VOLKSWAGENWERK AKTIENGESELLSCHAFT, PETITIONER, V. HERWIG J. SCHLUNK, ADMINISTRATOR OF THE ESTATES OF FRANZ J. SCHLUNK AND SYLVIA SCHLUNK, DECEASED No. 86-1052 In the Supreme Court of the United States October Term, 1987 On Writ of Certiorari to the Appellate Court of Illinois, First District Brief for the United States as Amicus Curiae Supporting Respondent TABLE OF CONTENTS Question Presented Interest of the United States Statement Introduction and summary of argument Argument: The Hague Service Convention permits service of a summons and complaint upon a foreign-based corporation through domestic delivery of the documents to the corporation's wholly owned and closely controlled United States subsidiary A. The Hague Service Convention addresses the service of judicial documents within the territory of another contracting nation B. The service method employed here does not constitute "service abroad" within the meaning of the Hague Service Convention Conclusion QUESTION PRESENTED Whether the Hague Service Convention prohibits a United States plaintiff from serving a summons and complaint upon a foreign-based corporation through domestic delivery of the documents to its wholly owned and closely controlled United States subsidiary. INTEREST OF THE UNITED STATES Petitioner Volkswagenwerk Aktiengesellschaft (VWAG), a corporation organized under the laws of the Federal Republic of Germany, challenges a decision from the Appellate Court of Illinois holding that respondent properly served VWAG through in-state service on Volkswagen of America, Inc. (VWoA), VWAG's wholly owned United States subsidiary. VWAG contends that respondent was required to serve his complaint in accordance with the procedures specified in the Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters, opened for signature Nov. 15, 1965, 20 U.S.T. 361, T.I.A.S. No. 6638, 658 U.N.T.S. 163 (Hague Service Convention). The United States has a direct and substantial interest in this international dispute. The United States is a party to the Hague Service Convention and has a vital sovereign interest in assuring that the Convention is construed in accordance with its terms and the intent of the contracting nations, including the United States. The United States previously filed a brief in this case, at this Court's invitation, urging that the Court grant the petition for a writ of certiorari. See U.S. Pet. Amicus Br. In addition, the United States has played a central role in the formulation and application of the Convention. The Department of State participated in its negotiation and domestic advice and consent process, and works through diplomatic channels to resolve difficulties that arise in its operation. See art. 14, 20 U.S.T. 364. The Department of Justice, through its Office of Foreign Litigation, serves as the United States Central Authority and is responsible for administration of the Convention in this country. See art. 2, 20 U.S.T. 362. Thus, the United States has both a strong interest and an important perspective on the question presented in this case. See, e.g., Societe Nationale Industrielle Aerospatiale v. United States District Court, No. 85-1695 (June 15, 1987), slip op. 12 n.19. STATEMENT 1. The Hague Service Convention is a multinational agreement, formulated through the Hague Conference on Private International Law, that prescribes methods for transmitting judicial and extrajudicial documents for service abroad. /1/ The Convention, which is expressed in equally authoritative English and French versions (20 U.S.T. 361-373), seeks "to create appropriate means to ensure that judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time" and, more generally, "to improve the organization of mutual judicial assistance" (20 U.S.T. 362 (preamble)). The Convention neither enlarges nor contracts the subject matter jurisdiction of a contracting nation's courts, nor does it alter the individual nation's standards for determining personal jurisdiction. The Convention is concerned solely with establishing internationally acceptable procedures for transnational service of process. /2/ Article 1 provides that the Convention "shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad" (20 U.S.T. 362). Articles 2 through 16 set forth procedures for service of judicial documents abroad (20 U.S.T. 362-365). Basically, each member nation must designate a "Central Authority" that shall "receive requests for service coming from other contracting States" (art. 2, 20 U.S.T. 362). The Central Authority, upon ascertaining that a request complies with the Convention's standard format and requirements (arts. 3-4, 20 U.S.T. 362), must arrange for service of the document through a method prescribed by the receiving nation's internal law or through a method designated by the requester and compatible with that law (art. 5, 20 U.S.T. 362-363). The Central Authority may require that the document be translated into the official language of the receiving nation (ibid.). Upon completion of service, the Central Authority must provide a certificate to the requester indicating the method, place and date of service (art. 6, 20 U.S.T. 363). If the Central Authority is unable to serve the document, it must specify the circumstances that have prevented service (ibid.). The Convention generally recognizes the validity of other service methods so long as the receiving nation does not object (arts. 8-11, 20 U.S.T. 363-364). It further provides that a receiving nation may refuse a request for service that complies with the terms of the Convention "only if it deems that compliance would infringe its sovereignty or security" (art. 13, 20 U.S.T. 364). The Convention also includes provisions governing the entry of and relief from default judgments where "a writ of summons or an equivalent document had to be transmitted abroad for the purpose of service * * * and the defendant has not appeared" (arts. 15-16, 20 U.S.T. 364-365). Other articles contain provisions governing service of "extrajudicial documents" (art. 17, 20 U.S.T. 365) and a number of "general clauses" (arts. 18-31, 20 U.S.T. 365-367). /3/ 2. Respondent filed a wrongful death action in the Circuit Court of Cook County on behalf of his deceased parents, Franz and Sylvia Schlunk, against Dennis Reed and VWoA, arising from a 1983 automobile accident (Pet. App. 2a; R. 2-25). Respondent alleged that Reed's negligence precipitated a headon collision in Cook County between Reed's automobile and the Schlunk's 1978 Volkswagen Rabbit (R. 2-9). He further alleged that VWoA had designed and sold a defective automobile that caused or contributed to his parents' deaths (R. 9-25). Respondent served the summons and complaint on Reed directly and on VWoA through delivery to C.T. Corporation, VWoA's registered agent for receipt of process in Illinois (Pet. App. 2a). /4/ Reed failed to appear and an order of default was entered against him (ibid.). VWoA filed a timely answer that, among other matters, denied designing or assembling the Schlunks' automobile (R. 28-31). Respondent then filed an amended complaint asserting his defective design claims against both VWAG and VWoA (R. 42-87). Respondent attempted to serve VWAG through delivery of a summons and amended complaint to VWoA's registered agent, C.T. Corporation, which refused acceptance on the ground that it "is not the Statutory/Registered Agent in Illinois" for VWAG (R. 88). Respondent then attempted to serve VWAG by providing C.T. Corporation with an alias summons addressed to VWoA "as Agent for" VWAG (R. 93-94). /5/ VWAG, at this juncture, entered a special appearance in the circuit court for the limited purpose of quashing service of process (R. 96-102). VWAG did not dispute that, upon proper service, it was subject to the personal jurisdiction of the Illinois courts. It maintained, however, that the court's jurisdiction could be perfected only through service in accordance with the Hague Service Convention (R. 158-169). The circuit court denied VWAG's motion to quash service (Pet. App. 24a-26a). The court first determined that, under principles of Illinois common law, VWAG and VWoA "are so closely related that VWoA is an agent for service of process as a matter of law, notwithstanding VWAG's failure or refusal to have made such a formal appointment of VWoA as its agent" (id. at 25a). The court then concluded that "service of process upon VWoA as agent of VWAG is effective service of process upon VWAG under the Illinois Supreme Court Rules and Illinois Code of Civil Procedure" and does not conflict with the Hague Service Convention because that Convention "is applicable only to service of process outside of the United States" (ibid.). Upon VWAG's application, the circuit court authorized interlocutory appeal of its decision (id. at 25a-26a). The Appellate Court of Illinois affirmed (Pet. App. 1a-20a). The court first rejected VWAG's contention that the Hague Service Convention provides the exclusive method for service on residents of other member nations. The court observed that the Convention, by its express terms, "shall apply in all cases, in civil or commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad" (art. 1, 20 U.S.T. 362). It concluded that the Convention was inapplicable here, stating (Pet. App. 4a): Under Illinois law, if the target for service can be found within the state there is simply no occasion for service abroad. Since there is no occasion for service abroad in this case, the Hague Convention, by its own terms, does not apply. The court specifically rejected VWAG's contention that the Hague Service Convention is designed to achieve a uniform method of service, stating that "(i)t is unclear why foreign nationals should be allowed greater protection than United States citizens" from local service rules (id. at 7a-8a). The court expressed the view that VWAG had "conceded away this preemption argument" by acknowledging that foreign nationals can voluntarily appoint domestic agents for receipt of service in this country (ibid.). The appellate court then examined "whether serving VWoA as agent for VWAG was good service" under Illinois law (Pet. App. 8a). The court concluded that VWAG was amenable to service under Illinois law because it was "doing business" in the state through its wholly owned subsidiary VWoA and that the relationship between VWAG and VWoA was sufficiently close to serve VWAG through delivery of the complaint to VWoA (id. at 8a-18a). It observed that "the relationship between VWAG and VWoA is so close that it is certain that VWAG 'was fully apprised of the pendency of the suit' by delivery of the summons to VWoA" (id. at 17a-18a, quoting Maunder v. DeHavilland Aircraft, Ltd., 102 Ill. 2d 342, 353, 466 N.E.2d 217, 223, cert. denied, 469 U.S. 1036 (1984)). The court rejected VWAG's various state law contentions as well as VWAG's claim that failure to quash service would prejudice its right to remove the action to federal court (Pet. App. 18a-20a). The Illinois Supreme Court denied VWAG's petition for leave to appeal (id. at 21a) but stayed the mandate pending VWAG's petition to this Court (id. at 22a-23a). INTRODUCTION AND SUMMARY OF ARGUMENT The Hague Service Convention represents a multinational effort to formulate acceptable methods for transnational service of judicial documents. The Convention responds to two basic international concerns. First, it recognizes that many civil law countries consider service a governmental function and accordingly object to attempts by foreign parties to serve documents within their territory. Second, it recognizes that the procedures for transnational service must be reasonably calculated to provide the defendant with timely notice of the pending proceedings. The Convention satisfies these concerns by creating a reasonably efficient and effective procedure, acceptable to all of the contracting nations, for serving documents within the territory of another contracting nation. The question presented in this case is whether the Hague Convention prevents a United States plaintiff from serving a foreign corporation through domestic delivery of a summons and complaint on its wholly owned and closely controlled United States subsidiary. This question in turn entails two interrelated inquiries. First, is the Convention the exclusive method for serving a resident of a foreign nation -- as petitioner VWAG maintains -- or is the Convention's mandatory procedure limited to cases in which service of process takes place in the territory of another contracting nation? Second, if the Convention applies only to cases in which service of process takes place in the territory of another contracting nation, then is service on a foreign corporation through in-state delivery of the documents to its wholly owned and closely controlled subsidiary properly regarded as a form of domestic service not governed by the terms of the Convention? A. The United States has consistently maintained that the Hague Service Convention prescribes a generally mandatory regime with respect to cases in which a private party seeks to serve a civil summons and complaint within the territory of a foreign contracting nation. The Convention does not, however, govern every case in which the defendant is a foreign national. By its express terms, the Convention applies "where there is occasion to transmit a judicial or extrajudicial document for service abroad" (art. 1, 20 U.S.T. 362 (emphasis added)); it does not prohibit a private plaintiff from employing domestic service procedures when the foreign defendant is properly amenable to service where the action is pending. This construction is wholly consistent with the language, structure, and history of the Convention, which draw a clear distinction between service abroad and service within a contracting state's own territory. The distinction, in turn, preserves the Convention's central goal of ensuring that foreign litigants receive expeditious and effective notice of "documents to be served abroad" (20 U.S.T. 362 (preamble)). Foreign nations retain their right to object to unauthorized process-serving within their borders (arts. 8, 10, 20 U.S.T. 363), while individual defendants retain certain procedural protections where "a writ of summons or equivalent document had to be transmitted abroad for the purpose of service" (art. 15, 20 U.S.T. 364). The Hague Service Convention does not limit the authority of a contracting nation to determine when there is occasion to transmit a document for service abroad. In particular, it does not limit the power a contracting nation to permit service of foreign corporations doing business within its borders through delivery of a summons and complaint to domestic agents or subsidiaries of those corporations. Indeed, it was well established at the time the Convention was drafted that a foreign corporation doing business in the United States was properly amenable to service of process by delivery of a summons and complaint to an agent or wholly owned American subsidiary. The United States understood that its ratification of the Convention would make no major changes in this aspect of its internal law. The result is not unfair to foreign corporations, nor does it impose undue hardship. The primary guarantor of fairness in this context is the Due Process Clause, which requires that a foreign corporation receive timely and effective notice of any legal action commenced against it in the United States. This is as much, or more, protection than United States corporations receive when they do business overseas. B. Although the domestic law of each contracting nation determines when extraterritorial service is required, the question whether the plaintiff has in fact attempted to make "service abroad" must in each case be resolved as a matter of construction of the Hague Service Convention. The negotiating history reveals quite clearly that "service" was understood by the drafters of the Convention to refer to the formal delivery of a document legally sufficient to charge the defendant with notice of a lawsuit. "Service abroad" was accordingly understood to refer to the formal delivery of such a document in the territory of another contracting nation. Thus, when the law of the forum provides that service is legally complete upon the delivery of a summons and complaint to a wholly owned domestic subsidiary of a foreign corporation, this should not be regarded as service abroad. Although the subsidiary will in all likelihood communicate with the foreign parent corporation about the contents of the summons land complaint, the form and manner of these communications are left to the discretion of the corporate entities, and are not part of the formal requirements for service of process. The Hague Service Convention's procedures have proven to be a reasonably efficient and reliable method for service of process in most cases. The United States strongly encourages American plaintiffs to employ those procedures even in situations -- as here -- where there are alternative methods for serving process. But the Convention was neither intended to be, nor is, the sole method for United States litigants to serve foreign corporations doing business in the United States. The policies favoring use of the Convention do not justify imposing it, as a mandatory and exclusive regime, in every situation. ARGUMENT THE HAGUE SERVICE CONVENTION PERMITS SERVICE OF A SUMMONS AND COMPLAINT UPON A FOREIGN-BASED CORPORATION THROUGH DOMESTIC DELIVERY OF THE DOCUMENTS TO THE CORPORATION'S WHOLLY OWNED AND CLOSELY CONTROLLED UNITED STATES SUBSIDIARY A. The Hague Service Convention Addresses the Service of Judicial Documents Within The Territory Of Another Contracting Nation 1. The Hague Service Convention was formulated in response to the rapid growth of foreign commerce, and consequent increase in transnational litigation, following World War II. The European countries maintained widely divergent internal service practices, resulting in great confusion and delay when attempts were made to serve a civil summons and complaint within foreign borders. /6/ Previous multi-national conventions had failed to resolve fully these difficulties. The United States, which in prior years had been reluctant to participate in conventions governing judicial procedure, took a lead role in developing solutions, both through unilateral revisions of its own procedures and through participation in the Tenth Hague Conference on Private International Law. /7/ The Hague negotiating delegations confronted two basic points of contention. First, some civil law countries, including Germany, treat the formal service of judicial documents as an official act of government; they accordingly consider any attempt by a foreign litigant to serve documents within their borders as an encroachment upon their sovereignty. /8/ Second, the internal law of some civil law countries, including France, permitted a method for transnational service of process known as notification au parquet that provided little assurance that the foreign defendant would receive timely notification of the pending law suit. /9/ The delegations attempted to accommodate these differences in their internal law through the formulation of unobjectionable and effective standardized procedures permitting private parties to serve documents within the territory of a foreign contracting state. See, e.g., III Conference de la Haye de Droit International Prive, Actes et Documents de la Dixieme Session 127-129 (1964) (comments of the U.S. delegation). The resulting Convention is, by its terms, primarily an enabling treaty, designed to create an internationally acceptable procedure for serving documents abroad. /10/ The United States has maintained that the Hague Service Convention prescribes a generally mandatory regime for private parties to serve a civil summons and complaint within the territory of a foreign contracting nation. See U.S. Pet. Amicus Br. 16. /11/ Under this regime, a private plaintiff cannot invoke his local forum's service rules to serve a foreign defendant within a foreign nation's borders -- through, for example, personal delivery or use of postal channels (see, e.g., Fed. R. Civ. P. 4(i)) -- unless the foreign nation consents. /12/ The United States further maintains, however, that the Convention's procedures govern methods for transnational service of process: the Convention's language, structure, history, and professed purpose all indicate that the Convention does not prohibit a contracting nation from specifying how process originating from its own courts may be served within its own borders. See U.S. Pet. Amicus Br. 16-18. The Hague Service Convention's formal title indicates that the agreement is concerned with "Service Abroad" (20 U.S.T. 361). Its operative language expressly recognizes a difference between service within and without the territory of the forum state. Article 1 provides that the Convention shall apply "where there is occasion to transmit a judicial or extrajudicial document for service abroad" (20 U.S.T. 362 (emphasis added)). /13/ The Convention draws on traditional principles of territorial sovereignty to adopt a fundamental distinction between formal service within and service without the borders of the forum state. /14/ The ratification documents reaffirm the distinction. /15/ This distinction between foreign and domestic service preserves the Convention's basic protections of foreign interests. Foreign nations retain their right to object to unauthorized process-serving within their borders (arts. 8, 10, 20 U.S.T. 363), while individual defendants retain certain procedural protections from default judgments where "a writ of summons or equivalent document had to be transmitted abroad for the purpose of service, under the provisions of the present Convention" (arts. 15, 16, 20 U.S.T. 364-365). The domestic forum, in turn, is free to exercise its recognized sovereign prerogatives (see, e.g., arts. 8, 10(c), 19, 20 U.S.T. 363-365) to determine appropriate rules for service within its borders. Cf. Societe Nationale Industrielle Aerospatiale, slip op. 21 n.29. /16/ The distinction between foreign and domestic service is also consistent with the basic purposes of the Convention. The Convention was designed to address the special problems that arise when one sovereign conducts official acts within the borders of another and to help ensure that foreign defendants served abroad receive timely notice of pending legal actions; it was not intended to immunize foreign nationals from domestic service rules. The Convention's preamble makes clear that the Convention was formulated to create appropriate means to ensure timely notice of documents "to be served abroad" (20 U.S.T. 362). The Convention goes on to establish generally uniform procedures "for that purpose" (ibid.). /17/ Thus, the Convention creates an internationally acceptable standardized method for serving documents on foreign soil, and places limits on other potentially objectionable transnational service methods, including formal service through personal delivery in a foreign nation, or through diplomatic or postal channels. But it was not intended to standardize the contracting nations' domestic service procedures -- however desirable that result may be. /18/ 2. The Hague Service Convention does not dictate when "there is occasion to transmit a judicial or extrajudicial document for service abroad" (art. 1, 20 U.S.T. 362); the Convention's language and negotiating history both indicate that this is a question for the nation where the action is pending. /19/ If, under the internal law of a contracting nation, service must take place abroad, then the Convention procedures govern. But if the law of the forum nation does not require service abroad, and the plaintiff does not attempt extraterritorial service, then the law of the forum determines whether service was proper. This position reflects the United States' understanding and intent at the time it ratified the Hague Service Convention. Prior to the formulation of the Convention, it was well established that a foreign corporation doing business in the United States was amenable to service through delivery of documents to a subsidiary or agent conducting the corporation's business in the United States. See, e.g., Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 444-445 (1952). /20/ As Judge Learned Hand explained, the corporation is attributed location outside its state of incorporation "by virtue of local activities of its agents which realize its purposes." Latimer v. S/A Industrias Reunidas F. Matarazzo, 175 F.2d 184, 185 (2d Cir. 1949). /21/ American courts regularly applied this concept to allow service on a foreign corporation through in-state delivery of documents to its United States agent or subsidiary conducting its affairs in the forum state. /22/ American courts have uniformly viewed such service methods -- in which all the formalities of service are completed within the forum state's territory -- as forms of in-state service. /23/ The United States neither expected nor intended that ratification of the Hague Service Convention would make major changes in that understanding and the resulting domestic service practices. In submitting the Convention to the Senate for advice and consent to ratification, the President, the Secretary of State, and the United States negotiating delegation reported that the Convention would make no major changes in existing American law, while requiring many civil law countries to adjust their practices "in the direction of our generous system of international judicial assistance and our concept of due process in the service of documents." /24/ This view was repeated in the subsequent hearings before the Senate Committee on Foreign Relations. /25/ The Senate Committee reiterated this point in recommending advice and consent; likewise, the various national and state bar associations that supported ratification gave no suggestion that the Convention would limit traditional in-state service methods. /26/ Thus, the Hague Service Convention's history conclusively shows that the United States negotiated and ratified the Convention with the understanding that the agreement established a mechanism for serving documents on foreign soil while making no major changes in pre-existing federal and state rules governing service in this country. Accordingly, the United States cannot accept VWAG's proposition that the Hague Service Convention broadly limits the authority of the United States -- or the individual states -- to allow service of a foreign corporation, doing business in the United States through a wholly owned subsidiary, by traditional domestic service methods. 3. VWAG argues that limiting the Hague Service Convention to extraterritorial service will result in unfairness or oppression of foreign corporations, and suggests that the lower court's construction will permit foreign corporations to be sued under fictitious agency theories that deprive them of effective notice and an opportunity to defend against pending litigation (VWAG Br. 47). These arguments overlook the fundamental role that the Due Process Clause performs in ensuring that all litigants in United States courts -- whether native or foreign -- receive a fair trial. /27/ Due process requires that state and federal courts abide by "'"traditional notions of fair play and substantial justice"'" (Asahi Metal Industry Co. v. Superior Court, No. 85-693 (Feb. 24, 1987), slip op. 1 (citations omitted)). This means, in the present context, that those courts must adopt methods of service that are "reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane v. Central Hanover Trust Co., 339 U.S. 306, 314 (1950). These protections make it unnecessary to adopt the sweeping interpretation of the Hague Service Convention urged by VWAG in order to protect foreign corporations against unfair methods of domestic service. VWAG cannot seriously contend that the Illinois service rules violate due process principles. A state does not offend due process by subjecting a foreign corporation that conducts business in the state through a wholly owned and closely controlled subsidiary to the jurisdiction of that state's courts. See International Shoe Co. v. Washington, 326 U.S. 310, 315-320 (1945). /28/ A state is accordingly entitled to prescribe a service procedure to assert its jurisdiction over such a corporation. See Omni Capital Int'l, Ltd. v. Rudolph Wolff & Co., No. 86-740 (Dec. 8, 1987) slip op. 5-6; Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 444-445 (1946). That procedure must, of course, satisfy Mullane's demand for notice "reasonably calculated" to inform the defendant of the pendency of the action (339 U.S. at 314). But it "is enough that (the defendant) has established such contacts with the state that the particular form of substituted service adopted there gives reasonable assurance that the notice will be actual." International Shoe Co., 326 U.S. at 320. The service method employed here clearly satisfies that test. The Illinois Appellate Court determined that VWAG transacts business in Illinois through its wholly owned subsidiary, VWoA. See Pet. App. 8a-17a. It further determined that "the relationship between VWAG and VWoA is so close that it is certain that VWAG 'was fully apprised of the pendency of the action' by delivery of the summons to VWoA" (id. at 17a). VWAG cannot credibly maintain that service upon its wholly owned subsidiary would fail to give it sufficient notice of the lawsuit. VWAG has complete control over its subsidiary: VWAG can take the necessary steps to assure that it receives prompt notice of the initiation of a suit. /29/ Domestic out-of-state corporations routinely adopt operating procedures to assure that a subsidiary communicates notice of a summons to the corporate headquarters, and there is no reason why VWAG cannot do the same. Foreign corporations may find the need to develop such internal procedures inconvenient, but they are certainly not onerous or unfair. /30/ Indeed, other contracting nations employ similar service practices. /31/ B. The Service Method Employed Here Does Not Constitute "Service Abroad" Within The Meaning Of The Hague Service Convention 1. Although the Hague Service Convention allows each member nation to determine when extraterritorial service is required, this does not mean that each nation may determine for itself what constitutes extraterritorial service. The Convention imposes mandatory procedures that must be followed in all civil and commercial litigation where there is "service abroad." The meaning of "service abroad" must therefore be determined as a matter of treaty construction rather than local law. Thus, even if an Illinois plaintiff is not required by the Hague Service Convention to make extraterritorial service on VWAG, the question remains whether the method of service chosen is in fact a form of "service abroad." If it is, then it is the Convention procedures -- and not whatever procedures are prescribed by state law -- that must govern service of process. The Convention does not by its terms define the meaning of the critical phrase "service abroad." Nevertheless, it is clear from the negotiating history that service of process was understood to refer to the formal delivery of documents that is legally sufficient, under the law of the forum, to charge the defendant with notice of a pending action. /32/ There was no suggestion that service of process was understood to be synonymous with the transmittal of any information to the defendant, no matter how informal, about the pendency of a lawsuit. The Convention's negotiating history unequivocally affirms this understanding. /33/ Given that service refers to the formal delivery of documents, then service abroad clearly refers to the formal delivery of documents in the territory of another member nation. That being the case, service on a wholly owned and closely controlled domestic subsidiary does not entail service abroad. Under Illinois law, service of process on a parent corporation is complete when the summons and complaint are served on a wholly owned subsidiary doing business within the State. It may be plausible to assume, as VWAG asserts, that there will generally be some further communication between the subsidiary and the parent corporation about the content of the summons and complaint. But this further transmittal of information, assuming it occurs, /34/ is not part of the formal legal action that constitutes service of process. Thus, when respondent served VWoA with a summons naming VWAG as a defendant in respondent's suit, there was no "service abroad" within the meaning of the Convention. The suggested interpretation is also fully consistent with the Convention's rejection of the European practice of notification au parquet. The Convention's drafters clearly understood notification au parquet to be a form of service abroad. /35/ The drafters indicated in the debates that the countries that used this service method had specified in their formal service rules that the documents had to be transmitted to the foreign defendant through diplomatic or postal channels. /36/ Thus, VWAG is quite wrong in suggesting that the decision below "revives in a single stroke one of the principal evils that the Convention sought to eliminate -- notification au parquet" (VWAG Br. 32). Service of process on a wholly owned and closely controlled domestic subsidiary does not entail service abroad; notification au parquet does. For the same reason, the practice which has evolved in this country of serving an out-of-state defendant through the state secretary of state or other state officials should generally be regarded as service abroad. These state service practices are analogous to notification au parquet. /37/ Typically, secretary of state service requires that a summons and complaint be served on the secretary of state or other government official, who then is obliged as a matter of law to transmit the summons and complaint to the defendant through postal channels. See U.S. Pet. Amicus Br. 10 n.16. As in the case of notification au parquet, the transmission of the summons and complaint is an integral part of the legal requirements for effective service. See generally 2 J. Moore & J. Lucas, Moore's Federal Practice Sections 4.15, 4.22, 4.41-1 (2d ed. 1987). Thus, we believe that the Convention limits the unconsented use of this method of service. Contracting nations that have exercised their rights under Articles 8 and 10 and have objected to service through diplomatic or postal channels (such as Germany) have effectively insulated their citizens from this service method. See 20 U.S.T. 363. Persons in contracting nations that authorize use of those channels receive the procedural protections set forth in Articles 15 and 16. Foreign parties that expressly consent to such service are, of course, bound by the terms of their consent. See U.S. Pet. Amicus Br. 10. VWAG argues (Br. 37) that if service on a wholly owned subsidiary of a foreign corporation is not service abroad, then a whole host of fictitious agency theories can be employed to circumvent the Convention. But this argument -- at bottom, a resort to a parade of horribles -- is more fanciful than real. On the one hand, as noted above (see pages 20-22, supra), an agency theory that is not "reasonably calculated" to inform the defendant of the action and allow it an opportunity to defend would violate due process. Mullane v. Central Hanover Trust, supra. On the other hand, if in order to overcome due process objections the theory incorporates a legal requirement that the defendant be directly notified in order to complete service (see, e.g., Wuchter v. Pizzutti, 276 U.S. 13 (1928)), then the theory would entail service abroad and would be subject to the Convention. Contrary to VWAG's suggestion, therefore, the set of state substitute service practices that would both avoid due process infirmities and yet not entail service abroad is in reality quite small. /38/ 2. As a general matter, the United States strongly encourages American plaintiffs to avail themselves of the Hague Service Convention's internationally accepted procedures even in situations -- as here -- where there are alternative methods for serving process. The Convention procedures have proven to be a reliable and generally preferred method for service of process in most cases. /39/ But the policies that favor use of the Convention do not justify imposing it, as a mandatory and exclusive regime, in every situation. The Convention was neither intended to be, nor is, the sole method for United States litigants to serve foreign corporations doing business in the United States. Furthermore, the present Convention is not likely to be the final word in resolving international conflicts over service of process. /40/ The interests of the international community are best served by applying the Convention in accordance with the Convention's terms. Diplomatic efforts can then proceed on a firm footing to resolve the remaining differences. We accordingly submit that the Hague Service Convention does not preclude respondent from serving VWAG through in-state delivery of the complaint, in accordance with Illinois law, to VWAG's wholly owned and closely controlled United States subsidiary. The Appellate Court of Illinois did not err in refusing to quash service in this case. CONCLUSION The decision of the Appellate Court of Illinois should be affirmed. Respectfully submitted. CHARLES FRIED Solicitor General RICHARD K. WILLARD Assistant Attorney General THOMAS W. MERRILL Deputy Solicitor General JAMES M. SPEARS Deputy Assistant Attorney General JEFFREY P. MINEAR Assistant to the Solicitor General DAVID EPSTEIN Attorney ABRAHAM D. SOFAER Legal Adviser Department of State FEBRUARY 1988 /1/ See generally Hague Conference on Private International Law, Practical Handbook on the Operation of the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1983); 1 B. Ristau, International Judicial Assistance (Civil and Commercial) 118-173 (1984 & Supp. 1986). The Hague Conference also formulated the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, opened for signature Mar. 18, 1970, 23 U.S.T. 2555, T.I.A.S. No. 7444, 847 U.N.T.S. 231 (Hague Evidence Convention). See Societe Nationale Industrielle Aerospatiale v. United States District Court, No. 85-1695 (June 15, 1987). /2/ The United States (in 1967) and the Federal Republic of Germany (in 1979) have both ratified the Convention (see Pet. App. 27a, 45a). They are thus contracting nations and not mere "signatories" (VWAG Br. 10, 20, 30). The term "signatories" includes nations that have signed but not ratified the Convention and thus are not to be bound by its terms. See arts. 26 and 28, 20 U.S.T. 366. Thirty other nations have either ratified or acceded to the Convention; Antigua and Barbuda; Barbados; Belgium; Botswana; Cyprus; Czechoslovakia; Denmark; Egypt; Fiji; Finland; France; Greece; Israel; Italy; Japan; Kiribati; Luxembourg; Malawi; the Netherlands; Nevis; Norway; Portugal; Seychelles; Spain; St. Kitts; St. Lucia; St. Vincent; Sweden; Turkey; and the United Kingdom. /3/ In fiscal year 1987, the United States Central Authority received 5,433 incoming requests for service on American citizens, including 1,622 requests from the Federal Republic of Germany. In calendar year 1986, Germany received 661 American requests for service on German citizens. See F.R.G. Amicus Br. 7-8. We are unable to estimate the total number of American requests transmitted abroad because outgoing requests are not transmitted through the United States Central Authority. /4/ Illinois law permits service on individuals by delivery of a copy of the summons to the individual or to a family member at the individual's usual place of abode. Ill. Ann. Stat. ch. 110, para. 2-203 (Smith-Hurd 1983). Illinois law further provides that a "private corporation may be served (1) by leaving a copy of the process with its registered agent or any officer or agent of the corporation found anywhere in the State; and (2) in any other manner now or hereafter permitted by law." Ill. Ann. Stat. ch. 110, para. 2-204 (Smith-Hurd Supp. 1987); see also id. ch. 32, para. 5.25. /5/ An alias summons is, of course, simply a summons issued when the "original has not produced its effect because defective in form or manner of service, and when issued, supersedes the first writ." Black's Law Dictionary 66 (5th ed. 1979). See Ill. Ann. Stat. ch. 110A, para. 103 (Smith-Hurd 1983). /6/ The various European practices were detailed by the Columbia University School of Law Project on International Procedure. See International Co-Operation in Litigation: Europe (H. Smit ed. 1965). See also, e.g., Smit, International Aspects of Federal Civil Procedure, 61 Colum. L. Rev. 1031, 1040-1043 (1961); Longley, Serving Process, Subpoenas and Other Documents in Foreign Territory, 1959 Proc. ABA Sec. of Int'l & Comp. L. 34; Jones, International Judicial Assistance: Procedural Chaos and a Program for Reform, 62 Yale L.J. 515, 534-537 (1953); Harvard Research in International Law, Draft Convention on Judicial Assistance, 33 Am. J. Int'l L. 11, 43-65 (Special Supp. 1939). /7/ See 1 B. Ristau, International Judicial Assistance (Civil and Commercial) Pt. 1 (1984 & Supp. 1986). The United States traditionally declined to participate because it viewed questions of judicial procedure as primarily matters of state law. See ibid.; Jones, supra, 61 Yale L.J. at 556-558; Comment, The United States and the Hague Conferences on Private International Law, 1 Am. J. Comp. L. 268 (1952). However, by the 1960's, Congress recognized that the United States could play an important leadership role in questions of international judicial procedure. In 1963, Congress authorized United States participation in the Hague Conference (Joint Res. of Dec. 30, 1963, 77 Stat. 775), and the United States Judicial Conference revised Rule 4 of the Federal Rules of Civil Procedure to address questions of transnational service. See Fed. R. Civ. P. 4(i). In 1964, Congress enacted legislation giving foreign litigants broad unilateral assistance in serving foreign process within the United States. See 28 U.S.C. 1696. See generally Comment, Revitalization of the International Judicial Assistance Procedures of the United States: Service of Documents and Taking of Testimony, 62 Mich. L. Rev. 1375 (1964). /8/ See, e.g., Smit, supra, 61 Colum. L. Rev. at 1040; Miller, International Cooperation in Litigation Between the United States and Switzerland: Unilateral Procedural Accommodation in a Test Tube, 49 Minn. L. Rev. 1069, 1075-1086 (1965); Longley, supra, 1959 Proc. ABA Sec. of Int'l & Comp. L. at 35. The Columbia Project noted that while Germany objected to any service by foreign persons within its borders (International Co-Operation in Litigation: Europe, supra, at 192-193), at the same time it sought to extend its own service into foreign countries through non-compulsory methods ("formlose Zustellung") and also allowed for service through publication (id. at 173-179). See also Heidenberg, Service of Process and Gathering of Information Relative to a Law Suit Brought in West Germany, 9 Int'l Law, 725, 728-729 (1975). /9/ See International Co-Operation in Litigation: Europe, supra, at 44-46 (Belgium), 122-129 (France); 383-385 (Netherlands). As the United States ratification documents explain, au parquet service generally consisted of delivering the document to a local court official, who was then supposed to transmit the document abroad through diplomatic or other channels. See S. Exec. Rep. 6, 90th Cong., 1st Sess. 11-12, 14-16 (1967); S. Treaty Doc. C, 90th Cong., 1st Sess. 5-6, 21 (1967). Under this practice, service was effective immediately, even if the defendant failed to receive actual notice of the action. See S. Exec. Rep. 6, supra, at 11-12. See generally Amram, The Revolutionary Change in Service of Process Abroad in French Civil Procedure, 2 Int'l Law, 650 (1967) (describing France's post-Convention revisions to notification au parquet). /10/ The Convention's preamble states that the intention of the signatories was "to create appropriate means" for timely serving documents abroad and "to improve the organisation of mutual judicial assistance for that purpose" (20 U.S.T. 362 (emphasis added)). See also S. Exec. Rep. 6, supra, at 14 ("the convention is an enabling convention, designed to create benefits where none now exist") (statement of Philip Amram, member of the U.S. delegation; emphasis in original). /11/ See also Brief for the United States as Amicus Curiae at 9 in Anschuetz & Co., GmbH v. Mississippi River Bridge Auth., No. 85-98; Brief for the United States as Amicus Curiae as Amicus Curiae at 7 in Club Mediterranee, S.A. v. Dorin, No. 83-461; Brief for the United States as Amicus Curiae at 5 in Volkswagenwerk A.G. V. Falzon, No. 82-1888 ("United States courts have consistently and properly held that litigants wishing to serve process in countries that are parties to the Service Convention must follow the procedures provided by that Convention unless the nation involved permits more liberal procedures."). The question whether the federal government must use the Convention to serve judicial documents in the territory of other contracting nations remains open: a number of civil law nations have suggested that at least some federal civil enforcement actions are not "civil or commercial" matters, and thus do not come within the terms of the Convention. See Restatement of Foreign Relations Law of the United States Section 471 comment (f) (Tent. Final Draft July 15, 1985). No question is presented in this case about the definition of a "civil or commercial" action; whatever the phrase means, it clearly encompasses respondent's products liability action. /12/ The Convention does not contain a provision expressly forbidding such service. The prohibition is, however, reasonably implicit in the Convention's various articles. For example, Article 1 states, in mandatory terms, that the Convention "shall apply * * * where there is occasion to transmit a judicial * * * document for service abroad" (20 U.S.T. 362). See Societe Nationale Industrielle Aerospatiale, No. 85-1695 (June 15, 1987), slip op. 11 n.1 (noting the Convention's "mandatory" character). Subsequent provisions then permit contracting nations to lodge formal objections to service through consular channels (art. 8), through postal channels (art. 10(a)) and through official channels of the receiving state (art. 10(b) and (c)). 20 U.S.T. 363. And other provisions recognize that the contracting states may provide more liberal methods for service within their own borders through subsequent treaties (art. 11) or by unilateral internal legislation (art. 19). 20 U.S.T. 363-365. These provisions, read in combination, indicate that the Convention was formulated as a generally mandatory regime for transnational service in contracting nations that refuse to allow alternative service methods. See also U.S. Pet. Amicus Br. 16-17 n.27 (noting several situations where the Convention procedures may not be mandatory). /13/ The equally authoritative French version of this provision, when read literally, expresses this distinction in even stronger terms: it states that the Convention is applicable in all cases where a judicial document is to be transmitted abroad to be served there. See 20 U.S.T. 362 ("La presente Convention est applicable * * * dans tous les cas ou un acte judiciaire * * * doit etre transmis a l'etranger pour y etre signifie ou notifie."). /14/ See Hague Conference on Private International Law, supra, at 28-29 (1983); Restatement of Foreign Relations Law of the United States, ch. 7 introductory note and Section 471(1) (Tent. Final Draft July 15, 1985). This distinction is present throughout the Convention's provisions. For example, Article 8 provides that each contracting state "shall be free to effect service of judicial documents upon persons abroad" through consular agents, but adds that a state "may declare that it is opposed to such service within its territory" (20 U.S.T. 363 (emphasis added)). Articles 15 and 16 provide certain procedural protections from default judgments where a summons "had to be transmitted abroad for the purpose of service" (20 U.S.T. 364-365 (emphasis added)). Article 19 later declares that the Convention does not affect provisions of a contracting state's internal law that permit alternative methods of transmitting "documents coming from abroad, for service within its territory" (20 U.S.T. 365 (emphasis added)). /15/ See, e.g., S. Exec. Rep. 6, supra, at 1 ("This convention applies to the service abroad of judicial and extrajudicial documents in all civil and commercial cases."); S. Treaty Doc. C, supra, at 4 (The Convention provisions "provide machinery by which agencies in country A may assist tribunals and litigants of country B, in actions pending in country B, to secure service of documents in country A.") (Secretary of State Rusk); see also Comm. on Int'l Law, The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 22 Rec. Ass'n Bar of N.Y.C. 280, 287 (1967) ("Domestic legislation -- whether federal or state -- cannot secure for United States residents the cooperation of foreign sovereigns in facilitating service on foreign soil of process emanating from the United States federal and state courts."). /16/ Articles 15 and 16 are certainly important, but they are not as all-encompassing as VWAG suggests (VWAG Br. 30-33). Their express terms indicate that they do not apply when the service requirements of the forum state can be fulfilled without transmitting the document overseas (for example, by personal delivery of the summons to a defendant present within the territory of the forum state), or when the transmittal is made under circumstances not governed by the Convention (for example, when the recipient's address is unknown (art. 1, 20 U.S.T. 362) or when service is made pursuant to a bilateral agreement (art. 11, 20 U.S.T. 363-364)). See III Actes et Documents de la Dixieme Session, supra, at 378 ("L'article 16 limite la faculte de relever la foreclusion aux cas ou la signification ou la notification de l'acte introductif d'instance * * * doit etre faite selon les dispositions de la convention."). /17/ The negotiating delegations specifically considered and rejected a proposal that would have extended the Convention's protections under Article 15 (then numbered Article 13) whenever a summons "concerne une personne qui reside (ou qui a son siege principal) dans le territore d'un Etat contractant autre que celui du for" (III Actes et Documents de la Dixieme Session, supra, at 252 (concerns a person who resides (or has his principal place of business) in the territory of a contracting state other than that of the forum)). See id. at 252-255. The Belgian delegate stated that under the Belgian Judicial Code, a judicial document may always be served on a foreigner who is in Belgium even if he does not reside there, and that, in his view, this principle should be perpetuated under the Convention. Id. at 254 ("M. Jenard (Belgique) * * * signale que selon le Code judiciare un acte judiciare peut toujours etre signifie a un etranger qui se trouve en Belgique meme s'il n'y reside pas. Il estime quant a lui que ce principe devrait etre consacre par la convention."). See also ibid. (statements of the Rapporteur; M. Bellet (France); and M. Loeff (Netherlands)). /18/ Our interpretation is fully consistent with established principles of treaty interpretation. "In interpreting an international treaty, we are mindful that it is 'in the nature of a contract between nations,' Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U.S. 243, 253 (194), to which '(g)eneral rules of construction apply.' Id., at 262. See Ware v. Hylton, 3 Dall. 199, 240-241 (1976) (opinion of Chase, J.). We therefore begin 'with the text of the treaty and the context in which the written words are used.' Air France v. Saks, 470 U.S. 392, 397 (1985). The treaty's history, '"the negotiations, and the practical construction adopted by the parties"' may also be relevant. Id., at 396 (quoting Choctaw Nation of Indians v. United States, 318 U.S. 423, 431-432 (1943))." Societe Nationale Industrielle Aerospatiale, slip op. 10-11. Furthermore, "'(t)he meaning attributed to treaty provisions by the Government agencies charged with their negotiation and enforcement is entitled to great weight'" (id. at 12 n.19 (citations omitted)). /19/ The negotiating delegations recognized that Article 1's provision that the Convention shall apply where "there is occasion" to transmit documents for service abroad (20 U.S.T. 362) would inevitably require reference to the forum nation's law. See III Actes et Documents de la Dixieme Session, supra, at 167-169. The Rapporteur explained in the debates that one must leave to the requesting state the task of defining when a document must be served abroad, that this solution was a consequence of the inability to establish an objective test, that it is a drawback and decreases the obligatory force of the Convention, but that it does provide clarity. Id. at 254 ("Il pense que l'on doit laisser a l'Etat requerant le soin de definir quand l'acte doit etre notifie a l'etranger, tout en reconnaissant que cette solution a eu pour consequence qu'il n'a pas ete possible d'etablir une condition objective, ce qui constitue un inconvenient et amoindrit la force obligatoire de la convention; cette solution a neanmoins permis d'obtenir la clarte."). /20/ "Today if an authorized representative of a foreign corporation be physically present in the state of the forum and be there engaged in activities appropriate to accepting service or receiving notice on its behalf, we recognize that there is no unfairness in subjecting that corporation to the jurisdiction of the courts of that state through such service of process upon that representative." 342 U.S. at 444-445. /21/ See also, e.g., International Shoe Co. v. Washington, 326 U.S. 310, 315-320 (1945); Bomze v. Nardis Sportswear, Inc., 165 F.2d 33, 37 (2d Cir. 1948) (L. Hand, J.); Hutchinson v. Chase & Gilbert, Inc., 45 F.2d 139, 141 (2d Cir. 1930) (L. Hand, J.). /22/ See, e.g., Perkins, 342 U.S. at 439-440; United States v. Scophony Corp., 333 U.S. 795, 818 (1948); id. at 820 (Frankfurter, J., concurring); Latimer, 175 F.2d at 186; In re Electric & Musical Indus., Ltd., 155 F. Supp. 892 (S.D.N.Y. 1957) (subpoena duces tecum); In re Seimens & Halske A.G., 155 F. Supp. 897 (S.D.N.Y. 1957) (subpoena duces tecum); United States v. Watchmakers of Switzerland Information Center, 133 F. Supp. 40 (S.D.N.Y. 1955); United States v. Imperial Chem. Indus., Ltd., 100 F. Supp. 504, 511 (S.D.N.Y. 1951). /23/ See International Shoe Co., 326 U.S. at 320 ("We are likewise unable to conclude that the service of process within the state upon an agent whose activities establish appellant's 'presence' there was not sufficient notice of the suit, or that the suit was so unrelated to those activities as to make the agent an inappropriate vehicle for communicating the notice."); Societe Fonciere et Agricole des Etats Unis v. Milliken, 135 U.S. 304, 307 (1890) ("it matters not under what law the company is organized, or where its domicil is, service of process may be made upon the local agent representing it within the county in which the suit is brought"). See also, e.g., Pet. App. 5a-6a; Lamb v. Volkswagenwerk A.G., 104 F.R.D. 95, 97 (S.D. Fla. 1985); Zisman v. Sieger, 106 F.R.D. 194, 199-200 (N.D. Ill. 1985); McHugh v. International Components Corp., 118 Misc. 489, 491-492, 461 N.Y.S.2d 166, 167-168 (Sup. Ct. 1983). See also text and footnotes, at pages 23-25, infra. /24/ S. Treaty Doc. C, supra, at 1 (President Johnson); see also id. at 8 ("The most significant aspect of the convention is the fact that it requires so little change in the present procedures in the United States, yet at the same time requires such major changes, in the direction of modern and efficient procedures, in the present practices of many other (nations)." (statement of Secretary of State Rusk)); id. at 20 ("In its broadest aspects the convention makes no basic changes in U.S. practices, while it makes substantial changes in the practices of many of the civil law countries, moving their practices in the direction of the U.S. approach to international judicial assistance and our concepts of due process in the service of process." (report of the U.S. delegation)). /25/ See, e.g., S. Exec. Rep. 6, supra at 9 ("it is my opinion, therefore, that this convention does not invade the domain of State law in the United States.") (prepared statement of Joe C. Barrett, member of the U.S. delegation and member of the National Conference of Commissioners on Uniform State Laws); id. at 11 ("(The Convention) leaves our common-law due-process principles unaffected and unchanged.") (prepared statement of Philip Amram, member of the U.S. delegation); Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (Executive C, 90-1): Hearing Before the Senate Comm. on Foreign Relations, 90th Cong., 1st Sess. 12-13 (1967) ("The second most remarkable thing about the Convention is that it requires absolutely no change in our procedures because the judicial assistance which is required by the Convention is less than the assistance that we are already giving under our own Act (28 U.S.C. 1696).") (testimony of Philip Amram); id. at 13-14 ("I think this is the reason that there has been no opposition from anyone. No lawyer examining this Convention could find in it anything but benefit to himself as a practitioner, and benefit to his clients.") (testimony of Philip Amram); id. at 16 ("The explanation is as you have given it on your part is that (the Convention) requires no change.") (statement of Sen. Fulbright). /26/ See S. Exec. Rep. 6, supra, at 2 ("In other words, nothing now authorized by our law will be repealed or modified in the event of ratification of this convention by the United States."); Amram, The Proposed International Convention on the Service of Documents Abroad, 51 A.B.A.J. 650 (1965); Comm. on Int'l Law, The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 22 Rec. Ass'n Bar of N.Y.C. 280 (1967). /27/ Significantly, in ratifying the Convention the United States expressed the view that the Convention in effect extended the protections of due process -- which already applied to domestic service of process -- to extraterritorial service of process, which had previously operated by less exacting standards. See, e g., S. Exec. Rep. 6, supra, at 15 ("The United States already provides the fullest due-process protection to foreign defendants in U.S. litigation. From the point of view of the U.S. delegation, we greet with pleasure the offer of any other state to mold its procedures in the direction of our concepts of due process.") (statement of Philip Amram). See text and footnotes at 18-19, supra, and note 37, infra. /28/ VWAG concedes that it is subject to the personal jurisdiction of the Illinois courts based on its extensive contacts with the forum state (Pet. App. 8a). We note that a similarly situated American company in Germany likewise would be subject to the personal jurisdiction of the German courts. German law provides that a German court may exercise personal jurisdiction over a non-German based on the mere presence of property in Germany. "Under this rule, 'a Russian may leave his galoshes in a hotel in Berlin and may be sued in Berlin for a debt of 100,000 Marks because of assets within the jurisdiction.'" Born, Reflections on Judicial Jurisdiction in International Cases, 17 Ga. J. Int'l & Comp. L. 1, 14-15 (1987) (paraphrasing Breit, Ueber das Auslaenderforum, 40 Juristische Wochenschrift 636, 639 (1911)). /29/ See, e.g., Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771-772 (1984). ("A parent and its wholly owned subsidiary have a complete unity of interest. * * * They share a common purpose whether or not the parent keeps a tight rein over the subsidiary; the parent may assert full control at any moment if the subsidiary fails to act in the parent's best interests." (footnote omitted)). /30/ This result is fully consistent with Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176 (1982), which recognized that foreign corporations are allowed to incorporate United States subsidiaries in order that they might conduct business in this country on a comparable basis with domestic firms (id. at 188). See Treaty of Friendship, Commerce and Navigation, United States-West Germany, Oct. 29, 1954, 7 U.S.T. 1839, T.I.A.S. No. 3593. VWAG points to no persuasive reason why foreign corporations that do extensive business in the United States through a wholly owned subsidiary cannot comply with the procedures that govern other out-of-state corporations. We note that if VWAG's position were to prevail, a foreign corporation could presumably demand, for example, that every "judicial document" in a lawsuit be served through the Convention, notwithstanding the common domestic rules providing that post-summons documents to be served upon a represented party shall be served upon his attorney. See, e.g., Fed. R. Civ. P. 5(b). /31/ For example, the European Court of Justice recognized in its landmark "dyestuffs" decision that "the separation between parent firm and subsidiaries arising out of the fact that each has a distinct legal personality does not prevent their conduct on the market from being viewed as a unity for purposes of the application of rules of competition." Imperial Chem. Indus., Ltd. v. Commission of the European Communities, 2 Common Mkt. Rep. (CCH) Paragraph 8161, at 8031 (July 14, 1972). See Hadari, The Structure of the Private Multinational Enterprise, 71 Mich. L. Rev. 729, 790 (1973). In that case, the Commission of the European Communities had served its decision on a parent corporation through service upon its subsidiary, reasoning that "it is sufficient if the notification is duly received within the recipient's 'sphere of influence'" (Imperial Chem. Indus., Ltd., at 8013). The European Court of Justice found no reason to question that procedure because the parent received actual notice (id. at 8026). Thus, while some contracting nations may object to serving a foreign corporation through a domestic subsidiary, the practice is, in fact, utilized in other countries. See also, e.g., Acciaierie Laminotoi Magliano Alpi (ALMA) SpA v. High Auth. of the European Coal & Steel Community, Case 8/56 (Ct. J. Eur. Coal & Steel Community Dec. 10, 1957), at 97, 99 ("application may be made of a principle of law recognized in all countries of the Community, namely that a written declaration of intent becomes effective as soon as it arrives in due course within the control of the addressee"); International Co-Operation in Litigation: Europe, supra, at 123 (noting that "service in France can be made at a branch establishment."). /32/ "The English term 'service' presents no ambiguity to American or English lawyers; it means the formal delivery of a legal document to the addressee in such a manner as legally to charge him with notice of receiving it." 1 B. Ristau, supra at 123; Black's Law Dictionary 1227 (5th ed. 1979). See, e.g., Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., No. 86-740 (Dec. 8, 1987), slip op. 6-7; 4 C. Wright & A. Miller, Federal Practice and Procedure Section 1063, at 225 (2d ed. 1987). European nations also understand the term "service" to signify an official act and not merely "a generic description governing the transmission of pleadings to foreign defendants who are sued in the courts of other signatory nations" (VWAG Br. 20). See, e.g., Heidenberg, supra, 9 Int'l Law, at 725 ("Service of process is defined in German law as the 'formal delivery of a document in accordance with statutory provisions.'" (citing RG 124, 22; BGH 8, 316)). Indeed, it is the official nature of service that gives rise to sovereignty concerns. See note 8, supra. Illinois law specifies that service shall be accomplished by delivery of process to "any officer or agent of the corporation found anywhere in the State" (Ill. Ann. Stat. ch. 110, para. 2-204 (Smith-Hurd 1983 & Supp. 1986)). Service was thus complete under Illinois law upon delivery of process to VWAG's agent within Illinois. /33/ For example, the Rapport explicatif stresses that Article I employs the French juridical terms for service, signification and notification, to emphasize that the Convention applies only in cases where one transmits a document in a formal manner. III Actes et Documents de la Dixieme Session, supra, at 366 ("On a encore voula affirmer, par l'emploi de deux mots juridiques, que la convention s'applique seulement aux cas ou l'on transmet un acte de maniere formelle."). During the debates, the German delegate specifically affirmed this point. See id. at 159 ("La convention ne peut s'appliquer que dans le cas ou l'on signifie ou transmet un acte de maniere formelle, et non d'une transmission informalle." (Mr. Arnold (Germany) (emphasis in original)). The Rapport further states that the use of more general terms, such as delivery or transmission, to determine the scope of the Convention was rejected because the Convention contemplates two operations: the transmission of the document from the requesting state to the receiving state, and service upon the person to whom it is intended. Id. at 366 ("La solution d'employer une expression neutre comme remise ou transmission pour fixer le domaine de la convention a ete repoussee. Il a ete convenu en effet que la convention visait deux operations: la transmission de l'acte de l'Etat requerant a l'Etat requis, et sa signification ou sa notification a la personne a qui l'acte est destine.") (emphasis in original). /34/ VWAG repeatedly asserts (e.g., Br. 14, 21, 22, 27, 29, 30) that the subsidiary must transmit the original summons and complaint to the parent corporation overseas. But this is not the only possible course that a foreign corporation might instruct its domestic subsidiary to follow. The foreign corporation might instruct the subsidiary to prepare a translation of the summons and complaint, or a summary of the summons and complaint, and transmit the translation or summary overseas. Or, the foreign corporation might send a representative to the forum nation to inspect the summons and complaint and make arrangements for handling the litigation on the scene. Finally, the foreign corporation might issue standing instructions to the subsidiary directing it to make arrangements on behalf of the foreign corporation for handling the litigation. None of these three alternatives would involve transmission of the original summons and complaint abroad. Indeed, the second and third alternatives would not involve the transmission abroad of any written information about the summons and complaint. /35/ The Rapport explicatif's discussion of Article 1 notes that, while the strict language of the provision might raise a question whether or not the Convention regulates notification au parquet, the understanding of the drafting commission, based on the debates, is that the Convention would apply. See III Actes et Documents de la Dixieme Session, supra, at 367 ("Cependant, en face de la lettre stricte de la disposition, on peut toujours se poser la question de savoir si, quand un Etat admet que la signification ou la notification d'une personne se trouvant a l'etranger, soit faite au parquet, la convention s'applique ou ne s'applique pas. L'interpretation authentique de la Commission telle qu' elle ressort des debats, est dans le sens de l'application de la convention." (emphasis and footnote omitted)). /36/ See III Actes et Documents de la Dixieme Session, supra, at 160, 167-169, 254 (statements of Mr. Bellet and Mr. Loussouarn (France) and M. Loeff (Netherlands)). See also, e.g., Fr. C. Pr. Civ. arts. 684-686. The Convention plainly treats formal service through diplomatic or postal channels as service "abroad" (see arts. 8, 10(a), 20 U.S.T. 363); it naturally follows that au parquet procedures are likewise a form of service "abroad." /37/ Notably, the United States delegation objected to notification au parquet because the practice lacked adequate assurances that notice would be communicated to the defendant and would therefore fail to "meet the requirements of 'due process of law' under the Federal Constitution." III Actes et Documents de la Dixieme Session, supra, at 128 (citing Wuchter v. Pizzutti, 276 U.S. 13 (1928)). See S. Exec. Rep. 6, supra, at 11-12, 14-16; S. Treaty Doc. C, supra, at 21. Philip Amram, a member of the United States negotiating delegation, explained that "notification au parquet has no relation to our 'long arm' statutes" because American courts "have marked out the constitutional due-process boundary lines of these statutes." S. Exec. Rep. 6, supra, at 12. Mr. Amram nevertheless apparently believed that the Convention would regulate long arm statutes providing for service through the secretary of state in the same manner as in the case of the foreign practice of notification au parquet. See id. at 15. /38/ Karl Schermer & Co. v. Alpha International, petition for cert. pending, No. 87-150 (filed July 24, 1987), on which VWAG relies (Br. 37), illustrates this point. In that case, service was allowed upon a foreign corporation through delivery of the documents to the corporation's domestic insurance adjuster. Although this type of substitute service does not entail service abroad, the case is quite aberrational. Indeed, the service method employed there appears defective under basic due process principles. If in order to cure the due process problems the state required parallel notification directly to the foreign corporation, then this method of service would constitute service abroad and would trigger the procedural requirements of the Convention. /39/ See, e.g., Gould Entertainment Corp. v. Bodo, 107 F.R.D. 308, 309 (S.D.N.Y. 1985); Oman Int'l Finance Ltd. v. Hoiyong Gems Corp., 616 F. Supp. 351, 356-357 (D.R.I. 1985). Failure to employ the Convention's procedures may raise serious obstacles to obtaining foreign assistance in enforcing a United States judgment. See Westin, Enforcing Foreign Commercial Judgments and Arbitral Awards in the United States, West Germany, and England, 19 L. & Pol. Int'l Bus. 325, 340-341 (1987). Thus, American plaintiffs have a strong incentive to use the Convention in lieu of other available service methods. /40/ As we have noted (note 11, supra), there is a lack of unanimity on the question whether the Hague Service Convention must be employed when a government agency seeks to serve a judicial summons and complaint abroad. Difficulties have also developed in obtaining foreign cooperation when serving complaints seeking punitive damages. See U.S. Pet. Amicus Br. 20 n.32. The contracting nations may ultimately wish to resolve these and other questions through further consultation and cooperation.