Second Circuit Rejects Email Service on Chinese Defendants in Baby Shark SAD Scheme Case

This case involves the “Baby Shark” earworm song, which has billions of YouTube views and ranks as the #1 most viewed YouTube video of all time. You already know the lyrics (and associated hand/arm movements) by heart, but the high-quality lyrics are worth reiterating. The first stanza:

Baby shark, doo doo doo doo doo doo Baby shark, doo doo doo doo doo doo Baby shark, doo doo doo doo doo doo Baby shark!

The song lyrics only get better from there.

Not satisfied by its widespread destruction of Gen Alpha brain cells, the Baby Shark IP owners (Smart Study) also tried to destroy due process using the SAD Scheme! But they suffer a major loss in the Second Circuit, and this ruling might take a major shark-bite out of the SAD Scheme.

* * *

In 2021, Smart Study filed a SAD Scheme case in the Southern District of New York. The sealed complaint named 58 China-based defendants, accusing them of counterfeiting Baby Shark products. Smart Study filed for an ex parte TRO and an order to show cause why a preliminary injunction shouldn’t issue, which the district court granted. Smart Study filed a second ex parte request for authorization to effectuate email service per FRCP 4(f)(3), which the district court also granted. Amazon dutifully handed over the defendants’ email addresses. The court granted Smart Study’s preliminary injunction request 9 days later when no defendants showed up.

Months later, two defendants objected to the injunction. Smart Study voluntarily dismissed them and requested default judgments against the remaining defendants.

The court designated a disinterested legal expert (Professor Benjamin L. Liebman at Columbia Law) to advise on Hague Convention’s applicability to email service. Smart Study retained their own expert. In 2022, the district court concluded that email service wasn’t proper.

Nevertheless, the district court granted a default judgment against the remaining defendants whose physical addresses allegedly weren’t reasonably available, and the court issued a permanent injunction and awarded $2.4M+ in damages. However, for two defendants, the court rejected email service (presumably because their physical addresses were reasonably available). Smart Study appealed the decision with respect to those two defendants.

Note: I assume Smart Study didn’t really care about what happened to these two defendants. After all, it voluntarily dismissed two other defendants earlier. The SAD Scheme is a numbers game, and no individual defendant is particularly high-value to the plaintiff. Instead, it looks to me like the lawyers viewed this case as a vehicle to establish circuit-wide precedent authorizing email service. The odds looked even better if the two defendants (who were never properly served) wouldn’t fight back, so plaintiffs could enjoy unrebutted advocacy before the appeals court. Despite this asymmetry, the plaintiff lawyers did not get their desired result. Their upside gamble turns into a major own-goal for the SAD Scheme plaintiffs’ bar.

* * *

The appeals court summarizes its position unambiguously:

The relevant question is therefore whether the [Hague] Convention allows for email service on the China-based defendants. We conclude that it does not.

The Hague Convention permits plaintiffs to serve defendants by postal mail. However, in the case of Chinese defendants, delivery must go through China’s Ministry of Justice, an intermediate step that adds time and frustration. To get around this, some courts have interpreted the Hague Convention’s reference to “postal mail” to include email as a postal mail equivalent. However, China has objected to that interpretation, as the Hague Convention permits it to do. Furthermore, the court says the Hague Convention doesn’t permit any alternative service methods (such as email) that are not expressly enumerated in the convention.

Smart Study argued that there should be a catchall exigency exception to the service methods enumerated in the Hague Convention. Putting aside the fact that plaintiffs always believe that their cases are urgent exigencies, the Hague Convention text doesn’t contain any exigency exception. Furthermore, Smart Study has determined that the Chinese mailing addresses for the two remaining defendants may be valid, so it had a way to proceed under the Hague Convention (even if that option isn’t very appealing). Smart Study also argued that FRCP 4(f)(2)(A) permitted email service, but this provision doesn’t help because it’s subject to any express treaties–such as the Hague Convention.

Undeterred, Smart Study argued it deserved a default judgment even without making any legally recognized service because, as Inigo Montoya might put it, it’s a very noble cause. The court doesn’t quite adopt the Miracle Max response (“are you a rotten liar!”) but comes close:

the Hague Service Convention was not designed to ensure that the service of process in China is as efficient and fast as domestic service in the United States under the Federal Rules of Civil Procedure. Given that Smart Study has not even attempted to comply with the Convention’s requirements, we cannot say that the district court abused its discretion in denying relief here

* * *

The Second Circuit’s holding is crystal-clear: no email service to China-based defendants. The facts before the court didn’t require it to address whether email service would be proper if the plaintiff can’t reasonably obtain a physical mailing address for the defendants, but the court’s short and clear holding and supporting reasoning applies equally to that scenario.

Given that the SAD Scheme template complaints routinely purport to target Chinese counterfeiters, this decision should mean that the plaintiffs must find some way to serve the defendants other than email, including trying to deliver service through the Chinese Ministry of Justice. Without the email service bypass, plaintiffs are going to have to spend a lot more time and money chasing defendants, and some plaintiffs will drop defendants who aren’t valuable enough to go through those efforts. Thus, this ruling nominally should cause a major reduction of the SAD Scheme.

In practice, those consequences are subject to at least four major caveats:

1. Will the Seventh Circuit agree? Only a small percentage of SAD Scheme cases are filed in Second Circuit-governed courts. (This could be why the plaintiffs’ lawyers chose to audition their Hague Convention theories here–lower risk of tainting the main body of cases). The real SAD Scheme action is in the Seventh Circuit. The Second Circuit opinion might persuade the Seventh Circuit…or not. Until the Seventh Circuit addresses the Hague Convention email service issue, this opinion won’t likely affect the vast majority of SAD Scheme cases. Instead, I bet SAD Scheme plaintiffs’ lawyers in the Northern District of Illinois will keep requesting–and getting–email service of Chinese defendants based on a variety of possibilities, including (a) plaintiffs will argue the Second Circuit opinion isn’t binding and perhaps the Seventh Circuit will see things differently; (b) defendants aren’t around to contest email service; (c) plaintiffs will argue that they can’t reasonably obtain the defendants’ physical addresses and argue the Second Circuit opinion didn’t exactly address that scenario; and (d) many judges will rubberstamp plaintiffs’ requests, as they have done many times before, even if the judges and their clerks know about this ruling.

(I’m wondering if the plaintiffs’ lawyers will expressly acknowledge this adverse persuasive precedent in their requests for email service, as I believe they will be required to do so).

2. Plaintiffs often have no idea where defendants are. Although many SAD Scheme plaintiffs hypothesize in their robo-filings that the defendants are Chinese counterfeiters, the reality is that far too often the plaintiffs’ lawyers haven’t researched the defendants’ locations (despite their Rule 11 obligation to do so if they are claiming the defendants are Chinese) and don’t have a clue where they actually are located. (That’s why American-based defendants keep getting sued via the SAD Scheme, even though the scheme is ill-suited for domestic defendants). Plaintiffs may lean into their willful ignorance and simply claim they don’t know where the defendants are, so email service should be OK because the plaintiffs haven’t confirmed the defendants are in China. This move ought to be forcefully rejected by judges for the obvious failure to comply with Rule 11 and other ethics rules, but so long as defendants aren’t around to protest, judges might still allow it.

3. The INFORM Consumers Act should widely increase the availability of postal addresses. One of the main points of the INFORM Consumers Act was to require merchants to display physical space addresses in their e-commerce marketplace listings. When that happens, the plaintiffs can follow the Hague Convention to effectuate service on Chinese merchants through the China Ministry of Justice.

4. Much of the SAD Scheme action takes place pre-service–or without plaintiffs ever serving defendants. One of the most insidious aspects of the SAD Scheme is that much of the “litigation” takes place before the plaintiff ever serves the defendants. The ex parte TRO triggers the account and cash freezes at the marketplaces or vendors, which induces many defendants to settle. All of that action takes place without plaintiffs effectuating any service. Plaintiffs must effectuate service before the court can issue an injunction or damages, but (a) I’ve seen judges grant multiple extensions of the ex parte TRO, delaying the need for an injunction, and (b) damage awards are needed only if defendants haven’t already settled. So long as the merchant’s cash remains frozen at the marketplace or vendor, SAD Scheme plaintiffs don’t necessarily mind delaying service indefinitely.

* * *

This is a big ruling curbing a crucial component of SAD Scheme practices. However, it may just be a speed bump for plaintiffs, who will find ways to keep wreaking havoc on marketplaces and merchants despite this ruling.

Case Citation: Smart Study Co. v. Shenzhenshixindajixieyouxiangongsi, No. 24-313 (2d Cir. Dec. 18, 2025).

Personnel note: Smart Study was represented by a team from Epstein Drangel, with amicus support from the usual suspects at Greer Burns. Their loss is even more shocking because the defendants apparently no-showed on appeal. The plaintiffs had an uncontested shot and still blew the layup. Ouch.

#StopTheSADScheme

Prior Blog Posts on the SAD Scheme

• 11th Circuit Sidesteps the SAD Scheme’s Problems–Ain Jeem v. Schedule A
• Another Shill Article Tries to Normalize the SAD Scheme
• Court Sanctions Plaintiff’s Lawyer for Unverified Claims That the Defendant Was Hiding–Guangzhou Youlan Technology Co. Ltd. v. Onbrill World
• SAD Scheme Cases Are a Cesspool of IP Owner Overreaches–Nike v. Quanzhou Yiyi Shoe Industry
• District of New Jersey Adopts SAD Scheme Standing Order
• Court “Sanctions” SAD Scheme Judge Shopping—Crimpit v. Schedule A Defendants
• Chicago-Kent SAD Scheme Symposium TOMORROW
• Amicus Brief Urges Seventh Circuit to Award Attorneys’ Fees in SAD Scheme Case–Louis Poulsen v. Lightzey
• Court Rejects Schedule A Claims Against Sellers of Compatible Parts/Accessories (Cross-Post)
• Judge Kness: the SAD Scheme “Should No Longer Be Perpetuated in Its Present Form”–Eicher Motors v. Schedule A Defendants
• SAD Scheme Lawyers Sanctioned for Judge-Shopping–Dongguan Deego v. Schedule A
• Judge Ranjan Cracks Down on SAD Scheme Cases
• Because the SAD Scheme Disregards Due Process, Errors Inevitably Ensue–Modlily v. Funlingo
• SAD Scheme-Style Case Falls Apart When the Defendant Appears in Court—King Spider v. Pandabuy
• Serial Copyright Plaintiff Lacks Standing to Enforce Third-Party Copyrights–Viral DRM v 7News
• Another N.D. Ill. Judge Balks at SAD Scheme Joinder–Zaful v. Schedule A Defendants
• Judge Rejects SAD Scheme Joinder–Toyota v. Schedule A Defendants
• Another Judge Balks at SAD Scheme Joinder–Xie v. Annex A
• Will Judges Become More Skeptical of Joinder in SAD Scheme Cases?–Dongguan Juyuan v. Schedule A
• SAD Scheme Leads to Another Massively Disproportionate Asset Freeze–Powell v. Schedule A
• Misjoinder Dooms SAD Scheme Patent Case–Wang v. Schedule A Defendants
• Judge Hammers SEC for Lying to Get an Ex Parte TRO–SEC v. Digital Licensing
• Judge Reconsiders SAD Scheme Ruling Against Online Marketplaces–Squishmallows v. Alibaba
• N.D. Cal. Judge Pushes Back on Copyright SAD Scheme Cases–Viral DRM v. YouTube Schedule A Defendants
• A Judge Enumerates a SAD Scheme Plaintiff’s Multiple Abuses, But Still Won’t Award Sanctions–Jiangsu Huari Webbing Leather v. Schedule A Defendants
• Why Online Marketplaces Don’t Do More to Combat the SAD Scheme–Squishmallows v. Alibaba
• SAD Scheme Cases Are Always Troubling–Betty’s Best v. Schedule A Defendants 
• Judge Pushes Back on SAD Scheme Sealing Requests
• Roblox Sanctioned for SAD Scheme Abuse–Roblox v. Schedule A Defendants
• Now Available: the Published Version of My SAD Scheme Article
• In a SAD Scheme Case, Court Rejects Injunction Over “Emoji” Trademark
• Schedule A (SAD Scheme) Plaintiff Sanctioned for “Fraud on the Court”–Xped v. Respect the Look
• My Comments to the USPTO About the SAD Scheme and Anticounterfeiting/Antipiracy Efforts
• My New Article on Abusive “Schedule A” IP Lawsuits Will Likely Leave You Angry
• If the Word “Emoji” is a Protectable Trademark, What Happens Next?–Emoji GmbH v. Schedule A Defendants
• My Declaration Identifying Emoji Co. GmbH as a Possible Trademark Troll

The post Second Circuit Rejects Email Service on Chinese Defendants in Baby Shark SAD Scheme Case appeared first on Technology & Marketing Law Blog.