• by Ray Schultz , April 6, 2018

The Commodity Futures Trading Commission (CFTC) has asked a federal court for permission to serve a summons against a civil defendant by email.

In a motion filed by U.S. attorneys in March, the CFTC claimed that process servers were unable to serve a summons in person against Dillon Michael Dean and  the Entrepreneurs Headquarters Limited, defendants charged in January with running a Ponzi-type scheme to solicit bitcoin from the public.

The attempts to serve were unsuccessful because Dean, of Longmont, Colorado, “is attempting to evade service by concealing his whereabouts,” a memo filed in support of the motion alleges.  

In theory, a decision in favor of the CFTC could further validate email as a legal delivery mechanism.

The New York Law Journal noted last year that people will “increasingly rely on email for the transmission of statutory and contractual notices as well as other documents that affect legal rights."

But it added: “With the typical office worker receiving more than 90 emails every day on average, it is certain that disputes will continue to arise concerning whether such emails constitute actual and constructive notice.”

The CFTC twice attempted to send the summons and complaint by email to several addresses, U.S. attorneys state. None bounced back, but there was no response.

The CFTC also sent copies of the documents by international registered mail to the company’s registered address in the U.K., it adds.

According to the CFTC, New York law states that “the Court may authorize service to Dean by email alone” when other means fail. In making this argument, it states that “Dean “ran an internet-based business and used email frequently for communication.”

Based in part on this, the court may conclude that Dean has already been served.

But the law is not so clear nationwide. In one civil collection case last year, a federal judge ruled that an email attachment does not enjoy the same presumption of receipt as a letter sent by postal mail.   

U.S. Judge Debra McVicker Lynch determined that debt collector Met-1 Solutions had not “sent” notices to plaintiff Beth Lavallee, as required by the Fair Debt Collection Practices Act (FDCPA), when it included them in email attachments. 

Lynch, a magistrate judge with the U.S. District Court for the Southern District of Indiana, Indianapolis division, observed that “not opening an email attachment is not the same as failing to open a letter one receives through the United States Postal Service mail system.”

She continued, “while consumers may open emails from companies to which they had given their email addresses, Lavallee would not have seen as safe an email from Med-1 Solutions.”

The judge continued that, “Today, email users are regularly warned and know to beware of email invitations to click on web-based attachments."

The Dean case is on file with the U.S. District Court for the Eastern District of New York.