On Shaq’s service shenanigans, and procedural ping-pong.

I previously posted¹ about an FTX-related claim against several celebrities, including Shaquille O'Neal. In April, the claimant investors claimed to have finally effected personal service on Shaq.

Does this mean that the procedural skirmishes are over, and Shaq will now defend himself on the merits?

Well, perhaps not quite yet.

Shaq's lawyers argue that he was not properly served with the papers, which were "thrown at his car, and landed on a public road".²

And if Shaq succeeds…

…the investors will have to keep trying to serve him, before they can finally get the show on the road.

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Some take-aways, for those bringing cross-jurisdictional claims against difficult-to-locate defendants.

First: procedural rules matter.

I previously pondered why the investors had not applied for substituted service. Well, it turns out they did - under Texas law, on the basis that Shaq is located in Texas.³

But! Their application was dismissed by the Florida court, who noted that the investors could have, but did not, apply to serve Shaq under Florida law.⁴ The investors therefore continued to try and serve the papers on Shaq personally.

Shaq argues that since the investors had not properly served him by a certain deadline, the case against him should be dismissed.

So procedural battles can lead to substantive outcomes.

TAKEAWAY: when choosing counsel, go with someone who knows the applicable procedural rules well.

Second: in order for a claim to proceed, it is not enough for the defendant to know of the lawsuit. The defendant will still need to be formally served according to the applicable rules.

Some of you may be thinking:

“Why is Shaq playing games? He knows about the claim – how else could he have instructed lawyers to take out this application? So isn’t that enough to get the claim underway?”

Well, it’s not so straightforward.

In many jurisdictions, a claimant can obtain default judgment (i.e. a walkover victory) against a defendant who has been served with the court papers, but chooses not to respond to the proceedings.

And if formal requirements for service have not been complied with, it “may be a matter of fortuity” as to whether the substituted service caused the defendant to be aware of the lawsuit.⁵

So often, the court will be less concerned with whether the defendant is aware of the lawsuit, and more concerned about whether the formal service requirements have been complied with.

And if not, the proceedings may be paused, until the formal service requirements have been complied with.

Which leads to time, expense, and frustration for the claimant.

TAKEAWAY: before commencing a lawsuit, have a discussion with your lawyers on where and how service should be effected. Don’t just take for granted that proper service will magically take place.