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Socially Aware Blog The Law and Business of Social Media

Federal Court in Manhattan “Likes” Service of Process via Facebook

Posted in FTC, Litigation

On March 7, 2013, a federal court in Manhattan ruled, in Federal Trade Commission v. PCCare247 Inc., that service via Facebook is an acceptable alternative means of serving court documents on foreign defendants. Although this is a watershed ruling in many respects, in other ways, it is a natural extension of current authority in a factual situation where such a ruling posed little risk.

In this case, the FTC brought suit against nine parties, including five India-based defendants—two entities and three individuals. The FTC alleged that the defendants violated a provision of the FTC Act by operating a scheme, run largely out of call centers in India, that tricked American consumers into spending money to fix non-existent computer problems. At the time of the decision, the FTC had already secured a temporary restraining order enjoining the defendants’ business practices and freezing various assets.

In addition, following procedures outlined in Rule 4(f)(1) of the Federal Rules of Civil Procedure and the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, the FTC had provided the summons, complaint and related court documents to the Indian Central Authority for service on the defendants and had also sent these documents by three alternative means: by email to the defendants’ last known addresses, by Federal Express and by personal service through an Indian process server. The process server had successfully delivered the documents to all five defendants and FedEx had confirmed delivery for most, but the Indian Central Authority had still not confirmed delivery nor responded to the FTC’s inquiries more than four months later. Nevertheless, defendants, on notice of the action, hired counsel to represent them at a preliminary injunction hearing, only to have counsel withdraw two months later due to nonpayment.

In the motion decided by this ruling, the FTC sought the court’s permission to serve documents other than the summons and complaint by alternative means on the five defendants located in India. In particular, the FTC sought to serve the defendants by email and Facebook. Analyzing Rule 4(f)(3) of the Federal Rules of Civil Procedure, concerning service of an individual in a foreign country by alternative means, the court first concluded that service by email and Facebook was not prohibited by international agreement and that India had not specifically objected to such service.

The court next turned to a due process analysis, considering whether the proposed means of service was reasonably calculated to notify defendants of future filings in the case. The court found that it was. Reasoning that the defendants used email frequently to run their Internet-based business and that the FTC had identified email addresses—some used for scheme-related tasks—for each of the individuals (who served as directors of the defendant corporations), the court concluded that it was highly likely that defendants would actually receive and respond to emails sent to these addresses. Thus, the court found that service by email alone would satisfy due process.

For the sake of “thoroughness,” according to the court, the FTC had proposed service by personal message via Facebook, attaching the relevant documents in addition to service by email. The court found that the FTC had also demonstrated a high likelihood that Facebook messages would reach the defendants, given that two of the defendants had registered their Facebook accounts with the known email addresses, two had listed their job titles at the defendant companies on their profiles, and two were Facebook friends with the third individual defendant.

Although the court recognized that Facebook service was a “relatively novel concept” and might not actually reach the defendants, it drew comfort from the fact that such service was a “backstop” to email service. In addition, the defendants were already on notice of the lawsuit. Where the defendants had embraced new technology in operating their scheme, it was only fitting that service by both email and Facebook should satisfy due process: “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.”

As reported in June 2012 by Socially Aware, the PCCare247 court is not the first court in the Southern District of New York to consider whether service by Facebook is an acceptable means of alternative service. In fact, in the June 7, 2012 decision of Fortunato v. Chase Bank USA, N.A., another judge in the Southern District of New York considered the issue and concluded that service of a third party complaint by Facebook message and email to an address listed on an individual’s Facebook profile (in addition to service on the woman’s estranged mother) would not satisfy due process.

As the PCCare247 court noted in distinguishing the earlier decision, the facts in Fortunato were much different. In Fortunato, the plaintiff had failed to show that the Facebook profile was authentic—that the account in fact belonged to or was maintained by the individual in question, who had a history of providing fictional or out-of-date addresses to state and private parties—or that the email address listed on the Facebook profile was operational or regularly used by the individual. By contrast, in PCCare247, the court had multiple indicia that the Facebook profiles actually belonged to the defendants and that the defendants regularly used both their Facebook accounts and their email addresses.

Even while concluding that Facebook service was an acceptable alternative means of service, the PCCare247 court struck a cautionary note about its ruling: “To be sure, if the FTC were proposing to serve defendants only by means of Facebook, as opposed to using Facebook as a supplemental means of service, a substantial question would arise whether that service comports with due process.” Other courts have not been so bothered by Facebook service alone. For example, in a May 10, 2011 ruling, a Minnesota state court concluded that it would be considered sufficient service for a woman who had unsuccessfully been seeking to serve divorce papers on her husband to serve them by publication on the Internet, in whatever format she believed it most likely that he would receive such notice, including by “[c]ontact via Facebook, Myspace, or other social networking site.” In addition, beginning with an Australian ruling in December 2008, courts in Australia, Canada, New Zealand and the United Kingdom have permitted service via Facebook. And a bill has recently been introduced in Texas that would permit service of process through social media sites.

The PCCare247 decision is indeed an important moment—the first time a federal court has endorsed service via Facebook as an alternative means of service. But it was also a safe decision in many ways. The service was of documents other than the summons and complaint after the foreign defendants had already appeared through counsel and proved themselves to be on notice of the case. By their online behavior, defendants had shown themselves to be highly likely to access Facebook messages. Most crucial, Facebook service was permitted only as a backstop to email service, which itself was highly likely to reach the defendants; the court took pains to note that Facebook service alone might not satisfy due process. And the permitted method of service was private Facebook message—quite similar to email service—not by a wall post or other means arguably more similar to traditional publication.

Nonetheless, the PCCare247 decision will likely serve as a springboard for more decisions endorsing service by social media because, as the court explained, “history teaches that, as technology advances and modes of communication progress, courts must be open to considering requests to authorize service via technological means of then-recent vintage, rather than dismissing them out of hand as novel.”