Whom Do You Serve?
Friday, June 15, 2018

Suppose you were asked to serve Nation Credit Adjusters, L.L.C.  Your first step would likely be to try to identify the LLC's agent for service of process.  If you perform a business entity search on the California Secretary of State's website, you will find the following:

Having determined that the LLC has a corporate agent for service, (Corporation Service Company), the next step would be to determine how to serve CSC.  That is where counsel in Cortez v. National Credit Adjusters, L.L.C., Case No. 17cv2152-LAB (KSC) (U.S.D.C. June 6, 2018) went off track by deciding to serve CSC at its Delaware address.  Counsel apparently overlooked the instruction to "click the link above and then select the most current 1505 certificate" to find the most current address and employees authorized to receive service.  As a result of this failure, U.S. District Judge Larry Alan Burns dismissed the action for failure to serve.

The continuing conflation of corporate and LLC law

Judge Burns provided the following explanation:

"Under Cal. Corp. Code § 1502(b), corporations must designate an in-state agent for service of process. If the agent is itself a corporation, it is required to have complied with Cal. Corp. Code § 1505.  This, in turn requires the corporate agent to provide the complete street address of its office or offices in California where it may be served with process, and the name of anyone there who is authorized to accept service. § 1505(a)(1)-(2)."

There is just one problem with this explanation - the intended defendant is a foreign limited liability company, not a "corporation".  Section 1502 applies to "corporations" (as defined in Section 162); it does not apply to LLCs. 

That is clear. A much more interesting question is whether Section 1505 applies to agents of foreign LLCs.  Section 1505 applies to the designation of a domestic or foreign corporation as agent for the purpose of service of process "of any entity pursuant to any law which refers to this section [1505]".  Corporations Code Section 17708.02 (not Section 1502) applies to the designation of agents for service of process in the case of foreign LLCs.  That statute requires the disclosure of the name and address of the initial agent for service of process, but it does not refer directly to Section 1505.  Rather, Section 17708.02 refers to an agent that meets the qualifications of Section 17702.13(c), which does refer to Section 1505.  Thus, the applicability of Section 1505 turns on how narrowly one reads its requirement that the law "refer to this section".  

 

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