861

(1992); emphasis added.)

California statutory law: California Code of Civil Procedure

section 413.10 provides in pertinent part as follows:

“... a summons shall be served on a person:


24

“(c) Outside the United States, as provided in this

chapter .... These rules are subject to the provisions of the

Convention on the ‘Service Abroad of Judicial and Extrajudicial

Documents’ in Civil or Commercial Matters (Hague Service

Convention).” (Emphasis added.)

Thus, California defers, as it must, to the mandatory requirements of the

Convention.

Appellees’ argument below, “that the Hague Convention

doesn’t require technical compliance,” has been rejected. (See Honda

Motor Co. v. Superior Court, supra, 10 Cal.App.4th 1043, 1049 [Plaintiffs

argued compliance with the Convention was unnecessary where defendant

had notice of the action, its attorneys stood ready to defend the action and

no practical aim could be accomplished by quashing the service that did

not comply with the Convention. The California Court of Appeal rejected

the argument: “However, plaintiff cites no authority permitting a California

court to authorize an action to go forward upon an invalid service of

process. The fact that the person served ‘got the word’ is irrelevant.... [A

prior California appellate] court felt it could not rewrite the work of the

California Legislature; how much less are we able to rewrite a federal


25

treaty.”])

Finally, lest there be any doubt, we quote the following

additional holding in Volkswagenwerk:

“By virtue of the Supremacy Clause, U.S. Const., Art. VI,

the Convention pre-empts inconsistent methods of service prescribed

by state law in all cases to which it applies.” (486 U.S. at 699.)

B. Inclusion of the Request and Summary documents with the

other documents served on RHC is mandatory to

accomplish effective service under the Hague Convention.

This Court’s remand order on the first appeal inter alia directed

the district court to make a fact finding “whether [RHC’s employee

Rougeau] was given a ‘Summary of the Document to be served’ or a

‘Request for Service Abroad.” ( ER 59.) The district court found, in

denying RHC’s new trial motion, that these documents were not served on

Rougeau. (ER 6, lines 25-27.)

We turn now to the key issue concerning service of process in

this matter: did the failure to include the above Hague Convention

documents with those actually served on Rougeau render the service


26

ineffective and thus deprive both the PRC court and later the district court

of jurisdiction to proceed with appellees’ action against RHC?

As we explain, the answer must be “yes,” based on (1) the

Hague Convention’s own stated requirements, (2) the purpose of those

requirements, (3) decisions of the Supreme Court and this Circuit


705; Brockmeyer v. May, supra, 383 F.3d 798, 801); (4) California cases

and its Code of Civil Procedure section 413.10; and (5) other equitable

considerations.

1. The mechanics of service under the Convention.

“The primary innovation of the Convention is that it requires

each state to establish a central authority to receive requests for service of

documents from other countries. [Citing the Convention, Art. 2.] Once a

central authority receives a request in the proper form, it must serve the

documents by a method prescribed by the internal law of the receiving

state or by a method designated by the requester and compatible with that

law. [Citing the Convention, Art. 5.] The central authority must then

provide a certificate of service that conforms to a specified model. [Citing


27

the Convention, Art. 6.] A state also may consent to methods of service

within its boundaries other than a request to its central authority. [Citing

the Convention, Arts. 8-11, 19, which are not at issue in the present case.]”


698-699.)

2. Provisions of the Hague Convention and subsequent

reports of the Convention’s Permanent Bureau and

its Special Commission verify that the Request and

Summary documents must be included with any

service of a summons and complaint.

“When interpreting a treaty, we begin with the text of the treaty

and the context in which the written words are used.” (Societe Nationale

Industrielle Aerospatiale v. United States District Court , 482 U.S. 522,

524, n. 15, 107 S.Ct. 461, 96 L.Ed.2d 461 (1987); internal quotation marks

omitted.)

Article 3 of the Hague Convention provides that a request for

service abroad shall “conform ... to the model annexed to the present

Convention” and that the “document to be served or a copy thereof [here,


6 “Annexed” means “attached” or “appended.” (The RandomHouse Dictionary of the English Language (2d ed. unabr.) p. 83.) As wediscuss below, “[w]ords used in a statute or constitutional provision shouldbe given the meaning they bear in ordinary use.” (Lundgren v.Deukmejian, 45 Cal.3d 727, 735, 248 Cal.Rptr. 115 (1988.)

7 Burda also held that service is not rendered ineffective by aclerical error regarding a third Convention model document, the Certificatethat is completed by the receiving country’s central authority or its agentand which attests to completion of the service. (417 F.3d at 301.) Such isnot the situation in the present case because the Certificate need not beincluded with the documents served on the defendant. Indeed, theCertificate form cannot even be filled out until after the service is effected.

Burda also upheld the district court’s factual finding that all therequired forms had been served on the defendant – unlike the fact findingin the present case.

28

the Summons and Complaint] shall be annexed6 to the request. The

request and the document shall both be furnished in duplicate.” (ER 43;

emphasis added.)

The “model annexed to the ... Convention” consists of a one-

page “Request for Service Abroad of Judicial or Extrajudicial Documents”

and a two-page “Summary of the Document to be Served.” (See ER 51-

53.) The model conforms to the Convention’s standards for submitting

service requests to a country’s Central Authority for receipt and service of

such requests under the Convention. (Burda Media, Inc. v. Viertel, 417

F.3d 292, 296 (2d Cir. 2005.)7

The Request for Service Abroad recites that service of process


29

is sought pursuant to Article 5 of the Hague Convention and thus that the

service is not otherwise unauthorized or impermissible. (See ER 51.)

Article 5 provides in part: “That part of the request, in the form

attached to the present Convention, which contains a summary of the

document to be served, shall be served with the document.” (See ER 44.)

The Summary of the Document to be Served has the same

function as the Request and also provides the defendant with specific

information, which may not be stated clearly or at all in the Summons and

Complaint, such as the name and purpose of the proceeding to which the

Sumons and Complaint refer, the amount in dispute, and relevant time

limits. (See ER 53,)

Despite Article 3’s directive, the summons and complaint

served on RHC were not “annexed to the request,” i.e., they were not

“attached” or “appened” or otherwise included among the documents

served. (See footnote 6, above.) And, despite Article 5's directive, the

Summary was not served, either. For these reasons alone, service on

RHC under the Convention must be deemed ineffective.

This conclusion is corroborated by a February 2009 report of a

Special Commission on the practical operation of the Convention, which


30

stated:

“The [Special Commission] strongly reaffirms that the use

of the Model Form is mandatory (Art. 3(1).” (ER 57; Report, ¶ 29;

emphasis added.)

The 2009 report also referred to a recommendation of a 1980

session of the Hague Conference’s Permanent Bureau that the model

forms accompany service “when one of the alternative channels of

transmission is used.” (ER 57; Report, ¶ 31.)

These statements evinced the Hague Commission’s underlying

assumption that such service was required by the Convention that the

Commission had sponsored in 1965. As administrative constructions of

the Convention, they are entitled to “great weight and will not be overturned

unless clearly erroneous.” (See Federal Trade Com. v. Mandel Brothers,

Inc., 359 U.S. 385, 391, 79 S.Ct. 878, 3 L.Ed.2d 893 (1959).)

///

///


31

3. The purposes of the Request and Summary

documents cannot be met unless they are served on

the defendant.

As noted above, the Request and the Summary forms include

the following: notice that service of process is sought pursuant to Article 5

of the Hague Convention and thus that the service is not otherwise

unauthorized or impermissible; specific information, which may not be

stated clearly or at all in the Summons and Complaint, such as the name of

the requesting party or entity; a statement of the purpose of the proceeding

to which the Summons and Complaint refer; the amount in dispute; and

relevant dates and time limits for a response. (See ER 51-53,)

Absent “annexation” of these documents to those served on

RHC, RHC had legitimate doubts about the authenticity and legal effect of

the documents that were received – the very problem that the Hague

Convention seeks to prevent. When combined with California’s submission

to the mandatory provisions of the Convention (see Cal. Code of Civil

Procedure sec. 413.10(c)), the conclusion of required service of the

Request and Summary forms is corroborated. (See Honda Motor Co. v.

Superior Court, supra, 10 Cal.App.4th 1043, 1049 [Plaintiffs argued


32

compliance with the Convention was unnecessary where defendant had

notice of the action, its attorneys stood ready to defend the action and no

practical aim could be accomplished by quashing the service that did not

comply with the Convention. The California Court of Appeal rejected the

argument: “However, plaintiff cites no authority permitting a California

court to authorize an action to go forward upon an invalid service of

process. The fact that the person served ‘got the word’ is irrelevant.... [A

prior California appellate] court felt it could not rewrite the work of the

California Legislature; how much less are we able to rewrite a federal

treaty.”])

4. Additional equitable considerations support the same

mandatory requirement.

RHC reasonably relied on the absence of the Request and

Summary documents from those served on it by appellees as a basis for

its conclusion that it had no obligation to respond. This conclusion was

supported by such additional facts as: RHC’s experience of always having

been served with the Request and Summons in numerous previous

instances of receiving service under the Convention (see RT ); RHC’s


8 This Court’s remand order, directing the district court to makethe fact finding regarding service of the Request and Summary documents,may also evince a view that the failure to serve those documents renderedthe service under the Convention ineffective. We can only speculate,

33

knowledge that appellees had already filed an abortive action in the PRC;

the meritless attempt to draw RHC into an international arbitration;

appellees’ unsuccessful appeal and attempts to lift the stay of the Los

Angeles Superior Court lawsuit; the overall eight and one-half year delay

since the Los Angeles Superior Court had ordered appellees to seek relief

in the PRC; and Mr. Goetz’s failure to hear from appellees’ counsel after

his request during the proceedings on appellees’ last unsuccessful effort to

lift the stay in 2000.

Finally, we observe that the PRC has never become a

signatory to the international judgment recognition treaty – a fact not

disputed in this case. This creates the following anomaly that militates

against the district court’s lax interpretation of the Hague Convention

requirements for service of process in the present case: the PRC’s

judgment which followed questionable service of process under the

Convention is enforced in the United States, but a judgment here following

proper service of process under the Convention could not be enforced in

the PRC.8


however, about what this Court must already know.

34

C. In view of the compulsory effect of ineffective service

under the Convention, it is immaterial whether the service

on RHC otherwise met minimum federal and California due

process requirements concerning notice. In any event,

and in light of the entire record, due process requirements

were not met.

The district court concluded that “[s]ervice of process in this

case was sufficient to satisfy Federal Rule of Civil Procedure 4(d)(3) as

interpreted in Direct Mail Specialists, Inc. v. Eclat Computerized Tech,

supra, 840 F.2d 685, 688). (ER 23, ¶ 3. See also ER 29, ¶ 28 [“Service of

process was proper under Federal Rule 4, the 9th Circuit Direct Mail ruling,

and the Hague Convention.”])

The references to Federal Rule 4, “as interpreted in Direct

Mail,” refer to the district court’s fact findings that Ms. Rougeau had

“authority on [her] part to receive service” and that Mr. Goetz later actually

received the documents. (See ER 23, ¶¶ 3a, 3b.) As noted above, RHC

does not contest these findings. But, they are immaterial to the issues

presented on this appeal, because service under the Convention is


35

ineffective if the required Request and Summary forms are not included

with those “actually served.”

For the latter reason, as explained above, the district court’s

conclusion (ER 29, ¶¶ 25, 28) that the service “complied with the Hague

Convention” was legally incorrect.

Finally, as also explained above, the court’s finding that

“[s]ervice of process was proper under Federal Rule 4" is of no legal

moment since compliance with the Hague Convention is a sine qua non of

effective service abroad. Compliance with Rule 4 and general due process

principles may be an additional requirement for effective service, but it is

not an alternative basis to achieve that result. Otherwise, the overriding

treaty obligation undertaken by the United States in ratifying the

Convention may simply be ignored in the circumstances of this and every

other similar case. (Cf. Volkswagenwerk Aktiengesell-Schaft v. Schlunk,

supra, 486 U.S. 695, 699 [noting the supremacy of treaty obligations].)

In addition, for all the reasons discussed above in Argument I-

B-3 and I-B-4, the district court must be deemed to have abused any

discretion it may have had in finding that the service here met the

requirements of Rule 4 and general due process principles.


36

D. Conclusion.

There is no logical reason – and appellees have suggested

none -- that the Convention would require a plaintiff to fill out the Summary

and Request forms and submit them to the agent who is to effect the

service, if those documents may then be withheld from the recipients of the

service.

For this and each of the other reasons discussed above, the

noncomplying attempt at service under the Hague Convention here means

the PRC court never acquired jurisdiction over RHC and there was no valid

judgment for the district court to enforce. (See, e.g., Jorge G. v. Maria G.,

164 Cal.App.4th 125, 134, 78 Cal.Rptr.3d 562 (2008) [“The Hague Service

Convention applies to juvenile dependency cases brought under [California

Welfare & Institutions Code] section 300. ... We conclude that service on

the parents was not proper under either Mexican or California law.

Accordingly, the defective service renders all subsequent proceedings

void, even if the party had actual notice of the proceedings.” (Citing inter

alia, Honda Motor Co. v. Superior Court, supra, 10 Cal.App.4th 1042,

1048; emphasis added.)


37

II. APPELLEES MAY NOT SEEK ENFORCEMENT OF THEIR PRC

JUDGMENT IN THE PRESENT DISTRICT COURT ACTION

BECAUSE THE JUDGMENT WAS NO LONGER ENFORCEABLE

IN THE PRC AT THE TIME THE PRESENT ACTION WAS FILED.

A. The relevant PRC and California statutes show that the

PRC’s six-month statute of limitations for enforcement

controls the result here.

Independent of the grounds in Argument I above, appellees’

PRC judgment should not have been enforced by the district court

because, under applicable PRC and California law, that judgment was no

longer “enforceable” in the PRC when the present action was filed in the

district court.

1. The PRC’s statutes: Articles 219 and 266.

We acknowledge that appellees’ expert deLisle opined that

PRC law controlled this issue to the extent the PRC would not apply its

Article 219 six-month statute of limitations to seek enforcement of the

judgment, but rather would defer to California’s 10-year statute because


9 Article 219 provides in full: “The time limit for the submission ofan application for execution shall be one year, if both or one of the partiesare citizens; it shall be six months if both parties are legal persons or otherorganizations. ¶ The above-mentioned time limit shall be calculated fromthe last day of the period of performance specified by the legal document. If the legal document specifies performance in stages, the time limit shallbe calculated from the last day of the period specified for each state ofperformance.” (Emphasis added.)

Article 266, which states no time limit, provides in full: “If aparty applies for enforcement of a legally effective judgment or writtenorder made by a people’s court, and the opposite party or his property isnot within the territory of the People’s Republic of China, the applicant maydirectly apply for recognition and enforcement to the foreign court whichhas jurisdiction. The people’s court may also, in accordance with therelevant provisions of the international treaties concluded or acceded to byChina, or with the principle of reciprocity, request recognition andenforcement by the foreign court. ¶ If a party applies for enforcement of alegally effective arbitral award made by an arbitral organ in the People’sRepublic of China handling cases involving [a\ foreign element and theopposite party or his property is not within the territory of the People’sRepublic of China, he may directly apply for recognition and enforcementof the award to the foreign court which has jurisdiction.” (Emphasisadded.)

38

the PRC’s Article 266, which discusses recognition of PRC judgments in

foreign countries, states no time limit for initiating such an effort.9

However, as stated in the Standards of Review section above,

determination of this issue is de novo because it involves interpretation of

statutes. Thus, the district court’s selection of one expert’s opinion over

the other does not relieve this appellate court of its duty to resolve the

issue as a matter of law.


10 We discuss the effect of the 2007 amendments to the UFMJRAbelow, as those amendments support RHC’s position on the effect offormer section 1713.2.

39

2. Upon receipt of a request for enforcement of a

judgment from the PRC, California would apply the

PRC’s six-month limitation period.

The beginning point of analysis is former section 1713.2 of the

California Code of Civil Procedure, which was part of California’s Uniform

Foreign Money-Judgments Recognition Act (the “UFMJRA”) (see Cal.

Code of Civil Procedure sec. 1713), in effect at the time the present action

was filed on March 24, 2006. The section provided as follows:

“This chapter applies to any foreign judgment that is final

and conclusive and enforceable where rendered even though an

appeal therefrom is pending or it is subject to appeal.” (Emphasis

added.)10

The meaning of “enforceable where rendered” controls the

resolution of the timeliness issue.

First, however, it is helpful to review the following relevant facts,

established in the district court:

! Appellees filed their present action to enforce their PRC


40

judgment on March 24, 2006, pursuant to the provisions of California’s

version of the UFMJRA.

! At that time, California Code of Civil Procedure section

1713.2 provided, as quoted above, that one requirement for enforcement

here was enforceability where the judgment was rendered.

! Article 219 of the PRC’s Civil Procedure Law established the

time period within which judgment creditors were required to commence

enforcement proceedings in the PRC, as follows:

“The time limit for the submission of an application for

execution shall be one year, if both or one of the parties are citizens;

it shall be six months if both parties are legal persons or other

organizations.” (Emphasis added.)

! Appellees and RHC are “legal persons or other

organizations,” within the meaning of Article 219. As a result, the six-

month time limit for enforcement would apply here by its own terms.

! Article 219 and other provisions of the PRC’s Civil

Procedure Law, i.e., Articles 141, 147, 158 and 249, establish that a six-

month period within which appellees could enforce their PRC judgment in

the PRC expired on December 4, 2005. Appellees’ expert deLisle


41

acknowledged that appellees could no longer have enforced their judgment

in the PRC when they filed their present enforcement action in the district

court: “– they would not have been within the six-month window under

Article 219 for seeking a Chinese court to enforce a judgment in China.”

(RT 138,-139; quotation at 138, line 25 - 139, line 2.) RHC’s Chinese law

expert, Shen Xiangman, agreed. (See RT 123, lines 4-8.)

! Appellees commenced their present action on March 24,

2006, beyond any applicable six-month limit.. (ER 63, Dkt. No. 1.)

Courts that have addressed this type of issue have consistently

looked first to the law of the country where the judgment was rendered to

determine whether the judgment was still “enforceable” or was time-barred

by that country’s law. (See, e.g., Guiness PLC v. Ward, 955 F.2d 875,

888-889 (4th Cir. 1992 [court is required to focus on the law concerning

enforceability of the country where the decree was issued]); V. Corp. Ltd.

v. Redi Corporation (USA), 2004 WL 2290491, *2, *4 (S.D.N.Y. October 9,

2004 [same]; Seetransport Wiking Trader Schiffahrtsgesellschaft MBH &

Co. Kommanditgesellschaft v. Navimpex Centrala Navala, 989 F.2d 572,

583 (2d Cir. 1993) [remanding to determine “whether the decision of the

Court of Appeals in Paris is enforceable in France”]; Island Territory of


42

Curacao v. Solitron Devices, Inc., 489 F.2d 1313, 1323 (2d Cir. 1973).

Accordingly, this court must look to the internal laws of the PRC

to determine whether enforcement of the subject PRC judgment was time-

barred in the PRC. Here, both sides’ experts agreed that the PRC

judgment was not “enforceable where rendered” when the present district

court action was filed on March 24, 2006. Therefore, appellees did not

meet the “enforceable where rendered” requirement of California’s

UFMJRA.

The district court, however, rejected this result, stating

conclusions of law that must be deemed erroneous.

For example, the district court’s Conclusion of Law No. 14

refers to the absence of a statute of limitation in the PRC’s Civil Procedure

Law “for parties applying to foreign courts for recognition of judgments

rendered in the PRC” and concludes that the “law of the foreign court

where recognition is sought dictates the limitation period for filing

recognition claims.” (See ER 25.) However, we note that California’s

former UFMJRA did not contain a statute of limitations provision, either.

(See Manco Contracting Co. (W.L.L.) v. Bezdikian, 45 Cal.4th 192, 204, 85

Cal.Rptr. 233 (2008) [California’s new uniform act, the UFCMJRA [Uniform


43

Foreign Country Money Judgment Recognition Act], “was intended

primarily to clarify provisions of the earlier act [the UFMJRA] that had led to

confusion.”])

The district court’s Conclusion of Law No. 15 refers to former

California Code of Civil Procedure section 1713.3, which provides that a

foreign judgment is “enforceable in the same manner as the judgment of a

sister state which is entitled to full faith and credit ....” (ER 25.) The district

court’s Conclusion of Law No. 16 ( ER 25-26) then relies on California

Code of Civil Procedure section 337.5, which provides for a ten-year

statute of limitations in “[a]n action upon a judgment or decree of any court

of the United States or of any state within the United States.” This

Conclusion then determined that the same ten-year period “also applies to

the filing of recognition actions under California’s [earlier] UFMJRA,” citing

Manco Contracting Co. (W.L.L.) v. Bezdikian, supra, 45 Cal.4th 192, for the

proposition that a court should apply California’s ten-year statute of

limitations to determine whether a foreign judgment is “enforceable where

rendered.” (See ER 7-8, 25-26.)

The district court rejected RHC’s reliance on the six-month limit

of Article 219, explaining: “Article 219 of Part 4, on which defendant relies,


44

does provide that an application for execution of a judgment must be made

within six months from the time of its entry. That section is a general

section referring to judgments enforced in China. Article 266 specifically

relates to the enforcement of judgments abroad. The Court is satisfied that

Article 266 controls, and that the plaintiffs’ Judgment was enforceable at

the time this action was brought.” (ER 7, line 22 - 8, line 4.)

The district court’s analysis was wrong. For example, the

court’s reliance on Manco was misplaced because that case is actually

consistent with RHC’s position. Manco involved the issue whether a

foreign country’s judgment was “final” for purposes of starting the

limitations period. Here, there is no dispute as to when the PRC judgment

became final or when the limitations period began to run. Rather, the issue

here is whether the PRC judgment was “still enforceable” when this action

was filed, so as to provide appellees with the right under the UFMJRA to

enforce it at all.

Manco concerned the question whether, in the absence of a

clear statute of limitations provision in the UFMJRA, the statute to be

applied there was four years under California Code of Civil Procedure

section 343 or ten years under section 337.5. California’s Supreme Court


11 “Enforceable” has a different meaning than “final” and“conclusive.” For example, “enforceable” is defined as “obtain[ing](payment, obedience, etc.) by force or compulsion.” “Final” is defined as “afinal result” or “precluding further controversy on the question passedupon” or as “determining all issues presented, so that no further decisionon the merits is necessary.” “Conclusive” is defined as “serving to settleor decide a question; decisive; convincing.” (The Random HouseDictionary of the English Language, supra, pp. 424, 644, 718. See alsoLundgren v. Deukmejian, supra, 45 Cal.3d 727, 735 [“[w]ords used in astature or constitutional provision should be given the meaning they bear in

45

held that the ten-year statute applied. Notably, however, there was no

issue or argument made in Manco regarding the limitation period for

enforcement of a judgment in the foreign jurisdiction, apparently because

no evidence was presented on that point. Accordingly, Manco should not

be read to apply California’s ten-year statute to the present case because

the record here shows that the PRC has a six-month statute for

enforcement of appellees’ judgment in that country.

This result is corroborated by separate holdings in Manco. For

example, Manco holds as follows:

! “... the better interpretation of section 1713.2" is that

“California courts must recognize a foreign judgment ... so long as

the judgment is final, conclusive, and enforceable in the country

where it was rendered.” (45 Cal.4th at 201, repeating the language

of section 1713.2; emphasis added.)11


ordinary use.”])

46

! California’s new act, the UFCMJRA, “was intended

primarily to clarify provisions of the earlier act [the UFMJRA] that had

led to confusion.” (45 Cal.4th at 204.) That confusion was

engendered by the absence of a statute of limiations in the UFMJRA

and was “remedied in ... the new version of the act, which states that

recognition actions must be brought ‘within the earlier of the time

during which the foreign-country judgment is effective in the foreign

country or 10 years from [that date].” (45 Cal.4th at 204; emphasis

added.) The California Legislature’s clarification in the new act of the

confusion about the statute of limitations provides strong evidence of

the Legislature’s intent when it enacted the earlier act, the UFMJRA.

(See 45 Cal.4th at 204 [referring to the Legislature’s intent to “correct

problems created by the courts’ interpretations of various provisions

of [the UFMJRA] over the years since its adoption in 1967.”])

! Finally, the UFMJRA “ensures that a foreign judgment

will not be recognized in California if it is unenforceable under the

statute of limitations, or on any other basis, in the country where it

was rendered.” (45 Cal.4th at 206.)


47

3. Rules of statutory construction also support this

result.

The district court’s analysis also fails under California’s rules of

statutory construction that “clear and unambiguous” words in a statue must

be given their ordinary meanings, unless an absurd result would ensue,

such as frustration of “the manifest purpose of the enactment as a whole.”

(Arias v. Superior Court, 46 Cal.4th 969, 95 Cal.Rptr.3d 588 (2009). See

also Lundgren v. Deukmejian, supra, 45 Cal.3d 727, 735.)

The district court’s interpretation of “enforceable” has two flaws.

First, it would give “enforceable” no separate meaning from the

requirements of “finality” and “conclusiveness.” However, Arias and

Lundgren preclude such an interpretation because the plain meaning of

“enforceable” is different than the meanings of “final” and “conclusive.”

(See footnote 11, above.)

Second, no absurd result ensues if “enforceable” is given its

plain and separate meaning. Indeed, an absurd result would ensue if

California law on this point were interpreted to give appellees greater rights

to enfoce their PRC judgment here than they were given in their own

country.


48

Lest there be any doubt on this point, the new California act,

the UFCMJRA, “was intended primarily to clarify provisions of the earlier

act [the UFMJRA] that had led to confusion.” (Manco, 45 Cal.4th at 204.)

As noted above, and relevant to the present case, Manco states that the

confusion was “remedied in ... the new version of the act, which states that

recognition actions must be brought ‘within the earlier of the time during

which the foreign-county judgment is effective in the foreign country or 10

years from [that date].’” (45 Cal.4th at 204.) This holding and Manco’s

further holding “that a foreign judgment will not be recognized in California

if it is unenforceable under the statute of limitations ... in the country where

it was rendered” lead inexorably to the conclusion that PRC Article 219's

six-month limitation period applies in the present circumstances.

B. An inequitable precedent would ensue from upholding the

district court’s decision on the enforcement issue.

In conclusion, we note two considerations that further

demonstrate the inequitable precedent that would ensue from upholding

the district court’s interpretation of the law here.

First, as noted above in Argument I, affirmance of the district


49

court’s judgment would create an anomaly in the relevant law, since the

PRC is not a signatory to a treaty with the United States for reciprocal

enforcement of judgments. Specifically, if the situation here were reversed

and a plaintiff sought to enforce an American judgment against a

defendant in the PRC, a PRC court would have no obligation to enforce it.

Second, commentators have stated that the district court’s

judgment enforcing a PRC judgment is the first of its kind and is “very

disturbing” because the PRC does not give reciprocal recognition to

American judgments. (See, e.g., Kuslan, AsiaBizBlog (August 24, 2009.)

Conversely, there is no illogic or unfairness in applying the

PRC’s six-month statute because appellees “knew all along” that they

would have to proceed in California to enforce their PRC judgment. Thus,

they could easily have undertaken their enforcement action within the six-

month period – a period of time far longer than the five weeks’ notice they

attempted to give RHC with their attempt at service under the Convention.

Based upon each of the above considerations, the judgment

here must be reversed for the independent reason that appellees’ PRC

judgment was no longer enforceable in the PRC when appellees filed their

present enforcement action in the district court.


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CONCLUSION

The judgment should be reversed because service of process

was ineffective under the mandatory requirements of the Hague

Convention and/or because the PRC judgment was no longer enforceable

in the PRC when the present enforcement action was filed in the district

court. The district court should therefore be directed to enter a new

judgment in favor of RHC.

Respectfully submitted,

Stephen E. Ronk Gary J. Lorch Gordon & Rees LLP

Tim A. Goetz

Edward J. Horowitz,A Professional Corporation

By /s/ Edward J. Horowitz Edward J. Horowitz


51

CERTIFICATE OF COMPLIANCE WITH RULE 32(a)(7)

I certify that Appellants’ Opening Brief has been proportionately

spaced using Ariel type and a typeface of 14 points. The total word count

is 9,690 words.

/s/ Edward J. Horowitz Edward J. Horowitz


52

STATEMENT OF RELATED CASES

There was a prior appeal in this case, with the same title and

parties. (Ninth Circuit Case No. 07-55649; 2008 WL 2873355.) A copy of

this Court’s decision in that case is included in the Excerpts of Record at

pages 58-60.

/s/ Edward J. Horowitz Edward J. Horowitz


53

CERTIFICATE OF SERVICE

I hereby certify that on April 6, 2010, I electronically filed the

foregoing APPELLANT’S OPENING BRIEF with the Clerk of the Court,

United States Court of Appeals, Ninth Circuit, by using the appellate

CM/ECF system.

Participants in the case who are registered CM/ECF users will

be served by the appellate CM/ECF system.

DATED: April 6, 2010

/s/ Edward J. HorowitzEdward J. Horowitz


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