Cleer LLC v. Stranger et al

Filing 61

ORDER: For the reasons stated in the attached ruling, Stranger's motions to dismiss the complaint under Fed. R. Civ. P. 12(b)(5) (ECF Nos. 32 , 58 ) and motion to continue the settlement conference (ECF No. 59 ) are denied. The Court exercises its discretion under Rule 4(f)(3) to permit service on Stranger by serving her counsel. Given the particular facts of this case - including the urgency of the plaintiff's motion for a preliminary injunction, the Court's order req uiring expedited discovery in anticipation of a settlement conference and a preliminary injunction hearing, Stranger's actual notice of the proceedings and consent to personal jurisdiction, and finally, the plaintiff's attempt to serve her, the Court finds that allowing such alternate service of process is appropriate under the circumstances. Accordingly, Plaintiff shall forthwith serve the original summons, the complaint, and the amended complaint on Stranger's counsel by email and overnight mail, and shall file proof of such service on or before November 29, 2024.Signed by Judge Michael P. Shea on 11/22/24. (Constantine, A.)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
CLEER LLC (F/K/A GREENBACK BUSINESS
SERVICES LLC) D/B/A CLEER TAX,
Plaintiff,
No. 3:24cv1496 (MPS)
v.
CRYSTAL STRANGER, et al.,
Defendants.

RULING ON MOTION TO DISMISS
The plaintiff filed this action against its former employee, Crystal Stranger, and her
company, Optic Tax, alleging, among other claims, breach of non-solicitation and noncompete
covenants.

Stranger moves to dismiss the complaint under Fed. R. Civ. P. 12(b)(5) for

insufficient service of process.1 ECF Nos. 32, 58.
“When a defendant moves to dismiss under Rule 12(b)(5), the plaintiff bears the burden
of proving adequate service.” Dickerson v. Napolitano, 604 F.3d 732, 752 (2d Cir.
2010)(alteration and internal quotation marks omitted). “Plaintiff must meet this burden by
making a prima facie case of proper service through specific factual allegations and any
supporting materials.” Sikhs for Justice v. Nath, 850 F. Supp. 2d 435, 440 (S.D.N.Y. 2012)
(internal quotation marks and citation omitted). A plaintiff’s “conclusory statements are not
sufficient to overcome a defendant’s sworn affidavit that service was improper.” Id. See Mende
v. Milestone Tech., Inc., 269 F. Supp. 2d 246, 251 (S.D.N.Y. 2003) (“Conclusory statements that

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The Court issued a temporary restraining order. ECF No. 34. Stranger does not argue that the Court lacked the
power to do so in the absence of service of process. See Fed. R. Civ. P. 65(a)(1) (a court “may issue a preliminary
injunction only on notice to the adverse party.”) Rather, she maintains that service is required to make her a party to
the action and “required to take action in that capacity.” ECF No. 58-1 at 2.

a defendant was properly served are insufficient to overcome a defendant’s sworn affidavit that
he was never served with process.”)
The plaintiff asserts it properly served Stranger under Fed. R. Civ. P. 4(e)(2)(C)2 by
“delivering a copy of [the summons and complaint] to an agent authorized by appointment or by
law to receive service of process.” ECF No. 31 at 2. The plaintiff states it mailed the complaint
and summons via certified mail to an agent in Wyoming, who signed for it. ECF No. 31 at 2.
Stranger argues that plaintiff’s certificate of receipt was signed by a party “unknown by
[her], not present at her abode, and not authorized by her, or by law, to accept service of her
behalf.” ECF No. 30. She avers that the entity in Wyoming the plaintiff served, RV Mail, was
not Stranger’s “authorized agent” under Rule 4(e)(2)(C). ECF Nos. 32-2, 58-2, 60, Stranger
Affs. In addition, she avers that she resides in South Africa and that the plaintiff was well aware
of this fact, pointing to her correspondence with plaintiff. ECF No. 58-2, Stranger Aff. ¶ 5
(averring that the owner of the plaintiff business knew “South Africa was my main home base”
and “asked me for South Africa travel advice”); ECF No. 41-2 (Stranger’s email to owner of
plaintiff business in which Stranger discussed her experience living in South Africa).
Rule 4(e) permits service on an agent only if the agent is “authorized by appointment or
by law to receive” it. Fed. R. Civ. P. 4(e)(2)(C). The plaintiff’s reliance on the fact that the
alleged “agent” signed for the service package is not sufficient. “[G]ood-faith reliance on
apparent authority” suffices for the purposes of Rule 4(e)(2)(C) of the Federal Rules of Civil
Procedure only if the principal has “held out another person as possessing certain authority, not
where the agent has done so.” Parfitt Way Mgmt. Corp. v. GSM By Nomad, LLC, No. 27-CV0299, 2018 WL 2364287, at *5 n.3 (N.D.N.Y. May 24, 2018). The plaintiff has not shown how
Stranger “held out” this agent as possessing authority to receive service on her behalf. On the
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The plaintiff cited Rule 4(e)(1)(C) but appears to mean Rule 4(e)(2)(C).

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record before the Court, the plaintiff has not met its burden of showing it properly served
Stranger.3
“Upon a finding of insufficient service, the Court may dismiss the case or may, in its
discretion, retain the case, quash service, and direct that service be effectuated properly.” Spin
Master, Ltd. v. Aomore-US, No. 23 CIV. 7099, 2024 WL 3030405, at *12 (S.D.N.Y. June 17,
2024). The Court has “broad discretion to dismiss the action or to retain the case but quash the
service that has been made on defendant.” Aries Ventures Ltd. v. Axa Fin. S.A., 729 F. Supp. 289,
303 (S.D.N.Y. 1990). “[Insufficient] service will ordinarily be quashed and the action preserved
where there is a reasonable prospect that plaintiff ultimately will be able to serve defendant
properly.” Montalbano v. Easco Hand Tools, Inc., 766 F.2d 737, 740 (2d Cir. 1985) (internal
quotation marks and citation omitted).
Here, there is no dispute that Stranger has actual notice and that the Court has personal
jurisdiction. See generally Henderson v. United States, 517 U.S. 654, 672 (1996) (“[T]he core
function of service is to supply notice of the pendency of a legal action, in a manner and at a time
that affords the defendant a fair opportunity to answer the complaint and present defenses and
objections.”). Under these circumstances, the appropriate remedy is to quash the improper
service, rather than dismiss the action because proper service may still be obtained. See Aries
Ventures Ltd., 729 F. Supp. at 303 (declining to dismiss for lack of proper service and finding

That Stranger is aware of the instant lawsuit is not sufficient because “actual notice does not cure improper
service.” Jean-Baptiste v. United States Dep’t of Just., No. 23-441, 2024 WL 1193062, at *1 (2d Cir. Mar. 20, 2024).
The filing of the amended complaint also does not alter the Court’s analysis because service is still a prerequisite.
“Rule 5 governs service of pleadings only after a party has been hauled into court through service of the summons
and complaint under Rule 4.” Shum v. JILI Inc., No. 17CV7600, 2022 WL 17403608, at *3 (E.D.N.Y. Dec. 2,
2022). See Adams v. City of New York, No. 21-CV-3956, 2023 WL 2734611, at *3 (E.D.N.Y. Mar. 31, 2023) (“Rule
5 governs service of pleadings after proper service of the original complaint, and provides that such later pleadings
may be served by sending [them] to a registered user by filing [them] with the court’s electronic filing system.”)
(internal quotation marks and citation omitted).
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“quashing service is the more appropriate remedy” where defendants “clearly had actual notice
of the present action” and directing plaintiff to serve defendant).

Court-ordered Service under Rule 4(f)(3)
As indicated, Stranger maintains that she resides in South Africa. ECF No. 58-2 ¶ 5.
Service of an individual in a foreign country is governed by Fed. R. Civ. P. 4(f). In particular,
Rule 4(f)(3) provides that service on a foreign litigant can be effected “by other means not
prohibited by international agreement, as the court orders.” “Under Rule 4(f)(3), courts can
order service through a variety of methods, including publication, ordinary mail, mail to the
defendant’s last known address, delivery to the defendant’s attorney, telex, and …, email,
provided that there is no international agreement directly to the contrary.” Juicero, Inc. v. Itaste
Co., No. 17-cv-1921, 2017 WL 3996196, at *2 (N.D. Cal. June 5, 2017) (internal quotation
marks omitted). A “plaintiff is not required to attempt service through the other provisions of
Rule 4(f) before the [c]ourt may order service pursuant to Rule 4(f)(3).” AMTO, LLC v. Bedford
Asset Mgmt., LLC, No. 14-cv-9913, 2015 WL 3457452, at *4 (S.D.N.Y. June 1, 2015). “The
only limitations on Rule 4(f)(3) are that the means of service must be directed by the court and
must not be prohibited by international agreement.” Advanced Aerofoil Techs., AG v. Todaro, No.
11 Civ. 9505, 2012 WL 299959, at *1 (S.D.N.Y. Jan. 31, 2012). “The decision whether to allow
alternative methods of serving process under Rule 4(f)(3) is committed to the sound discretion of
the district court.” In GLG Life Tech Corp. Sec. Litig., 287 F.R.D. 262, 265 (S.D.N.Y. 2012). In
exercising this discretion, courts in this Circuit generally require: (1) a showing that the plaintiff
has reasonably attempted to effectuate service on the defendant, and (2) a showing that the
circumstances are such that the court’s intervention is necessary. Merrimack Mut. Ins. Co. v. New
Widetech Indus. Co., No. 3:20CV546(MPS), 2020 WL 5879405, at *2 (D. Conn. Oct. 2, 2020).
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The “court should look at the case-specific record before it.” Baliga on behalf of Link Motion
Inc. v. Link Motion Inc., No. 18-CV-11642, 2020 WL 5350271, at *9 (S.D.N.Y. Sept. 4, 2020)
(citation omitted).
“Courts routinely direct service on an international defendant’s counsel under Rule
4(f)(3).” Basatne Int’l, LLC v. INQ Star Corp., No. 3:21-CV-3142-S, 2022 WL 3904690, at *3
(N.D. Tex. May 12, 2022); see also Freedom Watch, Inc. v. Org. of the Petroleum Exporting
Countries, 766 F.3d 74, 83 (D.C. Cir. 2014) (observing that many courts have “sanctioned
service on United States counsel as an alternative means of service under Rule 4(f)(3) without
requiring any specific authorization by the defendant for the recipient to accept service on its
behalf”).

“[T]he majority view in this District is that service on U.S.-based counsel is

permissible pursuant to the Rule.” Khan Funds Mgmt. Am., Inc. v. Nations Techs. Inc., No. 22CV-5055, 2024 WL 3013759, at *5 n.6 (S.D.N.Y. June 13, 2024) (ordering alternative service on
defendant by serving counsel); Orient Plus Int’l Ltd. v. Baosheng Media Grp. Holdings Ltd., No.
1:24-CV-00744, 2024 WL 2317715, at *7 (S.D.N.Y. May 22, 2024) (granting Plaintiffs leave to
serve defendants by serving U.S. counsel); United States v. Mrvic, 652 F. Supp. 3d 409, 412
(S.D.N.Y. 2023) (noting that courts have held that “service on a defendant located abroad via
U.S.-based counsel is permitted under the text of Rule 4(f)(3),” citing cases, and ordering such
service).
The question, then, is whether the Court should exercise its discretion under Rule 4(f)(3)
to permit service on Stranger by serving her counsel. Given the particular facts of this case –
including the urgency of the plaintiff’s motion for a preliminary injunction, the Court’s order
requiring expedited discovery in anticipation of a settlement conference and a preliminary
injunction hearing, Stranger’s actual notice of the proceedings and consent to personal

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jurisdiction, and finally, the plaintiff’s attempt to serve her –, the Court finds that allowing such
alternate service of process is appropriate under the circumstances.

See In re Chinese-

Manufactured Drywall Prod. Liab. Litig., No. CV 09-02047, 2015 WL 13387769, at *7 (E.D. La.
Nov. 9, 2015) (“The purpose of service is to give appropriate notice to allow parties to properly
present their substantive arguments and not to create considerable procedural hurdles to delay an
action.”). See Fed. R. Civ. P. 4(d)(1) (parties subject to service under Rule 4(f) have a “duty” “to
avoid unnecessary expenses of serving the summons”).
Accordingly, Plaintiff shall forthwith serve the original summons, the complaint, and the
amended complaint on Defendant Stranger’s counsel by email and overnight mail, and shall file
proof of such service on or before November 29, 2024.
For these reasons, Stranger’s motions to dismiss under Fed. R. Civ. P. 12(b)(5) (ECF Nos.
32, 58) and motion to continue the settlement conference (ECF No. 59) are denied.
IT IS SO ORDERED.
/s/
Michael P. Shea, U.S.D.J.
Dated: Hartford, Connecticut
November 22, 2024

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