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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Federal Court Allows Service On Foreign Defendants Through Facebook

Posted in Legislation, Practice & Procedure, Social Media

Did you think Facebook was just for “likes” and “status” updates? Think again! A federal district court in New York recently tackled the issue of service of process via social media head on, permitting service via Facebook as a backup means of service for serving foreign defendants.

In the case of Federal Trade Commission v. PCCare247, Inc., the Federal Trade Commission (“FTC”) sued multiple defendants, including five based in India. The foreign defendants included two businesses and three individuals. According to the FTC, the defendants had violated certain provisions of the Federal Trade Commission Act by developing a business to deceive American consumers into fixing non-existent computer problems. The FTC had already secured a temporary restraining order against the defendants, which enjoined specific business practices and froze some of the defendants’ assets.

Each defendant had been provided with the summons, complaint, and related court documents by email to their last known addresses, by Federal Express (“FedEx”), and by personal service through a process server. FedEx had confirmed delivery for some of the defendants, and the process server had confirmed delivery to all defendants.

The FTC also served the documents to the Indian Central Authority for service, pursuant to Rule 4(f)(1) of the Federal Rules of Civil Procedure and the terms of the Hague Convention. After multiple inquiries over a four month period, the Indian Central Authority had not responded to the FTC in order to confirm receipt. The Defendants were on notice of the lawsuit, and hired attorneys to represent them at the preliminary injunction. However, defendants’ attorneys withdrew a few months later for nonpayment.

Since the Indian Central Authority failed to confirm service, the FTC filed a motion seeking permission to serve additional documents via email and Facebook. In its analysis, the Court concluded that service by email and Facebook was not prohibited by international agreement, nor had India objected to this type of service. The court conducted a due process analysis, and found that Facebook service was reasonably calculated to notify the defendants of future filings.

Here, the defendants used both email and social media frequently to run their business, and therefore, service by email alone was sufficient to satisfy due process. Furthermore, the fact that two of the defendants had registered their email accounts with Facebook, included their job titles on Facebook, and were Facebook friends with one another, suggested they were highly likely to receive such messages. According to the court, “where defendants run an online business, communicated with customers via email, and advertise their business on their Facebook pages, service by email and Facebook together presents a means highly likely to reach defendants.”

Although the district court permitted service of process in PCCare247, the fact that it was merely an alternative means of service seems to have played a key role in the decision. Prior case law from the same district court suggests that we should not necessarily expect Facebook service to spread like wildfire, and that such service may be limited to cases where the Facebook profile can be properly authenticated. For example, in Fortunato v. Chase Bank USA, the court declined to permit service of a third party complaint by Facebook message to an address found on the individual’s Facebook profile, as the plaintiff failed to show the Facebook profile was authentic or that it was regularly used by the individual.

The use of social media for service is likely to become an increasingly disputed issue in the coming months and years. This past month, Texas became the first state to propose a bill allowing for service of legal process via social media. Texas State Representative Jeff Leach, a Republican, recently introduced a bill in the state’s House of Representatives regarding the use of social media for service of process. If passed, House Bill 1989, would permit “an electronic communication sent to the defendant through a social media website” to act as a method for service of process, provided that “the defendant maintains a social media page on that website, the profile on the social media page is the profile of the defendant, the defendant regularly accesses the social media page account, and the defendant could reasonably be expected to receive actual notice if the electronic communication were sent to the defendant’s account.” If the bill were to become law, Texas would be the first state to legalize social media as an alternative means of service.

Service via social media has become increasingly prevalent in other countries, suggesting the United States may not be far behind. In England, the High Court recently approved the use of Facebook for service of legal documents in a commercial dispute. Similarly, “Facebook is routinely used to serve claims in Australia and New Zealand.”

The use of social media for service of process is likely to be a continuing issue in the United States, and we will keep you apprised of future developments in this rapidly changing area.