Judge: Elaine Lu, Case: 20STCV14383, Date: 2022-08-30 Tentative Ruling
Case Number: 20STCV14383 Hearing Date: August 30, 2022 Dept: 26
|
SELENA GOMEZ; Plaintiff, vs. FORGAME US CORPORATION, et al.; Defendants. |
Case No.: 20STCV14383 Hearing Date: August 30, 2022 [TENTATIVE] order RE: PLAINTIFF’S MOTION FOR ALTERNATIVE
SERVICE OF DEFENDANTS GUANGZHOU FEIDONG SOFTWARE TECHNOLOGY CO., LTD.,
GUANGZHOU FEIYIN INFORMATION TECHNOLOGY CO., LTD., GUANGZHOU JIEYOU SOFTWARE
CO., LTD., AND NA LIANG |
Background
On April 4, 2020, Plaintiff Selena
Gomez (“Plaintiff”) filed the instant right of publicity action against
Defendants Forgame US Corporation; Forgame Holdings Limited; Mutantbox
Interactive Limited; Guangzhou Feidong Software Technology Co., LTD.; Guangzhou
Feiyin Information Technology Co., LTD.; Guangzhou Jieyou Software Co., LTD;
Dongfeng Wang; Na Liang; and Roy Liu.
The complaint asserts two causes of action for (1) Violation of and
Conspiracy to Violate Statutory Right of Publicity and (2) Violation of and
Conspiracy to Violate Common Law Right of Publicity.
On February 28, 2022, the Court
denied Plaintiff’s motion for alternative service of process on Defendants
Guangzhou Feidong Software Technology Co., LTD.; Guangzhou Feiyin Information
Technology Co., LTD.; and Guangzhou Jieyou Software Co., LTD (“PRC Entity
Defendants”) without prejudice. The
Court found Plaintiff failed to demonstrate sufficient reasonable diligence and
discovery of the current addresses of PRC Entity Defendants for service of
process. The Court specifically noted
that Plaintiff’s evidence gave no indication of (1) what efforts, if any,
Plaintiff had undertaken to contact and locate any of the defendants with the
email addresses, phone number, and fax number Plaintiff had for the parties; (2)
efforts to obtain current addresses from the PRC Entity Defendants from their
parent company Forgame; and (3) efforts to obtain the PRC Entity Defendants’
current locations from their officers/representatives Dongfeng Wang and Na
Liang. The Court noted the motion was
prematurely filed.
On July 25, 2022, Plaintiff filed the
instant motion for alternative service of PRC Entity Defendants and Na Liang
(“Liang”). Defendant Dongfeng Wang (“Wang”)
filed opposition papers on August 9, 2022.
Plaintiff filed reply papers on August 15, 2022.
Request
for Judicial Notice
Plaintiff has submitted a request
for judicial notice with her reply, requesting judicial notice of: (1) Form S-1
Registration Statement for Prime Number Acquisition I Corp. filed as a
confidential draft submission to the SEC on June 4, 2021; (2) Form S-1
Registration Statement for Prime Number Acquisition I Corp. filed with the SEC
on February 1, 2022; (3) Amendment No. 2 to Form S-1 Registration Statement for
Prime Number Acquisition I Corp. filed with the SEC on May 3, 2022; (4)
Prospectus for Prime Number Acquisition I Corp. dated May 16, 2022 and filed
with the SEC; and (5) Form 8K Current Report for Prime Number Acquisition I
Corp. dated July 13, 2022 and filed with the SEC. Plaintiff’s request is granted.
Discussion
Motion
for Alternative Service
Plaintiff
seeks an order authorizing alternative service of process on PRC Entity
Defendants and Liang. Specifically,
Plaintiff seeks an order authorizing (1) service on PRC Entity Defendants and
Liang by publication, (2) service on PRC Entity Defendants through
co-defendants Wang and/or Forgame, and (3) service on Liang through her account
with LinkedIn.
As indicated in the February 28, 2022 order, defendants
living in another country can be served with summons in the same way as persons
living in other states: any of the four methods by which summons can be served
on persons within California (personal delivery, substitute service, mail
coupled with acknowledgment of receipt, publication); or certified or
registered mail with return-receipt requested; or any other method permitted
under the law of the country where the service was made, provided the
California court determines (before and after the service was made) that the
method used was “reasonably calculated to give actual notice.” (CCP § 413.10(c).)
International treaties such as the Hague Convention may
limit the manner of service on persons located in signatory countries. “ ‘[C]ompliance with the Convention is
mandatory in all cases to which it applies’ [Citation], and ‘the Convention
pre-empts inconsistent methods of service prescribed by state law in all cases
to which it applies’ [Citation.]” (Rockefeller Technology Investments (Asia)
VII v. Changzhou SinoType Technology Co., Ltd. (2020) 9 Cal.5th 125,
137.) “This Convention shall not apply
where the address of the person to be served with the document is not
known.” (November 15, 1965, 20 U.S.T.
361, T.I.A.S. No. 6638 [Hague Service Convention].) However, this provision has been construed to
mean the Hague Service Convention does not apply when defendant’s whereabouts
cannot be ascertained despite reasonable diligence. (Kott
v. Superior Court (1996) 45 Cal.App.4th 1126, 1139; Lebel v. Mai (2012) 210 Cal.App.4th 1154, 1162 [“the reasonable
diligence requirement applied to both
the question of whether the Hague Convention applied under article I, and
whether service by publication was proper”].)
“The term ‘reasonable diligence’ takes its meaning from
the former law: it denotes a thorough, systematic investigation and inquiry conducted
in good faith by the party or his agent or attorney[.]” (Kott,
supra, 45 Cal.App.4th at 1137.)
A.
Whether the Hague Convention Applies
Here, Plaintiff has been unable to effectuate service of
process of the PRC Entity Defendants and Liang.
In or about May or June 2020, Plaintiff learned that Liang was believed
to be in Foothill Farms, California and was also believed to be the CFO of Guangzhou
Feidong Software Technology Co., LTD.
(Weingarten Decl., ¶ 12.) Plaintiff
attempted to serve Liang at that location, including service of Guangzhou
Feidong Software Technology Co., LTD. through Liang. (Id.) Plaintiff also learned that co-defendant
Wang, who was believed to be the managing agent of Guangzhou Feiyin Information
Technology Co., LTD., was believed to be in Dublin, California and attempted to
serve Guangzhou Feiyin Information Technology Co., LTD. through Wang at that
location. (Id.) However, both
individuals claimed to be different people with the same names. (Id.)
Subsequently, Plaintiff retained First Legal to conduct
further investigations regarding the whereabouts of Defendants and arranged for
First Legal to prepare the necessary paperwork and provide for service of
process on PRC Entity Defendants in China through the Hague Service
Convention. (Weingarten Decl., ¶ 13.) A request for service was filed with the
PRC’s Central Authority in or about September 2020. (Id.) However, in or about February 2021, Plaintiff
received notice from the PRC Central Authority that service was unsuccessful
because the entities were not at the addresses provided. (Id.)
Plaintiff then retained Aaron Lukken (“Lukken”) of Viking
Advocates, LLC to assist with Plaintiff’s efforts to effect service of process
on PRC Entity Defendants and Liang in China, as provided in the Hague Service
Convention. (Weingarten Decl., ¶ 14; Lukken
Decl., ¶¶ 7-8.) Lukken retained
international investigative research and risk advisory firm Blackpeak Group of
Hong Kong (“Blackpeak”) to locate PRC Entity Defendants and Liang for
service. (Weingarten Decl., ¶ 14; Lukken
Decl., ¶ 8.) Through Blackpeak, Plaintiff
was able to obtain corporate registries and the registered addresses of PRC
Entity Defendants and Liang. (Weingarten
Decl., ¶¶ 15-18, 27; Lukken Decl., ¶¶ 8, 9.)
Requests for service of PRC Entity Defendants and Liang were submitted
to the PRC Central Authority on or about April 2, 2021. (Weingarten Decl., ¶¶ 19-22, 27; Lukken
Decl., ¶ 10.) However, service on these
addresses was unsuccessful and Plaintiff received certificates of non-service
from Lukken on November 3, 2021 and May 10, 2022. (Weingarten Decl., ¶¶ 23-26, 28.) The certificates of non-service explained
that the office of the address for Guangzhou Feidong Software Technology Co.,
LTD. was vacant; that Guangzhou Feiyin Information Technology Co., LTD. and
Guangzhou Jieyou Software Co., LTD. were not at the addresses provided; and
that Liang had moved, and her current location was not known. (Weingarten Decl., ¶¶ 24-26, 28, Exs. 20, 21,
22, 24.)
Plaintiff contacted Forgame’s counsel and Wang’s counsel
on March 28, 2022 to request current or last known addresses for PRC Entity
Defendants and Liang. (Weingarten Decl.,
¶¶ 31-32.) Wang’s counsel provided
addresses for PRC Entity Defendants, but those addresses were the same as those
used in Plaintiff’s April 2, 2021 requests for service with PRC Central
Authority. (Id., ¶ 31.) Wang’s counsel
did not provide any contact information for Liang. (Id.) Forgame’s counsel did not respond. (Id.,
¶ 32.)
Plaintiff
also conducted online searches regarding PRC Entity Defendants and learned of
certain email addresses and telephone and fax numbers associated with these
entities or Forgame. (Weingarten Decl., ¶
29.) Plaintiff asked Wang’s and Forgame’s
counsel to confirm the email addresses that Plaintiff found (i.e.,
IR@forgame.com, im@forgame.com, and zhaopin@gzfeiyin.com) or provide other
email addresses. (Id., ¶ 33.) Wang’s counsel
replied that IR@forgame.com should still be active, but did not provide other
email addresses. (Id.) Forgame’s counsel did
not respond. (Id.) Plaintiff sent emails to
IR@forgame.com, im@forgame.com, zhaopin@gzfeiyin.com, and art@gzfeiyin.com to
obtain information regarding the whereabouts of PRC Entity Defendants. (Id.,
¶ 34.) Emails to zhaopin@gzfeiyin.com
and art@gzfeiyin.com failed to send because the email addresses were described
as not found in the bounce-back messages.
(Id.) Emails to IR@forgame.com and im@forgame.com
did not result in email bounce-back messages, but Plaintiff has not received
any responses. (Id.) Plaintiff also
contacted the telephone and fax numbers that were found, but the telephone
numbers were not in service, and the faxed letters did not go through. (Id.,
¶ 35.)
Regarding
Liang, Plaintiff’s investigation also included extensive Internet searches to
find her contact information. (Weingarten
Decl., ¶ 36.) Plaintiff found what
appeared to be Liang’s LinkedIn account and sent a message via LinkedIn’s
InMail feature to the account, asking Liang to provide her contact information,
including her physical address. (Id.)
Plaintiff has not received a response.
(Id.) Plaintiff indicates Plaintiff was unable to
find other contact information for Liang despite diligent search. (Id.)
Plaintiff
also authorized Lukken and Blackpeak to conduct a supplemental investigation
regarding the whereabouts for PRC Entity Defendants and Liang. (Weingarten Decl., ¶ 38.) The updated corporate registries for PRC
Entity Defendants reflected the same addresses as the addresses where service
was attempted in 2021 under the Hague Service Convention, and no other
addresses were found. (Id.)
The supplemental investigation also yielded no other address for Liang
other than the address that was used in the attempted service through the Hague
Service Convention in 2021. (Id.)
The Court finds Plaintiff has sufficiently
demonstrated that the whereabouts of PRC Entity Defendants and Liang could not
be ascertained despite reasonable diligence.
Under these circumstances, the Hague Convention does not apply, and service
may be made through any of the four methods by which summons can be served on
persons within California or as directed by the court, provided service is
reasonably calculated to give actual notice.
(CCP § 413.10(c).) The Court will
thus discuss each of the proposed methods of service Plaintiff has requested.
B.
Service by Publication
Plaintiff
seeks an order permitting service on PRC Entity Defendants and Liang by
publication in the Los Angeles Daily
Journal and the China Business Herald. Plaintiff provides it is also exploring International Business Daily as another
Chinese national newspaper most likely to give actual notice to the defendants.
CCP
section 415.50 provides for service by publication “if upon affidavit it
appears to the satisfaction of the court in which the action is pending that
the party to be served cannot with reasonable diligence be served in another
manner specified in this article and that either: [¶] (1) [a] cause of action
exists against the party upon whom service is to be made or he or she is a
necessary or proper party to the action [or] [¶] (2) [t]he party to be served
has or claims an interest in real or personal property in this state that is
subject to the jurisdiction of the court or the relief demanded in the action
consists wholly or in part in excluding the party from any interest in the
property.” (CCP § 415.50(a).)
Given
Plaintiff has been unable to obtain valid addresses for PRC Entity Defendants
and Liang, the Court finds Plaintiff has demonstrated that PRC Entity
Defendants and Liang cannot with reasonable diligence be served by any other
manner under the statute. Plaintiff is
also asserting causes of action against PRC Defendants and Liang. Plaintiff has thus satisfied the requirements
for service by publication.
Regarding
where the summons is to be published, CCP section 415.50(b) provides that “[t]he
court shall order the summons to be published in a named newspaper, published
in this state, that is most likely to give actual notice to the party to be
served.” (CCP § 415.50(b).) “If the party to be served resides or is
located out of this state, the court may also order the summons to be published
in a named newspaper outside this state that is most likely to give actual
notice to that party.” (Id.)
According
to Plaintiff’s counsel, his office contacted third-party companies that provide
services in placing legal notices in newspapers published in China and
determined that potential Chinese newspapers that may be used for service by
publication include China Business Herald
or International Business Daily. (Weingarten, ¶ 46.) Plaintiff’s counsel provides the China Business Herald is a Chinese
business newspaper published and distributed nationally in China and the International Business Daily is a
Chinese national newspaper in the economic field with an average daily
circulation of over 400,000 copies based on data from 2020. (Id.,
¶¶ 47-48.) As the last known addresses
for PRC Entity Defendants and Liang were in China and these defendants are
engaged in the business field, the Court finds both proposed newspapers are
newspapers that are most likely to give actual notice to PRC Entity Defendants
and Liang. The Court will thus authorize
service by publication in the China
Business Herald and/or International
Business Daily in this case.
As
for the request for publication in the Los Angeles Daily Journal, Plaintiff has made no showing that this newspaper
is the most likely to give actual notice to PRC Entity Defendants and
Liang. In fact, because PRC Entity
Defendants and Liang appear to be located in China, it would not appear the Los
Angeles Daily Journal is likely to give actual notice to these defendants. However, the Court notes that the language of
CCP section 415.50(b) appears to require the summons to be published in a
newspaper published in California. (CCP
§ 415.50(b) (“The court shall order
the summons to be published in a named newspaper, published in this state . . .
.”) (emphasis added).) The order to
publish in a named newspaper outside of California appears to be an additional
order the Court may make if the defendant to be served is located outside of
California. (Id. (“If the party to be served resides or is located out of this
state, the court may also order the
summons to be published in a named newspapers outside this state . . . .”)
(emphasis added).) To this extent, the
Court will also authorize service by publication in the Los Angeles Daily Journal in addition to service by
publication in the China Business Herald
and/or International Business Daily.
Accordingly,
Plaintiff’s request for a court order authorizing alternative service by
publication in the Los Angeles Daily
Journal and China Business Herald
and/or International Business Daily
is granted.
C.
Service Through LinkedIn
Plaintiff
also seeks a court order authorizing service on Liang through LinkedIn
InMail.
Service
through social media or professional networking websites is not a specifically
authorized method of service in California.
Plaintiff has not cited any published California cases dealing with this
issue, and the Court is unaware of any such cases. However, Plaintiff has provided federal cases
demonstrating federal courts in California have permitted service through LinkedIn
and email on defendants in foreign countries when such service is not
prohibited by international agreements and are reasonably calculated to provide
actual notice to defendants. (See Facebook, Inc. v. ILikeAd Media Int’l Co.
(N.D. Cal. Apr. 29, 2021) 2021 WL 4942676, at *1-2 (finding plaintiffs had
demonstrated email service was reasonably calculated to provide actual notice
to defendants and that service via LinkedIn would provide assurance the
defendant had notice of the action); UBS
Fin. Servs. Inc. v. Berger (N.D. Cal. Apr. 24, 2014) 2014 WL 12643321, at
*2, 5 (recounting the trial court’s decision to authorize service through
LinkedIn InMail and ordering the petitioner to serve the ruling on respondent
through email and via LinkedIn’s InMail); Fabian
v. LeMahieu (N.D. Cal. June 19, 2020) 2020 WL 3402800, at *3 (finding service
by email and social media, coupled with service by mail, is appropriate).)
The
Court notes that the requirement that the service not be prohibited by international
agreements is a requirement set forth in Federal Rule of Civil Procedure 4(f). (Facebook,
Inc. v. ILikeAd Media Int’l Co. (N.D. Cal. Apr. 29, 2021) 2021 WL 4942676,
at *1; UBS Fin. Servs. Inc. v. Berger
(N.D. Cal. Apr. 24, 2014) 2014 WL 12643321, at *1-2; Fabian v. LeMahieu (N.D. Cal. June 19, 2020) 2020 WL 3402800, at *1.) Federal Rule of Civil Procedure 4(f) is
inapplicable in this case. However, CCP
section 413.10(c) has a similar limitation specifically with respect to the
Hague Service Convention. As discussed,
the Hague Service Convention does not apply here, meaning any prohibition of
service by LinkedIn, email, or other social media platforms that may be set
forth in the Hague Convention also does not apply. The only issue is thus whether service on
Liang by LinkedIn is reasonably calculated to provide actual notice to Liang in
this case.
According
to Plaintiff, the LinkedIn account that was discovered for Liang (https://cn.linkedin.com/in/¿-¿-141116b0)
matches her Chinese name (¿¿). (Motion, p. 14:27-28;
Weingarten Decl., ¶ 36.) Plaintiff also indicates
that the professional experience shown on the profile is consistent with
Liang’s position as CFO at Forgame.
(Motion, pp. 14:28, 15:1; Weingarten Del., ¶ 36, Ex. 31.) Plaintiff has provided a copy of Forgame’s
2017 Annual Report showing Liang listed as Forgame’s CFO. (Weingarten Decl., ¶ 5, Ex. 5, 2017 Forgame
Annual Report, p. 2, Corporate Information).)
Plaintiff’s evidence tends to show
that the LinkedIn profile located during Plaintiff’s investigation is the
LinkedIn profile for Defendant Liang.
However, it is unclear whether Liang still utilizes her LinkedIn
account. According to Plaintiff, Liang
is a former CFO at Forgame. (Motion, p. 2:12.) A review of the printout of the LinkedIn page
shows that Liang is listed as the CFO for Forgame from “Apr 2011 –
Present.” (Weingarten Del., ¶ 36, Ex. 31.) It thus appears the LinkedIn page is outdated,
and Liang may no longer be utilizing her account. To this extent, it is unclear whether service
through LinkedIn InMail would be reasonably calculated to provide actual notice
to Liang.
However, the Court notes that in
each of the instances where the federal court has approved of service by LinkedIn
or other social media, these methods were approved of in addition to another
authorized method of service. Service by
LinkedIn or other social media thus appears to have been allowed as additional
assurance the defendant would have notice of the lawsuit. (Facebook,
Inc. v. ILikeAd Media Int’l Co. (N.D. Cal. Apr. 29,
2021) 2021 WL 4942676, at *2.) As discussed above, the Court is
authorizing service by publication. The
Court will thus approve service on Liang through LinkedIn InMail as an
alternative service in addition to service by publication.
Accordingly, Plaintiff’s request
for alternative service on Liang through LinkedIn is granted as long as
Plaintiff also serves by publication as noted above.
D.
Service Through Co-Defendants Wang and Forgame
Plaintiff
also requests a court order authorizing alternative service on PRC Entity
Defendants through service on co-defendants Wang and Forgame and/or their
counsel. Plaintiff argues that the
nature of the relationship Wang and Forgame share with PRC Entity Defendants
means that service through Wang and/or Forgame is reasonably calculated to give
actual notice of service to PRC Entity Defendants.
Plaintiff
cites to Cosper v. Smith & Wesson
(1959) 53 Cal.2d 77, Yamaha Motor Co.,
Ltd. v. Superior Court (2009) 174 Cal.App.4th 264, and In re LDK Solar Sec. Litig. (N.D. Cal. June 12, 2008) 2008 WL
2415186 in support of this request.
In
Cosper, the California Supreme Court
primarily dealt with whether there was sufficient minimum contacts such that
the defendant foreign manufacturer, Smith & Wesson, could be subject to
jurisdiction in California. However, the
California Supreme Court also discussed whether the arrangement of defendant foreign
manufacturer, Smith & Wesson, with its manufacturer’s representative,
Lookabaugh, was sufficient for Lookabaugh to be deemed a general manager in
California for the purposes of effecting service on Smith & Wesson under Corporations
Code section 6500. In finding that the
arrangement was sufficient, the California Supreme Court found that “it
reasonably appear[ed] that Lookabaugh, as a manufacturer’s representative
actively engaged in promoting the sales of Smith & Wesson and earning
commissions through such sales, would have ample regular contact with Smith
& Wesson and would be of ‘sufficient character and rank to make it
reasonably certain’ that Smith & Wesson would be apprised of the service of
process. (Cosper, supra, 53 Cal.2d at 83.)
In
Yamaha Motor Co., Ltd., it was
undisputed that Yamaha-America was Yamaha-Japan’s wholly owned domestic
subsidiary in the United States and that Yamaha-America’s principal business
was to act as the exclusive importer and distributor of Yamaha vehicles
manufactured by Yamaha-Japan. (Yamaha Motor Co., Ltd., supra, 174
Cal.App.4th at 268.) The Court of Appeal
discussed Cosper, noting the bulk of
the Cosper decision was devoted to
the due process minimum contacts issue.
(Id. at 273.) Notwithstanding that, the Court of Appeal
also found that Cosper “clearly held
that service on the sales representative was valid service on the corporation
itself, reasoning that the representative had ‘ample regular contact’ so that
it was ‘reasonably certain’ that the representative would apprise the
manufacturer of the service.” (Id. (quoting Cosper, supra, 53 Cal.2d at 83).)
Based on this, the Court of Appeal found that Yamaha-America was a
general manager of defendant Yamaha-Japan because Yamaha-America had an
exclusive arrangement to sell the manufacturer’s products; provided warranty
service and English owner manuals; did testing and marketing; and received
complaints about the manufacturer’s products such that “[p]robable contact
between the domestic representative and the foreign corporation leading to
actual notification [was] far more present [there] than in Cosper.” (Id. at 274.) The Court of Appeal found that “[i]f it was
reasonably certain that a relatively casual sporting goods representative would
apprise the ‘foreign’ manufacturer of service in Cosper, it [was] doubly reasonably certain Yamaha-America [would]
apprise Yamaha-Japan of any service in California.” (Id.)
The
federal court in In re LDK Solar Sec.
Litig. (N.D. Cal. June 12, 2008) 2008 WL 2415186 dealt with the issue of
whether defendants, both individuals and the corporate defendant’s subsidiary,
located in China could be served by service through the domestic corporate
defendant at the corporate defendant’s California office. The federal court noted that to comport with
constitutional notions of due process, “the method of service crafted by the
district court must be ‘reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the action and afford them an
opportunity to present their objections.’”
(In re LDK Solar Sec. Litig. (N.D.
Cal. June 12, 2008) 2008 WL 2415186, at *4 (quoting Rio Properties, Inc. v. Rio Intern. Interlink (9th Cir. 2002) 284
F.3d 1007, 1016).) The federal court
found that the proposed form of service on the individual and subsidiary
defendants in China through service on the domestic corporation’s California
office was constitutionally acceptable as the domestic corporation traded on
the New York Stock Exchange, the corporate defendant’s subsidiary was located
in California, and the remaining defendants were all sophisticated officers,
directors, or the Chinese subsidiary of the corporate defendant. (Id.)
The
Court notes that the In re LDK Solar Sec.
Litig. Court found service through a corporate defendant’s domestic office was
constitutionally acceptable and reasonably calculated to apprise the foreign
defendants of the action without providing a well-reasoned explanation as to
why that is so. The federal court stated
that the domestic corporate defendant traded on the New York Stock Exchange,
its subsidiary is located in California, and the remaining defendants were all
sophisticated officers, directors, or the Chinese subsidiary of the corporate
defendant. (In re LDK Solar Sec. Litig. (N.D. Cal. June 12, 2008) 2008 WL
2415186, at *4.) These facts do not sufficiently
explain how service on the domestic corporate defendant’s California office is
reasonably calculated to give actual notice to the foreign defendants. In fact, it appears to suggest that such
service is acceptable by virtue of the sophistication of defendants and/or the
status of the foreign entity as a subsidiary of the domestic corporation. As In
re LDK Solar Sec. Litig. is a federal case and not binding on this court,
the Court declines to follow In re LDK
Solar Sec. Litig. to the extent it suggests service through the domestic
corporation may be proper by the mere existence of a subsidiary relationship
between the domestic corporate defendant and the foreign entity defendant. Rather, the Court finds service through a
domestic entity is proper and acceptable only where there is sufficient
evidence demonstrating probable or ample contact between the domestic entity
and foreign entity such that service is reasonably calculated to give actual
notice to the foreign entity, as was the case in Cosper and Yamaha Motor Co.,
Ltd.
Here,
Plaintiff argues that Forgame has a substantial equity and economic interest in
Guangzhou Feidong Software Technology Co., LTD. because Guangzhou Feidong
Software Technology Co., LTD. is an indirect, wholly-owned subsidiary of
Forgame. Plaintiff argues that Forgame has
a substantial economic interest in Guangzhou Feiyin Information Technology Co.,
LTD. and Guangzhou Jieyou Software Co., LTD. and effective control over them as
if they were wholly-owned subsidiaries of Forgame under the Contractual Arrangements
Forgame created between Guangzhou Feiyin Information Technology Co., LTD. and
Guangzhou Jieyou Software Co., LTD., and Guangzhou Feidong Software Technology
Co., LTD. Plaintiff contends these
relationships mean service of process through Forgame is reasonably calculated
to give actual notice of service to PRC Entity Defendants.
The
2013 Forgame Prospectus submitted by Plaintiff confirms that Guangzhou Feidong
Software Technology Co., LTD. is a wholly-owned subsidiary of Forgame and that Guangzhou
Feidong Software Technology Co., LTD. entered into a series of Contractual
Arrangements with Forgame’s PRC Operational Entities (including Guangzhou
Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co.,
LTD.) for Forgame to gain effective control over and receive the economic
benefits generated by the businesses currently operated by Forgame’s PRC
Operational Entities. (Weingarten Decl.,
¶¶ 5, 6, Ex. 4, 2013 Forgame Prospectus, pp. 5 (Contractual Arrangements), 18
(Definitions – “Feidong” and “Feiyin”), 22 (Definitions – “Jieyou”), 25
(Definitions – “PRC Operational Entities”).)
The
Court finds Plaintiff’s evidence regarding the corporate structure and the
relationships between PRC Entity Defendants and Forgame is insufficient to show
that service through Forgame will be reasonably calculated to give actual notice
to PRC Entity Defendants. Unlike in Cosper
and Yamaha Motor Co., Ltd., there is
insufficient evidence of ample and probable contact between the domestic entity
or representative and the foreign entity here.
Evidence showing that Guangzhou Feidong Software Technology Co., LTD. is
a subsidiary that has entered into contractual arrangements with Guangzhou
Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.
so that Forgame can receive the economic benefits of Guangzhou Feiyin
Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. is insufficient
to show there is probable contact between Forgame and PRC Entity
Defendants. That Forgame would gain
economic benefits through such a structure does not show Forgame would be in
probable contact with PRC Entity Defendants.
While there is a general mention of control over Guangzhou Feiyin
Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.
through Guangzhou Feidong Software Technology Co., LTD., this general mention
without more does not sufficiently show Forgame is in probable contact with PRC
Entity Defendants. Without evidence
showing ample or probable contact between Forgame and PRC Entity Defendants,
the Court cannot find that service on Forgame and its counsel would be
reasonably calculated to give actual notice to PRC Entity Defendants.
The
Court notes that, in requesting service through Forgame’s counsel, Plaintiff
asserts that Forgame “previously reported in one of its press releases that it
intends to consult with counsel regarding service of process on another
subsidiary.” (Motion, p. 14: 2-3.) A review of the subject press release shows
that Forgame was discussing the summons and complaint served on Mutant Box and
that Forgame was seeking legal advice on the claims asserted against it. (Weingarten Decl., ¶ 11, Ex. 12.) This press release does not show any probable
contact between Forgame and any of the PRC Entity Defendants.
Plaintiff’s
request for service on PRC Entity Defendants through service on Forgame and its
counsel is thus denied.
As
for co-defendant Wang, Plaintiff argues that, through Wang’s trust, Wang shares
an interest in the PRC Entity Defendants as a major shareholder of Forgame and
that Wang also owns a material stake in Guangzhou Feiyin Information Technology
Co., LTD. and Guangzhou Jieyou Software Co., LTD. as one of five shareholders
of the entities. Plaintiff contends
these relationships mean that service of process through Wang and his counsel
of record is reasonably calculated to give actual notice of service to PRC
Entity Defendants.
Wang
has filed an opposition asserting that he no longer has any control of or
relationship with PRC Entity Defendants beyond that of a shareholder and that
he has moved from China to the United States and has no contact with PRC Entity
Defendants. Wang thus contends serving
him would not be reasonably calculated to apprise PRC Entity Defendants of the
pendency of this action and afford them an opportunity to present their
objections.
Wang
has submitted a declaration declaring that he has resigned from his position of
executive director of Forgame, effective September 30, 2019; that he has
resigned from his remaining positions with Forgame in 2021, including his
position as independent non-executive director; that he is not currently an
officer, director, employee, or independent contractor with Forgame or any PRC
Entity Defendants; that he does not serve any of the entities in any other
representative capacity; that he currently owns 0.00% of Guangzhou Feidong
Software Technology Co., LTD., 23.75% of Guangzhou Feiyin Information
Technology Co., LTD., and 20.94% of Guangzhou Jieyou Software Co., LTD., but is
solely a shareholder with no role or control over operations; and that he has
not had any contact with any of the PRC Entity Defendants for three years. (Wang Decl., ¶¶ 2-9.) Based on Wang’s declaration, it would appear
that Wang is currently not in control of or in contact with any of the PRC
Entity Defendants such that service through Wang and his counsel would not be
reasonably calculated to give actual notice to PRC Entity Defendants. That Wang is still a shareholder of Guangzhou
Feiyin Information Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD.
is insufficient to show he has ample or probable contact with these entities.
However,
Plaintiff has submitted evidence in reply showing that Wang has submitted
statements to the SEC regarding a company he is in charge of that indicate he currently
holds a fiduciary position as a “director” of Guangzhou Feiyin Information
Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. (Request for Judicial Notice (“RJN”), Ex. 1, June
4, 2021 Form S-1 Registration Statement for Prime Number Acquisition I Corp., p.
129; id., Ex. 2, February 1, 2022
Form S-1 Registration Statement for Prime Number Acquisition I Corp., p. 125; id., Ex. 3, May 3, 2022 Amendment No. 2
to Form S-1 Registration Statement for Prime Number Acquisition I Corp., p. 128;
id., Ex. 4, May 16, 2022 Prospectus
for Prime Number Acquisition I Corp., p. 125.)
These statements were made as recently as May 16, 2022. Given this evidence was presented in Plaintiff’s
reply in response to Wang’s opposition, it is unclear whether Wang, despite his
declaration, is still a current director of Guangzhou Feiyin Information
Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. or if Wang
subsequently resigned from the position after filing those statements with the
SEC such that he is no longer a current director of these entities.
Because
Wang could have sufficient probable contact with Guangzhou Feiyin Information
Technology Co., LTD. and Guangzhou Jieyou Software Co., LTD. if he is still a
current director such that service through Wang could be reasonably calculated
to give actual notice to Guangzhou Feiyin Information Technology Co., LTD. and
Guangzhou Jieyou Software Co., LTD., the Court will continue the hearing to
allow Wang an opportunity to clarify whether he still maintains such a position
with Guangzhou Feiyin Information Technology Co., LTD. and Guangzhou Jieyou
Software Co., LTD.
Amount
of Damages Not Identified in the Operative Complaint
As discussed in the February 28, 2022, Plaintiff’s complaint
fails to give notice of the amount of damages Plaintiff seeks to recover, which
is problematic because the Court will not be able to enter default judgments as
to any of the currently defaulted defendants, as well as any of the PRC Entity
Defendants or Liang if Plaintiff succeeds in serving the original complaint on
PRC Entity Defendants and Liang. It does
not appear Plaintiff has made any attempts to amend the complaint to identify a
dollar amount of damages. Plaintiff is
reminded that even if Plaintiff is permitted to serve PRC Entity Defendants and
Liang through alternative service methods by way of the Court’s granting of
this motion, Plaintiff would have to first file an amended complaint and serve the
amended complaint, not the original complaint, on PRC Entity Defendants and
Liang in the event Plaintiff proceeds with a default judgment.
Conclusion
and ORDER
Based
on the foregoing, Plaintiff Selena Gomez’s motion for alternative service is
CONTINUED to September 19, 2022 at 8:30 am.
As discussed above, the Court is
inclined to grant Plaintiff’s requests for alternative service through
publication in the Los Angeles Daily
Journal and China Business Herald
and/or International Business Daily
and through LinkedIn InMail. The Court
is inclined to deny Plaintiff’s request for alternative service through service
on co-defendant Forgame and its counsel.
The
motion is continued with respect to Plaintiff’s request for alternative service
through service on Defendant Dongfeng Wang and his counsel. Defendant Dongfeng Wang is ordered to submit
supplemental evidence no later than September 6, 2022 clarifying his current
roles, if any, with Defendants Guangzhou Feiyin Information Technology Co.,
LTD. and Guangzhou Jieyou Software Co., LTD.
No later than September 13, 2022, Plaintiff may submit a supplemental
response to Wang’s supplemental evidence.
If
Plaintiff will be seeking to amend the complaint to identify the amount of its
damages in the prayer for relief and body of the complaint, Plaintiff must file
and serve either a stipulation signed by all parties or a noticed motion
seeking leave to amend within 10 days, noticed for hearing on a date reserved
on the online Court Reservation System (CRS).
Plaintiff to give notice and file
proof of service of such.
DATED:
August 30, 2022 ___________________________
Elaine Lu
Judge of the Superior Court