Opinion
23-cv-0671-AGS-VET
01-16-2024
Gaston Procopio GIMENEZ, individually and on behalf of all others similarly situated, Plaintiff, v. GUNNAR OPTIKS, LLC, Defendant.
ORDER GRANTING REMAND MOTION (ECF 4) AND CLOSING CASE
ANDREW G. SCHOPLER, UNITED STATES DISTRICT JUDGE.
Plaintiff's remand motion turns on one question: Under California law, is substitute service on a company valid, even when plaintiffs have not made reasonably diligent attempts to serve the company personally? The answer is yes.
BACKGROUND
Plaintiff Gaston Gimenez sued defendant Gunnar Optiks, LLC, in California state court. On February 28, 2023, plaintiff's process server tried to personally serve defendant's designated agent at his office. (ECF 4-1, at 2.) Because the agent was “unavailable,” the server instead undertook substitute service by “hand[ing] the documents to” the agent's employee and “mail[ing] a copy” of the summons and complaint to Gunnar Optiks that same day. (Id.)
No one disputes that the process server followed the nuts-and-bolts requirements for substitute service. The question is whether he was allowed to resort to such service so quickly, without greater efforts to serve the agent personally. If substitute service was permitted, it was “deemed complete on the 10th day after the mailing,” on March 10, 2023. See Cal. Civ. Proc. Code § 415.20(a). And Gunnar Optiks had “30 days” from completion of service to file a notice of removal. See 28 U.S.C. § 1446(b).
On April 14, 2023-35 days after substitute service was arguably complete- Gunnar Optiks removed the case to federal court. (ECF 1.) In its notice of removal, Gunnar Optiks asserted that removal was “timely as the complaint has not yet been properly served,” so the “30-day period within which to remove has not yet begun.” (Id. at 3.) Gimenez disagrees and moves to remand. (ECF 4.)
DISCUSSION
A. Governing Law
A district court may remand a case for “failure to comply with removal requirements.” Kamm v. ITEX Corp., 568 F.3d 752, 755 (9th Cir. 2009); see 28 U.S.C. § 1447(c). As relevant here, defendants must file a notice of removal “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading . . . .” 28 U.S.C. § 1446(b). “When service of process becomes effective is governed by state law.” Gray v. Extended Stay Am., Inc., No. 2:19-cv-01269-MCE-EFB, 2020 WL 1274265, at *4 (E.D. Cal. Mar. 17, 2020). Defendant has “the burden of establishing removal jurisdiction.” Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 2006).
B. Must a Plaintiff Attempt Personal Service on an Entity Defendant?
The defense argues that plaintiffs must exercise “reasonable diligence” to personally serve a company before employing substitute service. (See ECF 7, at 1, 3, 5.) Not so. California requires plaintiffs to use “reasonable diligence” to personally serve only individuals, not entities. See Produce v. Cal. Harvest Healthy Foods Ranch Mkt., No. C-11-04814 DMR, 2012 WL 259575, at *3-4 (N.D. Cal. Jan. 27, 2012) (distinguishing California's substitute-service rules “depending on whether the defendant being served is an entity or an individual”). Compare Cal. Civ. Proc. Code § 415.20(b) (substitute-service rules for individuals, requiring “reasonable diligence” at personal service), with Id. § 415.20(a) (substitute-service rules for entities, with no personal-service requirement).
Many courts have concluded that California law allows plaintiffs to rely on substitute service of an entity without any attempt at personal service. See, e.g., Bishil v. LBF Travel Inc., No. 2:22-cv-06059-MEMF-ASx, 2022 WL 17252186, at *3 (C.D. Cal. Nov. 28, 2022) (“[N]o such [‘reasonable diligence'] requirement exists for effecting service on corporate entities.”); Alvandi v. Fidelity Cap. Holdings, Inc., No. CV 14-4379 DSF (AJWx), 2016 WL 11759095, at *2 (C.D. Cal. July 21, 2016) (rejecting argument that “reasonable diligence at personal service must be made before resort to substituted service” on a corporate defendant and noting that the reasonable-diligence “requirements are found in [Cal. Civ. Proc. Code] § 415.20(b), which does not apply to corporations, and not in § 415.20(a), which does”); Alameda Cty. Elec. Indus. Serv. Corp. v. Gatejen Consol. Indus., No. C-13-00241 JCS, 2013 WL 4081310, at *9-10 (N.D. Cal. June 27, 2013) (distinguishing between the “more stringent” requirements for substitute service on individuals, which call for “reasonable diligence,” and those for corporate defendants, which do not); Produce, 2012 WL 259575, at *4 (“Unlike substitute service on an entity defendant, substitute service may be made on an individual only after attempting to personally serve the defendant with ‘reasonable diligence.'”); Gaboratory, Inc. v. Gaboratory Int'l, Inc., No. CV 07-04725 MMM (Ex), 2008 WL 11406072, at *4 (C.D. Cal. Nov. 10, 2008) (“While it is always appropriate to serve a corporation by substituted service, an individual may be served in this way only after plaintiff has made ‘reasonabl[y] diligen[t]' efforts to serve the individual personally.”).
Treatises concur with this conclusion. See, e.g., Michael Paul Thomas, California Civil Courtroom Handbook and Desktop Reference § 10.24 (2023 ed.) (“Unlike substitute service on natural persons, substitute service on entities does not require any prior attempt at personal service.”); Robert I. Weil et al., California Practice Guide: Civil Procedure Before Trial ¶ 4:196 (2023 ed.) (“No such showing [of prior efforts at personal service] is necessary for substitute service on entity defendants ....”).
So does California's Judicial Council. See Judicial Council Comment to Cal. Civ. Proc. Code § 415.20(a) (“If a defendant is a corporate or noncorporate entity, service may be made in the first instance, in lieu of delivery of process to a specified officer or employee of such entity personally, by leaving the papers in his office.”).
Nonetheless, Gunnar Optiks paddles against this cascade of authority on the strength of four cases. Yet each seems to mistakenly import the substitute-service rules for individuals into the entity context. For example, in EDJX, Inc. v. 6x7 Networks, LLC, No. 21-cv-02398-SK, 2021 WL 4262290 (N.D. Cal. Sept. 20, 2021), the court held that “California law requires that ‘a plaintiff must first make reasonably diligent (i.e., two or three) attempts at personal service.'” Id. at *1 (quoting Shaw v. Five M, LLC, No. 16-cv-03955-BLF, 2017 WL 747465, at *2 (N.D. Cal. Feb. 27, 2017) (in turn citing Bein v. Brechtel-Jochim Grp., 8 Cal.Rptr.2d 351, 352 (Ct. App. 1992))). But the ultimate authority for that proposition comes from a section of the Brechtel-Jochim decision discussing service on “the Brechtels” in their individual capacity-and relying on the code section that pertains to substitute service on individuals, not entities. See Brechtel-Jochim, 8 Cal.Rptr.2d at 353-54 (citing Cal. Civ. Proc. Code § 415.20(b)). At any rate, EDJX's “reasonable diligence” analysis is dicta, as that court identified other valid grounds to disqualify service. See EDJX, 2021 WL 4262290, at *2 (“Additionally, the proofs of service were defective ....”).
The tale is the same for Gunnar Optiks' remaining authorities. All three presume that “reasonable diligence” applies to service on entities, but the citational trail always leads back to caselaw about individuals. Specifically, each case ultimately relies on Evartt v. Superior Court of Stanislaus County, 152 Cal.Rptr. 836, 837-39 (Ct. App. 1979), or Espindola v. Nunez, 245 Cal.Rptr. 596, 597-99 (Ct. App. 1988), which both involved individual defendants and focused on section 415.20(b), regarding substitute service on individuals. See Aussieker v. M&S Green-Power Energy, Inc., No. 2:18-cv-03234-JAM-AC, 2019 WL 2183783, at *4 (E.D. Cal. May 21, 2019) (relying on Evartt and Espindola); Falco v. Nissan N. Am. Inc., 987 F.Supp.2d 1071, 1080 (C.D. Cal. 2013) (relying on Evartt and also citing Cal. Civ. Proc. Code § 415.20(a), which contains no “reasonable diligence” requirement); Estate of Hong-Ming Lu v. Primax Wheel Corp., No. C 04-4170 JSW, 2005 WL 807048, at *3 (N.D. Cal. Apr. 7, 2005) (relying on Evartt and Espindola).
In short, Gunnar Optiks' argument cannot overcome the plain language of the statute and the overwhelming weight of authority. The Court concludes that California has no “reasonable diligence” requirement for substitute service on entities. So a plaintiff may serve a company by substitute service without attempting personal service. Gimenez's service here was effective; Gunnar Optiks' notice of removal was “filed after [the] thirtyday window”; and “remand to state court is therefore appropriate.” See Babasa v. LensCrafters, Inc., 498 F.3d 972, 974 (9th Cir. 2007).
CONCLUSION
Plaintiff's motion to remand is GRANTED. The Clerk is directed to close this case and remand it to San Diego County Superior Court.