Bakery and Confectionery Union and Industry International Pension Fund v. Bakery

Background

The Bakery and Confectionery Union and Industry International Pension Fund and the Board of Trustees of the Bakery and Confectionery Union and Industry International Pension Fund sued Dick’s Bakery, Inc., alleging violations of the Employee Retirement Income Security Act. The plaintiffs asked for permission to serve the company by delivering the summons and complaint to the California Secretary of State.

The company’s September 2019 state filing listed addresses for its principal offices, mailing address, officers, and registered agent. The plaintiffs made numerous unsuccessful service attempts, including attempts at the registered agent’s office and residence, the company’s listed offices, the listed officers’ addresses, a post-office box, and other addresses found through investigations. The registered agent later stated that he was no longer the company’s agent, and the company’s state filing was changed to list another agent and new office and personal addresses. The plaintiffs also reported that one person at a listed address had never heard of the company and that the original Oroville address appeared to be fraudulent.

The opinion states that Laurel Bivens and Laurel Sota were treated as the same person because the filings listed the same first name and plaintiffs did not distinguish between them.

Legal standard

Federal Rule of Civil Procedure 4(h)(1)(A) allows a domestic corporation to be served using methods permitted by state law. California Corporations Code section 1702(a) allows service through the California Secretary of State when the corporation’s designated agent cannot be found at the listed address and the plaintiff shows through an affidavit or declaration that service could not be completed with reasonable diligence.

“Reasonable diligence” means taking the steps that a reasonable person who genuinely wanted to provide notice would have taken under the circumstances. The court considered whether the plaintiffs had reasonably attempted personal service, substitute service, mail service, and service on the company’s registered agent or officers.

Court’s analysis

The court found that the plaintiffs’ efforts were reasonably diligent. They used commercial locator services, researched county property records, made telephone calls, consulted a receptionist, and visited multiple in-state and out-of-state addresses. The court concluded that personal service could not be completed at any of the addresses listed in the company’s state filings.

The court determined that substitute service was not practical because the plaintiffs found no activity at most of the addresses, and the only person who appeared to be present did not know of the company. Mail service was also not feasible because prior mail attempts failed and Aaron Sota refused to accept service by mail. The court further found that service on the company’s former and current agents and officers was not feasible despite the plaintiffs’ investigations and repeated attempts.

Disposition

The court held that the plaintiffs had exercised reasonable diligence and could serve Dick’s Bakery through the California Secretary of State under California Corporations Code section 1702(a). Judge Edward J. Davila therefore granted the plaintiffs’ application to serve the summons and complaint upon the California Secretary of State. The order did not decide the plaintiffs’ underlying Employee Retirement Income Security Act claims.