In the case of Bacon v. Nygard, Peter Sverd of the Law Offices of Peter Sverd, PLLC, successfully overturned a $200 million defamation judgment against his client. The said client was sued for alleged defamation but never received notice of the lawsuit and, thus, was unable to defend himself against the allegations, resulting in a default judgment and an award of $200 million to the plaintiff. The First Department of the New York Appellate Division unanimously overturned this judgment, finding that the service of process was insufficient and the default judgment was unwarranted.
What happened in this case?
The defendant-appellant was serving time in prison when the plaintiff-respondent sued him for alleged defamation in the Supreme Court in New York County. When the process server went to give the defendant the summons and complaint, however, he instead gave it to a receptionist at the prison where he was incarcerated, with a promise that the documents would be conveyed to the defendant. However, he never received notice of the lawsuit, meaning he never submitted a response nor appeared in court to defend himself, resulting in a default judgment against him. A special referee then awarded the plaintiff $200 million in damages for the alleged defamation. The defendant appealed both of these decisions to the First Department.
What was the legal issue in dispute?
The primary legal question before the court is whether the service of process was sufficient to satisfy the legal requirement of notice. By law, all defendants must be given a summons and complaint, in person, by a process server, unless there is some circumstance that makes in-person service impossible. If that happens, there must be an acceptable substitute. The question was whether this was an acceptable substitute for in-person service.
What did the court decide?
By a unanimous vote, the First Department found that the service of process was insufficient, meaning the Supreme Court erred in awarding a default judgment to the plaintiff. A receptionist at a prison was not a valid recipient for the appellant’s service of process, precisely because it created the kinds of communication issues seen here. As a result, both the default judgment and the $200 million judgment were overturned.
Why does this matter?
In order for people to be able to exercise their legal rights, they must first be afforded the opportunity to defend themselves in court. This includes the right to know they are being sued in the first place, and the service of process requirements are an integral part of that. The outcome in the Supreme Court is a sign of what can happen when these essential procedural requirements are sidestepped or ignored.