IN RE PANGANG GROUP COMPANY, LTD.; PANGANG GROUP STEEL VANADIUM & TITANIUM COMPANY, LTD.; PANGANG GROUP TITANIUM INDUSTRY COMPANY, LTD.; PANGANG GROUP INTERNATIONAL ECONOMIC & TRADING COMPANY,
No. 17-72370
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Filed August 22, 2018
D.C. No. 4:11-cr-00573-JSW
FOR PUBLICATION
PANGANG GROUP COMPANY, LTD.; PANGANG GROUP STEEL VANADIUM & TITANIUM COMPANY, LTD.; PANGANG GROUP TITANIUM INDUSTRY COMPANY, LTD.; PANGANG GROUP INTERNATIONAL ECONOMIC & TRADING COMPANY, Petitioners,
v.
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA, OAKLAND, Respondent,
UNITED STATES OF AMERICA, Real Party in Interest.
Petition For Writ Of Mandamus
Argued and Submitted June 13, 2018 San Francisco, California
Filed August 22, 2018
Before: Michael R. Murphy,* Richard A. Paez, and Sandra S. Ikuta, Circuit Judges.
Opinion by Judge Ikuta
SUMMARY**
Mandamus /
The panel denied a petition for a writ of mandamus, brought by companies owned and controlled by the Chinese government, asking this court to vacate the district court‘s order denying their motion to quash service of criminal summonses the government had delivered to attorneys for the companies.
The companies argued that the delivery of the summonses did not effect service on them under
COUNSEL
Kathleen M. Sullivan (argued) and William B. Adams, Quinn Emmanuel Urquhart & Sullivan LLP, New York, New York; Robert P. Feldman and Andrew P. March, Quinn Emmanuel Urquhart & Sullivan LLP, Redwood Shores, California; for Petitioners.
Merry Jean Chan (argued), Assistant United States Attorney; J. Douglas Wilson, Chief, Appellate Division; United States Attorney‘s Office, San Francisco, California; for Real Party in Interest.
IKUTA, Circuit Judge:
After the government delivered criminal summonses to attorneys for the Pangang Group Company, Ltd. and its subsidiaries Pangang Group Titanium Industry Company, Pangang Group Steel Vanadium & Titanium Company, Ltd., and Pangang Group International Economic & Trading Company (collectively, the “Pangang Companies“), the attorneys made a special appearance on behalf of their clients to quash service of the summonses. The district court denied their motion. The Pangang Companies petition for a writ of mandamus directing the district court to vacate its order, arguing that the delivery of the summonses did not effect service on the Pangang Companies under
I
This petition requires us to review the intertwined history of the 2016 amendments to Criminal Rule 4 and the government‘s repeated attempts at service on the Pangang Companies.
A
On February 7, 2012, the government indicted the Pangang Companies on charges of conspiracy to commit economic espionage, in violation of
A federal magistrate judge issued summonses to each of the Pangang Companies. The government served the summonses at the New Jersey office of a U.S. subsidiary of one of the Pangang Companies, Pan America, Inc., and mailed copies to the same location. At the time, the government attempted service pursuant to the 2011 version of Criminal Rule 4, which provides the process for issuing and executing an arrest warrant or summons to a defendant if a criminal complaint establishes probable cause to believe that an offense has been committed and that the defendant committed it.
On March 29, 2012, the Pangang Companies made a special appearance in district court through two attorneys from Quinn Emanuel Urquhart & Sullivan, LLP (the “Quinn
Emanuel attorneys“), and filed a motion to quash service of the summonses on the grounds that service on Pan America was defective under Criminal Rule 4. On July 23, 2012, the district court granted the motion, reasoning that service had not complied with the delivery requirement of Criminal Rule 4 for three of the Pangang Companies, and had not satisfied the mailing requirement as to all four Pangang Companies, see
On February 7, 2013, the Pangang Companies made a second special appearance in district court through the Quinn Emanuel attorneys, and filed another motion to quash. The district court granted the motion, holding that none of the agents and addresses bore the requisite connection to the Pangang Companies required under
B
While the government was struggling to serve the Pangang Companies, the DOJ asked the Advisory Committee on the Criminal Rules to make changes to Criminal Rule 4.
For those unfamiliar with the rulemaking process, we provide a brief overview. The Rules Enabling Act of 1934,
The rulemaking process proceeds as follows. After evaluating proposals for new rules or amendments to existing rules, an Advisory Committee may recommend a proposed change to the Standing Committee. See
proposed changes to the Supreme Court. If the Supreme Court approves the proposal, it will promulgate the revised rules to take effect on December 1 of the same year unless Congress enacts legislation to the contrary. See
The DOJ asked the Advisory Committee to amend Criminal Rule 4 to allow service on an organization outside of the United States either by serving the organization under the laws of the foreign jurisdiction
The Standing Committee approved the Advisory Committee‘s recommendation to publish the proposed amendments for public comment. Comm. on Rules of Practice and Procedure, September 2014 Report to the Judicial Conference, at 18-19 (Sept. 1, 2014);6 see also Comm. on Rules of Practice and Procedure, Preliminary Draft of Proposed Amendments to the Federal Rules of Criminal Procedure, at 333-34 (Aug. 14, 2014).7
The Advisory Committee received six public comments on its proposal, including a comment letter from the Quinn Emanuel attorneys who had previously represented the Pangang Companies in their special appearances in 2012 and 2013. Advisory Comm. on Criminal Rules, March 2015
Agenda Book, at 71 (Mar. 16-17, 2015).8 As explained in more detail below, the Quinn Emanuel attorneys contended that allowing service on an organization to be effected “by any other means that gives notice” would result in a range of evils. Robert P. Feldman & John M. Potter, Comment Letter on Proposed Amendment to Federal Rule of Criminal Procedure 4, at 1 (Feb. 13, 2015) [hereinafter Quinn Emanuel Comment Letter].9 Among other things, it would allow the government to serve a summons by informal means such as “simply by sending a letter or an email,” which would “render superfluous the limitations
court learns as a result of that appearance, including that a party has received actual notice of the prosecution, may be considered by the court.”
After considering the comments, the Advisory Committee approved the amendments to Criminal Rule 4 as published. In its report to the Standing Committee, the Advisory Committee discussed at some length “the open-ended provision in (c)(3)(D)(ii) that allows service ‘by any other means that gives notice,‘” and explained that this language “provides flexibility for cases in which the Department of Justice concludes that service cannot be made (or made without undue difficulty) by the enumerated means.” Advisory Comm. on Criminal Rules, May 2015 Report to Standing Committee, at 3 (May 6, 2015) [hereinafter Final Advisory Committee Report].11 Therefore, the Advisory Committee chose not to require the government “to show other options were not feasible or had been exhausted before resorting to certain options for service.”
The Standing Committee did so, and transmitted them to the Judicial Conference. Comm. on Rules of Practice and Procedure, September 2015 Report to the Judicial Conference, at 2, 23-25 (Sept. 1, 2015).12 After approval by the Judicial Conference, the Supreme Court promulgated the amendments to Criminal Rule 4 and transmitted them to Congress on April 28, 2016. The transmittal instructed that the amendments “shall take effect on December 1, 2016, and shall govern in all proceedings in criminal cases thereafter commenced and, insofar as just and practicable, all proceedings then pending.”13 Congress did not stop the rule from going forward.
C
The amendments to Criminal Rule 4 took effect December 1, 2016. The new
(D) A summons is served on an organization not within a judicial district of the United States:
(i) by delivering a copy, in a manner authorized by the foreign jurisdiction‘s law, to an officer, to a managing or general agent, or to an agent appointed or
legally authorized to receive service of process; or
(ii) by any other means that gives notice, including one that is:
(a) stipulated by the parties;
(b) undertaken by a foreign authority in response to a letter rogatory, a letter of request, or a request submitted under an applicable international agreement; or
(c) permitted by an applicable international agreement.
D
While the rulemaking process for Criminal Rule 4 was still ongoing, the government obtained a new superseding indictment against the Pangang Companies. After the amendments to Criminal Rule 4 took effect, the court reissued summonses for the Pangang Companies at the government‘s request. The government made a new attempt to serve the Pangang Companies by serving the president of a U.S. affiliate of the Pangang Companies and submitting a formal request that a Chinese agency assist in serving the summonses abroad. The Chinese agency again declined the request.
The government also delivered the summonses to the Quinn Emanuel attorneys by email and certified mail. One of the Quinn Emanuel attorneys responded by letter on January 17, 2017. Stressing the limited nature of Quinn Emanuel‘s prior special appearances, he explained that the Quinn Emanuel attorneys were “not authorized to accept service of the summonses” and that they were not “obligated to send the summonses to Pangang and [would] not do so.” As the attorneys later conceded, although they never transmitted the summonses to the Pangang Companies, they informed the Pangang Companies that they had received them, causing the Pangang Companies to consult with two other law firms as to how they should proceed.
The Pangang Companies failed to appear at the January 2017 hearing set by the summonses, or at a status hearing in February 2017. The government then filed a motion for the imposition of civil contempt sanctions on the Pangang Companies for their failure to appear. On April 24, 2017, the Pangang Companies made a special appearance through the
Quinn Emanuel attorneys, moving to quash service and opposing the government‘s motion for sanctions.
At a hearing on the motions, one of the Quinn Emanuel attorneys conceded that
The district court denied the motion to quash and deferred ruling on sanctions. The court found that the Pangang Companies “received notice of the summonses from the Quinn Emanuel firm, even if they did not receive the actual documents.” Based on the Quinn Emanuel attorneys’ 2012 and 2013 special appearances, as well as their 2015 comment letter on the proposed amendments to Criminal Rule 4, the district court found that the Quinn Emanuel attorneys had “a pre-existing relationship” with the Pangang Companies, and had also conceded at the hearing that the Pangang Companies had received actual notice. Therefore, the court concluded that delivery of the summonses to the Quinn Emanuel attorneys satisfied
other than by having to defend against the charges on the merits.
The Pangang Companies timely appealed, and then filed this petition for a writ of mandamus. We dismissed the direct appeal of the court‘s interlocutory order, but have jurisdiction over the petition for a writ of mandamus pursuant to
II
A writ of mandamus is a “drastic and extraordinary remedy reserved for really extraordinary causes.” Cheney v. U.S. Dist. Court for D.C., 542 U.S. 367, 380 (2004) (internal quotation marks omitted). Accordingly, mandamus is appropriate only in “exceptional circumstances amounting to a judicial usurpation of power or a clear abuse of discretion.” In re United States, 884 F.3d at 834 (quoting Cheney, 542 U.S. at 380).
In deciding whether the writ should issue, we consider the five factors set forth in Bauman v. U.S. District Court, 557 F.2d 650, 654-55 (9th Cir. 1977):
- whether the petitioner has no other means, such as a direct appeal, to obtain the desired relief;
- whether the petitioner will be damaged or prejudiced in any way not correctable on appeal;
- whether the district court‘s order is clearly erroneous as a matter of law;
- whether the district court‘s order is an oft repeated error or manifests a persistent disregard of the federal rules; and
- whether the district court‘s order raises new and important problems or issues of first impression.
In re United States, 884 F.3d at 834 (citation omitted). Because “the absence of the third [Bauman] factor, clear error, is dispositive” and requires denial of mandamus, Burlington N. & Santa Fe Ry. Co. v. U.S. Dist. Court for Dist. of Mont., 408 F.3d 1142, 1146 (9th Cir. 2005), we begin with the question whether the district court
A
The Federal Rules of Criminal Procedure are promulgated by the Supreme Court pursuant to the Rules Enabling Act.
rule, courts may also consult the rulemaking history of the relevant Advisory Committee proceedings for further guidance. See, e.g., Microsoft Corp. v. Baker, 137 S. Ct. 1702, 1709-10 (2017); United States v. Petri, 731 F.3d 833, 839-40 (9th Cir. 2013).
Here, the text of the rule states that “[a] summons is served on an organization not within a judicial district of the United States: . . . (ii) by any other means that gives notice . . . .”
Applying the relevant language here, the Pangang Companies are not within a judicial district of the United States. See
B
The Pangang Companies argue that this straightforward interpretation of Criminal Rule 4 is erroneous on two grounds. First, they argue that the canons of statutory construction do not permit such a broad interpretation of the amendment to Criminal Rule 4. Second, they argue that we should read the rule narrowly to avoid inconsistency with the historical role of special appearances. We address each of these arguments in turn.
1
First, the Pangang Companies claim that two canons of statutory construction—the superfluity canon and the canon of ejusdem generis—require the conclusion that the three means of giving notice listed in
Canons of construction provide guidance for interpreting ambiguous statutes
a statute superfluous, and therefore “we must give effect to every word of a statute wherever possible.” Leocal v. Ashcroft, 543 U.S. 1, 12 (2004). The canon of ejusdem generis refers to the inference that a general term in a list “should be understood as a reference to subjects akin to th[ose] with specific enumeration.” Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 223 (2008) (quoting Norfolk & W. Ry. Co. v. Am. Train Dispatchers Ass‘n, 499 U.S. 117, 129 (1991)).
Relying first on the superfluity canon, the Pangang Companies argue that the district court‘s broad reading of “by any other means that gives notice” renders superfluous the enumerated means of service listed in
We disagree. As explained above, the words “by any other means that gives notice” are not ambiguous, and we disfavor efforts to use canons of construction to introduce ambiguity into straightforward text. See Germain, 503 U.S. at 253-54.
Moreover, the Pangang Companies’ argument that the Advisory Committee intended Criminal Rule 4 to be read
narrowly in accordance with the canons of construction is thoroughly undercut by statements of the Advisory Committee itself. First, the Advisory Committee Notes indicate that the enumerated list of means of service is non-exhaustive, thereby dissolving the inference that it is superfluous both to provide an enumerated list and to allow other means of service.
at 3. In one instance, the Advisory Committee directly rejected the inference that the enumerated list limited the government.
For the same reason, any inference that the Advisory Committee intended to limit service to “formal processes that respect domestic and foreign law,” pursuant to the canon of ejusdem generis, is baseless. To the contrary, the Advisory Committee‘s final report contemplated the possibility that the government might accomplish service “on an organizational defendant in a foreign nation without its consent, or in violation of international agreement.”
2
The Pangang Companies also argue that the district court erred in holding that the government could effect service by delivering summonses to the Quinn Emanuel attorneys after
they had made prior special appearances; such a ruling, they argue, would effectively eliminate the possibility of a special appearance by a foreign corporation to contest service. Given the important and longstanding role of special appearances for challenging defects in the service of summons, the Pangang Companies assert, the Advisory Committee did not intend the amendments to Criminal Rule 4 to make such a break with historical practice.
We disagree. As an initial matter, the Pangang Companies have not offered any evidence of a longstanding historical practice of allowing special appearances in criminal cases. The Pangang Companies have pointed only to a handful of district court cases—all within the last 30 years—which have, without explanation or critical examination, permitted criminal defendants to enter special appearances to raise threshold objections. See, e.g., United States v. Kolon, 926 F. Supp. 2d 794, 797-99 (E.D. Va. 2013); United States v. Tucor Int‘l, Inc., 35 F. Supp. 2d. 1172, 1176, 1183-85 (N.D. Cal. 1998); United States v. Noriega, 683 F. Supp. 1373, 1374 (S.D. Fla. 1988); cf. United States v. Sinovel Wind Grp. Co., 794 F.3d 787, 789-90 (7th Cir. 2015) (noting, without comment, that the
By contrast, there is extensive authority regarding the historical function of special appearances in civil cases. Harkness v. Hyde, 98 U.S. 476, 479 (1878) (holding, in a civil
case, that where special appearances are allowed, “[t]he right of the defendant to insist upon the objection to the illegality of the service was not waived by the special appearance of counsel for him to move [for] the dismissal of the action on that ground“); see also Davidson Bros. Marble Co. v. United States, 213 U.S. 10, 18-19 (1909) (same); S. Pac. Co. v. Denton, 146 U.S. 202, 206 (1892) (same). But in the civil context, this historical tradition has been superseded by
Even if there were a robust tradition of special appearances in the criminal context, however, we see no basis for contravening the text of Criminal Rule 4 in order to avoid limiting the possibility of special appearances. The Pangang Companies do not argue that serving a defendant who makes a special appearance is unconstitutional or violates a federal statute. Cf. Omni Capital Int‘l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104-05 (1987) (explaining, in the civil context, that “whether there is authorization to serve summons” depends on a construction of the applicable federal rule and any other applicable federal statutes). Indeed, the Supreme Court has rejected the argument that defendants have a constitutional right to this procedure. York v. Texas, 137 U.S. 15, 20-21 (1890). Thus a state may, “without violence to the ‘due process’ clause of the 14th Amendment” declare that “one who voluntarily enters one of its courts to contest any question in an action there pending shall be deemed to have submitted himself to the jurisdiction of the court for all purposes of the action,” including when the person makes “a special appearance entered for the purpose of objecting that the trial court has not acquired jurisdiction over the person of
the defendant.” W. Life Indem. Co. of Ill. v. Rupp, 235 U.S. 261, 271-72 (1914) (citing York, 137 U.S. at 20).16
Nor is there a basis for inferring that the Advisory Committee did not intend to impinge on the practice of special appearances by criminal defendants. The Advisory Committee was aware, contrary to the Pangang Companies’ contentions, that the change in Criminal Rule 4 would prevent certain foreign organizations from making a special appearance to argue that they had not been properly served. In its comments on the draft rule, Quinn Emanuel
explained, an institutional defendant could no longer make a special appearance to argue that the defendant lacked notice, but could still use a special appearance to assert other objections, “such as a constitutional attack on
To the extent the Pangang Companies argue that delivering a summons to an attorney who previously represented an institutional defendant does not necessarily constitute serving a summons on that defendant, we agree. Criminal Rule 4 does not list delivery of a summons to the foreign organization‘s attorney. Therefore it is not a method that is presumed to provide notice, and “whether actual notice has been provided may be challenged in an individual case.”
C
The Pangang Companies argue alternatively that, even if the district court correctly interpreted Criminal Rule 4, the
court erred by applying the amended version in their case because it was unjust to apply it retroactively. According to the Pangang Companies, had they anticipated that amended Criminal Rule 4 would allow the government to serve them by delivering the summonses to the attorneys who had previously made special appearances on their behalf, the Quinn Emanuel attorneys could have withdrawn their 2012 and 2013 special appearances.
We disagree. Even assuming that the district court‘s application of amended Criminal Rule 4 to the Pangang Companies was retroactive,18 the district court did
January 2017. As explained above, under the plain language of amended Criminal Rule 4, service is effective if it gives notice, and the district court could reasonably conclude that the Pangang Companies had notice of the summonses when their attorneys made a special appearance on their behalf in April 2017. This was sufficient evidence for the district court to conclude that the Pangang Companies had been appropriately served. The government did not rely on the Quinn Emanuel attorneys’ previously entered special appearances in 2012 and 2013 to demonstrate notice, and therefore the Quinn Emanuel attorneys’ inability to withdraw such earlier special appearances was not prejudicial. Had the Pangang Companies not made a special appearance through the Quinn Emanuel attorneys in April 2017, and had the Quinn Emanuel attorneys maintained that they did not give their clients notice of the 2017 summonses, the government would have had to find other means to prove that the Pangang Companies had actual notice. Therefore, the district court did not abuse its discretion in concluding that the Pangang Companies had not demonstrated any prejudice from the application of amended Criminal Rule 4.
Accordingly, we conclude that the district court did not err, let alone clearly err, in denying the Pangang Companies’ motion to quash service. We therefore deny the petition for a writ of mandamus and do not reach the remaining Bauman factors.
PETITION DENIED.
Notes
A summons is served on an organization by delivering a copy to an officer, to a managing or general agent, or to another agent appointed or legally authorized to receive service of process. A copy must also be mailed to the organization‘s last known address within the district or to its principal place of business elsewhere in the United States.