Blue in Style, LLC et al v. ES/EX Corporation et al

Filing 12

ORDER re ECF No. 9 denying without prejudice the plaintiffs' motion to serve the defendants through the California Secretary of State and granting in part their request to extend the service deadline. Signed by Judge Laurel Beeler on 5/25/2017. (lblc1S, COURT STAFF) (Filed on 5/25/2017)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA 10 San Francisco Division United States District Court Northern District of California 11 12 BLUE IN STYLE, LLC, et al., Case No. 17-cv-01145-LB Plaintiffs, 13 v. 14 15 ES/EX CORPORATION, et al., Defendants. 16 ORDER DENYING THE PLAINTIFFS’ MOTION TO SERVE THE DEFENDANTS THROUGH THE CALIFORNIA SECRETARY OF STATE Re: ECF No. 9 17 This is a trademark-infringement and breach-of-contract case concerning three trademarks 18 related to Blue in Style’s blue sparkling wine, Blanc de Bleu.1 Blue in Style and its parent, Bronco 19 Wine Company, allege that their former business partners, ES/EX Corporation, Premium Vintage 20 Cellars, and Koh Ohsedo (ES/EX and Premium Vintage’s only officer and director), breached an 21 agreement to convey their rights in the Blanc de Bleu brand and infringed related trademarks.2 22 After unsuccessfully seeking a waiver of service from Mr. Ohsedo, the plaintiffs ask to serve the 23 corporate defendants through California’s Secretary of State.3 24 25 See Compl. – ECF No. 1, ¶ 1. Record citations refer to material in the Electronic Case File (“ECF”); pinpoint citations are to the ECF-generated page numbers at the top of documents. 26 1 27 2 See id. 28 3 See generally Motion – ECF No. 9. ORDER — No. 17-cv-01145-LB Federal Rule of Civil Procedure 4(h)(1)(A) allows service of process on corporations and other 1 2 business entities by any method permitted by the law of the state in which the district court is 3 located or in which service is made. See Fed. R. Civ. P. 4(h)(1)(A), 4(e)(1). Under California law, 4 a court may authorize service on a corporation through the Secretary of State if (1) the 5 corporation’s agent for service has resigned and has not been replaced, and (2) the plaintiff shows 6 by affidavit that process “against [the] domestic corporation cannot be served with reasonable 7 diligence.” Cal. Corp. Code § 1702(a). The second, “reasonable diligence” requirement may be 8 satisfied by showing that process cannot be served (i) on the corporation’s designated agent by 9 hand under California Civil Code sections 415.10, 415.20(a), or 415.30(a), or (ii) on the 10 corporation itself under Civil Code sections 416.10(a)–(c) or 416.20(a). Id. United States District Court Northern District of California 11 Here, the plaintiffs submit counsel’s declaration establishing that “the agents for service of 12 process for Defendants ES/EX Corporation and Premium Vintage Cellars, Inc. have resigned and 13 have not been replaced.”4 They have thus satisfied the first requirement for service through the 14 Secretary of State. But they have not satisfied the second. The plaintiffs do not demonstrate, by affidavit, that 15 16 ES/EX and Premium Vintage cannot be served with reasonable diligence. Of course, it appears 17 that they could not serve the corporations’ “designated agent” because they currently have none 18 (the agent resigned earlier this year).5 But the plaintiffs have not shown that they cannot with 19 reasonable diligence serve the corporate defendants by other statutorily identified means — for 20 example, under section 416.10(b). That section provides that a corporation may be served by delivery of process to “the 21 22 president, chief executive officer, or other head of the corporation, a vice president, a secretary or 23 assistant secretary, a treasurer or assistant treasurer, a controller or chief financial officer, a 24 general manager, or a person authorized by the corporation to receive service of process.” Cal. 25 Civ. Code § 416.10(b). 26 27 4 Belcher Decl. – ECF No. 9-1, ¶ 7, Exs. 1–4. 28 5 See id. ORDER — No. 17-cv-01145-LB 2 The plaintiffs allege that Mr. Ohsedo is the sole officer and director of both ES/EX and 1 2 Premium Vintage.6 Indeed, as of October 2014, Mr. Ohsedo was listed as the CEO, CFO, 3 secretary, and sole director of both corporate defendants.7 The plaintiffs’ counsel emailed Mr. 4 Ohsedo at two email addresses the he “has used or copied . . . in recent unrelated communications 5 with [the] Plaintiffs.”8 Counsel requested that Mr. Ohsedo “waive service on behalf of all 6 Defendants” and attached the waiver, complaint, and other related documents.9 Counsel mailed the 7 same to Mr. Ohsedo’s “U.S. home address,” a Foster City, California address listed on the 8 corporations’ state filings.10 Mr. Ohsedo did not respond to the email and the mail was returned as 9 unclaimed.11 He also did not respond to counsel’s follow-up email sent six weeks later.12 These efforts to get Mr. Ohsedo to waive service do not show that the plaintiffs cannot by 11 United States District Court Northern District of California 10 reasonable diligence serve ES/EX and Premium Vintage through Mr. Ohsedo as their CEO, CFO, 12 or secretary. See Cal. Civ. Code § 416.10(b). In fact, because the plaintiffs do not request an order 13 authorizing alternative service on Mr. Ohsedo, it appears that they intend to serve him individually 14 (or at least try to), and thus may be able to serve him in his capacity as a corporate officer, too. 15 The plaintiffs must establish by affidavit that this cannot be done before the court can authorize 16 service under Corporations Code section 1702. See Gibble v. Car-Lene Research, Inc., 67 Cal. 17 App. 4th 295, 311 (1998) (“Indeed, a careful reading of Corporations Code section 1702 suggests 18 that a party serving process upon any corporation that has failed to designate an agent for service 19 of process should, and arguably must, first attempt service upon both the officers and agents 20 enumerated in subdivisions (b) and (c) of section 416.10 . . . .”) (emphasis in original). 21 22 23 6 Compl. ¶ 7; Motion at 2, ¶ 1. 24 7 See Belcher Decl., Exs. 5, 7. 25 8 Id. ¶ 4. 9 Id. 26 10 Id. ¶ 5, Exs. 5 & 7. 27 11 Id. ¶¶ 4–5. 28 12 Id. ¶ 6. ORDER — No. 17-cv-01145-LB 3

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