Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 1 of 17 PageID #: 956
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`MARSHALL DIVISION
`
`Plaintiff,
`
`
`
`v.
`
`
`AGIS Software Development, LLC,
`
`
`
`
`
`ZTE CORPORATION, ZTE (USA) INC.,
`AND ZTE (TX), INC.,
`
`
`
`
`
`
`
`Defendants.
`
`
`
`
`
`
`Case No. 2:17-CV-00517-JRG
`
`
`
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`
`
`
`
`RESPONSE IN OPPOSITION TO AGIS’S
`MOTION FOR ALTERNATIVE SERVICE
`
`
`
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 2 of 17 PageID #: 957
`
`
`Plaintiff AGIS Software Development, LLC (“AGIS”) has filed a Motion for Alternative
`
`Service (“Motion”), seeking alternative means to serve ZTE Corporation (“ZTE Corp.”), in a
`
`case currently pending against ZTE (USA), Inc. (“ZTA”), and ZTE (TX) Inc. (“ZTX”)
`
`(collectively the “Defendants”), but AGIS has not even attempted (not once) to serve the
`
`pleading at issue (namely, the Amended Complaint) on ZTE Corp. via the Hague Convention.
`
`Further, the Fifth Circuit is clear that a foreign defendant is entitled to proper service
`
`under the Hague Convention, and ZTE Corp. should not be denied the right to correct and proper
`
`service. See Sheets v. Yamaha Motors Corp., U.S.A., 849 F.2d 179, 185 n.5 (5th Cir. 1988).
`
`AGIS seeks extraordinary relief from this Court—an exemption from serving the
`
`Amended Complaint under the Hague Convention— but the issue of service is AGIS’s own
`
`dilly-dallies. AGIS did attempt to serve the original Complaint via the Hague Convention on
`
`ZTE Corp., but AGIS then later filed an Amended Complaint, which rendered the original
`
`Complaint a legal nullity. Yet, although the Amended Complaint became the operative pleading,
`
`AGIS never served or even attempted to serve ZTE Corp. with the new, amended pleading.
`
`Given the failure by AGIS to attempt to serve the Amended Complaint on ZTE Corp.,
`
`there is no basis for this Court to consider the requests for alternative service, as none of the
`
`alternatives can be justified under the Federal Rules. See Fed. R. Civ. P. 4(c)(1). In simple
`
`terms, AGIS’s unexplained delay in seeking service of the operative pleading undermines its plea
`
`for alternative service. Also, AGIS’s two requests for alternative means of service—either (1)
`
`service on the U.S. Defendants or (2) service on other U.S. counsel—do not comport with Rule
`
`4(h) for service on foreign defendants, and the plea also entirely ignores the distinction between
`
`4(h)(1) and 4(h)(2). For these reasons, this Court should deny AGIS’s motion, and it should
`
`enforce the proper Hague Convention procedures for foreign service of the Amended Complaint.
`
`
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 3 of 17 PageID #: 958
`
`I.
`
`FACTUAL BACKGROUND
`
`On June 21, 2017, AGIS filed the original Complaint, asserting four patents, against two
`
`ZTE entities, namely, (1) ZTX and (2) ZTE Corp. Dkt. 1. AGIS then delayed several months
`
`before seeking service of ZTE Corp., a foreign defendant in China. AGIS did not begin the
`
`process of serving ZTE Corp. through the Hague Convention in China until approximately
`
`August 2017, two months after filing the original Complaint. Dkt. 64 at 1. AGIS then waited
`
`another four months—until December 26, 2017—before checking with its vendor on the service
`
`of ZTE Corp. Dkt. 64-2. Next, AGIS waited another two months—until February 19, 2018, and
`
`eight months in total from the original Complaint filing date—before checking on the service
`
`vendor again. Dkt. 64-3. During this period of delay, AGIS never (1) sought to expedite the
`
`service process with the Chinese Central Authority; (2) contacted the Chinese Central Authority
`
`itself; or (3) sought an explanation from the Ministry of Justice in China regarding the service
`
`timeline of the original Complaint (other than hearsay from its own service processor). Id.
`
`In the meantime, on September 26, 2017, ZTX (which had been served) filed a Motion to
`
`Dismiss AGIS’s original Complaint, for (1) failure to state a claim and (2) improper venue, or in
`
`the alternative, to transfer. Dkt. 28. Rather than responding to ZTX’s motion, AGIS took
`
`advantage of Rule 15(a)(1)(B) and amended its Complaint, without leave of Court, on October
`
`17, 2017, Dkt. 32, which was twenty-one days after ZTX’s motion. In the voluntary amendment
`
`of the original Complaint, which allowed AGIS to avoid responding to ZTX’s motion, AGIS
`
`added new legal theories of infringement, including a fifth patent, and added new theories
`
`against the newly-added ZTE defendant, ZTA. Dkt. 32. Thus, the Amended Complaint mooted
`
`ZTX’s motion and required an additional round of briefing. This decision to file an Amended
`
`Complaint, aimed at keeping Defendants in this inconvenient forum, rendered the original
`
`2
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 4 of 17 PageID #: 959
`
`Complaint non-operative and triggered AGIS’s obligation to serve the Amended Complaint on
`
`all parties in the case. See King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994) (“[an] amended
`
`complaint supersedes the original complaint and [thus] renders it of no legal effect”).
`
`Next, instead of attempting service of the operative pleading, that is, the Amended
`
`Complaint on ZTE Corp. through the Hague Convention, AGIS then did nothing. AGIS did not
`
`contact its service processor in China and did not attempt to effectuate service of the operative
`
`pleading (the Amended Complaint). Dkt. 64-3. In fact, AGIS made no attempt of the new
`
`pleading at service at all, and instead AGIS waited more than six months after filing the
`
`Amended Complaint to act on it—which was ten months after the original Complaint—and then
`
`requested a waiver of service. Further, at that late date (in April 2017), AGIS refused to agree to
`
`proper service of the Amended Complaint, as AGIS asserted that no further service activities
`
`were needed. AGIS had ample time to serve the Amended Complaint, and indeed, if AGIS had
`
`acted to try to serve ZTE Corp. properly, it is possible service would be complete. But, instead,
`
`due to inaction by AGIS (and unexcused delay), the lack of service of ZTE Corp. falls squarely
`
`on AGIS, not the Hague Convention requirements or even the Chinese Central Authority.
`
`II.
`
`STATEMENT OF THE LAW
`
`A summons must be served with a copy of a complaint, under Federal Rule of Civil
`
`Procedure 4(c). Fed. R. Civ. P. 4(c)(1). Service of a complaint without the summons is not
`
`effective, and likewise, service of a summons without a copy of a complaint is not effective. See
`
`Wright & Miller, 4A Fed. Prac. & Proc. Civ. § 1093 (4th ed.). Moreover, service of a superseded
`
`complaint with summons also does not satisfy Rule 4, because a superseded complaint is “a mere
`
`scrap of paper.” Id. It is clear that an “amended complaint supersedes the original complaint and
`
`renders it of no legal effect unless the amended complaint specifically refers to and adopts or
`
`incorporates by reference the earlier pleading.” King v. Dogan, 31 F.3d 344, 346 (5th Cir. 1994)
`
`3
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 5 of 17 PageID #: 960
`
`(emphasis added); see also Boelens v. Redman homes, Inc., 759 F.2d 504, 508 (5th Cir. 1985);
`
`and Bosarge v. Mississippi Bureau of Narcotics, 796 F.3d 345, 440 (5th Cir. 2015).
`
`Rule 4(h)(1)-(2) governs service on a foreign corporation. Rule 4(h) has two options of
`
`service--either in the U.S. or outside the U.S. Rule 4 states that a foreign corporation “must be
`
`served: (1) in a judicial district of the United States,” or “(2) at a place not within any judicial
`
`district of the United States, in any manner prescribed by Rule 4(f) for serving [an individual in a
`
`foreign country], except personal delivery under (f)(2)(C)(i).” Fed. R. Civ. P. 4(h)(1)-(2)
`
`respectively (emphasis added). In turn, Rule 4(f)--through 4(h)(2)--provides that service in a
`
`foreign country may be made “by any internationally agreed means of service that is reasonably
`
`calculated to give notice, such as those authorized by the Hague Convention on the Service
`
`Abroad of Judicial and Extrajudicial Documents.” Fed. R. Civ. P. 4(f)(1). As an alternative, a
`
`court may order service “by other means not prohibited by international agreements,” i.e., the
`
`Hague Convention. Fed. R. Civ. P. 4(f)(3). However, and notably, Rule 4(f), and the alternative
`
`service means, does not pertain to service within the United States. Fed. R. Civ. P. 4(f).
`
`Service of a foreign corporation within the United States, as through Rule 4(h)(1), does
`
`not apply Rule 4(f) and it is time sensitive. Under Rule 4(m), “[i]f a defendant is not served
`
`within 90 days after the complaint is filed, the court—on motion or on its own after notice to the
`
`plaintiff—must dismiss the action without prejudice against that defendant.” Fed. R. Civ. P.
`
`4(m) (emphasis added). A court may extend the time for service under Rule 4(m) “for an
`
`appropriate period” of time, if the plaintiff “shows good cause for the failure” to properly serve
`
`within the time limit. Id. But, absent a showing of good cause for a delay beyond 90 days, then it
`
`is appropriate to dismiss the case for that defendant.
`
`4
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 6 of 17 PageID #: 961
`
`III. ARGUMENT: AGIS HAS FAILED TO DEMONSTRATE A NEED FOR
`ALTERNATIVE SERVICE, AS AGIS HAS NOT ATTEMPTED SERVICE
`
`AGIS has never even attempted service of the operative Amended Complaint here on
`
`ZTE Corp.,1 and this dilatory behavior does not excuse compliance with the Federal Rules.
`
`
`
`As shown above, alternative service is not warranted, as AGIS failed to even attempt service of
`
`the operative Amended Complaint, and there are also no extenuating circumstances, suggesting
`
`that service through the Hague Convention would be ineffective or somehow unduly dilatory.
`
`Additionally, AGIS’s proposed alternative service methods, service on U.S.-based Defendants
`
`within the United States and/or on U.S. counsel in other cases, do not comply with Rule 4(h)(2).
`
`
`
`1 ZTE Corp. is not a party, until AGIS has properly served the Amended Complaint.
`
`5
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 7 of 17 PageID #: 962
`
`A.
`
`
`
`AGIS Has Not Attempted Service and Alternative Service Is Not Justified
`
`Courts have consistently found that granting any request for alternative service requires a
`
`showing that (1) reasonable attempts to effectuate service have been made and (2) other methods
`
`of service are unduly burdensome or futile. See, e.g., Codigo Music, LLC v. Televisa S.A. De
`
`C.V., No. 15-cv-21737, 2017 WL 4346968, at *7, 9 (S.D. Fla. Sep. 29, 2017) (quoting FMAC
`
`Loan Receivables v. Dagra, 228 F.R.D. 531, 534 (E.D. Va. 2005) and Ryan v. Brunswick, No.
`
`02-CV-0133E(F), 2002 WL 1628933, at *2 (W.D.N.Y. 2002)). AGIS has not satisfied either
`
`requirement, as (1) it has not made reasonable attempts to effectuate service, and (2) it has not
`
`shown that any extenuating circumstances, such as burden or futility, justify alternative service.
`
`Further, Fifth Circuit precedent, not Federal Circuit, controls the application of Rule 4 to
`
`the facts of this case. See, e.g., Two-Way Media LLC v. AT&T, Inc., 782 F.3d 1311, 1314 (Fed.
`
`Cir. 2015) (stating that where issue is “not unique to patent law,” law of the regional circuit
`
`applies). But, the Fifth Circuit has not yet considered all of the nuances of service. See Hazim v.
`
`Schiel & Denver Book Publishers, 647 F. App’x 455, 461 (5th Cir. 2016); and Nabulsi v. Bin
`
`Zayed Al Nahyan, 383 F. App’x 380, 381 n.1 (5th Cir. 2010). Thus, this Court should follow the
`
`analytical framework outlined in the factually analogous Codigo case. See, Codigo Music, LLC
`
`v. Televisa S.A. De C.V., No. 15-cv-21737, 2017 WL 4346968, at *7, 9 (S.D. Fla. Sep. 29, 2017).
`
`In Codigo, the court denied a request for alternative service on the defendant’s domestic
`
`counsel. Codigo at *14 (ordering the plaintiffs to attempt Hague Convention service a second
`
`time). The court in Codigo reasoned that circumstances did not warrant alternative service,
`
`because “[t]here is no evidence that the Defendant in this case is evading service, that the
`
`Defendant’s address is unknown, that there is any great urgency present in the case, and there has
`
`been no showing that service is particularly difficult.” Id.at *10. Of most importance, the court
`
`observed that “Plaintiffs have not, … reasonably attempted to effectuate service on defendant”
`
`6
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 8 of 17 PageID #: 963
`
`and concluded service under the Hague Convention was not “unduly burdensome or futile.” Id.
`
`(emphasis added). Similar facts are present here, and the Court should reach the same result.
`
`First, AGIS never attempted service of the operative Amended Complaint, so alternative
`
`service now is not warranted. The only complaint that AGIS attempted to serve was the original
`
`Complaint, but it was rendered ineffective on October 17, 2017, when AGIS amended it. Dkt. 32
`
`at ¶¶ 3, 16; and Dkt. 64 at p. 3. By adding (1) several new legal theories, (2) a new defendant,
`
`and (3) a new asserted patent—AGIS superseded its original Complaint. See King, 31 F.3d at
`
`346. And, because the Amended Complaint does not “specifically refer[ ] to and adopt[ ] or
`
`incorporate[ ] by reference the earlier pleading,” the original Complaint has “no legal effect.” Id.;
`
`see also Dkt. 32. Here, AGIS is required to serve ZTE Corp. with a copy of the correct effective
`
`complaint, i.e. the Amended Complaint, but refuses to do so. See Fed. R. Civ. P. 4(c)(1).
`
`Second, in each case cited by AGIS, where a foreign defendant’s U.S. counsel was
`
`served, or a foreign defendant’s domestic subsidiary was served, different circumstances existed.
`
`And, none of those cases are binding on this Court, and each one is distinguishable.
`
`
`
`
`
`In In re GLG Life Tech Corp. Sec. Litig., the court allowed alternative service on
`a foreign individual located in a foreign country, where there was evidence of
`active evasion of service. 287 F.R.D. 262, 264, 266 (S.D.N.Y. 2012); see also
`Brown v. China Integrated Energy, Inc., 285 F.R.D. 560, 562–66 (C.D. Cal.
`2012) (similar); and Rio Props. Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1015
`(9th Cir. 2002) (similar). Here, ZTE Corp.--a foreign corporation--is not evading
`service but is merely seeking proper service through the Hague Convention.
`In Knit With v. Knitting Fever, Inc., the court allowed alternative service, when
`the plaintiff “made multiple efforts to effect service over nearly two years.” No.
`08-4221, 2010 WL 4977944, at *3-5 (E.D. Pa. Dec. 7, 2010); see also Marlabs
`Inc. v. Jakher, No. 07-cv-04074, 2010 WL 1644041, at *1-3 (D.N.J. Apr. 22,
`
`7
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 9 of 17 PageID #: 964
`
`
`
`2010) (similar). In contrast, AGIS has not attempted proper service of the
`operative pleading (that is, the Amended Complaint) ever, not even once.
`In Canal Indem. Co. v. Castillo, the court allowed alternative service, when
`plaintiff properly demonstrated that it “met continuous roadblocks in its dealings
`with the Mexican government” pursuant to the Hague Convention. No. DR-09-
`CV-43-AMCW, 2011 WL 13234740, at *2 (W.D. Tex. Mar. 30, 2011); see also
`Nuance Comms., Inc. v. Abbyy Software House, 626 F.3d 1222, 1239 (Fed. Cir.
`2010) (similar). But, here, AGIS has not presented any reliable evidence of any
`type or form of “roadblocks to service” through the Chinese Central Authority.
`In Ackerman v. Global Vehicles U.S.A., Inc., the court allowed alternative service,
`because no response to the motion for alternative service was offered. No. 4:11-
`cv-687, 2011 WL 3847427, at *2-3 (E.D. Mo. Aug. 26, 2011). Here, of course,
`this response explains why AGIS is not entitled to seek alternative service means.
`
`In sum, each of these cases, as cited by AGIS, involved different/other circumstances,
`
`
`
`which materially increased the difficulty and burden of service under the Hague Convention
`
`(with no guarantee of success). None of those extenuating circumstances are present here. In
`
`fact, AGIS admits that it has not even attempt service of the operative pleading, the Amended
`
`Complaint, through the Hague Convention. AGIS also offers no valid reasons for its inaction in
`
`effectuating service. AGIS filed this lawsuit, and AGIS made a tactical decision to file the
`
`Amended Complaint and not serve it, and AGIS must live with the consequences.
`
`B.
`
`
`
`The Requested Alternative Means of Service Do Not Satisfy Rule 4
`
`The alternative methods of service requested by AGIS do not comport with the due
`
`process requirements of reasonable notice, nor do they satisfy the requirements of Rule 4. Rule
`
`4(h)(1)—not 4(h)(2) or 4(f)(3)—provides the means for serving a foreign entity in the United
`
`States. Indeed, as discussed above, both Rule 4(h)(2) and 4(f) pertain only to service “at a place
`
`not within any judicial district of the United States.” See supra at pp. 2-3; see also, Codigo, 2017
`
`8
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 10 of 17 PageID #: 965
`
`WL 4346968, at *13 (questioning “whether Rule 4(f)(3) is the proper vehicle for granting []
`
`alternative service” on a defendant’s domestic counsel where “[t]hat Rule and its subparts deal
`
`only with service in a place ‘not within an judicial district in the United States’”). After a
`
`reasonable search, no ruling of a binding authority over this Court has squarely decided whether
`
`Rules 4(h)(2) and 4(f)(3) even allows service on a foreign defendant in the United States.
`
`Additionally, it also appears to be an open question, whether “actual notice” of a lawsuit,
`
`standing alone, is enough to justify any alternative method of service, such as service on a
`
`foreign defendant’s U.S. counsel or U.S. subsidiary. Thus, AGIS seeks relief that may be ill-
`
`founded.2
`
`Any extension of “actual notice” seems especially improper in this case. In arguing that
`
`ZTE Corp.’s “actual knowledge” of this case should excuse AGIS’s service requirements, AGIS
`
`references two other law firms—(1) Pillsbury and (2) McDermott, Will & Emery—neither of
`
`which represents ZTE Corp. in this matter, and AGIS attempts to ascribe knowledge from non-
`
`technical ZTA employees to ZTE Corp. Dkt. 64 at 7. This is an error by AGIS. First, contrary
`
`to the facts in Fundamental Innovation, where counsel from McDermott WIll & Emery appeared
`
`on behalf of ZTE Corp., in this case, (1) neither Pillsbury nor McDermott, Will & Emery have
`
`appeared on ZTE Corp.’s behalf in this case, and (2) neither Pillsbury nor McDermott, Will &
`
`
`
`2 In Codigo, the court rejected the relief requested by AGIS, under Eleventh Circuit law:
`
`[T]he undersigned questions whether in this circuit, actual knowledge of a law
`suit standing alone, is sufficient to obviate the need of a plaintiff to comply with
`the dictates of Fed. R. Civ. P. 4. Indeed, the Eleventh Circuit has stressed the need
`for formal service of process despite actual notice of an action by a defendant.
`
`
`Codigo, 2017 WL 4346968, at *12.
`
`
`
`9
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 11 of 17 PageID #: 966
`
`Emery represent ZTE Corp. in this matter. See Fundamental Innovation Sys. Int’l, LLC v. ZTE
`
`Corp., et al., No. 3:17-cv-1827 (N.D. Tex. Feb. 13, 2017). Dkt. 64-13. Second, without
`
`analyzing Texas state law, AGIS presumes that notice given to non-technical ZTA employees is
`
`satisfactory in providing notice of this infringement action to ZTE Corp. Dkt. 64 at 2-3.
`
`However, none of these allegations provide ZTE Corp. with notice of the events and theories
`
`presented in the Amended Complaint, which is sufficient to excuse AGIS’s service obligations.
`
`Therefore, as there is neither law nor facts that support alternative service methods under
`
`Rule 4, and given the lack of any attempt by AGIS to serve the Amended Complaint by proper
`
`channels, there is no basis for this Court to approve the extraordinary remedy of alternative
`
`service. Nevertheless, for arguendo, we turn to AGIS’s two arguments for alternative service.
`
`
`1.
`
`AGIS Provides No Authority for Alternative Service on U.S. Counsel
`
`AGIS seeks to serve the Amended Complaint on U.S. counsel for ZTE Corp. in another
`
`case, and for this remedy, AGIS cites Nuance, Dkt. 64 at 6, a Federal Circuit case for the
`
`proposition that service on a U.S. attorney comports with Rule 4(f)(3). Nuance Comms., Inc. v.
`
`Abbyy Software House, 626 F.3d 1222, 1239-40 (Fed. Cir. 2010). But, Nuance discussed this
`
`issue only in dicta. In that case, Russian defendant Abbyy Production was served personally in
`
`Moscow by a Russian process server. Id. at 1228. Thus, the Federal Circuit was not presented
`
`with the question of whether service on a U.S. attorney would satisfy Rule 4(f)(3). Additionally,
`
`the Federal Circuit applied Ninth Circuit precedent, not Fifth Circuit or Texas state law. Id.
`
`Here, AGIS has not cited any controlling authority, supporting alternative service to U.S.
`
`counsel in another case, and none has been found. As addressed above, Fifth Circuit precedent,
`
`not Federal Circuit precedent, controls the application of Rule 4. See, e.g., Two-Way Media LLC
`
`v. AT&T, Inc., 782 F.3d 1311, 1314 (Fed. Cir. 2015). The Fifth Circuit has not yet considered the
`
`precise issues by this alternative service method. See Hazim v. Schiel & Denver Book Publishers,
`
`10
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 12 of 17 PageID #: 967
`
`647 F. App’x 455, 461 (5th Cir. 2016) (summarizing in dicta district court’s denial of alternative
`
`service due to plaintiff’s lack of “due diligence”); Nabulsi v. Bin Zayed Al Nahyan, 383 F. App’x
`
`380, 381 n.1 (5th Cir. 2010) (declining to consider alternative service after concluding there was
`
`no personal jurisdiction over defendant). Thus, no binding authority controls if this Court is to
`
`order alternative service on the ZTE Corp., through U.S. in another case. Here, this Court should
`
`follow the framework outlined in the factually analogous Codigo case, as discussed above, and
`
`the Court should require AGIS to serve ZTE Corp., as required by Rule 4. Codigo, WL 4346968.
`
`2.
`
`
`
`AGIS Has No Legal Basis for Service on U.S.-Based Defendants
`
`AGIS alternatively seeks to serve the Amended Complaint on U.S.-based ZTE
`
`Defendants, but this alternative service method is improper too. In Volkswagenwerk, the
`
`Supreme Court held that courts should look to the laws of the forum state to determine the
`
`applicability of long-arm statutes over foreign entities. Volkswagenwerk Aktiengesellschaft v.
`
`Schlunk, 108 S.Ct. 2014, 2108-11 (1988); see also Lisson v. ING GROEP N.V., 262 Fed. Appx.
`
`567, 570 (5th Cir. 2007) (applying the state long-arm statute). Of note, rather than applying
`
`controlling Texas law, AGIS consistently cites to California law. Dkt. 64 at 5-9.3 In fact, AGIS
`
`never even describes Texas law in addressing alternative service on U.S.-based Defendants. Id.
`
`The Sheets cases offer guidance. See Sheets v. Yamaha Motors Corp., U.S.A., 849 F.2d
`
`179 (5th Cir. 1988) (“Sheets I”); and Sheets v. Yamaha Motors Corp. U.S.A., 891 F.2d 533 (5th
`
`
`3 Of note, AGIS does cite Affinity Labs of Texas, LLC v. Nissan N. Am. Inc., No. 13-CV-369,
`2014 WL 11342502, at *4 (W.D. Tex. July 2, 2014), see Dkt. 64 at 8, alleging that “service on
`foreign defendant through its domestic affiliate comported with due process.” However, Affinity
`Labs is not controlling. And, in reaching its holding, the W.D. Tex. did not fully consider Sheets
`II. The full quote is: “[u]nder the Illinois long-arm statue, as long as a foreign corporation
`exercises such control over the domestic subsidiary that the two entities are essentially one,
`process can be served on a foreign corporation by serving its domestic subsidiary--without
`sending documents abroad.” Sheets v. Yamaha Motors Corp. U.S.A., 891 F.2d 533, 537 (5th Cir.
`1990) (emphasis added). The Affinity Labs court thus did not fully apply the Texas state law.
`
`11
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 13 of 17 PageID #: 968
`
`Cir. 1990) (“Sheets II”). In Sheets I, the Fifth Circuit found there was no basis to criticize
`
`defendants for insisting on service through the Hague Convention. Sheets I, 849 F.2d at 185 n.5.
`
`This ruling (that requiring service under the Hague Convention is appropriate) was reaffirmed in
`
`Sheets II, even after Volkswagenwerk. Sheets II, 891 F.2d at 535. Indeed, the Fifth Circuit in
`
`Sheets II specifically found that the “plaintiff never served the domestic subsidiary . . . as an
`
`agent for its parent,” but it had rather attempted service on the parent by transmitting documents
`
`abroad. Id. at 537 (emphasis added). Without addressing whether state law permitted service of a
`
`foreign corporation by serving its domestic subsidiary, the Fifth Circuit found that, “because the
`
`service that plaintiff attempted fell squarely within the scope of [the] Hague Convention,
`
`insisting on service pursuant to its provisions was warranted by existing law.” Id.
`
`It is appropriate for ZTE Corp. to do the same here – that is, “insisting on service
`
`pursuant to its provisions was warranted by existing law,” or “service … within the scope of
`
`[the] Hague Convention.” AGIS originally attempted service through the transmittal of the
`
`original Complaint abroad, Dkt. 64 at 1, which is “precisely the type of service that triggers the
`
`application of Hague Convention procedures.” Id. Therefore, service through the Hague
`
`Convention of the Amended Complaint is now warranted and necessary, under Texas law.
`
`C.
`
`
`
`AGIS Does Not Merit Any Other Type of Discretionary Relief
`
`As AGIS recognizes, any plea for alternative service under Rule 4(f)(3) is, at its heart, a
`
`discretionary matter for this Court. And, for the reasons noted herein, AGIS does not merit such
`
`discretion. Rather, this Court should hold AGIS to the requirements of Rule 4(h), by requiring
`
`service of the Amended Complaint through the Hague Convention, which is in compliance with
`
`4(h)(2), that is, “at a place not within any judicial district of the United States;” or alternatively,
`
`this Court should dismiss the action against ZTE Corp. for failure to timely serve the Amended
`
`Complaint “in a judicial district of the United States,” in compliance with Rule 4(h)(1) and 4(m).
`
`12
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 14 of 17 PageID #: 969
`
`AGIS has never attempted service of the Amended Complaint under the Hague
`
`Convention, and further, AGIS waited six months to even request a waiver of service. After
`
`AGIS amended the original Complaint, AGIS made no attempt to properly serve the Amended
`
`Complaint, as it was required to do. See F.R.C.P. 4(c). And, AGIS offers no evidence of making
`
`any good faith attempts to secure service of the Amended Complaint in China. Instead of
`
`considering its own faulty-superseded original Complaint, AGIS attempts to place blame on the
`
`China Central Authority for delay. However, AGIS offers no evidence that the “central authority
`
`receiv[ed] [the] request in the proper form,” as required before effectuating service, other than a
`
`self-supporting email thread. Volkswagenwerk, 108 S.Ct. at 2107; see also Dkt. 64-3. And, even
`
`still, AGIS never attempted service of the Amended Complaint. Therefore, the record is clear
`
`that AGIS has never even attempted proper service in China at all.
`
`Further, contrary to AGIS’s allegations, the evidence of record suggests that China’s
`
`Central Authority is capable of handling service in a timely manner. AGIS’s own service
`
`processor stated that the Central Authority “… will eventually complete the service and send the
`
`Certificate.” Dkt. 64-3. Additionally, the evidence of record shows that the Central Authority
`
`executes service requests in China “[w]ithin three to four months,” which is typical of service in
`
`China. See Exhibit A.4 Thus, given AGIS’s delay in even seeking service in China, and given
`
`AGIS’s failure to seek timely service of ZTE Corp., a four-month period for service is not
`
`unreasonable, but AGIS has to actually pursue the proper procedures for such service. And as
`
`such, AGIS should be required to follow the Hague process to serve the Amended Complaint.5
`
`
`
`4 Hague Conference on Private Int’l Law, China-Central Authority & practical information,
`https://www.hcch.net/en/states/authorities/details3/?aid=243 (last visited May 22, 2018).
`5 Also, ZTA’s and ZTX’s Motion to Dismiss or Transfer venue is still pending before the Court.
`
`13
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 15 of 17 PageID #: 970
`
`D.
`
`
`
`Given the Circumstances, Dismissal as to ZTE Corp. Is Appropriate
`
`AGIS has not even attempted service of the Amended Complaint. Also, AGIS’s attempts
`
`to circumvent Rule 4(h)(1)—and thus Rule 4(m). For these reasons, dismissal here is
`
`appropriate. Rule 4(h) provides two options for serving foreign entities, an option within the
`
`U.S. and an option outside the U.S. Service within the U.S., as AGIS now requests, falls under
`
`Rule 4(h)(1), not 4(h)(2) or 4(f)(3), and Rule 4(h)(1) is subject to the timely service limitations of
`
`Rule 4(m). Thus, because AGIS filed the Amended Complaint seven months ago, and because
`
`AGIS has not attempted any service of any kind since then, and because AGIS has not provided
`
`any good cause for the delay in seeking any service of the Amended Complaint, there are special
`
`circumstances here. AGIS has not provided any reason, much less good cause, for its actions.
`
`Thus, if AGIS maintains its request for service within the U.S., i.e. appropriately under Rule
`
`4(h)(1), then its requested methods should be subject to Rule 4(m) and considered untimely.
`
`Because AGIS, in its opening brief, provided no showing of good cause for the untimely service
`
`of the Amended Complaint as required by the Rule, the Court should dismiss this action.
`
`IV. CONCLUSION – IF THE COURT DOES NOT DISMISS AS TO ZTE CORP. THE
`HAGUE CONVENTION IS THE PROPER FORM OF SERVICE UNDER RULE 4
`
`AGIS has not even attempted service of the operative pleading in this case, the Amended
`
`Complaint, and AGIS offers no reason why service through the Hague Convention would be
`
`ineffective or unduly in time. Additionally, AGIS’s proposed alternative service methods,
`
`service on U.S. counsel in other cases or U.S.-based Defendants in the United States, do not
`
`comply with Rule 4. And, even if Rule 4 permits alternative methods of service, the Court should
`
`not grant AGIS’s requested relief, as AGIS’s pleas for service are improper, given that AGIS has
`
`not yet even attempted to serve ZTE Corp. under the appropriate channels. The Court should
`
`dismiss the Amended Complaint against ZTE Corp. or at least deny AGIS’s motion for relief.
`
`14
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 16 of 17 PageID #: 971
`
`
`
`
`
`
`
`
`
`
`Dated: June 5, 2018
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`/s/ Lionel M. Lavenue
`Lionel M. Lavenue
`
`
`
`Lionel M. Lavenue (Lead Attorney)
`VA State Bar No. 49,005
`Bradford C. Schulz
`VA State Bar No. 91,057
`FINNEGAN, HENDERSON, FARABOW,
` GARRETT & DUNNER, LLP
`Two Freedom Square
`11955 Freedom Drive
`Reston, VA 20190
`Phone: (571) 203-2700
`Fax: (202) 408-4400
`
`ATTORNEYS FOR DEFENDANTS
`ZTE (USA) INC. AND ZTE (TX), INC.
`
`15
`
`

`

`Case 2:17-cv-00517-JRG Document 68 Filed 06/05/18 Page 17 of 17 PageID #: 972
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on June 5, 2018 , I electronically filed the foregoing with the Clerk
`
`of Court using the CM/ECF system, which will send a notification of such filing (“NEF”) all
`
`counsel of record who have appeared in this case. I also caused the documents above to be sent
`
`to all counsel of record via electronic mail.
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`