United States District Court, W.D. Louisiana, Monroe Division
REPORT AND RECOMMENDATION
KAREN L. HAYES, Magistrate Judge.
Before the undersigned Magistrate Judge, on reference from the District Court, is a motion to dismiss for insufficient service of process, Fed.R.Civ.P. 12(b)(5) [doc. # 5], filed by defendant Groupo Rimar, AKA Suavinex, SA ("Suavinex"). The motion is opposed, in part. For reasons explained below, it is recommended that the motion be denied, but service quashed.
a) Current Suit
On August 14, 2014, Luv N' Care, Ltd. ("LNC"), a Louisiana corporation, with its principal place of business at Monroe, Louisiana, filed the instant complaint before this court against Suavinex, a Spanish corporation, with its principal place of business at Alicante, Spain. (Compl.). According to the complaint, effective January 1, 2009, LNC contracted with Suavinex for the latter company to act as the exclusive distributor for LNC's products in Spain. (Compl., Exh. A; "2009 Agreement"). The 2009 Agreement included provisions protecting intellectual property rights and ensuring confidentiality. Id. Effective April 12, 2012, however, LNC and Suavinex confected a Termination Agreement and Mutual Release ("2012 Agreement") that recognized the expiration of the 2009 Agreement, and settled a dispute regarding the payment of outstanding commission and invoices. (Compl., Exh. B). The 2012 Agreement also preserved certain provisions of the 2009 Agreement regarding intellectual property rights, termination of trademark rights, and use of confidential information. Id. The 2012 Agreement further specified that "[a]ny action, hearing, suit or proceeding arising out of or relating to this Agreement shall be brought in the United State[s] District Court for the Western District of... Louisiana." Id.
According to LNC, Suavinex is selling products in contravention of provisions of the 2009 Agreement that were incorporated into the 2012 Agreement. (Compl.). Accordingly, LNC seeks recovery against Suavinex for damages, in an amount greater than the jurisdictional threshold, for breach of contract and for violation of the Louisiana Unfair Trade Practices and Consumer Protection Act, La. R.S. 51:1401, et seq.  LNC also requests an injunction, attorney's fees, interest, costs, and expenses.
b) Prior Suit
On June 6, 2013, more than one year before it filed the instant suit, LNC filed substantially the same suit against Suavinex in the 4th Judicial District Court for the Parish of Ouachita, State of Louisiana. See Petition; Pl. Opp. Memo., Exh. A. On June 13, 2014, however, Suavinex filed a "Declinatory Exception of Improper Venue, " on the basis that the parties had designated the United States District Court for the Western District of Louisiana as the proper venue for all actions between them. (Pl. Opp. Memo., Exh. C). In the wake of Suavinex's exception, counsel for LNC suggested to opposing counsel that Suavinex simply remove the case to federal court, or failing that, LNC would have to re-file the matter in federal court. See E-Mails between Joe Guerriero, Bob Baldwin, and Bob Altherr, Jr.; Pl. Opp. Memo., Exhs. D-G. After engaging in settlement negotiations that failed to bear fruit, LNC re-filed the suit in federal court, and apparently voluntarily dismissed the state court action. See Id.
c) Service and the Pending Motion to Dismiss
LNC served Suavinex with the state court suit via the Hague Convention. (Pl. Opp. Memo., pg. 3). After LNC re-filed the suit in federal court, LNC's counsel asked counsel for Suavinex whether Suavinex intended to insist on service of the new suit via the Hague Convention. (Pl. Opp. Memo., Exh. F). There is no indication that counsel for Suavinex ever replied to this inquiry. Id. Subsequently, on September 4, 2014, counsel for LNC advised defense counsel that he had "just remembered" that LNC's CEO would be attending a trade show in Germany, and thus, - in the absence of Suavinex's immediate agreement to accept service of the federal lawsuit - LNC's CEO would proceed to serve Suavinex at the trade show. Id. There is no indication that counsel for Suavinex ever responded or objected to counsel for LNC's proposal.
As promised, on September 12, 2014, a process server left service papers with Sauvinex employees who were staffing a booth at a Cologne trade show. See Affidavits of Sarah Munoz and Gustavo Lubian; Def. M/Dismiss, Exhs. A & B). On September 22, 2014, counsel for LNC advised opposing counsel that he had served their client and filed the return of service confirming personal service at the show. [doc. # 4].
On October 3, 2014, Suavinex filed the instant motion to dismiss for insufficient service of process pursuant to Rule 12(b)(5) of the Federal Rules of Civil Procedure. Suavinex argues that LNC's service attempt at the trade show was insufficient because, as a Spanish corporation, Suavinex must be served pursuant to the Hague Convention. On October 6, 2014, LNC filed its opposition to the motion to dismiss, in which it did not contest that its service attempt at the German trade show was ineffective. However, in lieu of dismissal, LNC urges the court to quash the prior service, and permit LNC to effect service on Suavinex in accordance with the Hague Convention. Suavinex did not file a reply, and the time to do so has lapsed. Thus, the matter is ripe.
A "Rule 12(b)(5) motion is the proper vehicle for challenging the mode of delivery or the lack of delivery of the summons and complaint." 5B CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1353 (3d ed. 2013). "When service of process is challenged, the serving party bears the burden of proving its validity or good cause for failure to effect timely service." Sys. Signs Supplies v. U.S. Dep't of Justice, 903 F.2d 1011, 1013 (5th Cir. 1990). A district court "enjoys broad discretion in determining ...