353 F.3d 916 (11th Cir. 2003), 03-11580, Prewitt Enterprises, Inc. v. Organization of Petroleum Exporting Countries

Docket Nº:03-11580
Citation:353 F.3d 916
Party Name:Prewitt Enterprises, Inc. v. Organization of Petroleum Exporting Countries
Case Date:December 18, 2003
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit

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353 F.3d 916 (11th Cir. 2003)

PREWITT ENTERPRISES, INC., on its own behalf and on behalf of all others similarly situated, Plaintiff-Appellant,



No. 03-11580.

United States Court of Appeals, Eleventh Circuit

December 18, 2003

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[Copyrighted Material Omitted]

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        Michael Straus, Straus & Boies, LLP, Mark J. Schirmer, Birmingham, AL, Jeffrey A. Bartos, Guerrieri, Edmond & Clayman, Washington, DC, David Boies, Boies, Schiller & Flexner, LLP, Robert J. Dwyer, Armonk, NY, for Plaintiff-Appellant.

        Thomas S. Martin, Perry S. Bechky, Kristine A. Huskey, Shaniek Mills Maynard, Jonathan Richard DeFosse, Washington, DC, J. Mark White, White, Dunn & Booker, M. Christian King, Lightfoot, Franklin & White, LLC, Sam C. Pointer, Jr., Birmingham, AL, for Defendant-Appellee.

        Gregory S. Coleman, Austin, TX, William F. Gardner, Cabaniss, Johnston, Gardner, Dumas & O'Neal, N. Lee Cooper, Maynard, Cooper & Gale, Birmingham, AL, Carolyn B. Lamm, White & Case, Louis George Ferrand, Thomas C. Green, Sidley & Austin, William J. Kolasky, Jr., Washington, DC, Thomas J. O'Sullivan, New York City, for Amici Curiae.

        Appeal from the United States District Court for the Northern District of Alabama.

        Before ANDERSON, BARKETT and RONEY, Circuit Judges.

        BARKETT, Circuit Judge:

        Prewitt Enterprises, Inc. ("Prewitt") appeals from the dismissal of its complaint against the Organization of the Petroleum Exporting Countries ("OPEC") for insufficient service of process and from the denial of its motion for alternative service of process. Prewitt's complaint against OPEC alleged a violation of the Sherman Act, 15 U.S.C. § 1, 1 for illegal price-fixing agreements on production and export of crude oil and claimed equitable relief pursuant to the Clayton Act, 15 U.S.C. § 26. 2 Because OPEC initially did not respond to the complaint, the district court entered a default final judgment against OPEC enjoining it from entering into, implementing or enforcing any agreements to fix and control the production and export of crude

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oil for one year. OPEC then appeared and moved to vacate the default judgment and injunction on the grounds that OPEC had never been properly served with process, and thus, the court lacked jurisdiction over it. The district court concluded that, because OPEC resides in Austria and the applicable Austrian law prohibits service without OPEC's consent, Prewitt's complaint must be dismissed for lack of jurisdiction. We agree and affirm the dismissal of Prewitt's complaint for lack of jurisdiction because service of process on OPEC has not been effectuated. We also affirm the district court's denial of alternative service of process because, in this case, there are no means available for service upon OPEC under the Federal Rules of Civil Procedure.

         I. BACKGROUND

        Prewitt is a corporation organized and existing under the laws of Alabama with its principal place of business in Birmingham, Alabama. Prewitt purchases substantial quantities of gasoline and other refined petroleum products for resale at its Eastwood Texaco Service Center gasoline station.

        OPEC is an intergovernmental organization originally established in 1960 via resolutions promulgated at the Conference of the Representatives of the Governments of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela in Baghdad, Iraq. 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." OPEC Stat. art. 2(A) (2000). Presently, OPEC's membership consists of: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Since September 1, 1965, OPEC has been headquartered in Vienna, Austria. Its relationship with the Austrian government is governed by 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 Countries, February 18, 1974, BGBL 1974/382 ("Austrian/OPEC Headquarters Agreement" or "Headquarters Agreement").

        Prewitt filed a complaint with the district court against OPEC on behalf of itself and as the representative of all persons or entities who have indirectly purchased petroleum or petroleum products in the United States since March 1999. Prewitt claimed that OPEC has been coordinating an international conspiracy through agreements among its Member States and non-OPEC members to limit the production and export of oil in order to fix world oil prices above competitive levels. Prewitt argued that these agreements constitute violations of United States antitrust laws, specifically the Sherman and Clayton Acts, and have resulted in a substantial and adverse impact on United States trade and commerce. 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

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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.

        Without the participation of OPEC, the district court certified a class defined as all persons or entities who purchased refined petroleum products in the United States from March 1999 to the present and entered a default final judgment and order of injunction against OPEC. The court found that there was a conspiracy between OPEC, its Member States, and non-OPEC members, namely Norway, Mexico, the Russian Federation and Oman, to fix and control crude oil prices; that the agreements coordinated and implemented by OPEC were illegal under United States antitrust laws; that OPEC's illegal conduct has resulted in substantial and adverse impact on United States trade and commerce of approximately $80-120 million per day; and that OPEC and those acting in concert with OPEC should be enjoined from entering into, implementing, and enforcing any further oil price-fixing agreements for a period of twelve months. Copies of the court's orders were delivered to each of the United States embassies for the Member States of OPEC.

        In response, OPEC made a special appearance and filed a motion to set aside the default judgment and stay its enforcement pursuant to Rule 60(b)(1), (4), (5) and (6)3 of the Federal Rules of Civil Procedure ("Fed. R. Civ. P."), which the district court granted, vacating the default judgment and injunction. 4 OPEC then filed a motion to dismiss Prewitt's complaint on various grounds including insufficient service of process pursuant to Fed.R.Civ.P. 12(b)(5). 5 The district court dismissed the case without prejudice, finding that Prewitt had failed to serve OPEC its summons and complaint properly under the Federal Rules. Prewitt then filed a motion to pursue alternative means of effecting service or to amend the judgment. The district court denied the motion finding that, in this case, OPEC cannot be effectively served with process.


        We review the district court's grant of a motion to dismiss for insufficient service of process under Fed.R.Civ.P. 12(b)(5) by applying a de novo standard to the law and a clear error standard to any findings of fact. S & Davis Int'l, Inc. v. Republic of Yemen, 218 F.3d 1292, 1298 (11th Cir. 2000). We generally review the district court's interpretation of Fed.R.Civ.P. 4 on service of process as a matter of law de novo. Vencor Hosp., Inc. v.

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Standard Life & Accident Ins., 279 F.3d 1306, 1308 (11th Cir. 2002). Likewise, the district court's interpretation of foreign law in determining sufficiency of service of process is subject to de novo review. United States v. McNab, 331 F.3d 1228, 1240 (11th Cir. 2003) (citing United States v. Gecas, 120 F.3d 1419, 1424 (11th Cir. 1997) (en banc)). However, we join our sister circuit in holding that the district court's denial of a motion for alternative service of process under Fed.R.Civ.P. 4(f)(3) is subject to an abuse of discretion standard because the plain language of the rule stipulates that the district court "may" direct alternative means of service. Rio Properties, Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1014 (9th Cir. 2002).

        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...

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