Judge David S. Cunningham, Case Number: 23STCV11823, Date: 2024-03-11 Tentative Ruling

Judge: David S. Cunningham, Case: 23STCV11823, Date: 2024-03-11 Tentative Ruling

The motion to quash is granted, and the complaint is dismissed without prejudice.

This is a putative class action. The complaint alleges that Nutra falsely advertises that its diet product – Lean PM Fat Burner and Sleep Support – supports weight loss. Plaintiff claims the alleged conduct violates the Consumer Legal Remedies Act (“CLRA”).

* Plaintiff sent the CLRA prelitigation notice to Defendant’s legal department in Canada by Federal Express (“FedEx”).

* Stephen Winter is a Canadian attorney. He is a partner in the Stewart McKelvey law firm, which has represented Defendant at times.

* Plaintiff served the summons and complaint on Winter in Canada via personal service.

First, Defendant contends the motion should be granted as to Plaintiff’s CLRA prelitigation notice because the Hague Convention and California law do not allow service by FedEx. (See Motion, pp. 6-7, 11.)

Plaintiff disagrees. She claims FedEx is an appropriate postal channel under Article 10(a) of the Hague Convention. (See Opposition, pp. 6-7.)

The hearing is continued as to this issue. “Article 10(a) permits the ‘sending’ of judicial documents by mail to persons abroad ‘provided the State of destination does not object.’” (Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2023 Update) ¶ 4:329.) “Thus, in cases governed by the Hague Convention, service by mail is permissible so long as the receiving state has not objected to service by mail and service by mail is authorized under otherwise applicable law.” (Ibid.) There is no assertion that Canada objects to service by mail, so the next question is whether service via FedEx is authorized. Under the Hague Convention, whether a particular postal channel may be utilized depends on the law of the forum state – here, California law. (See Inversiones Papaluchi S.A.S. v. Superior Court (2018) 20 Cal.App.5^th 1055, 1066 (“Inversiones”.) Defendant cites Inversiones for the proposition that California law bars use of FedEx. There, the document at issue was a summons served in Colombia. The Second District Court of Appeal found that California law did not permit service by FedEx in that context. The analysis focused specifically on Code of Civil Procedure section 413.10(c), which expressly pertains to service of a summons outside the United States. Is there a California case that renders section 413.10(c) applicable to prelitigation notices as well? If not, what is the particular California rule or statute that governs the circumstances here? The Court orders the parties to provide supplemental briefs to answer these questions.

Second, Defendant asserts that the motion should be granted because Plaintiff failed to send the prelitigation notice to “an officer or authorized agent[.]” (Motion, p. 12.)

The analysis is the same. Defendant’s authorities appear to regard service of a summons on a corporation. The parties’ supplemental briefs should discuss whether these rules – or other rules – apply to service of a prelitigation notice.

Third, Plaintiff claims the Hague Convention only governs service of process. She contends a CLRA prelitigation notice, by contrast, merely needs to be sent, not served. (See id. at pp. 7-8.)

The Court disagrees. The Hague Convention applies “in all cases, in civil and commercial matters, where there is occasion to transmit a judicial or extrajudicial document for service abroad.” (Rockefeller Technology Investments (Asia) VII v. Changzhou SinoType Tech. Co. (2020) 9 Cal.5^th 125, 137.) A prelitigation notice at least qualifies as an extrajudicial document.

Fourth, Plaintiff contends the service substantially complied with Civil Code section 1782. (See Opposition, pp. 8-9.)

The Court disagrees. The CLRA requires a prelitigation notice “to be in writing sent by certified or registered mail, return receipt requested, to the place where the transaction occurred, such person's principal place of business within California, or, if neither will effect actual notice, the office of the Secretary of State of California.” (Stern, Business & Professions Code Section 17200 Practice (The Rutter Group March 2023 Update) ¶ 10:58.) Plaintiff admits that she used FedEx instead of certified mail, return receipt requested. (See Opposition, p. 8.)

Fifth, Plaintiff contends strict compliance with section 1782 was impossible given that the transaction took place in cyberspace. (See id. at p. 9.)

The Court disagrees. Plaintiff may have purchased the product from the internet, but she clearly understood that she needed to send the prelitigation notice to Defendant’s place of business in Canada. Strict compliance was possible and would have been accomplished if Plaintiff had used certified mail, return receipt requested.

Sixth, Plaintiff claims Defendant waived its challenge to the prelitigation notice. (See id. at pp. 10-11.)

The Court disagrees in part. Plaintiff’s evidence of waiver is two letters from defense counsel that were sent to Plaintiff’s counsel after Plaintiff sent the prelitigation notice. The first letter simply states that defense counsel are awaiting instructions from Defendant and will further communicate with Plaintiff’s counsel once the instructions are received. (See Ferrell Decl., Ex. B, p. 2.) At the end of the second letter, defense counsel states that the letter “is not intended to, and should not be construed in any way as, waiver of [Defendant’s] rights to object to the defective service of the notice and the summons and complaint[.]” (Id. at Ex. C, p. 14.) These facts are different than the facts in Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30 where the defense counsel’s letter said: “We have reviewed your letter of October 11, 1974, which we received on October 21, 1974, and which we are treating as a preliminary notice and demand under California Civil Code 1782a.” (Outboard Marine, supra, 52 Cal.App.3d at 41.)

Nevertheless, the Court continues the hearing as to this issue. The purpose of a prelitigation notice is to establish a 30-day period for pre-suit settlements to occur. (See Stern, supra, at ¶ 10:57.) Plaintiff sent the prelitigation notice on March 23, 2023. (See Ferrell Decl., ¶ 2.) Defense counsel’s first response letter is dated August 15, 2023. (See id. at Ex. B, p. 2.) The second letter is dated November 17, 2023. (See id. at Ex. C, p. 1.) Both were sent well after the 30-day period. Is there a delay component that should be considered in assessing waiver? The supplemental briefs should address this question.

In summary, the hearing is continued for supplemental briefing on the FedEx and waiver issues.[1]

Defendant contends the motion should be granted as to the summons and complaint because Winter is not an officer or authorized agent. (See Motion, pp. 7-8, 14-18.)

Plaintiff contends her process server served Winter at Defendant’s registered address, and the service substantially complied with due process. (See Opposition, pp. 13-17.)

The Court agrees with Defendant. The parties agree that personal service is allowed in Canada under the Hague Convention. The key question, though, is whether Plaintiff complied with the personal-service rules. Winter states that he is not an officer, employee, or in-house counsel of Defendant. (See Winter Decl., ¶ 2.) His declaration tends to show that he is not a proper person to serve to effectuate personal service on Defendant under either California law or Canada law. (See Motion, p. 17 [citing Code of Civil Procedure section 416.10, Corporations Code section 2110, and Rule 6.02 of the Civil Rules of the Supreme Court of Newfoundland and Labrador]; see also Reply, pp. 9-11.) This part of the motion is granted, and the complaint is dismissed without prejudice. (See Kott v. Superior Court (1996) 45 Cal.App.4^th 1126, 1136 [instructing in a case involving a Canadian defendant that “[f]ailure to comply with the Hague Service Convention procedures voids the service” “even where the defendant had actual notice of the defendant”].)

[1] Defendant contends the Court must dismiss the CLRA damages claim with prejudice if it ends up finding the prelitigation notice defective. (See, e.g., Reply, pp. 6-8.) The Court disagrees. Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4^th 1235 is a Second District decision. It holds that the dismissal should be without prejudice, and Plaintiff should be granted leave to resend the prelitigation notice after the complaint is filed.