United States District Court, D. Maryland
XINIS UNITED STATES DISTRICT JUDGE.
RoyaltyStat, LLC (“Plaintiff” or
“RoyaltyStat”) filed a Complaint against
Defendants Institute for IntangibleSpring Corp.
(“IntangibleSpring”) and Raul Pacheco Quintanilla
(“Pacheco” and collectively,
“Defendants”). ECF No. 1. Plaintiff brings this
action against Defendants for violations of the Copyright
Act, Lanham Act, Maryland Uniform Trade Secrets Act, and
Maryland state law in connection with alleged
misappropriation of trade secrets and the use of false
pending before the Court is Defendants' Motion to Dismiss
(ECF No. 20). The issues have been fully briefed, and the
parties were granted a hearing on the matter which took place
on January 18, 2017. See ECF No. 35. At oral
argument, the parties agreed the Court has authority to
convert this motion to one to quash process. See Vorhees
v. Fischer & Krecke, 697 F.2d 574, 576 (4th Cir.
1983); Copeland v. Ecolab, Inc., No. CIV.
WDQ-10-1158, 2011 WL 1837886, at *3 (D. Md. May 12, 2011);
Witcher v. Mac Tools, Inc., 62 F.R.D. 708, 710 (M.D.
reasons stated below, service on both Defendants shall be
quashed. Defendants' motion to dismiss pursuant to Rule
12(b)(6) will be denied as moot and without prejudice to its
renewal if service is properly effected.
RoyaltyStat is a limited liability company organized under
the laws of the State of Maryland. RoyaltyStat provides its
clients with a database of intellectual property royalty
rates used for pricing and valuation in connection with
litigation, corporate bankruptcy, business development, and
mergers and acquisitions. ECF No. 1 at 5.
IntangibleSpring is a corporation organized under the laws of
the Republic of Panama. Defendant Pacheco is a former
independent contractor of RoyaltyStat and an owner of shares
in IntangibleSpring. According to Plaintiff, Pacheco
currently resides in France, ECF No. 27 at 7, but according
to the Defendants' counsel, Pacheco formerly resided in
France but is now a resident of Mexico. ECF No. 21 at 2.
December 23, 2015, Plaintiff filed the instant lawsuit. ECF
No. 1. Plaintiff alleges that Pacheco stole RoyaltyStat's
customer list and proprietary data prior to being terminated
and used this data to form IntangibleSpring, a competitor
December 30, 2015, Plaintiff attempted to personally serve
attorney John DiGiacomo (“DiGiacomo”), ECF No.
27-3 at 2, who later entered his appearance on behalf of both
Defendants on June 22, 2016. ECF No. 24. According to
Plaintiff, DiGiacomo, through his law firm Revision Legal,
PLLC, was the last legal counsel representing
IntangibleSpring in the United States and in connection with
IntangibleSpring's registration of its trademark.
See Trademark Application, ECF No. 27-2 at 9-10.
When the process server delivered the papers, DiGiacomo
advised the process server that he was not authorized to
accept service on behalf of IntangibleSpring. ECF No. 27 at
March 18, 2016, Plaintiff served the Panamanian law firm,
Zuniga y Asociadas, through Yamileth Sanchez. ECF No. 14; ECF
No. 21-3 at 2. Zuniga y Asociadas is a “resident
agent” of IntangibleSpring. ECF No. 27 at 4 (citing
Panama Corporation and Foundation Name Search Results for
IntangibleSpring, ECF No. 27-1 at 1); ECF No. 21-3 at 2. At
Plaintiff's direction, a private process server hand
delivered a copy of the Complaint, the Summons, and all other
pleadings (in both Spanish and in English) to the offices of
Zuniga y Asociadas. ECF No. 27 at 5.
April 25, 2016, a French bailiff attempted to personally
serve Pacheco. According to bailiff's certificate,
because “the aforementioned individual had left without
a leaving a forwarding address, ” the French bailiff
sent the summons and a formal record of the search “via
registered mail with receipt confirmation” to the last
known address of Pacheco. ECF No. 17 at 4.
IntangibleSpring and Pacheco now move to dismiss pursuant to
Fed.R.Civ.P. 12(b)(5) and (b)(6) for insufficient service of
process and for Plaintiff's failure to state a claim upon
which relief can be granted. ECF No. 20 at 2.
STANDARD OF REVIEW
Rule 12(b)(5) of the Federal Rules of Civil Procedure, a
defendant may move to dismiss for insufficient service of
process. Fed.R.Civ.P. 12(b)(5). If service is contested, the
plaintiff bears the burden of establishing that it effected
proper service under Rule 4 of the Federal Rules of Civil
Procedure. O'Meara v. Waters, 464 F.Supp.2d 474,
476 (D. Md. 2006); Dickerson v. Napolitano, 604 F.3d
732, 752 (4th Cir. 2010); Fed.R.Civ.P. 4.
notice is not the controlling standard, Mining Energy,
Inc. v. Dir., Office of Workers' Comp. Programs, 391
F.3d 571, 576 (4th Cir. 2004); however, “when service
of process gives the defendant actual notice of the pending
action, the courts may construe Rule 4 liberally to
effectuate service of process and uphold the jurisdiction of
the court.” O'Meara, 464 F.Supp.2d at 476
(citing Karlsson v. Rabinowitz, 318 F.2d 666, 668
(4th Cir. 1963)); see also Armco, Inc. v. Penrod-Staufer
Bldg. Sys., Inc., 733 F.2d 1087, 1089 (4th Cir. 1984).
Nevertheless, “the rules are there to be followed, and
plain requirements for the means of effecting service of
process may not be ignored.” Armco, Inc., 733
F.2d at 1089. If a court finds that plaintiff has failed to
effectuate service under the meaning of Rule 4, the court may
either dismiss the complaint or quash service and allow the
plaintiff to attempt service again. Miller v. Baltimore
City Bd. of Sch. Comm'rs, 833 F.Supp.2d 513, 516 (D.
Md. 2011) (citing Vorhees v. Fischer & Krecke,
697 F.2d 574, 575-76 (4th Cir. 1983)).
contend that each has not been properly served consistent
with the requirements for service in a foreign country.
Plaintiff disagrees as to Defendant IntangibleSpring, arguing
that service on DiGiacomo constitutes valid service. As for
Defendant Pacheco, Plaintiff claims to have satisfied Rule 4
in delivering the summons and complaint to his purported last
known address in France. The Court finds that service on both
Intangible Spring and Pacheco is insufficient. Plaintiff has
provided the Court with no authority that service of
Intangible Spring was valid under Panamanian Law and have
improperly attempted service on an attorney unauthorized to
accept service of process. Plaintiff's attempted service
of Defendant Pacheco was improper because Plaintiff neither
complied with the Hague Convention nor satisfied due process.
service of process is a prerequisite to a district
court's assertion of personal jurisdiction.”
Persaud Companies, Inc. v. S. Md. Dredging, Inc.,
No. 12-2114, 2014 WL 640878, at *2 (D. Md. Feb. 18, 2014)
(quoting Swaim v. Moltan Co., 73 F.3d 711, 719 (7th
Cir. 1996)) (internal quotation marks omitted). “In the
absence of service of process (or waiver of service by the
defendant), a court ordinarily may not exercise power over a
party the complaint names as defendant.” Murphy
Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S.
344, 350 (1999) (citing Omni Capital Int'l, Ltd. v.
Rudolf Wolff & Co., 484 U.S. 97, 104 (1987)).
“Accordingly, one becomes a party officially, and is
required to ...