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Cheetah Mobile Inc. v. Apus Group

United States District Court, N.D. California

July 28, 2016

CHEETAH MOBILE, INC., et al., Plaintiffs,
v.
APUS GROUP, Defendant.

          ORDER GRANTING PLAINTIFFS’ MOTION TO SERVE BY ALTERNATIVE MEANS AND DENYING DEFENDANT'S MOTION TO DISMISS FOR LACK OF SERVICE RE: DKT. NOS. 63, 66

          HAYWOOD S. GILLIAM, JR. United States District Judge.

         Pending before the Court are two motions: (1) Plaintiffs Cheetah Mobile, Inc., Cheetah Mobile America, Inc., and Cheetah Technology Corporation’s motion to serve Defendant APUS Group by alternative means and to extend the service deadline (“Motion for Alternative Service”) and (2) Defendant APUS Group’s cross-motion to dismiss for lack of service (“Motion to Dismiss”). Dkt. Nos. 63, 66. For the reasons articulated below, Plaintiffs’ Motion for Alternative Service is GRANTED and Defendant’s Motion to Dismiss is DENIED.

         I. BACKGROUND

         On May 27, 2015, Plaintiffs filed a complaint alleging eleven causes of action under California and federal law: (1) defamation; (2) trade libel/product disparagement; (3) copyright infringement; (4) false advertising; (5) trademark dilution by tarnishment; (6) trademark dilution; (7) unfair competition and business practices; (8) false and misleading advertising; (9) unfair competition; (10) intentional interference with prospective economic advantage; and (11) intentional interference with contract. Dkt. No. 1. Plaintiffs seek injunctive relief, monetary damages, restitution, and attorney’s fees and costs. Id.

         Plaintiffs have been attempting to serve Defendant unsuccessfully since May 27, 2015. Mot. for Alternative Service at 1; Dkt. No. 63-1 (“Slenkovich Decl.”) ¶ 3. On the same day that they filed their complaint, Plaintiffs attempted to personally serve a copy of the complaint and summons upon Defendant’s CEO, Mr. Tao Li, in Mountain View, California, where he was attending a public event. Mot. for Alternative Service at 2; Slenkovich Decl. ¶ 3. However, the summons served upon Mr. Li was not signed by the clerk of the court and did not bear the court’s seal. Dkt. No. 25-8; see also Slenkovich Decl. ¶ 6. Accordingly, on October 21, 2015, this Court issued an order quashing service and extending Plaintiffs’ deadline to properly effectuate service to February 15, 2016. Dkt. No. 57.

         On June 11, 2015, shortly after receiving notice that Defendant would challenge Mr. Li’s service as ineffective, Plaintiffs initiated service via the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 20 U.S.T. 361, T.I.A.S. No. 6638 (1969) (the “Hague Convention”). Slenkovich Decl. ¶ 4. The parties dispute the events surrounding the Chinese authorities’ attempt to serve Defendant at the sole physical address listed on Defendant’s website - No. 10 Wangjing Street, 42/F Area B, Tower 3, Wangjing SOHO, Chaoyang District, Beijing, China 100015. However, it is undisputed that an individual located at the aforementioned address informed Chinese authorities that they were at the incorrect location to serve “APUS GROUP.” See Dkt. 63-6 (“Liu Decl.”) ¶ 7; Dkt. 66-4 (“Pan Decl.”) ¶¶ 6-8. Thereafter, Chinese authorities attempted to serve Defendant at a second business address, but service was again unsuccessful. See Mot. for Alternative Service at 4; Pan Decl. ¶ 11.

         Plaintiffs’ February 15, 2016, deadline to effectuate service has passed, and service has not been completed to date. On February 8, 2016, Plaintiffs filed the currently pending Motion for Alternative Service. On February 25, 2016, Defendant filed its opposition to Plaintiffs’ Motion for Alternative Service and Defendant’s cross-Motion to Dismiss.

         II. DISCUSSION

         The Court will first analyze Plaintiffs’ Motion for Alternative Service before addressing Defendant’s Motion to Dismiss.

         A. Plaintiffs’ Motion for Alternative Service

         Plaintiffs’ Motion for Alternative Service requests that the Court (1) permit Plaintiffs to serve the complaint, summons, and associated papers on Defendant via email and by serving Defendant’s U.S. counsel and (2) extend Plaintiffs’ deadline to properly effectuate service. Mot. for Alternative Service at 2.

         i. Legal Standard

         “Before a federal court may exercise personal jurisdiction over a defendant, the procedural requirement of service of summons must be satisfied.” Omni Capital Int’l v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Under Federal Rule of Civil Procedure 4(h), a defendant corporation can be served “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 (f)(2)(C)(i).” Fed.R.Civ.P. 4 (h)(2). The relevant subsection of Federal Rule of Civil Procedure 4(f) provides that a foreign defendant may be served outside of the United States “by other means not prohibited by international agreement, as the court orders.” Fed.R.Civ.P. 4(f)(3).

         “[S]ervice under Rule 4(f)(3) must be (1) directed by the court; and (2) not prohibited by international agreement.” Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1014 (9th Cir. 2002). To comport with traditional notions of due process, notice must be “reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950); Rio Props., Inc., 284 F.3d at 1016. “[S]ervice under Rule 4(f)(3) is as favored as service available under Rule 4(f)(1) or Rule 4(f)(2)” and is “neither a ‘last resort’ or ‘extraordinary ...


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