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Oluwaseun Fasugbe and Luke Huckaba, On v. 1524948 Alberta Ltd.


January 28, 2011




Plaintiffs Oluwaseun Fasugbe and Luke Huckaba brought this action against defendant 1524948 Alberta Ltd. d/b/a Terra Marketing Group d/b/a, alleging violations of California's False Advertising Law, Cal. Bus. & Prof. Code §§ 17500-17606, and other claims. Defendant is a seller of online auction currency and products. (Compl. ¶ 3.) Plaintiffs allege that 1524948 Alberta Ltd. operates under the names Terra Marketing Group and (Id. at 1:24.) Plaintiffs bring this action after having been charged allegedly unauthorized fees by (Id. ¶¶ 34-47.) Plaintiffs served defendant by serving Davinci Executive Suites in Utah. (Docket No. 13.) Defendant now moves to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(5) for insufficient service of process.

Federal courts cannot exercise personal jurisdiction over a defendant without proper service of process. Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Insufficient service can result in dismissal under Federal Rule of Civil Procedure 12(b)(5). To determine whether service of process was proper, courts look to the requirements of Federal Rule of Civil Procedure 4. See Fed. R. Civ. P. 4. Rule 4(h) governs service over domestic and foreign corporations, and provides that a corporation may be served:

(1) in a judicial district of the United States:

(A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or

(B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and--if the agent is one authorized by statute and the statute so requires--by also mailing a copy of each to the defendant; or

(2) at a place not within any judicial district of the United States, in any manner prescribed by Rule 4(f) for serving an individual, except personal delivery under


Fed. R. Civ. P. 4(h). Rule 4(e)(1), governing service of individuals, allows service by:

(1) following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made; or

(2) doing any of the following: (A) delivering a copy of the summons and of the complaint to the individual personally;

(B) leaving a copy of each at the individual's dwelling or usual place of abode with someone of suitable age and discretion who resides there; or

(C) delivering a copy of each to an agent authorized by appointment or by law to receive service of process. Fed. R. Civ. P. 4(e)(1).

Plaintiffs have alleged that 1524948 Alberta Ltd. does business as Terra Marketing Group and as (Compl. at 1:24), and defendant does not dispute that it owns and operates the website and auction platform. (See Decl. of Benjamin H. Richman ¶ 2 (Docket No. 19-1).) Plaintiffs contend that Davinci was the registered agent of for service in the state of Utah. They provide a listing of registered principals in Utah, the authenticity of which defendant has not disputed, listing Davinci Executive Suites as the registered agent for (Pls.' Response in Opp'n to Def.'s Mot. to Quash Service of Process Ex. 1-B.) The registration was performed by Sphere Media, which is apparently one of defendant's other names. (See id. Ex. 1-D at 2.) As defendant has not contested the fact that it is registered for service at the address where it was in fact served, the court finds that service was proper under Rule 4(h)(1).

Even if service was not done in conformance with Rule 4, "[s]o long as a party receives sufficient notice of the complaint, Rule 4 is to be 'liberally construed' to uphold service." Travelers Cas. & Sur. Co. of Am. v. Brenneke, 551 F.3d 1132, 1135 (9th Cir. 2009) (quoting Chan v. Soc'y Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir. 1994)). The Ninth Circuit applies a flexible approach to determine whether to permit the defective service to stand. In Borzeka v. Heckler, 739 F.2d 444, 447 (9th Cir. 1984), the Ninth Circuit adopted a rule permitting courts to overlook a non-compliant service of process provided that (1) the party to be served received actual notice, (2) the defendant would not be prejudiced by the defect in service, (3) there was a justifiable excuse for the failure to properly serve, and (4) the plaintiff would be severely prejudiced if the complaint were dismissed. Id.

Defendant does not argue that it did not have actual notice or that it would be prejudiced by maintaining the action, and the court finds that the first two prongs are therefore met.

As to whether plaintiffs had a justifiable excuse for failure to properly serve, they have sufficiently demonstrated that the confusion surrounding the various names of defendant constituted a justifiable excuse. Plaintiffs attempted service of the Complaint on at the address provided by the Utah Secretary of State, on which they justifiably relied.

While plaintiffs have not argued that they would be prejudiced if non-compliant service resulted in dismissal of the suit, it is clear that at least some prejudice would result. Dismissal and subsequent re-filing solely to perfect service of process would burden the resources of the parties and the court. Given the complete lack of prejudice to defendant, the fact that actual notice was clearly accomplished, and the confusion, if not purposeful obfuscation on the part of defendant in hiding behind its multiple names leading to a potential technical defect in service, the court finds that plaintiff substantially complied with Rule 4. Accordingly, the court will not dismiss the Complaint for failure to properly serve defendant. See Borzeka, 739 F.2d at 447.

IT IS THEREFORE ORDERED that defendant's motion to dismiss plaintiffs' Complaint be, and the same hereby is, DENIED.


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