Orient Plus International Limited v. Baosheng Media Group Holdings Limited

CourtDistrict Court, S.D. New York
DecidedMay 22, 2024
Docket1:24-cv-00744
StatusUnknown

This text of Orient Plus International Limited v. Baosheng Media Group Holdings Limited (Orient Plus International Limited v. Baosheng Media Group Holdings Limited) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orient Plus International Limited v. Baosheng Media Group Holdings Limited, (S.D.N.Y. 2024).

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ORIENT PLUS INTERNATIONAL LIMITED et al., Plaintiffs, Case No. 1:24-cv-00744 (JLR) -against- OPINION AND ORDER BAOSHENG MEDIA GROUP HOLDINGS LIMITED et al., Defendants. JENNIFER L. ROCHON, United States District Judge: Plaintiffs have sued thirteen corporate and individual defendants alleging violations of federal securities laws. See ECF No. 82 (the “Second Amended Complaint” or “SAC”) ¶ 1. Plaintiffs successfully served the corporate defendants – Baosheng Media Group Holdings Limited (“BAOS”), Univest Securities, LLC, The Benchmark Company, LLC, WestPark Capital, Inc., Marcum LLP, and Friedman LLP – all of whom have appeared. Plaintiffs now move for leave to serve Sheng Gong, Yu Zhong, Zuohao Hu, Yue Jin, and Yanjun Hu (together with Adam (Xin) He and Wenxiu Zhong, the “Individual Defendants”) by alternative means pursuant to Federal Rule of Civil Procedure (“Rule”) 4(f)(3). ECF No. 71 (“Br.”) at 1; ECF No. 83 (“Reply”). BAOS opposes the motion. ECF No. 73 (“Opp.”). For the reasons stated below, the motion is GRANTED.1

1 Plaintiffs argue, as a threshold matter, that BAOS lacks standing to oppose Plaintiffs’ motion to serve other defendants. Reply at 1-2. While maintaining that it has standing to challenge this motion, BAOS alternatively requests that the Court consider it an amicus curiae. Opp. at 2-3. In the absence of any other adversarial briefing, the Court has considered BAOS’s opposition. See In re New Oriental Educ. & Tech. Grp. Inc. Sec. Litig., No. 22-cv-01014 (JHR), 2023 WL 5466333, at *1 n.1 (S.D.N.Y. Aug. 24, 2023) (considering corporate defendant’s opposition to motion for alternative service on individual defendants); In re GLG Life Tech Corp. Sec. Litig., 287 F.R.D. 262, 265 (S.D.N.Y. 2012) (considering corporate defendant an amicus curiae and accepting its opposition to motion for alternative service); Auto. Club of N.Y., Inc. v. Port Auth. of N.Y. & N.J., 11-cv-06746 (RJH), 2011 WL 5865296, at *1 (S.D.N.Y. Nov. 22, 2011) (“District courts have broad discretion to permit or deny an BACKGROUND

On February 1, 2024, Plaintiffs filed their initial complaint, asserting claims under Sections 11, 12, and 15 of the Securities Act of 1933. ECF No. 1. In the operative Second Amended Complaint, Plaintiffs allege, among other things, that BAOS failed to disclose in its registration statement that BAOS was under investigation by the Chinese government in the months before its IPO; that this investigation caused the company to “essentially shut down” operations in the months leading up to the IPO; and that the investigation would likely result (and did result) in a large fine and the loss of BAOS’s most significant client. SAC ¶¶ 51-54. Although BAOS is registered as a corporation in the Cayman Islands, its current and former directors and officers are all based in China. Id. ¶¶ 5, 11-12, 15-18. Of the seven Individual Defendants, two are current BAOS employees or directors: Yue Jin serves as BAOS’s Chief Financial Officer and Sheng Gong serves as a director on BAOS’s board (together, the “BAOS Defendants”). Id. ¶¶ 12, 18. Four of the Individual Defendants are former directors of BAOS: Yu Zhong, Zuohao Hu, Adam (Xin) He, and Wenxiu Zhong (together, the “Director Defendants”). Id. ¶¶ 11, 15-17. The remaining Individual Defendant, Yanjun Hu, is a BAOS shareholder. Id. ¶ 19.2

On March 1, 2024, Plaintiffs served BAOS through its registered agent in the United States. ECF No. 69 (“Blodger Decl.”) ¶ 2. The process server also attempted to serve the Individual Defendants through the same registered agent, which refused to accept service on their behalf. Id. On March 18, 2024, Plaintiffs asked BAOS’s then-counsel if he would

appearance as amicus curiae in a case.”).

2 The Second Amended Complaint alludes to two other defendants, Kun Zhang and Weitao Liang. SAC ¶¶ 13-14. But Plaintiffs do not include them in their list of defendants, see id. at 1, allege any counts against them, see id. at 16-23, or seek to serve them by alternative means, see generally Br. accept service on behalf of the Individual Defendants. Id. ¶ 3.3 BAOS’s counsel declined. Id.; see ECF No. 69-1 at 1-3 (email exchange). The next day, Plaintiffs asked BAOS’s counsel to provide the addresses of the Individual Defendants, but BAOS’s counsel did not respond until a month later – after Plaintiffs filed the instant motion for alternate service. Blodger Decl. ¶ 4; ECF No. 74 ¶¶ 2-3. On March 20, 2024, Plaintiffs searched publicly available records – using Google, Baidu, and the PRC Ministry of Public Security’s

database – for the Individual Defendants’ contact information. Blodger Decl. ¶ 5. Through these efforts, Plaintiffs found work email addresses for Yu Zhong, Zuohao Hu, and Yanjun Hu. See id. ¶ 7. However, they did not find email addresses for the other Individual Defendants, or residential addresses for anyone. Id. ¶¶ 6-7. On March 28, 2024, BAOS filed a Form 6-K with the Securities and Exchange Commission, in which BAOS disclosed its receipt of the complaint in this case, described the claims asserted and stated that it “intends to defend the matter vigorously.” ECF No. 84-1 (“Form 6-K”) at 3. Plaintiffs moved for alternate service on April 9, 2024. Br. The motion is fully briefed. Opp.; Reply.4

DISCUSSION Plaintiffs request permission to serve the Individual Defendants, believed to live in

3 At the time, BAOS was represented by Mark Hunter, a lawyer at Hunter Taubman Fischer & Li. See Blodger Decl. ¶ 3. BAOS has since replaced its counsel with Warren Gluck, a lawyer at Holland & Knight LLP. ECF No. 90.

4 Plaintiffs requested oral argument via a notation on their reply brief. The Court declines this request because the parties’ briefing was sufficient and oral argument would not materially assist the Court. See Dotson v. Griesa, 398 F.3d 156, 159 (2d Cir. 2005) (“[A] district court acts well within its discretion in deciding dispositive motions on the parties’ written submissions without oral argument.”). China, by alternate methods pursuant to Rule 4(f)(3), and for expedited discovery. Br. at 1. Specifically, Plaintiffs seek authorization for: (1) alternate service for the BAOS Defendants through BAOS’s counsel or registered agent; (2) alternate service through email for Yu Zhong, Zuohao Hu, and Yanjun Hu; and (3) expedited discovery to determine the email addresses for Wenxiu Zhong and Adam (Xin) He, the two Director Defendants for whom Plaintiffs lack contact information. Id.

Rule 4(f) provides three methods of service of an individual in a foreign country: (1) “by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents”; (2) “a method that is reasonably calculated to give notice,” for example, “as the foreign authority directs in response to a letter rogatory”; or (3) “by other means not prohibited by international agreement, as the court orders.” Fed. R. Civ. P. 4(f)(1)- (3). Under the third method, Rule 4(f)(3), “a court may fashion means of service on an individual in a foreign country, so long as the ordered means of service (1) is not prohibited by international agreement; and (2) comports with constitutional notions of due process.” Front Row Fund I, L.P. ex rel. ChoiceWORX, Inc. v. Gross, No. 23-cv-02255 (JHR) (JLC),

2023 WL 4441976, at *1 (S.D.N.Y. July 11, 2023) (citation omitted); accord United States v. Mrvic, 652 F. Supp. 3d 409, 412 (S.D.N.Y. 2023).

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Orient Plus International Limited v. Baosheng Media Group Holdings Limited, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orient-plus-international-limited-v-baosheng-media-group-holdings-limited-nysd-2024.