McCurdy v. American Bd. of Plastic Surgery

• Decision Date: 13 July 1998
• Docket Number: No. 97-1971,97-1971
• Citation: 157 F.3d 191
• Parties: John A. McCURDY, Jr., M.D.; John A. McCurdy, Jr., M.D., FACS, Inc., Appellants, v. AMERICAN BOARD OF PLASTIC SURGERY. . Submitted Pursuant to Third Circuit LAR 34.1(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 191

157 F.3d 191

41 Fed.R.Serv.3d 988

John A. McCURDY, Jr., M.D.; John A. McCurdy, Jr., M.D., FACS, Inc., Appellants, v. AMERICAN BOARD OF PLASTIC SURGERY.

No. 97-1971.

United States Court of Appeals, Third Circuit.

Submitted Pursuant to Third Circuit LAR 34.1(a) July 13, 1998.

Decided Sept. 22, 1998.

Robert A. Smith, Kaneohe, HI, for Appellants.

Gabriel L. Bevilacqua, Saul, Ewing, Remick & Saul, Philadelphia, PA, for Appellee.

Before: SLOVITER and ROTH, Circuit Judges, and FEIKENS, ^* District Judge.

OPINION OF THE COURT

SLOVITER, Circuit Judge.

This appeal requires us to consider the intersection of Rules 4(m) and 12(h) of the Federal Rules of Civil Procedure, in particular whether an objection to service of process as untimely under Rule 4(m) may be waived under 12(h) if not made in compliance with Rule 12(g). Surprisingly, it is an issue we have not previously addressed.

I.

Appellant John A. McCurdy, Jr., M.D., is a licensed physician practicing cosmetic surgery in the State of Hawaii through the professional corporation of John A. McCurdy, Jr., M.D., FACS, Inc., wholly owned by McCurdy (collectively referred to as "McCurdy"). McCurdy filed for bankruptcy after a jury awarded a former patient $2 million in her malpractice suit against him. Thereafter, on June 10, 1996, McCurdy filed a complaint in the United States District Court for the District of Hawaii against the American Board of Plastic Surgery ("ABPS") (the appellee here), the Hawaii Plastic Surgery Society, the American Society of Plastic and Reconstructive Surgeons, Inc., seven individual plastic surgeons, and two professional medical corporations. McCurdy alleged unfair competition, unlawful restraint of trade and various antitrust violations in the field of cosmetic plastic surgery under the Clayton Act, 15 U.S.C. § 15 (1994), the Sherman Act, 15 U.S.C. §§ 1-2 (1994), and Haw.Rev.Stat. § 480-13(a)(1). Among the overt acts alleged was the testimony of a California plastic surgeon on behalf of the plaintiff in the malpractice suit. On October 4, 1996, McCurdy filed an amended complaint, pursuant to Fed.R.Civ.P. 15(a), naming an additional defendant, the American Board of Medical Specialties ("ABMS").

The instant appeal involves only defendant ABPS, which was served with both the original and amended complaints on October 28, 1996, 20 days after the expiration of the original 120-day period provided for under Fed.R.Civ.P. 4(m). McCurdy claims that he failed to serve ABPS during the 120-day period because counsel had used that time to make his Rule 11 inquiry, concluding by October 4, 1996, that a factual and legal basis for suit existed. Although service had been initially mailed to ABPS on October 4, 1996, it was directed to William D. Morain, M.D., who was no longer employed by ABPS. Consequently, McCurdy re-served ABPS on October 24, 1996. This time, service was directed to Constance Hanson, an ABPS administrator, who accepted it on October 28, 1996.

On January 17, 1997, ABPS moved to dismiss McCurdy's claims under Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure, asserting that Hawaii lacked personal jurisdiction over it and that venue was improper. ABPS did not allege a defect in the October 28 service of process pursuant to Rules 12(b)(4) or 12(b)(5).

On January 27, 1997, the Hawaii district court granted a motion to dismiss for lack of personal jurisdiction and improper venue filed by defendant ABMS. The court reasoned that under Hawaii's long-arm statute, Hawaii had no jurisdiction over ABMS and that even if it did, McCurdy's claims with respect to ABMS were barred by the statute of limitations.

McCurdy anticipated that the court would apply the same reasoning to ABPS, which like ABMS had been served under Hawaii's long-arm statute. Therefore, McCurdy sought to moot the issue of personal jurisdiction under the state long-arm statute by re-serving ABPS under the Clayton Act, which provides that process on a corporate defendant "may be served in the district of which it is an inhabitant, or wherever it may be found." 15 U.S.C. § 22 (1994). McCurdy believed that the October 4 filing of the first amended complaint initiated a new 120-day time period in which to serve ABPS, but even that period would have expired on February 3, 1997. On February 5, 1997, McCurdy filed an ex parte motion requesting the court to exercise its discretion under Fed.R.Civ.P. 4(m) to extend the 120-day period by nine days. On February 7, 1997, while the ex parte motion was pending, the amended complaint was personally served on ABPS. Although the first service was designated in counsel's cover letter as under the Hawaii long-arm statute, the February service was ostensibly under the nationwide service provision of the Clayton Act. A week later, the Hawaii magistrate judge denied without prejudice McCurdy's ex parte motion to enlarge the time in which to serve. On February 27, 1997, ABPS moved to quash the February 7, 1997 service on the ground that it was untimely under Rule 4(m). The record contains no indication of any ruling on that motion.

On April 11, 1997, the Hawaii district court, ruling on ABPS's January 17 motion to dismiss, held that it lacked personal jurisdiction over ABPS and that venue was improper. Nonetheless, the court then transferred McCurdy's suit against ABPS to the Eastern District of Pennsylvania "in the interest of justice," as it would have otherwise been time-barred as of that time. McCurdy never re-served ABPS.

On May 13, 1997, following the transfer, ABPS filed a motion to dismiss arguing that the original October 28, 1996, service was untimely. McCurdy opposed the motion and filed a cross-motion for an extension of time to effect service. McCurdy argued that ABPS had waived any challenges to the timeliness of the October service because its motion to dismiss the action in the District of Hawaii listed as grounds only lack of personal jurisdiction and venue. On November 12, 1997, the Pennsylvania district court granted ABPS's motion on the ground that McCurdy had failed to effect service within 120 days of either the original or first amended complaints. The court read the language of Rule 4(m) that requires that service of process be made within 120 days to be mandatory, and not subject to waiver. Thereafter, the court determined that McCurdy had not been diligent in attempting to serve ABPS and declined to find good cause for extending the time for service. Accordingly, the district court dismissed McCurdy's complaint against ABPS. McCurdy now appeals that dismissal.

II.

McCurdy argues on appeal that the district court erred in determining that failure to effect service in compliance with Rule 4(m) requires dismissal and is not subject to waiver by the defendant. He claims that ABPS waived any challenge to the October 28 service by not raising it in the Rule 12 motion filed in Hawaii on January 17, 1997. In that motion, ABPS moved to dismiss based on lack of personal jurisdiction and venue but not on the ground that service had been untimely. Issues concerning the propriety of service under Rule 4 are subject to plenary review. See Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 481 (3d Cir.1993).

Rule 12(g) provides that "[i]f a party makes a motion under this rule but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted." Fed.R.Civ.P. 12(g).

The Rule "contemplates the presentation of an omnibus pre-answer motion in which defendant advances every available Rule 12 defense and objection he may have that is assertable by motion." 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure: Civil 2d § 1384 at 726 (1990). Thus, if a defendant seeks dismissal of the plaintiff's complaint pursuant to Rule 12(b)(5) on the ground that service of process was insufficient or ineffective, it must include that defense either in its answer or together with any other Rule 12 defenses raised in a pre-answer motion. See generally 2 James Wm. Moore et al., Moore's Federal Practice, § 12.21 (3d ed.1997).

In turn, Rule 12(h) provides:

A defense of lack of jurisdiction over the person, improper venue, insufficiency of process, or insufficiency of service of process is waived (A) if omitted from a motion in the circumstances described in subdivision (g), or (B) if it is neither made by motion under this rule nor included in a responsive pleading or an amendment thereof permitted by Rule 15(a) to be made as a matter of course.

Fed.R.Civ.P. 12(h)(1) (emphasis added).

Thus, if a Rule 12 motion is made and the defendant omits its objection to the timeliness or effectiveness of service under Rule 12(b)(5), that objection is waived. This court has long recognized that objections to service of process are waived if not timely raised. See, e.g., Government of the Virgin Islands v. Sun Island Car Rentals, Inc., 819 F.2d 430, 433 (3d Cir.1987) (defective service waived if not challenged in first defensive pleading); Konigsberg v. Shute, 435 F.2d 551, 551-52 (3d Cir.1970) (per curiam) (finding defendant waived right to assert defenses of lack of personal jurisdiction and insufficiency of process where these objections were not raised in first responsive pleading); Zelson v. Thomforde, 412 F.2d 56, 58-59 & n. 8 (3d Cir.1969) (per curiam) (deeming defendants' objection to service of process waived where defendants initially moved to dismiss only on statute of limitations grounds).

The courts of appeals in our sister circuits have reached the same conclusion. See Armstrong v. Sears, 33 F.3d 182, 188 (2d Cir.1994) (noting that Fed.R.Civ.P. 12(g) requires consolidation of defenses and Fed.R.Civ.P. 12(h)(1) requires that objections to service be included in first Fed.R.Civ.P. 12 motion); Golden v. Cox Furniture Mfg. Co., 683 F.2d...