United States: U.S. District Court Denies Motion for Service of Process via Twitter in Cryptocurrency Value Manipulation Case

united-states:-us.-district-court-denies-motion-for-service-of-process-via-twitter-in-cryptocurrency-value-manipulation-case

On December 13, 2021, the U.S. District Court for the District of Arizona issued a ruling in a class action case against Binance, one of the largest cryptocurrency exchanges in the world, that service of process through Twitter did not satisfy the requirements of Federal Rule of Civil Procedure 4(f). (Cox v. CoinMarketCap OpCo LLC, et al., No. CV-21-08197-PCT-SMB (D. Ariz. Dec. 14, 2021) (Case).) Rule 4(f) provides the framework for service of a summons on an individual in a foreign country, generally by procedures outlined in an international agreement (such as The Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents) that will reasonably provide notice to the individual, or in a specific manner ordered by the court (so long as it is not prohibited by an international agreement). In this case, the plaintiffs filed a motion asking the court for leave to serve several defendants by providing the case documents to their “verified” Twitter accounts. (Twitter provides criteria for a “verified” account; these are also colloquially referred to as “blue check mark” accounts). (Case at 2.)

In its order denying the motion, the court concluded that because the plaintiff was unable to show what country the defendants resided in, the court could not determine whether service by Twitter would be a violation of international law. (Case at 3.)The court explained that it could order service of process by an alternative means so long as it found the method satisfied constitutional due process concerns and was not barred by an international agreement. (Case at 3.) The court agreed generally that other district courts had granted motions authorizing service via social media in other cases, but it distinguished the circumstances in the underlying case. (Case at 3–4.) For example, in a case out of the Northern District of California (St. Francis Assisi v. Kuwait Finance House, Case No. 3:16-cv-2340-LB (N.D. Cal. Sept. 30, 2016)), the court granted a motion to serve by Twitter because the defendant in that case was a resident of Kuwait, which is not a party to the Hague Convention, and service by Twitter would likely provide notice. (Case at 4.)

The court explained that in this case, however, the plaintiffs alleged that the defendants may be residents of multiple countries (Taiwan, Singapore, Malta, and the United States), so it would not be possible for the court to determine if service by Twitter would violate the Hague Convention, stating that the plaintiff “merely speculates” as to the residences of the defendants. (Case at 3.)