JANIS L. SAMMARTINO, District Judge.
Presently before the Court is United States' Motion to Dismiss Second Unserved Defendants. ("MTD," ECF No. 126.) Also before the Court are Plaintiff Lycurgan, Inc.'s Response in Opposition to, ("Opp'n," ECF No. 148),
Plaintiff Lycurgan, Inc. is a California corporation with its principal place of business in San Diego County, California. (Second Am. Compl. ("SAC"), ¶ 3, ECF No. 109.) Plaintiff sells "unfinished lower receivers," which are gun parts used by consumers to assemble their own AR-15 rifles. (Id.) On March 14, 2014 an agent of the Bureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF") submitted an affidavit and subsequently received a search warrant authorizing a search of Plaintiff Lycurgan's four locations in San Diego County. (SAC ¶ 69.) The following day ATF agents executed the search warrant. (Id. ¶ 74.) Defendant Unknown Named Agent I is the affiant on the affidavit supporting the search warrant; (id. ¶ 11) Defendant Unknown Named Technologist is an "FTB Enforcement Officer" whose statements supported the affidavit; (id. ¶ 10) Defendants Unknown Named Agents II through VII executed the search at the Ares Armor National City location; (id. ¶ 12) and Defendants Does I through X are ATF agents who executed search warrants at the other Ares Armor locations. (Id. ¶ 13) (collectively "Unknown Named Defendants.")
Plaintiff brings a Bivens action against the various Defendants for violation of its constitutional rights guaranteed under the First, Fourth, and Fifth Amendments. (See generally id.) Plaintiff named the Unknown Named Defendants for the first time in its First Amended Complaint ("FAC"), filed on December 17, 2014. (ECF No. 42.) The parties dispute whether Plaintiff effectively served the Unknown Named Defendants, but Plaintiff concedes it has not identified and served each Unknown Named Defendant. (MTD 2; Opp'n 8.) Plaintiff's purported substitute service consisted of mailing service to the U.S. Attorney General, the U.S. Attorney's Office for the Southern District of California, and to ATF. (Opp'n 22.) Plaintiff also filed an ex parte motion to take early discovery on April 5, 2017. (ECF No. 117.) The Magistrate Judge denied the request due to the pendency of the MTD currently before the Court. (ECF No. 140.)
Rule 12(b)(5) of the Federal Rules of Civil Procedure authorizes a defendant to move for dismissal due to insufficient service of process. Fed. R. Civ. P. 12(b)(5). When a defendant challenges service, the plaintiff bears the burden of establishing the validity of service as governed by Rule 4. See Brockmeyer v. May, 383 F.3d 798, 801 (9th Cir. 2004). When a court determines that service of process is insufficient, it has broad discretion to either dismiss the action without prejudice, or retain the case but quash the service of process. In re Sheehan, 253 F.3d 507, 513 (9th Cir. 2001); see also 4B Charles Wright & Arthur Miller, Federal Practice and Procedure § 1137 (4th ed. 2017). A court should generally quash service of process instead of dismissing the action when there is a reasonable prospect that the plaintiff ultimately will be able to serve the defendant properly. Buzztime Entm't, Inc. v. Sony Computer Entm't Eur. Ltd, No. 08-CV-0122 W (LSP), 2008 WL 11337017, at *1 (S.D. Cal. July 10, 2008) (citing 5B Wright & Miller, § 1354.348; and Stevens v. Security Pac. Nat'l Bank, 538 F.2d 1387, 1389 (9th Cir. 1976); and Montalbano v. Easco Hand Tools, Inc., 766 F.2d 737, 740 (2d Cir. 1985)).
As a preliminary matter, Plaintiff argues that the United States is not a defendant in the case and therefore is not entitled to file on behalf of individual defendants. (Opp'n 14.) The United States responds that it has standing to advocate on it employees behalf, where the interests of the United States and its employees are aligned. (Reply 2 (citing United States v. Westinghouse Elec. Corp., 638 F.2d 570, 574 (3d Cir. 1980)).) Further, the United States argues that Plaintiff brought the United States back into the case by moving for discovery. (Id.)
Plaintiff's argument lacks merit. 28 C.F.R. § 50.15 sets out the procedures by which the Department of Justice ("DOJ") undertakes representation of federal officers and employees in civil, criminal, and Congressional proceedings. Specifically, it authorizes the DOJ to represent employees—sued in their individual capacity—as long as the individual's action is within the scope of his or her employment and the Attorney General or his designee determines that representation would be in the interest of the United States. Id. § 50.15(a). Plaintiff does not point to any defect in the underlying regulations or give any reason why they should not apply here. The Court finds the United States has standing to advocate for federal officials and employees sued in their individual capacity, including the Unknown Defendants in this case.
Both Plaintiff and Defendants agree that at the time of filing Plaintiff's FAC Rule 4(m) provided for 120 days rather than the current 90 days to serve a defendant. (Opp'n 15; MTD 3 n.1; see also Fed. R. Civ. P. 4(m) (2014).) Plaintiff's FAC was filed on December 17, 2014; the deadline for service was April 12, 2015. (MTD 4.) Plaintiff argues that it completed substitute service by sending summons to the locations most likely to provide the Unknown Named Defendants with notice. (Opp'n 20-22.) Plaintiff points to Federal Rule of Civil Procedure 4(e) which generally allows for service by any method authorized by state law or by delivering a copy of the summons to an authorized agent. Fed. R. Civ. P. 4(e)(1), (2)(C). California state law authorizes substitute service to a person's usual place of business or to a person apparently in charge of his or her office or place of business. Cal. Code Civ. Proc. § 415.20(b). Plaintiff mailed service to three government locations. (Opp'n 22.) Plaintiff argues that this substitute service mirrors the requirements of California law.
In order to sue a federal official or employee in her individual capacity Rule 4(i)(3) requires a party to "serve the United States and also serve the officer or employee." Fed. R. Civ. Pro. 4(i)(3). When a federal employee is sued in an individual capacity, service of the United States or its agency alone is not sufficient; the official must be dismissed from the action unless she is also served in her individual capacity. Rosales v. Dutschke, No. 15-cv-01145-KJM-KJN, 2016 WL 1756962, at *2 (E.D. Cal. May 3, 2016) (citing Hutchinson v. United States, 677 F.2d 1322, 1328 (9th Cir. 1982)). Here, Plaintiff mailed service to three different locations—the U.S. Attorney General in Washington, D.C.; the U.S. Attorney's Office in San Diego; and Earl Griffith care of the ATF office in West Virginia—on February 17, 2015. (ECF No.144-1, Ex. E.) Plaintiff executed proof of service on March 6, 2015. (Opp'n 12.) Plaintiff's service on the U.S. Attorney General and the U.S. Attorney's Office for the Southern District of California meets the requirements of Rule 4(i)(1)(A) and 4(i)(1)(B). Plaintiff did not serve any individual defendant (other than Mr. Griffith)
On October 21, 2016, Plaintiff attempted service on Unknown Named Defendants by mailing eight separate summons to ATF Headquarters in Washington, D.C. (See generally ECF Nos. 111-1 to 111-10.) The service was returned executed on November 3, 2016. (ECF No. 111.) Assuming, arguendo, that mailing summons to unnamed defendants meets Rule 4(i)(3), Defendant correctly notes that Plaintiff's attempted service of the Unknown Named Defendants was completed more than two and a half years after Plaintiff filed its FAC. (Reply 5.) The 120-day deadline for service was April 12, 2015 and the October 21, 2016 substitute service falls well outside the Rule 4(m) deadline.
In the interim between April 12, 2015 (the 120-day deadline for service under the FAC) and November 3, 2016 (when Plaintiff executed proof of service), Plaintiff filed its SAC on August 5, 2016. (ECF No. 109.) The filing of an amended complaint does not reset the 120-day service deadline unless the amended complaint adds a new defendant. See McGuckin v. United States, 918 F.2d 811, 813 (9th Cir. 1990). In McGuckin, the Ninth Circuit allowed service within 120 days of filing the amended complaint, but only because the plaintiff added the United States as a new defendant in the amended complaint. Id. Here, the Unknown Named Defendants were named in the FAC on December 17, 2014. (ECF No. 42.) Filing the SAC does not restart the service period for those Defendants. See, e.g., Thai v. United States, No. 15-CV-583-WQH (NLS), 2016 WL 1585135, at *2 (S.D. Cal. Mar. 15, 2016); Torres v. Colvin, No. CV-13-2300-PHX-LOA, 2014 WL 2683296 (D. Ariz. June 13, 2014).
In sum, Plaintiff filed its FAC naming Unknown Named Defendants on December 17, 2014. It had until April 12, 2015 to serve those Defendants. The Court finds that Plaintiff's attempted substitute service on February 17, 2015 only gave notice to the United States and thus failed to meet the two-part requirement of Rule 4(i)(3). The filing of the SAC did not reset the service window because all Defendants were previously named in the FAC. Therefore, all actions taken after April 12, 2015 fall outside the 120-day service window and requires either good cause or the Court's discretion under Rule 4(m), to which the Court now turns.
Federal Rule of Civil Procedure 4(m) provides that:
Fed. R. Civ. Pro. 4(m). Rule 4(m) requires a two-step analysis to determine whether to extend the 120-day limitation. "First, upon a showing of good cause for the defective service, the court must extend the time period. Second, if there is no good cause, the court has the discretion to dismiss without prejudice or to extend the time period." Sheehan, 253 F.3d at 512. At a minimum good cause means "excusable neglect." Id. (quoting Boudette v. Barnette, 923 F.2d 754, 756 (9th Cir. 1991)). It also requires "attorneys to be diligent in prosecuting their cause of action;" i.e., something more than inadvertence or mistake of counsel. Townsel v. Contra Costa Cnty., 820 F.2d 319, 320 (9th Cir. 1987) (quoting Wei v. State of Hawaii, 763 F.2d 370, 372 (9th Cir. 1985) (per curiam)). Another court defined good cause as meaning "that service has been attempted but not completed, that plaintiff was confused about the requirements of service, or that plaintiff was prevented from serving defendants by factors beyond his control." Chemehuevi Indian Tribe v. Wilson, 181 F.R.D. 438, 440 (N.D. Cal. 1998) (quoting Mateo v. M/S KISO, 805 F.Supp. 792, 795 (N.D. Cal. 1992)). Finally, the Ninth Circuit has applied a three-factor test for good cause: "(a) the party to be served received actual notice of the lawsuit; (b) the defendant would suffer no prejudice; and (c) plaintiff would be severely prejudiced if his complaint were dismissed." Boudette, 923 F.2d at 756 (citing Hart v. United States, 817 F.2d 78, 80-81 (9th Cir. 1987)). The Court considers Plaintiff's good cause and discretion arguments in turn.
Plaintiff advances several arguments why it was unable to properly serve the Unknown Named Defendants and thus why good cause exists under Rule 4(m). (Opp'n 16.) Plaintiff places significant weight on its actions in a separate case, Lycurgan v. Bureau of Alcohol, Tobacco, Firearms, and Explosives, No. 14-CV-1424 JLS (BGS) ("No. 14-1424"), in this Court and the "entire action [in No. 14-1424] was aimed solely at discerning the identities of the `unserved' Defendants in this case." (Opp'n 19.) Defendant counters that Plaintiff's purpose in No. 14-1424 was not to uncover the identity of the Unknown Named Defendants, but rather to "challenge the legality of the search and seizure conducted by [ATF]." (Reply 6-7 (quoting No. 14-1424, ECF No. 1, at 1-2).) The Court agrees with Defendant. Plaintiff's Motion to Unseal in No. 14-1424 reveals that its purposes were: (1) "Examine the Search Warrant Documents to Challenge the Government's Forfeiture Proceeding;" (No. 14-1424, ECF No. 1, at 13) (2) to allow non-party Tyler Hughes to evaluate possible post-conviction relief; (id. at 14) and (3) to curb government misconduct. (id. at 15.) Nowhere in Plaintiff's No. 14-1424 Motion to Unseal or in its Reply Brief (No. 14-1424, ECF No. 9) does Plaintiff argue that it needs the identity of Unknown Named Defendants in order to pursue a Bivens claim.
Furthermore, Plaintiff pleaded that only two of the seven Unknown Named Defendants were in the affidavit. Specifically, Defendant Unknown Named Technologist allegedly made false statements to support the search warrant. (FAC ¶ 11; SAC ¶ 10.) Defendant Unknown Named Agent I was the affiant supporting the search warrant. (FAC ¶ 12; SAC ¶ 11.) The remaining five Defendants were the agents who participated in the actual search itself. (FAC ¶ 13; SAC ¶ 12.) Even if Plaintiff had been successful in unsealing the entire affidavit it still would need to identify Unknown Named Defendants II through VII.
Plaintiff argues that it had no other means through which to obtain the identities of the Unknown Named Defendants except by court action. (Opp'n 19.) In principle, the Court agrees. The Ninth Circuit has held that "where the identity of the alleged defendant[][is] not [] known prior to the filing of a complaint[,] the plaintiff should be given an opportunity through discovery to identify the unknown defendants, unless it is clear that discovery would not uncover the identities, or that the complaint would be dismissed on other grounds." Wakefield v. Thompson, 177 F.3d 1160, 1163 (9th Cir. 1990) (alterations in original) (quoting Gillespie v. Civiletti, 629 F.2d 637, 642 (9th Cir. 1980). Thus, Plaintiff's proper course of action was to request early discovery at the outset of this litigation. Plaintiff did pursue early discovery, but not until April 5, 2017 (Opp'n 23)—nearly two years after the Rule 4(m) 120-day deadline passed.
Good cause requires some excusable neglect. Plaintiff's actions or omissions fail to demonstrate excusable neglect. An attorney's ignorance or inadvertence is not an excuse. See Townsel, 820 F.3d at 320. Nor was Plaintiff prevented from serving Defendants by factors beyond its control. See Chemehuevi Indian Tribe, 181 F.R.D. at 440. Plaintiff failed to request early discovery within the 120-day window. Nothing prevented Plaintiff from doing so. Nor did any third party prevent Plaintiff from requesting discovery. Plaintiff's other excuses are equally unavailing. While there may be good cause for service that has been attempted but not completed, id., Plaintiff's purported substitute service was inadequate because it only attempted service on the United States and not the individual defendants. See supra Section II. Further, the litigation in the companion case, No. 14-1424, did not raise the critical issue of identities of the Unknown Named Defendants until the case was on appeal.
The Court arrives at the same conclusion applying the 3-part Boudette test. First, the United States does not concede that the Unknown Named Defendants have actual notice. (Reply 6.) Nor has Plaintiff established actual notice. Plaintiff conjectures that "it is highly unlikely the Unknown Named Defendants could be unaware of the potential suit against them." (Opp'n 24.) Plaintiff supports the conjecture with assumptions about the litigation, such as the ATF sealing the search warrant and affidavit "likely anticipating legal action related to those involved in the raid." (Id. at 25.) At best, Plaintiff shows that the United States and its agencies had notice of the lawsuit. However, the burden is on Plaintiff to show proper service, see Brockmeyer, 383 F.3d at 801, and there is no evidence of actual notice by the Unknown Named Defendants themselves. Second, the Defendants would suffer at least some prejudice because more than two years has passed since the deadline for service. See infra Section III.B (discussing prejudice to Defendants). Third, the Court agrees with Plaintiff that it would be severely prejudiced if the SAC is dismissed because the statute of limitations has run. See infra Section III.B (discussing statute of limitations bar). The severe prejudice to Plaintiff does not rebut the other factors to determine good cause and is instead a proper issue to determine whether this Court should grant discretion under Rule 4(m). Plaintiff's statute of limitations argument stems largely from Plaintiff waiting to file an early discovery request until April 5, 2017. Thus, Plaintiff cannot claim the benefit of severe prejudice when it was the cause of the prejudice. Accordingly, the Court finds there is no good cause to quash service of process.
If there is no good cause, Rule 4(m) permits the district court to grant an extension to serve Defendants. The Ninth Circuit has declined to articulate a specific test for Rule 4(m) discretion. Sheehan, 253 F.3d at 512. In fact, "[d]istrict courts have broad discretion to extend time for service under Rule 4(m)." Efaw v. Williams, 473 F.3d 1038, 1040 (9th Cir. 2007). A district court may consider factors "like a statute of limitations bar, prejudice to the defendant, actual notice of a lawsuit, and eventual service." Id. at 1041 (quoting Troxell v. Fedders of N. Am., Inc., 160 F.3d 381, 383 (7th Cir. 1998)). The Court finds the Efaw framework persuasive and applies it here.
Plaintiff argues that it would be severely prejudiced if the SAC is dismissed because the statute of limitations on its Bivens cause of action has run. (Opp'n 19.) In the Ninth Circuit the applicable statute of limitations for a Bivens claim is the state personal injury statute of limitations. Van Strum v. Lawn, 940 F.2d 406, 410 (9th Cir. 1991). In California the personal injury statute of limitations is two years. Cal. Code of Civ. Pro. § 335.1. Although state law determines the length of the statute of limitations, federal law determines when a claim accrues. Knox v. Davis, 260 F.3d 1009, 1013 (9th Cir. 2001) (citation omitted). "Under federal law, `a claim accrues when the plaintiff knows or has reason to know of the injury which is the basis of the action." Id. (quoting Tworivers v. Lewis, 174 F.3d 987, 991 (9th Cir. 1999)).
Plaintiff concedes that the alleged violations occurred on March 15, 2014 and that statute of limitations ran on March 15, 2016. (Opp'n 20.) The search warrant was executed on March 15, 2014, which is when Plaintiff would have reason to know of its injury. The Court agrees with Plaintiff that it would be prejudiced if the SAC is dismissed without prejudice. If the Court dismisses without prejudice then such an outcome is tantamount to dismissing the SAC with prejudice. The two-year statute of limitations ran on March 15, 2016. Plaintiff would suffer severe prejudice if the Court dismisses the SAC because the statute of limitations would bar refiling this action. See Mann v. Am. Airlines, 324 F.3d 1088, 1090-91 (9th Cir. 2003) ("[W]hen the statute of limitations would bar re-filing of the suit . . . . the advisory committee notes [to Rule 4(m)] explicitly contemplate that a district court might use its discretion to grant an extension. . . ." (citation omitted)). This factor weighs in Plaintiff's favor.
The United States does not articulate a specific prejudice it would suffer if this case proceeds to an early discovery and then to the merits of the Bivens claim.
As previously discussed, the Court finds that Plaintiff has not demonstrated that the Unknown Named Defendants have actual notice. See supra Section III.A (discussing actual notice of individual defendants). Clearly, the United States has notice through its responses filed in this case. However, actual notice to the United States does not automatically impute to Unknown Named Defendants. To date, no Unknown Named Defendant has been served. Plaintiff invites the Court to infer actual notice through all the actions taken by the United States in relation to this case. (Opp'n 24-26.) To do so would blur any distinction between the requirement in Rule 4(i)(3) to serve both the United States and the federal employee in her individual capacity. See Fed. R. Civ. P. 4(i)(3). Therefore, the Court does not find actual notice and this factor weighs against exercising discretion.
After nearly two years of a dilatory approach, Plaintiff requested early discovery on April 5, 2017. (ECF No. 117.) Magistrate Judge Crawford denied Plaintiff's requested discovery largely, but not exclusively, on the grounds that this Court should address the present MTD as a predicate step to discovery. (ECF No. 140, at 8.) Plaintiff's belated request for early discovery demonstrates that it does in fact know the proper procedure to determine the identities of Unknown Named Defendants. See Wakefield, 177 F.3d at 1163. Yet, Plaintiff did not choose to do this in the more than two years since filing its FAC. This does not instill confidence that Plaintiff will diligently pursue this litigation; however, the Court notes that going forward a diligent plaintiff could request early, limited discovery, ascertain defendants' identities, complete service, and argue the merits. The Court finds that it is at least possible for eventual service to be completed. This factor weighs in favor of discretion.
There is a general preference for deciding cases on the merits rather than on procedural technicalities. See, e.g., Mendoza v. Wight Vineyard Mgmt., 783 F.2d 941, 945-46 (9th Cir. 1986). The dispositive issue for discretion here is the statute of limitations bar. If the Court were to dismiss without prejudice this case will be barred from refiling. Therefore, the Court finds that discretion is appropriate in this case. Accordingly, the Court
Plaintiff also objects to Magistrate Judge Crawford's Order Denying Early Discovery. (("Magistrate Order"), ECF No. 140.) A party may object to a non-dispositive pretrial order of a magistrate judge within fourteen days after service of the order. Fed. R. Civ. P. 72(a). The magistrate judge's order will be upheld unless it is "clearly erroneous or is contrary to law." Id.; 28 U.S.C. § 636(b)(1)(A). The "clearly erroneous" standard of review applies to factual findings and discretionary decisions made concerning nondispositive pretrial discovery. See F.D.I.C. v. Fid. & Deposit Co. of Md., 196 F.R.D. 375, 378 (S.D. Cal. 2000). The "clearly erroneous" is "significantly deferential, requiring a definite and firm conviction that a mistake has been committed." Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension Tr. of S. Cal., 508 U.S. 602, 623 (1993) (quotation marks omitted).
Here, Magistrate Judge Crawford's decision rested on the United States' Motion to Dismiss pending before this Court. (Magistrate Order 8.) Judge Crawford decided that the "[District] Court should first be given an opportunity to decide defendants' pending Motions to Dismiss, which appear to raise potentially valid legal challenges, before considering plaintiff's overarching discovery requests." (Id.) The Magistrate Order did not decide Plaintiff's ex parte Motion for Early Discovery on the merits. Instead, Judge Crawford made a discretionary choice to deny Plaintiff's motion in order to allow a decision on the predicate issue of improper service. Critically, the Magistrate Order did so without prejudice and there is no bar to Plaintiff refiling its discovery request. Therefore, the Magistrate Judge's decision was not clearly erroneous. Because Plaintiff can simply refile its early discovery request, the Court
For the reasons stated above, the Court
