Joint Liquidators of Three Arrows Capital, LTD v. Tackett

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Civil Action No. 24–mc–00121-CNS-STV
JOINT LIQUIDATORS OF THREE ARROWS CAPITAL, LTD.,
Petitioner,
v.
ZANE TACKETT,
Respondent.
______________________________________________________________________
ORDER
______________________________________________________________________
Chief Magistrate Judge Scott T. Varholak
This matter is before the Court on Petitioner’s Amended Motion for Substituted
Service of a Subpoena on Respondent Zane Tackett (the “Motion”) [#5], which was
referred to this Court [#6]. Through the Motion, Petitioner requests that the Court permit
substituted service for Respondent Zane Tackett pursuant to Federal Rule of Civil
Procedure 45(b)(1). 	[#5] 	For the following reasons, the Motion is DENIED WITHOUT
PREJUDICE.1
I. 	BACKGROUND
The underlying dispute involves the insolvency proceedings of two entities: Three
Arrows Capital, Ltd. (“3AC Debtor”) and FTX Trading Ltd. (“FTX Debtors”). 	[#5 at ¶ 1]
The 3AC Debtor, a hedge fund incorporated in the British Virgin Islands (“BVI”) that
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focused on cryptocurrency and digital asset investments, collapsed in May and June
2022 during significant volatility in cryptocurrency markets. 	[Id. at ¶ 2] 	On June 27,
2022, the Eastern Caribbean Supreme Court in the High Court of Justice Virgin Islands
(Commercial Division) commenced liquidation proceedings for the 3AC Debtor. 	[Id.]
On July 1, 2022, the Joint Liquidators initiated Chapter 15 proceedings in the United
States Bankruptcy Court for the Southern District of New York, seeking recognition of
the 3AC Debtor’s foreign main proceeding in the BVI (Case No. 22-10920 (MG)). [Id. at
¶ 3] Recognition was granted on July 28, 2022. [Id.]
Zane Tackett, the former Head of Institutional Sales at FTX Trading, is believed
to have critical information regarding the relationship between FTX and the 3AC Debtor,
including events surrounding the liquidation of 3AC Debtor’s assets. 	[Id. at ¶ 10] 	The
Joint 	Liquidators 	prepared 	a 	subpoena 	for 	Mr. 	Tackett, 	seeking 	documents 	and
deposition testimony regarding these matters. [Id. at ¶ 11] Attempts to personally serve
the subpoena at Mr. Tackett’s last known address in Erie, Colorado, were unsuccessful,
as Mr. Tackett was reported to be traveling internationally with no known return date.
[Id. at ¶ 12] 	On November 12, 2024, the subpoena was mailed to Mr. Tackett’s
residence, where it was received and signed for by his stepfather. 	[Id.] 	Despite further
attempts at personal service, the process server was unable to locate Mr. Tackett,
although a Notice of Intent to Serve Subpoena was successfully delivered to Mr.
Tackett’s stepfather on November 18, 2024. 	[Id.] 	On December 31, 2024, a process
1 The Court ordered that Petitioner’s first Motion for Substitute Service [#1] be denied on
December 12, 2024. [#4] That Order should have been framed as a denial under Rule
45. 	Accordingly, the Court withdraws the previous Order denying Petitioner’s Motion to
Substitute Service [#4] and instead issues the foregoing Order in response to both [#1]
and [#5] Motions.
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server returned to Mr. Tackett’s residence to attempt service, and again spoke to Mr.
Tackett’s stepfather who again said that Mr. Tackett is out of the country. [Id.]
Being unable to serve Mr. Tackett in person, Petitioner now seeks authorization
to serve him by mailing the subpoena to his verified home address, or by leaving the
subpoena with his stepfather at Mr. Tackett’s residence. [Id. at ¶ 22]
II. 	ANALYSIS
Federal Rule of Civil Procedure 45(b)(1) governs the service of a subpoena and
provides that “[s]erving a subpoena requires delivering a copy to the named person.”
“The 	longstanding 	interpretation 	of 	Rule 	45 	has 	been 	that 	personal 	service 	of
subpoenas is required,” although “[i]n recent years a growing number of cases have
departed from the view that personal service is required and alternatively have found
service of a subpoena under Rule 45 proper absent personal service.” 9A Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedures § 2454 (3d ed. updated Apr.
2021). 	This Court recognizes that there is a split of authority among courts which have
ruled on this issue, and that the Tenth Circuit has not yet addressed this question. 	In
fact, both interpretations of Rule 45(b)(1) can be found from courts within this district.
Compare 	Williams 	v. 	Lowe's 	Companies, 	Inc., 	No. 	17-cv-02564-MEH, 	2019 	WL
13473875, at *1 (D. Colo. Nov. 7, 2019) (“Under Rule 45(b), then, personal service is
expressly required; the rule makes no allowance for service by alternate means.”); with
Collins v. Trans Union, LLC, No. 14-cv-00742-RBJ-NYW, 2015 WL 1932044, at *3-4 (D.
Colo. 	Apr. 	28, 	2015) 	(finding 	certified 	mail 	constitutes 	acceptable 	service 	of 	a
subpoena); and E.A. Renfroe & Co. v. Moran, No. 08-cv-00732-RPM-KMT, 2008 WL
1815535, at *5-6 (D. Colo. Apr. 18, 2008) (“[E]ffective service under Rule 45 is not
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limited to hand-to-hand personal service in every case[;] . . . what is mandated is that
service be made in a manner which reasonably insures actual receipt of the subpoena. .
. . 	The Federal Rules [of Civil Procedure] should not be construed as a shield for a
witness who is purposely attempting to evade service.”).
“The rationale for this [latter] minority view is that the language of Rule 45(b)(1) is
ambiguous and should be considered in context of Rule 45 as well as other federal
rules.” 	Bank of Oklahoma, N.A. v. Arnold, No. 06-cv-543-GKF-PJC, 2008 WL 482860,
at *3 (N.D. Okla. Feb. 20, 2008) 	“Reading Rule 45(b)(1) as allowing only personal
service of the subpoena would render the statement regarding the ‘manner of service’
[in Rule 45(b)(4)] superfluous.” 	Id. 	(citing Western Resources, Inc. v. Union Pacific
Railroad Co., 2002 WL 1822432 at *2 (D.Kan. July 23, 2002). “Further, if such were the
reading, the language of Rule 4(e)(2)(A) requiring that ‘delivering’ a copy of the
summons and complaint be done ‘personally’ would be pure surplusage.” 	Id. 	“[T]hese
courts reason, reading ‘delivering’ in light of these federal rules militates against
restricting that delivery to personal service.” 	Id. 	Nonetheless, for substitute service to
be valid, it must comport with due process by being calculated “to apprise interested
parties of the pendency of the action and afford them an opportunity to present their
objections.” 	Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950).
Whether a non-party served with a subpoena other than by personal service has been
afforded due process depends upon the particular facts of the service. 	In re Shur, 184
B.R. 640, 644 (Bankr. E.D.N.Y. 1995).
Given the facts of this case, the Court need not take a position on whether Rule
45 inherently allows substitute service of a subpoena or not. 	In those cases where
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Colorado courts have deemed substitute service of a subpoena permissible under the
rule, the determination has been driven by the specific facts of each case. 	See
Williams, 2019 WL 13473875 at *1-2 (finding substitute service permissible despite
stating that personal service is expressly required under Rule 45 because: 1) the Court
found that the defendants employed due diligence in attempting to effect personal
service, and 2) allowing substitute service “facilitate[d] the just, speedy, and inexpensive
resolution of th[e] matter, which [was] scheduled for trial [just five months later]”; Collins,
2015 WL 1932044 at *4 (finding certified mail constituted acceptable service of a
subpoena that notified defendants of plaintiff’s intention to serve subpoenas to produce
documents, not to appear for a deposition); E.A. Renfroe & Co., 2008 WL 1815535 at
*5-6 (finding that service of a subpoena by mail satisfied the delivery requirement of
Rule 45 because the service “accomplished the goal of actual receipt of the subpoena
by the witness”). As these cases demonstrate, even if this Court were to determine that
substitute service is permitted under Rule 45, other threshold requirements must be met
before granting a motion for such service.
Here, Petitioner requests that this Court allow substituted service of a subpoena
on Mr. Tackett by certified mail to his verified address and by leaving the subpoena with
Mr. Tackett’s stepfather. Petitioner claims that this should be permissible because: 1) it
has diligently attempted to personally serve Mr. Tackett to no avail 	[#5 at ¶ 18]; 2) the
substituted service of the subpoena through Mr. Tackett’s stepfather is “reasonably
calculated to provide Mr. Tackett of actual notice of his deposition subpoena,” as the
rule requires [id. at ¶ 19]; 3) mailing the subpoena to Mr. Tackett’s residence is
“reasonably 	calculated 	to 	provide 	Mr. 	Tackett 	of 	actual 	notice 	of 	his 	deposition
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subpoena,” as the rule requires [id. at ¶ 20]; and 4) further attempts at personal service
of Mr. Tackett are unlikely to have success because he is traveling internationally with
no specified return date [id. at ¶ 21]. The Court addresses each argument in turn.
A. 	Due Diligence
Petitioner claims that the Court should allow substitute service in this case
because it has diligently attempted to personally serve Mr. Tackett without success. [Id.
at ¶ 18] 	Specifically, Petitioner has tried to serve the subpoena on Mr. Tackett five
times over two months at one address; despite being told on its first attempt by Mr.
Tackett’s stepfather and resident of that address that Mr. Tackett was out of the country
indefinitely. [Id. at ¶ 12] Petitioner relies on the Williams court’s finding of due diligence
to allow substitute service. 	[Id. at ¶ 18] 	In that case, the defendants: 1) attempted to
contact the target of the subpoena informally on five occasions without success; 2)
retained a third-party process server to locate and attempt service at two residences
associated with the target, one of which had a vehicle registered to the target in the
driveway; and 3) conducted research to determine the target’s place of employment,
which became the desired service location for its substituted service motion. 	Williams,
2019 WL 13473875 at *1.
Here, Petitioner’s efforts to serve Mr. Tackett fall short of those in Williams.
Importantly, Petitioner has not demonstrated that it employed efforts to locate Mr.
Tackett beyond the single address on which it attempted service. 	In the context of
Federal Rule of Civil Procedure 4, which governs service of process for summons,
Colorado courts have found that due diligence is not satisfied by attempts at a single
address. 	See Elide Fire USA, LLC v. Auto Fire Guard, LLC, No. 21-cv-00943-NYW,
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2021 WL 4947287, at *4 (D. Colo. Sept. 14, 2021) (“Although service was apparently
attempted multiple times at this address, this is nevertheless insufficient to demonstrate
due diligence [when] [i]t does not appear that Plaintiff has attempted to serve [the
defendant] at any other address”); Allstate Ins. Co. v. Cruz, No. 20-cv-03139-DDD-
MEH, 2020 WL 7421389, at *2 (D. Colo. Nov. 18, 2020) (“Allstate’s apparent attempts
to serve Mr. Cruz at only one residential address also do not warrant the somewhat
extraordinary measure of allowing [alternate] service.”). 	In contrast, courts generally
find that the due diligence requirement is satisfied when a party has made multiple
attempts at service at multiple addresses. 	See, e.g., BMO Harris Bank N.A. v.
Marjanovic, No. 19-cv-02945-CMA-KMT, 2020 WL 4705294, at *1 (D. Colo. Aug. 13,
2020) 	(plaintiff 	employed 	due 	diligence 	by 	attempting 	service 	at 	four 	different
addresses); Malone v. Highway Star Logistics, Inc., No. 08-cv-01534-RPM-KLM, 2009
WL 2139857, at *2 (D. Colo. July 13, 2009) (due diligence satisfied where personal
service was attempted at five different addresses). 	Here, Petitioner has not provided
any evidence that: (1) it attempted to locate Mr. Tackett in Thailand, or (2) attempted
service pursuant to Rule 45(b)(3) and 28 U.S.C. §1783 (providing guidance on issuing
and serving a subpoena directed to a United States national or resident who is in a
foreign country), if appropriate.
Because Petitioner has failed to show more extensive due diligence in locating
and serving Mr. Tackett, the Court cannot find that substitute service in this matter is
appropriate.
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B. 	Substitute Service on Mr. Tackett’s Stepfather
Petitioner 	claims 	that 	service 	on 	Mr. 	Tackett’s 	stepfather 	is 	“reasonably
calculated to provide Mr. Tackett of actual notice of his deposition subpoena.” 	[#5 at ¶
19] 	Petitioner relies on In re Falcon Air Exp., Inc., No. 06-11877-BKC-AJC, 2008 WL
2038799 (Bankr. S.D. Fla. May 8, 2008) to support the assertion that serving a
subpoena on the target’s family member—living at a residence owned by the target
while the target does not reside there—is sufficient to meet the delivery requirement of
Rule 45. 	[Id.] 	In that case, the court found that substitute service was permitted
because the subpoena was served on the target’s wife at a residence owned by him, a
residence which public records identified as his homestead, and although the target did
not live there at that time, the substitute service was “reasonably calculated to insure
receipt of the subpoena by the witness, as evidenced by the fact that [the target] both
timely received the subpoena from his wife, and was able to file a timely motion to
quash the subpoena.” In re Falcon Air Exp., Inc., 2008 WL 2038799 at *4.
Petitioner in this case does not have the luxury of the same showing. 	Because
Petitioner has been unable to effectuate service, it cannot show that Mr. Tackett has
received the subpoena, which contradicts the court’s key consideration in In re Falcon
Air Exp. 	And Petitioner has not provided any indication that Mr. Tackett’s stepfather is
in touch with Mr. Tackett beyond knowing that he is indefinitely out of the country, or
whether these two individuals have an ongoing relationship. While courts have allowed
substitute service on family members in certain circumstances, the operative question is
whether such service is reasonably calculated to insure receipt of the subpoena by the
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relevant witness. 	Without additional evidence or argument, the Court cannot conclude
that Mr. Tackett will receive the subpoena through service on his stepfather in this case.
C. 	Mailing the Subpoena to Mr. Tackett’s Residence
Petitioner next claims that mailing the subpoena to Mr. Tackett’s residence is
reasonably calculated to insure receipt of the subpoena by Mr. Tackett. 	[Id. at ¶ 20]
Here, Petitioner relies on Cordius Tr. v. Kummerfeld, No. 99 CIV. 3200 (DLC), 2000 WL
10268 (S.D.N.Y. Jan. 3, 2000) and JPMorgan Chase Bank, N.A. v. IDW Grp., LLC, No.
08 CIV. 9116(PGG), 2009 WL 1313259 (S.D.N.Y. May 11, 2009). 	In Cordius, the
plaintiff made repeated attempts to serve a subpoena on the target at his place of
employment (wherein the process server was informed the target no longer worked
there) and at his residence (where the doorman “repeatedly barred the process server
from ascertaining whether [the target] was in his apartment”). Cordius, 2000 WL 10268
at *1. 	The plaintiff was able to reach the target of the subpoena at a pre-trial
conference, where he submitted to service in his corporate capacity. 	Id. 	In JPMorgan
Chase 	Bank, 	the 	court 	found 	substitute 	service 	by 	mail 	permissible 	because 	it
“reasonably insure[d] actual receipt of the subpoena by the witness . . . [and] comports
with due process as it is reasonably calculated . . . to provide [the target] with both
notice and an opportunity to present obligations.” 	2009 WL 1313259 at *3. 	The court
went on to note that such alternate service is appropriate because the target “appears
to be aware that [plaintiff] seeks to depose her.” Id.
The facts of the instant case differ from these cases in an important way. 	Mr.
Tackett is not just away from home temporarily, he is indefinitely out of the country with
no specified date of return. 	[#5 at ¶ 12] 	Petitioner does not demonstrate how mailing
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the subpoena to Mr. Tackett’s address—which it has already done [see #5-1]—will
provide Mr. Tackett with the requisite notice of a subpoena to appear at a deposition (as
required by Rule 45 and traditional notions of due process) when Mr. Tackett is
currently in Thailand with no specified plans to return to his residence. 	[#5 at ¶ 12]
Without additional evidence or argument, the Court cannot conclude that Mr. Tackett
will receive the subpoena through service via mailing it to his residence in Colorado.
D. 	Further Service Attempts on Mr. Tackett
Petitioner lastly claims that given his indefinite travel plans in Thailand, further
attempts to serve Mr. Tackett are unlikely to be successful. 	[Id. at ¶ 21] 	Petitioner’s
evidence supporting this assertion is deficient. 	As discussed above, Petitioner has not
demonstrated that it employed due diligence to be certain that further attempts to serve
Mr. Tackett will be unsuccessful. 	According to the Motion, it does not appear that
Petitioner has attempted to locate Mr. Tackett beyond a single address. 	[#5 generally]
Thus, the Court cannot conclude that further attempts to serve Mr. Tackett will be
unsuccessful.
III. 	CONCLUSION
Accordingly, the Court finds that service by certified mail to the verified address
and 	leaving 	the 	subpoena 	with 	Mr. 	Tackett’s 	stepfather 	is 	not 	a 	manner 	which
reasonably insures actual receipt by Mr. Tackett. 	Petitioner’s Motion [#5] is therefore
DENIED WITHOUT PREJUDICE to filing a motion for substitute service that corrects
the deficiencies identified herein.
DATED: February 13, 2025 	BY THE COURT:
s/Scott T. Varholak
Chief United States Magistrate Judge
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