U . S . Court Authorizes Service of Subpoena on U . S . Nationals through Social Media While Prohibiting the Issuance of a Subpoena on Foreign Nationals Abroad ( continued from page 20 )
Among the factors the court will consider is the subpoena recipient ’ s cooperation , or lack thereof , in informal discovery prior to the issuance of a subpoena . Here , even though Three Arrows had multiple ancillary proceedings globally , the information sought in the U . S . proceeding was tailored to matters that have a connection with the United States . And , although discovery may be obtainable in the Singaporean proceeding , it does not mean that the information sought here , related to the United States , would be obtainable in Singapore .
Nonconventional Methods of Service of Process of Subpoenas Under Rule 45 ( b )( 1 ), the service of a subpoena may only be completed by personal delivery . Notwithstanding the express language , courts routinely authorize an alternative means of service . These courts have found that the meaning behind “ delivering ” a subpoena is to ensure receipt by a recipient . Thus , where a method of service is “ reasonably calculated ” to provide actual and timely notice to a subpoena recipient , such method meets the requirements of Rule 45 .
U . S . courts will not allow an obstructionist party , hiding from creditors , to hinder an investigation .
In Three Arrows , the U . S . Bankruptcy Court considered three issues : “( 1 ) when alternative service is permissible ; ( 2 ) what types of alternative service have been recognized as permissible under Rule 45 , and ( 3 ) to the extent that the [ movant relies ] on precedent involving alternative service pursuant to rules other than Rule 45 , whether there is an adequate basis for applying those precedents in the context of Rule 45 .” Id .
First , a movant is generally required to demonstrate that it attempted to serve the subpoena recipient personally before requesting an alternative means . A court , however , can waive this requirement . For example , the Three Arrows court found that attempting to serve Davies personally would be futile because he was concealing his location .
Second , the U . S . Bankruptcy Court found that the most recognized alternative means of service is certified mail because it requires actual receipt . Again , with respect to Davies , this method was impossible given Davies ’ unknown whereabouts .
Third , the U . S . Bankruptcy Court considered whether service by e-mail and social media was permissible . Previously , courts only authorized service of a subpoena by e-mail as a backup to personal service . With respect to the service of complaints , however , the U . S . Bankruptcy Court , found that U . S . federal courts had previously authorized service by e-mail and social media . These courts , in so authorizing under Rule 4 , applied the same standard in Rule 45 — a showing that the method is “ reasonably calculated ” to provide actual notice . Thus , the U . S . Bankruptcy Court found that e-mail or social media is permissible where there is a demonstration that a subpoena recipient is presently using such medium . Indeed , given that “ Twitter use appears to be somewhat public , … the continued use of public Twitter accounts could ostensibly provide probative evidence of actual receipt of the subpoenas .” Thus , the U . S . Bankruptcy Court authorized , based on Davies ’ proven use of e-mail and Twitter , service of a subpoena through such mediums .
After the liquidators served a subpoena on Davies via social media , Davies was reportedly located in Indonesia . According to the liquidators , Indonesia is a jurisdiction that will not compel compliance with a foreign court ’ s subpoena . Although enforcement of a U . S . court order abroad is dependent upon the local laws of the enforcing court , a U . S . court is not powerless to enforce its own orders . Here , the liquidators filed a motion compelling Davies to produce documents . Additionally , his continued refusal to comply with a U . S . court order can lead to sanctions .
Practical Implications The U . S . Bankruptcy Court ’ s decision demonstrates the importance of U . S . courts and U . S . discovery rules in asset tracing . And , relatedly , how a chapter 15 proceeding is used in implementing a global liquidation strategy with multiple ancillary proceedings . Specifically , U . S . courts will not allow an obstructionist party , hiding from creditors , to hinder an investigation . Accordingly , the Three Arrows liquidators were allowed ( creatively ) to serve a subpoena on a U . S . citizen overseas via social media . p – 2023 BLANK ROME LLP
1 . In re Three Arrows Cap ., Ltd ., No . 22-10920 ( MG ), 2022 WL 17985969 ( Bankr . S . D . N . Y . Dec . 29 , 2022 ). 2 . See In re Petrobras Sec . Litig ., 2016 WL 908644 , at * 1 ( S . D . N . Y . Mar . 4 , 2016 ). 3 . In re Three Arrows Cap ., Ltd ., 2022 WL 17985969 , * 7 ( quoting Aristocrat Leisure Ltd . v . Deutsche Bank Tr . Co . Americas , 262 F . R . D . 93 , 305 ( S . D . N . Y . 2009 )).
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