A recent decision allowing alternative service of process on a non-U.S. defendant via his U.S. counsel highlights a recent trend of parties using Rule 4 of the Federal Rules of Civil Procedure to reach persons who are located outside the territorial United States.[1] In Troell v. Binance Holdings Ltd., 2025 WL 1415808 (S.D.N.Y. May 16, 2025), the Honorable Jeannette A. Vargas granted the plaintiffs’ request to serve Changpeng Zhao (“Zhao”), the former CEO of Binance Holdings Limited (“Binance”) who was residing in the United Arab Emirates (“U.A.E.”), via his U.S. counsel. Despite acknowledging that “courts are split on the issue of whether domestic service on a foreign defendant’s U.S. counsel” is appropriate, Judge Vargas reasoned that service on Zhao’s U.S. counsel would provide him “with notice that comports with constitutional due process.” This decision, the precedent upon which it relies, and several other recent cases[2] raise several questions, including whether alternative service on U.S. counsel might obviate the need to comply with international treaties, and what steps (if any) non-U.S. defendants can take to mitigate the risk of an end-run around typical rules governing service of process.
The Underlying Action
The plaintiffs in Troell are a group of 535 direct or indirect victims of terrorist attacks that took place between 2017 and 2023. They bring claims under the Anti-Terrorism Act (“ATA”) against Binance, a global crypto exchange, and Zhao, as Binance’s former CEO, alleging that the defendants aided and abetted attacks carried out or authorized by foreign terrorist organizations (“FTOs”), including Hezbollah, Hamas, al-Qaeda, and ISIS. The plaintiffs claim that Binance and Zhao knowingly facilitated the transfer of hundreds of millions of dollars’ worth of cryptocurrency to and from the FTOs and purposely failed to implement adequate anti-money laundering controls that allowed illicit activity to occur on Binance’s platform.
Service on Binance and Zhao
The plaintiffs served Binance in October 2024 via a process server. The plaintiffs, however, encountered difficulties in effecting service on Zhao, who is a dual citizen of Canada and the U.A.E. The plaintiffs first attempted to serve Zhao in the U.S., as they understood he was due to be released from a federal detention facility located in California at the end of September 2024. Despite enlisting the U.S. Marshals Service to assist with service on Zhao immediately upon his release, the plaintiffs failed to serve Zhao because he had already left the country. The plaintiffs suspected that Zhao had gone to the U.A.E. and was residing there, but they were unable to obtain an address for him.
Change in Zhao’s U.S. Counsel
Around the same time that the plaintiffs attempted to serve Zhao in person, Zhao and Binance were represented by a U.S. law firm in various U.S. litigations, even though the firm did not represent Zhao in the action brought by the plaintiffs.[3] The plaintiffs sought to serve process on the U.S. firm, arguing that this means of alternative service would “comport[] with due process because Zhao was represented by [the firm] in other cases in the district, and [the firm] is currently representing Binance in the instant action.” In the alternative, the plaintiffs argued that alternative service was permissible on a different U.S. law firm that “Zhao subsequently retained . . . to represent him” in the case at hand. That second law firm corresponded with the plaintiffs via e-mail and sought to reach an agreement on a briefing schedule with respect to the plaintiffs’ motion for alternative service. While the second firm opposed any method of alternative service on Zhao, the plaintiffs cited these interactions as support for alternative service “through one of the law firms” that represented Zhao.
The Court’s Holding
Judge Vargas granted the plaintiffs’ request to effect alternate service through Zhao’s U.S. counsel. Citing to decisions approving alternative service on defendants in the U.A.E., Judge Vargas first found that there is no international agreement with the U.A.E. that prescribes acceptable methods of service, i.e., the U.A.E. is not a signatory to the Hague Convention. Judge Vargas emphasized that Zhao already had actual notice of the lawsuit, had communicated with counsel regarding the litigation, and that service via Zhao’s U.S. counsel would comport with constitutional notions of due process. In particular, the Court quoted from e-mail correspondence between Zhao’s counsel and the plaintiffs, stating the exchange “clearly shows that Zhao and his attorneys have communicated regarding Plaintiffs’ motion for alternative service” and that Zhao is “apparently already aware of this instant action.”
Judge Vargas also dispensed with Zhao’s argument that Rule 4 should not be construed to permit alternative service via U.S. counsel because the rule, by its terms, applies only where service is to be effected “at a place not within any judicial district of the United States,” and the U.S. law firm is clearly located within a judicial district of the U.S. Judge Vargas acknowledged that while “courts are split on the issue of whether domestic service on a foreign defendant’s U.S. counsel can constitute service at a place not within the U.S. under Rule 4(f)(3), . . . the majority view service on U.S.-based counsel a permissible method under Rule 4(f)(3).” In siding with the majority view on this issue, Judge Vargas further noted that the “relevant circumstance is where the defendant is, and not the location of the intermediary.”
Takeaways
The Troell decision demonstrates that a court may be more inclined to authorize alternative service via U.S. counsel where the court believes the defendant is aware of the lawsuit at issue and has communicated with U.S. counsel about it. Non-U.S. clients that have relationships with U.S. counsel, therefore, should consider taking steps to clearly demarcate the situations in which a firm is (and is not) authorized to accept service of process and the matters in which the law firm is representing the client. Ultimately, the decision whether to authorize alternative service is within the court’s discretion. As the Troell decision shows, the particular facts of a lawsuit are likely to carry significant weight and influence whether the court will require a showing that service has been attempted through the other methods authorized by the Federal Rules of Civil Procedure. We will continue to monitor whether other courts follow the approach in Troell and other recent service of process cases, or if the issue is escalated to the Courts of Appeals.
[1] A party initiating a lawsuit must provide the opposing party with proper notice of the action by serving them with copies of the case-initiating documents (e.g., the summons and complaint). Under U.S. federal law, acceptable methods of service on a party residing outside of the U.S. include, inter alia, any agreed upon means set forth in an international agreement; any means prescribed by the other country’s law for service in that country; or as an official of that country directs in response to a specific inquiry relating to the lawsuit. Another option, however, is available to litigants: “alternative service.”
[2] See William S. Dodge, Serving Foreign Defendants’ U.S. Counsel to Avoid the Hague Service Convention, Transnat’l Litig. Blog (April 10, 2025), https://tlblog.org/serving-foreign-defendants-u-s-counsel-to-avoid-the-hague-service-convention/.
[3] The Court observed that initially the U.S. law firm indicated to the plaintiffs that it represented “Binance and Zhao in this matter,” but subsequently clarified that “they were not authorized to accept service for Zhao, and then later indicated that they did not represent Zhao in [the] lawsuit.”
