GS Holistic, LLC v. Puffy Smoke Shop 2, Inc

Background

GS Holistic, LLC sued Puffy Smoke Shop #2, Inc., doing business as Puffy Smoke Shop, Elian Hanna, and Simon Maida for trademark infringement, false designation of origin, and unfair competition. The issue in this order was whether GS Holistic could serve Hanna by publication after unsuccessful attempts to serve him.

GS Holistic attempted service on Hanna at Puffy Smoke Shop in Salinas, California, on February 12 and 14, 2023. During those attempts, an employee provided another address for Hanna, and another employee said Hanna was unavailable and that he was out of the country. GS Holistic did not attempt service at the additional address. After receiving another extension, GS Holistic made a third attempt at the shop on May 10, 2023, when an employee said Hanna had moved.

Legal standard

Federal Rule of Civil Procedure 4(e)(1) permits service under the law of the state where the federal court is located or where service is made. Under California law, service by publication is allowed only when the defendant cannot, with reasonable diligence, be served in another permitted way and the plaintiff shows that a valid claim exists against the defendant or that the defendant is a necessary or proper party. Publication is a last resort, and the order must identify a newspaper most likely to provide actual notice.

Court’s reasoning

The court found that GS Holistic had not shown reasonable diligence. The court emphasized that GS Holistic made only three attempts over several months, all at the same location, and never investigated the alternative address provided during the first attempt. GS Holistic also provided no evidence of searches of business or property records, social-media platforms, voter registration records, city directories, or telephone directories. It did not show that it had exhausted other ways to locate Hanna or contacted Maida, an allegedly co-owning codefendant who had been served.

The court also found two additional problems. First, the application did not identify the newspaper in which GS Holistic proposed to publish the summons. Second, the supporting affidavit addressed only the search for Hanna and did not provide sworn facts, based on personal knowledge, showing that a claim existed against him.

Ruling and next steps

The court DENIED WITHOUT PREJUDICE GS Holistic’s application for permission to serve Hanna by publication. GS Holistic may refile by June 27, 2023, but the new motion must address the problems identified in the order. If GS Holistic does not refile, it must respond in writing by June 27, 2023, to the court’s order to show cause why the claims against Hanna should not be dismissed for failure to prosecute, and it must appear at a July 11, 2023 hearing. The court stated that failing to refile or respond would result in dismissal of Hanna without prejudice.