Gimenez v. Gunnar Optiks, LLC

1 UNITED STATES DISTRICT COURT 2 SOUTHERN DISTRICT OF CALIFORNIA — 3 — 4 Gaston Procopio GIMENEZ, individually Case No.: 23-cv-0671-AGS-VET and on behalf of all others similarly — 5 — situated, ORDER GRANTING REMAND 6 MOTION (ECF 4) AND CLOSING Plaintiff, CASE — 7 — v. — 8 — GUNNAR OPTIKS, LLC, — 9 — Defendant. — 10 — 11 Plaintiff’s remand motion turns on one question: Under California law, is substitute 12 service on a company valid, even when plaintiffs have not made reasonably diligent 13 attempts to serve the company personally? The answer is yes. 14 BACKGROUND 15 Plaintiff Gaston Gimenez sued defendant Gunnar Optiks, LLC, in California state 16 court. On February 28, 2023, plaintiff’s process server tried to personally serve defendant’s 17 designated agent at his office. (ECF 4-1, at 2.) Because the agent was “unavailable,” the 18 server instead undertook substitute service by “hand[ing] the documents to” the agent’s 19 employee and “mail[ing] a copy” of the summons and complaint to Gunnar Optiks that 20 same day. (Id.) 21 No one disputes that the process server followed the nuts-and-bolts requirements for 22 substitute service. The question is whether he was allowed to resort to such service so 23 quickly, without greater efforts to serve the agent personally. If substitute service was 24 permitted, it was “deemed complete on the 10th day after the mailing,” on March 10, 2023. 25 See Cal. Civ. Proc. Code § 415.20 (a). And Gunnar Optiks had “30 days” from completion 26 of service to file a notice of removal. See 28 U.S.C. § 1446 (b). 27 On April 14, 2023—35 days after substitute service was arguably complete— 28 Gunnar Optiks removed the case to federal court. (ECF 1.) In its notice of removal, Gunnar 1 Optiks asserted that removal was “timely as the complaint has not yet been properly 2 served,” so the “30-day period within which to remove has not yet begun.” (Id. at 3.) 3 Gimenez disagrees and moves to remand. (ECF 4.) 4 DISCUSSION 5 A. Governing Law 6 A district court may remand a case for “failure to comply with removal 7 requirements.” Kamm v. ITEX Corp., 568 F.3d 752, 755 (9th Cir. 2009); see 28 U.S.C. 8 § 1447(c). As relevant here, defendants must file a notice of removal “within 30 days after 9 the receipt by the defendant, through service or otherwise, of a copy of the initial pleading 10 . . . .” 28 U.S.C. § 1446 (b). “When service of process becomes effective is governed by 11 state law.” Gray v. Extended Stay Am., Inc., No. 2:19-cv-01269-MCE-EFB, 2020 WL 12 1274265, at *4 (E.D. Cal. Mar. 17, 2020). Defendant has “the burden of establishing 13 removal jurisdiction.” Abrego Abrego v. Dow Chem. Co., 443 F.3d 676, 685 (9th Cir. 14 2006). 15 B. Must a Plaintiff Attempt Personal Service on an Entity Defendant? 16 The defense argues that plaintiffs must exercise “reasonable diligence” to personally 17 serve a company before employing substitute service. (See ECF 7, at 1, 3, 5.) Not so. 18 California requires plaintiffs to use “reasonable diligence” to personally serve only 19 individuals, not entities. See Produce v. Cal. Harvest Healthy Foods Ranch Mkt., No. C20 11-04814 DMR, 2012 WL 259575 , at *3–4 (N.D. Cal. Jan. 27, 2012) (distinguishing 21 California’s substitute-service rules “depending on whether the defendant being served is 22 an entity or an individual”). Compare Cal. Civ. Proc. Code § 415.20 (b) (substitute-service 23 rules for individuals, requiring “reasonable diligence” at personal service), with id. 24 § 415.20(a) (substitute-service rules for entities, with no personal-service requirement). 25 Many courts have concluded that California law allows plaintiffs to rely on substitute 26 service of an entity without any attempt at personal service. See, e.g., Bishil v. LBF Travel 27 Inc., No. 2:22-cv-06059-MEMF-ASx, 2022 WL 17252186 , at *3 (C.D. Cal. Nov. 28, 28 2022) (“[N]o such [‘reasonable diligence’] requirement exists for effecting service on 1 corporate entities.”); Alvandi v. Fidelity Cap. Holdings, Inc., No. CV 14-4379 DSF 2 (AJWx), 2016 WL 11759095 , at *2 (C.D. Cal. July 21, 2016) (rejecting argument that 3 “reasonable diligence at personal service must be made before resort to substituted service” 4 on a corporate defendant and noting that the reasonable-diligence “requirements are found 5 in [Cal. Civ. Proc. Code] § 415.20(b), which does not apply to corporations, and not in 6 § 415.20(a), which does”); Alameda Cty. Elec. Indus. Serv. Corp. v. Gatejen Consol. 7 Indus., No. C-13-00241 JCS, 2013 WL 4081310 , at *9–10 (N.D. Cal. June 27, 2013) 8 (distinguishing between the “more stringent” requirements for substitute service on 9 individuals, which call for “reasonable diligence,” and those for corporate defendants, 10 which do not); Produce, 2012 WL 259575 , at *4 (“Unlike substitute service on an entity 11 defendant, substitute service may be made on an individual only after attempting to 12 personally serve the defendant with ‘reasonable diligence.’”); Gaboratory, Inc. v. 13 Gaboratory Int’l, Inc., No. CV 07-04725 MMM (Ex), 2008 WL 11406072 , at *4 (C.D. 14 Cal. Nov. 10, 2008) (“While it is always appropriate to serve a corporation by substituted 15 service, an individual may be served in this way only after plaintiff has made ‘reasonabl[y] 16 diligen[t]’ efforts to serve the individual personally.”). 17 Treatises concur with this conclusion. See, e.g., Michael Paul Thomas, California 18 Civil Courtroom Handbook and Desktop Reference § 10.24 (2023 ed.) (“Unlike substitute 19 service on natural persons, substitute service on entities does not require any prior attempt 20 at personal service.”); Robert I. Weil et al., California Practice Guide: Civil Procedure 21 Before Trial ¶ 4:196 (2023 ed.) (“No such showing [of prior efforts at personal service] is 22 necessary for substitute service on entity defendants . . . .”). 23 So does California’s Judicial Council. See Judicial Council Comment to Cal. Civ. 24 Proc. Code § 415.20(a) (“If a defendant is a corporate or noncorporate entity, service may 25 be made in the first instance, in lieu of delivery of process to a specified officer or employee 26 of such entity personally, by leaving the papers in his office.”). 27 Nonetheless, Gunnar Optiks paddles against this cascade of authority on the strength 28 of four cases. Yet each seems to mistakenly import the substitute-service rules for 1 individuals into the entity context. For example, in EDJX, Inc. v. 6x7 Networks, LLC, No. 2 21-cv-02398-SK, 2021 WL 4262290 (N.D. Cal. Sept. 20, 2021), the court held that 3 “California law requires that ‘a plaintiff must first make reasonably diligent (i.e., two or 4 three) attempts at personal service.’” Id. at *1 (quoting Shaw v. Five M, LLC, 5 No. 16-cv-03955-BLF, 2017 WL 747465 , at *2 (N.D. Cal. Feb. 27, 2017) (in turn citing 6 Bein v. Brechtel-Jochim Grp., 8 Cal. Rptr. 2d 351, 352 (Ct. App. 1992))). But the ultimate 7 authority for that proposition comes from a section of the Brechtel-Jochim decision 8 discussing service on “the Brechtels” in their individual capacity—and relying on the code 9 section that pertains to substitute service on individuals, not entities. See Brechtel-Jochim, 10 8 Cal. Rptr. 2d at 353–54 (citing Cal. Civ. Proc. Code § 415.20 (b)). At any rate, EDJX’s 11 “reasonable diligence” analysis is dicta, as that court identified other valid grounds to 12 disqualify service. See EDJX, 2021 WL 4262290 , at *2 (“Additionally, the proofs of 13 service were defective . . . .”). 14 The tale is the same for Gunnar Optiks’ remaining authorities. All three presume 15 that “reasonable diligence” applies to service on entities, but the citational trail always 16 leads back to caselaw about individuals. Specifically, each case ultimately relies on Evartt 17 v. Superior Court of Stanislaus County, 152 Cal. Rptr. 836 , 837–39 (Ct. App. 1979), or 18 Espindola v. Nunez, 245 Cal. Rptr. 596 , 597–99 (Ct. App. 1988), which both involved 19 individual defendants and focused on section 415.20(b), regarding substitute service on 20 individuals. See Aussieker v. M&S Green-Power Energy, Inc., No. 2:18-cv-03234-JAM21 AC, 2019 WL 2183783 , at *4 (E.D. Cal. May 21, 2019) (relying on Evartt and Espindola); 22 Falco v. Nissan N. Am. Inc., 987 F. Supp. 2d 1071, 1080 (C.D. Cal. 2013) (relying on 23 Evartt and also citing Cal. Civ. Proc. Code § 415.20 (a), which contains no “reasonable 24 diligence” requirement); Estate of Hong-Ming Lu v. Primax Wheel Corp., No. C 04-4170 25 JSW, 2005 WL 807048 , at *3 (N.D. Cal. Apr. 7, 2005) (relying on Evartt and Espindola). 26 In short, Gunnar Optiks’ argument cannot overcome the plain language of the statute 27 and the overwhelming weight of authority. The Court concludes that California has no 28 “reasonable diligence” requirement for substitute service on entities. So a plaintiff may 1 ||serve a company by substitute service without attempting personal service. Gimenez’s 2 service here was effective; Gunnar Optiks’ notice of removal was “filed after [the] thirty3 window”; and “remand to state court is therefore appropriate.” See Babasa vy. 4 || LensCrafters, Inc., 498 F.3d 972, 974 (9th Cir. 2007). 5 CONCLUSION 6 Plaintiff's motion to remand is GRANTED. The Clerk is directed to close this case 7 ||and remand it to San Diego County Superior Court. 8 Dated: January 16, 2024 10 Andrew G. Schopler 11 United States District Judge — 12 — — 13 — — 14 — — 15 — — 16 — — 17 — — 18 — — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 —