Prewitt Enterprises, Inc. v Org. of Petroleum Exporting Countries, 353 F.3d 916 (11th Cir. 2003)
Relevance of the case
The present case addresses effective service of process of an international organization which the state is not party to. The US Court of Appeals for the Eleventh Circuit relied upon the Federal Rules of Civil Procedure (FRCP) because the Organization of Petroleum Exporting Countries (OPEC) did not fall within the purview of the International Organizations Immunities Act (IOIA) and no other applicable treaty existed regarding the treatment of OPEC in a United States domestic court. The decision’s reliance upon FRCP and application of foreign law resulted in the inability of the plaintiffs to bring a claim against OPEC without its express consent.
I. Facts of the case
Prewitt Enterprises, Inc. (Prewitt), an Alabama corporation, bought large quantities of gasoline for resale. OPEC is an intergovernmental organization established in 1960 and presently headquartered in Vienna, Austria. The principal aim of OPEC is ‘the co-ordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively’.1
OPEC’s relationship with the Austrian government is set forth in the Agreement Between the Republic of Austria and the Organization of the Petroleum Exporting Countries Regarding the Headquarters of the Organization of the Petroleum Exporting Countries2 (Headquarters Agreement). The Austrian Parliament enacted this agreement into law by resolution and the agreement was published in the Austrian Official Gazette.
Prewitt filed a complaint in the Northern District of Alabama, Southern Division on behalf of itself and as representative of all other entities who directly purchase gasoline products in the United States, against OPEC for violations of US antitrust law.3 Specifically, Prewitt claimed that OPEC’s co-ordination agreements amongst member and non-member states to fix world prices for oil violated the Sherman Act and the Clayton Act. OPEC objected to the district court’s jurisdiction on several grounds, including insufficient service of process. The district court dismissed the case finding that Prewitt did not serve OPEC in accordance with the FRCP. Prewitt appealed the district court’s dismissal. The Eleventh Circuit affirmed the district court’s decision on the same reasoning.
II. The legal question
The question raised by the present case is the following: did the claimant effectively serve OPEC under the FRCP by sending the complaint through international registered mail, which provided OPEC with actual notice of the suit?
Prewitt claimed that as a result of OPEC’s illegal conduct, its own acquisition and inventory costs for gasoline have increased significantly. Consequently, Prewitt requested that the court declare the OPEC-coordinated agreements illegal under United States law, enjoin implementation of the agreements, grant any other appropriate equitable relief, and award costs of the suit against OPEC for injuries sustained by Prewitt.
Prewitt attempted service on OPEC by requesting that the trial court send a copy of the complaint to OPEC by international registered mail, return receipt requested. The court clerk did so, mailing Prewitt’s summons and complaint to OPEC at its headquarters in Vienna. The pleadings were signed for, stamped ‘received’ by OPEC’s Administration and Human Resources Department, and forwarded to the Director of OPEC’s Research Division as well as other departments including the Secretary General’s office. Ultimately, the Secretary General decided that the OPEC Secretariat would not take any action with regard to the summons and complaint.
The threshold issue in this case is whether OPEC has been effectively served under the Federal Rules of Civil Procedure. If it has not, we must then determine whether extraterritorial service of process on OPEC may be effectuated at all under the circumstances here. By definition, ‘service of summons is the procedure by which a court having venue and jurisdiction of the subject matter of the suit asserts jurisdiction over the person of the party served.’ Miss. Publ’g Corp. v. Murphree, 326 U.S. 438, 444-45, 66 S.Ct. 242, 90 L.Ed. 185 (1946). A court is required to have personal jurisdiction under the Due Process Clauses of the Fifth and Fourteenth Amendments to the United States Constitution ‘as a matter of individual liberty’ so that ‘the maintenance of the suit [...] [does] not offend “traditional notions of fair play and substantial justice.”’ Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).
Thus an ‘unincorporated association’ headquartered outside of the United States that is (1) subject to suit under a common name and (2) has not waived service may be served in any manner authorized under Fed.R.Civ.P. 4(f) for individuals in a foreign country except for personal delivery.
In this case, no other means of service has been ‘otherwise provided by federal law’ nor is there an ‘internationally agreed means reasonably calculated to give notice such as those means authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents ...’ The federal laws pertaining to service of process on a foreign entity are codified in 28 U.S.C. §§ 1602 et seq., the Foreign Sovereign Immunities Act (FSIA), and 22 U.S.C. §§ 288 et seq., the International Organizations Immunities Act (IOIA). The parties agree that neither of these federal laws apply to OPEC in this case. The parties likewise agree that there is no international agreement that stipulates the appropriate means of service.
Thus we must look to the remainder of Fed.R.Civ.P. 4(f), which provides for other methods by which an unincorporated association may be served in the absence of relevant federal law or international agreements:
- (2) if there is no internationally agreed means of service or the applicable international agreement allows other means of service, provided that service is reasonably calculated to give notice:
- (A) in the manner prescribed by the law of the foreign country for service in that country in an action in any of its courts of general jurisdiction; or
- (B) as directed by the foreign authority in response to a letter rogatory or letter of request; or
- (C) unless prohibited by the law of the foreign country, by
- (i) delivery to the individual personally of a copy of the summons and the complaint; or
- (ii) any form of mail requiring a signed receipt, to be addressed and dispatched by the clerk of the court to the party to be served; or
- (3) by other means not prohibited by international agreement as may be directed by the court.
Fed.R.Civ.P. 4(f)(2) and (3).
Prewitt originally chose to attempt service of process on OPEC under Fed.R.Civ.P. 4(f)(C)(ii). However, the method set forth under that provision applies only if it is not prohibited by the law of the foreign country. Based on the evidence presented, the district court correctly found that service on OPEC was prohibited by the law of Austria. Article 5(2) of the Austrian/OPEC Headquarters Agreement provides that: ‘the service of legal process [.] shall not take place within the [OPEC] headquarters seat except with the express consent of, and under conditions approved by, the Secretary General.’ Since the Headquarters Agreement was enacted into law by resolution of the Austrian Parliament and published in the Austrian Official Gazette pursuant to the Austrian Constitution, the district court found it to be an integral part of Austrian law. Thus, because service was prohibited by Austrian law, Prewitt could not have effectively served OPEC under Fed.R.Civ.P. 4(f)(C)(ii).
Prewitt nonetheless suggests that we should liberally construe the formal requirements for service under the Federal Rules because OPEC received actual notice but simply chose to ‘ignore the whole thing.’ Br. of Appellant at 23. However, we find no support for such an argument. Due process under the United States Constitution requires that ‘before a court may exercise personal jurisdiction over a defendant, there must be more than notice to the defendant [...] [t]here also must be a basis for the defendant’s amenability to service of summons. Absent consent, this means there must be authorization for service of summons on the defendant’ Omni Capital Int’l v. Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987) (emphasis added). In other words, an individual or entity ‘‘is not obliged to engage in litigation unless [officially] notified of the action [...] under a court’s authority, by formal process’’ Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999). In this case, Fed.R.Civ.P.(f)(2)(C)(ii) clearly states that service of process by registered mail is only authorized where it is not prohibited by foreign law. Here, the Headquarters Agreement constitutes Austrian law and, under Article 5(2), expressly prohibits all service of process upon OPEC within the headquarters seat that has not been consented to by its Secretary General. Thus, we agree with the district court that even though OPEC had actual notice of the filing of the suit, service of process was ineffective because it was clearly not in substantial compliance with the requirements of Fed.R.Civ.P. 4(f)(2)(C)(ii).
Alternatively, Prewitt argues that even if service failed under Fed.R.Civ.P. 4(f)(2)(C) (ii), service by registered mail upon OPEC nonetheless complied with Fed.R.Civ.P. 4(f)
(2) (A), which permits service if it is effectuated ‘‘in the manner prescribed by the law of the foreign country for service in that country in an action in any of its courts of general jurisdiction.’’ The provisions of Austrian law that Prewitt references from Austria’s Civil Procedure Code and regulations for service of process by mail relate to service by Austrian courts on persons resident in Austria and abroad. None of these Austrian law provisions directly pertain to service mailed from abroad upon international organizations resident in Austria. [...] Section 11(2) (as amended 1998) of the Austrian Services Act directly addresses service from abroad upon international organizations such as OPEC requiring that:
the mediation of the Federal Ministry for Foreign Affairs shall be enlisted in undertaking service of process on foreigners or international organizations that enjoy privileges and immunities under international law, regardless of their place of residence or headquarters.
There would be no way for Prewitt to serve OPEC under § 11(2) of the Austrian Service Act because we must assume that if it had gone to the Austrian Federal Ministry of Foreign Affairs, the Ministry would have applied the laws of its own country and obeyed the dictates of the Austrian/OPEC Headquarters Agreement prohibiting service without OPEC’s consent.
Finally, Prewitt contends that even if its service by registered mail on OPEC could not be effectuated pursuant to any of the provisions of Fed.R.Civ.P. 4(f)(2), the district court still had the discretion to order service of process pursuant to Fed.R.Civ.P. 4(f)
(3) , which provides that service may be effected ‘by other means not prohibited by international agreement as may be directed by the court.’ (emphasis added). We agree with Prewitt that a district court’s denial of relief under 4(f)(3) is reviewed under an abuse of discretion standard. However, there is no abuse of discretion here; on the contrary, any circumvention of 4(f)(2)(C)(ii) by the district court in directing service again by registered mail would constitute such an abuse. On these facts, we cannot read 4(f)(3) as permitting that which has already been specifically prohibited under 4(f)(2).
However, the 1993 Advisory Committee Notes to Fed.R.Civ.P. 4(f)(3) instruct that: Paragraph (3) authorizes the court to approve other methods of service not prohibited by international agreements [.] Inasmuch as our Constitution requires that reasonable notice be given, an earnest effort should be made to devise a method of communication that is consistent with due process and minimizes offense to foreign laws.
Rather than minimizing offense to Austrian law, the failure to obtain OPEC’s consent would constitute a substantial affront to Austrian law. We can find no support permitting such a consequence in the face of Austria’s direct prohibition of service on OPEC without its consent.
Austrian law clearly provides protection to OPEC as an international organization from all methods of service of process without its consent and also requires that any service of process from abroad be effected through Austrian authorities. In this case, OPEC has made clear that it refuses to consent expressly to service of process by Prewitt; thus, the district court did not abuse its discretion in denying Prewitt’s motion to authorize alternative means of service.
There has been disagreement regarding how to effectuate service of process in claims brought against an international organization that does not fall within the scope of any federal statute or treaty. The lack of a controlling international convention that applies to all international organizations uniformly creates widely varied case law from state to state. Thus, domestic law often plays a significant role in determining effective service of process of an international organization.
In general, international organizations with broad regional power enjoy a wide range of immunity from every form of legal process. In Prewitt, the District Court recognized the tension between the plaintiff’s right to bring the claim against OPEC due to violations of US law and OPEC’s immunity from legal service of process. The district court realized that the decision would preclude United States claimants from effectively serving OPEC; thereby, giving OPEC a way around being held liable for its violations of US law. However, the district court opined that the FRCP reflects Congress’ respect for the legislative decisions of other states.
Although the decision would, in effect, insulate OPEC from suit in the United States, the Eleventh Circuit affirmed the District Court’s dismissal because service did not comport with US domestic law. As a preliminary matter, no international agreement or federal statute governed in Prewitt because OPEC is not considered an international organization under the IOIA. Moreover, the US is not a member of OPEC. 
Thus, the court turned to the FRCP to determine whether service of process was effectuated." The court first applied Fed. R. Civ. P. 4(h)(2) that provided for legal service of OPEC in any manner authorized by Fed. R. Civ. P. 4(f)d2 To satisfy the rule, the court noted that plaintiffs must have served OPEC in accordance with the law of the foreign country it was located ind3 Thus, in holding that the plaintiff did not effectively serve OPEC under the FRCP, the court made various determinations regarding what is proscribed as effective service of process in Austrian lawd4 Specifically, the Austrian/OPEC Headquarters Agreement precludes service of process without the express consent of OPEC’s Secretary Generald5 Due to the fact that the Austrian/ OPEC Headquarters Agreement was enacted into law by the Austrian Parliament, the court deferred to Austrian lawd6 The court also rejected plaintiffs’ arguments regarding OPEC’s actual notice of the suit, thus applying the FRCP’s language in a strict sense.17
In 2013, the United States District Court for the District of Columbia was faced with a similar situation.18 In that case, the plaintiffs also sued OPEC for violations of the Sherman Act and the Clayton Act and the court was again called on to dismiss the motion for insufficient service of process.^ The court adopted Prewitt and dismissed the case because Austrian law prohibits any form of service of process to OPEC without its consent.20
-  Thanks to Marissa Mastroianni for her excellent research assistance. 1 cf. OPEC Statute, art. 2(A), 10 October 1960, 443 U.N.T.S. 247. 2 eb. 18, 1974, BGBL 1974/38. 3 cf. Prewitt Enterprises, Inc. v Org. of Petroleum Exporting Countries, 224 FRD 497 (N.D. Ala. 2002);however, note that this judgment vacated an earlier judgment in Prewitt Enterprises, Inc. v Org. ofPetroleum Exporting Countries, CV-00-W-0865-S, 2001 WL 624789 (N.D. Ala. 22 March 2001).
-  The International Law Commission (ILC) spent more than thirty-one years trying to reach a consensus on the topic of relations between states and international organizations, but abandoned its effortsin 1992. See M. Moldner, ‘International Organizations or Institutions, Privileges and Immunities’, inMax Planck Encyclopedia of Public International Law (2008), p. 2.
-  Not only does domestic law play an important role in implementing international agreements, but inthe absence of such an international agreement, domestic law can directly grant privileges and immunities to international organizations. See Moldner (n. 4), p. 3.
-  See C. Wickremasinghe, ‘International Organizations or Institutions, Immunities Before NationalCourts’, in Max Planck Encyclopedia of Public International Law (2009), p. 2 (this also includes theAfrican Union, Council of Europe, and Organization of American States).
-  Prewitt Enterprises, 224 FRD, p. 502 (‘The notion of wholly insulating from service of process anentity such as OPEC—whose decisions surely affect the daily lives of most Americans—is, for many, abitter pill to swallow. But the Court must apply the rules as they are written. The rules reflect a clearlyexpressed diplomatic policy choice of Congress to respect the normative and, ultimately, the legislative,decisions of foreign sovereigns.’).
-  Unless OPEC expressly consented to service, pursuant to art. 5(2) of the Headquarters Agreement.
-  cf. Prewitt Enterprises, 353 F.3d at 922.
-  ю It is important to note that US courts have not treated all cases against an international organizationof which it is not party to in the same manner. For example, in International Tin Council v Amalgameet,Inc., the state court pointed out that there was no basis to extend the immunities the International TinCouncil (ITC) enjoyed under its Headquarters Agreement with the United Kingdom. 524 N.Y.S.2d 971,975 (N.Y. Sup. Ct. 1988) affd, 529 N.Y.S.2d 983 (1988).
-  cf. Prewitt Enterprises (n. 9), p. 923. 5 cf. Prewitt Enterprises (n. 9), p. 922. ‘3 Ibid., pp. 922-4. M Ibid., p. 928. 15 Ibid., p. 923. 16 Ibid., p. 924. 17 Ibid., pp. 924-9. 18 cf. Freedom Watch, Inc. v Org. of Petroleum Exporting Countries, 288 F.R.D. 230 (D.D.C. 2013).