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The Knit With v. Knitting Fever

December 7, 2010

THE KNIT WITH, PLAINTIFF,
v.
KNITTING FEVER, INC., DESIGNER YARNS, LTD.,
FILATURA PETTINATA V.V.G. DISTEFANO VACCARI & C., SION
ELALOUF, DIANEELALOUF, JEFFREY J. DENECKE, JR., JAY OPPERMAN, AND DEBBIE BLISS, DEFENDANTS.
THE KNIT WITH, PLAINTIFF,
v.
EISAKU NORO & CO., LTD., KNITTING FEVER, INC., SION ELALOUF, DIANEELALOUF,
AND JAY OPPERMAN, DEFENDANTS.



The opinion of the court was delivered by: Buckwalter, S.J.

MEMORANDUM

Currently pending before the Court are: (1) Plaintiff The Knit With's Petition for Special Order of Service of Process Against Defendants Filatura Pettinata V.V.G. di Stefano Vaccari & C. and Designer Yarns, Ltd; and (2) the Motion of Defendants Designer Yarns, Ltd and Filatura Pettinata V.V.G. di Stefano Vaccari & C. to Dismiss. For the following reasons, Plaintiff's Petition is granted and Defendants' Motion is denied.

I. FACTUAL AND PROCEDURAL HISTORY

The factual background of this case is one familiar to both the parties and the Court and has been reiterated in several of this Court's prior opinions.*fn1 The Court therefore repeats only the facts relevant to the present Motions.

This matter arises between Plaintiff The Knit With ("The Knit"), a small, family-owned and operated business retailing specialty yarns and accessories to consumers, and Defendant Knitting Fever, Inc. ("KFI"), a New York corporation that manufactures and distributes specialty yarns. At the core of the dispute is Plaintiff's claim that KFI sold designer knitting yarns to The Knit, representing that the yarns contained a percentage of cashmere, which they allegedly did not.

On September 2, 2008, Plaintiff initiated litigation against KFI and its officers/directors, as well as Italian Defendant and yarn manufacturer Filatura Pettinata V.V.G. di Stefano Vaccari & C. ("Filatura"), and British Defendants and yarn designers/manufacturers Designer Yarns, Ltd. ("Designer Yarns") and Debbie Bliss, alleging that, as a consequence of the false labeling of three Cashmerino yarns, its business and commercial interests were harmed. (Compl., The Knit With v. Knitting Fever, Inc., No. CIV.A.08-4221 (E.D. Pa. Sept. 2, 2008).) Over the course of the next two years KFI and The Knit engaged in vigorous litigation, including discovery and dispositive motions. Throughout this entire course of events, however, Defendants Filatura, Debbie Bliss, and Designer Yarns never entered appearances. Accordingly, on May 10, 2010, Plaintiff moved for default judgments against these entities. The three foreign Defendants engaged attorney Joshua Slavitt of Pepper Hamilton, LLP -- who had been acting as counsel for KFI and its principals in the litigation to date -- to represent them in challenging Plaintiff's action against them. Defendant Filatura then countered, on May 12, 2010, with a Motion to Dismiss the case against it for insufficient service. That same day, the Clerk of this Court entered defaults against Defendants Debbie Bliss and Designer Yarns. On May 14, 2010, the two defaulting Defendants moved to reopen the judgments against them and simultaneously filed Motions to Dismiss for insufficient service identical to the one filed by Filatura. By way of Order entered July 13, 2010, the Court quashed the service of process on Defendants Filatura, Designer Yarns, and Debbie Bliss; vacated the default judgments against Designer Yarns and Debbie Bliss; and ordered Plaintiff to effect proper service on these three Defendants within sixty days, or else face dismissal of the actions against them with prejudice. The Knit With v. Knitting Fever, Inc., No. CIV.A.08-4221, 2010 WL 2788203 (E.D. Pa. July 13, 2010).

On July 14, 2010, one day after the Court's entry of its Order, the Knit requested that Mr. Slavitt accept service of process on behalf of his clients Filatura, Designer Yarns, and Debbie Bliss. (Pl.'s Petition for Alternate Service ("Pl.'s Petition") Ex. F.) Mr. Slavitt promptly replied that his office would not accept such service. (Id.) On July 15, 2010, Plaintiff also filed a Notice of Lawsuit and Request to Waive Service of Summons to Filatura, Designer Yarns, and Debbie Bliss. (Id. Ex. G.) Finally, on July 19, 2010, Plaintiff requested that the Clerk of Court for the United States District Court for the Eastern District of Pennsylvania effect service, pursuant to Federal Rule of Civil Procedure 4(f)(2)(C)(ii), on Designer Yarns, Filatura, and Debbie Bliss. (Id. Ex. K.) The Clerk mailed process to these Defendants by registered first-class mail, return receipt requested, on July 19, 2010. (Docket No. 174.) As of early August, 2010, service of process against Bliss was effected by personal service, once in Portland, Oregon and once in Seattle, Washington. (Pl.'s Petition, Ex. H; Docket No. 190.) Neither Filatura nor Designer Yarns, however, acknowledged receipt of the service by the Clerk. (Decl. of James F. Casale, ¶ 18, Sept. 15, 2010 ("Casale Decl.").) Likewise, neither of these Defendants signed and returned the waiver of service of process. (Id. ¶¶ 15-18.) On September 13, 2010, Plaintiff's counsel received the return of the waiver addressed to Bliss, indicating that the delivery was refused on August 17, 2010. (Pl.'s Petition, Exs. I & J.)

Plaintiff filed the current Petition for Special Order of Service of Process on Filatura and Designer Yarns on September 16, 2010 -- three days after the Court-ordered time for effecting service on these Defendants expired. Defendants responded on October 4, 2010, and Plaintiff filed a Reply Brief on October 13, 2010. In the meantime, on October 6, 2010, Defendants Filatura and Designer Yarns filed a Motion to Dismiss under Federal Rule of Civil Procedure 41(b) for failure to properly accomplish service of process against them within the Court-ordered period. Plaintiff responded to that Motion on October 19, 2010.*fn2 This Court now turns to a consideration of the pending Motions.

II. PLAINTIFF'S PETITION FOR SPECIAL ORDER OF SERVICE OF PROCESS

In the United States, Federal Rule of Civil Procedure 4(f) governs service of process upon individuals in a foreign country. FED. R. CIV. P. 4(f). The Rule provides for service as follows:

Unless federal law provides otherwise, an individual -- other than a minor, an incompetent person, or a person whose waiver has been filed -- may be served at a place not within any judicial district of the United States:

(1) by an internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents;

(2) if there is no internationally agreed means, or if an international agreement allows but does not specify other mans, by a method that is reasonably calculated to give notice:

(A) as prescribed by the foreign country's law for service in that country in an action in its courts of general jurisdiction; (B) as the foreign authority directs in response to a letter rogatory or letter of request; ...


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