Zoho Corporation v. Target Integration, Inc. et.al.

• Court: District Court, N.D. California
• Decided: April 7, 2023
• Docket: 3:23-cv-00054
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ZOHO CORPORATION, et al., Case No. 23-cv-00054-SI

8 Plaintiffs, ORDER AUTHORIZING 9 v. ALTERNATIVE SERVICE BY EMAIL UNDER RULE 4(F)(3) OF THE 10 TARGET INTEGRATION, INC., et al., FEDERAL RULES OF CIVIL PROCEDURE 11 Defendants. Re: Dkt. No. 21 12

14 BACKGROUND 15 Plaintiffs Zoho Corporation and Zoho Corporation Pvt. Ltc. (“ZCPL”) (collectively 16 “Plaintiffs” or “Zoho”) brought an action against Target Integration Inc. (“TII”) and Target 17 Integration Consultancy Pvt. Ltd. (“TICPL”) (collectively, “Defendants” or “Target Integration”) 18 for violations of the Defend Trade Secrets Act, 18 U.S.C. § 1836, and the California Uniform Trade 19 Secrets Act, Cal. Civ. Code § 3426. Compl. Dkt. No. 1 at 11, 12. Before the Court is plaintiffs’ 20 motion for an order declaring service of process on TICPL effective or, in the alternative, 21 authorizing alternative service on TICPL via email. Dkt. No. 21. Plaintiffs allege that TII is a 22 corporation incorporated in Delaware and doing business in California, while TICPL is organized 23 and exists under the laws of India. Dkt. No. 1 ¶ 1. Plaintiffs allege, however, that TII and TICPL 24 act as “a single enterprise globally” and have overlapping executives, including the same CEO, 25 Rohit Thakral. Dkt. No. 21 at 3–4. 26 Zoho is a web-based business software and information technology tool provider. Dkt No. 27 1 ¶ 1. As a result of its engagement with businesses over the past two decades, Zoho collected 1 “critical business and market information in its internal CRM [customer relationship management 2 database].” Id. ¶ 12. Plaintiffs allege that in September of 2022 they were notified by a business 3 partner that one of the business partner’s customers had received a marketing solicitation email from 4 Target Integration on September 21, 2022. Id. ¶¶ 11, 15. The business partner expressed concern 5 because “the recipient’s email address . . . was a unique address that . . . could have been obtained 6 only from that [business partner] or Zoho’s internal CRM.” Id. ¶ 15. Zoho contacted Aman Thrakal, 7 Target Integration’s Business Head residing in Mountain View, CA, and Rabindranath Mukherjee, 8 believed to be a Target Integration Sales Head, and asked how Target Integration obtained the 9 customer’s email. Id. at 17. On November 6, 2022, Zoho received another email from a different 10 business partner alerting Zoho that the business partner had received an email from Target 11 Integration. Id. On the same day, Zoho itself received a solicitation email from Target Integration. 12 Id. ¶¶ 19, 20. Zoho subsequently filed suit, alleging that Target Information illegally accessed, 13 obtained and used Zoho’s confidential and proprietary trade secret information from Zoho’s CRM. 14 Id. 15 After filing suit, Zoho emailed Target Integration’s Indian counsel and asked if counsel 16 would waive service of process. Marton Decl. Dkt. No. 21-1 ¶ 14. Target Integration’s Indian 17 counsel informed Zoho that it only represented TII and TICPL within India, and that TII and TICPL 18 were unrepresented in the United States. Id. ¶ 14. Zoho then formally served TII, a corporation 19 incorporated in Delaware and doing business in California, through its registered agent in Delaware. 20 Id. Zoho unsuccessfully attempted service on TICPL through TII’s registered agent. Id. ¶ 7, Ex. F. 21 On January 25, 2023, Rohit Thakral, CEO of both TII and TICPL, contacted Zoho’s counsel 22 by email and copied the Court, requesting an extension on behalf of “Target Integration” to respond 23 to Zoho’s complaint and informing Zoho and the Court that “Target Integration” had not yet 24 obtained legal counsel. Id. ¶ 16. Zoho’s counsel emailed Mr. Thakral, notifying him that Zoho 25 planned to file this Ex Parte Motion Requesting Authorization for Alternative Service. Dkt. No. 21 26 at 1 n. 1. Plaintiffs’ Ex Parte Motion Requesting Authorization for Alternative Service requests that 27 the Court (1) find that Zoho’s service on TICPL was effective when Zoho served TII’s registered 1 authorize alternative service by email on TICPL pursuant to Rule 4(f)(3) of the Federal Rules of 2 Civil Procedure. Dkt. No. 21. 3 4 LEGAL STANDARD 5 “Ex parte motions may be brought in emergencies, to preserve state secrets and in a variety 6 of other contexts.” Blixseth v. Yellowstone Mountain Club, LLC, 742 F.3d 1215, 1219 (9th Cir. 7 2014). “A federal court has jurisdiction over a defendant only if the defendant has been properly 8 served.” Cadence Design Sys., Inc. v. Syntronic AB, No. 21-cv-03610-SI, 2021 WL 4222040, at *3 9 (N. D. Cal. Sept. 16, 2021). Fed. R. Civ. P. 4(f) provides that an individual not within any judicial 10 district of the United States may be served: 11 (1) by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention . . . 12 (2) if there is no internationally agreed means, or if an international agreement allows 13 but does not specify other means, by a method that is reasonably calculated to give notice: . . . or 14 (3) by other means not prohibited by international agreement, as the court orders. 15 Fed. R. Civ. P. 4(f). 16 “The Constitution does not require any particular means of service of process, only that the 17 method selected be reasonably calculated to provide notice and opportunity to respond.” Rio Props., 18 Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1017 (9th Cir. 2002). 19

20 DISCUSSION 21 I. Appropriateness of Ex Parte Motion 22 “Ex parte motions may be brought in emergencies, to preserve state secrets and in a variety 23 of other contexts.” Blixseth v. Yellowstone Mountain Club, LLC, 742 F.3d 1215, 1219 (9th Cir. 24 2014). Plaintiffs notified defendants via email before filing this motion and have been in contact 25 with defendants’ CEO via email. Dkt. No. 21 at 1 n. 1. Defendants have actual notice of the motion. 26 The Court finds that it is appropriate for plaintiffs to move ex parte in these circumstances because 27 requiring plaintiffs to serve defendants before requesting authorization for alternative service would 1 be paradoxical. 2 3 II. Alternative Service Under Rule 4(f)(3) of the Federal Rules of Civil Procedure 4 Plaintiffs request that the Court find that plaintiff properly served TICPL through TII’s 5 registered agent in Delaware. Dkt. No. 21 at 6. The Court denies this request. In the alternative, 6 plaintiffs request authorization for alternative service by email under Federal Rule of Civil 7 Procedure 4(f)(3). Dkt. No. 21 at 7. The Court grants this request and authorizes service by email 8 pursuant to Federal Rule of Civil Procedure 4(f)(3). 9 To determine whether the Court should allow alternative service by email, the Court must 10 determine that (1) service by email is not barred by an international agreement and (2) the benefits 11 of alternative service by email outweigh the limitations in this particular case. Rio Props., Inc. v. 12 Rio Int’l Interlink, 284 F.3d 1007, 1014 (9th Cir. 2002). 13 Plaintiffs argue the Court should authorize alternative service by email pursuant to Rule 14 4(f)(3) of the Federal Rules of Civil Procedure. Dkt. No. 21 at 7. First, plaintiffs argue that 15 alternative service through email to Indian defendants is not prohibited by international agreement. 16 Dkt. No. 21 at 7–8. Second, they argue that “alternative service by email comports with due 17 process” because Zoho has “completed service of all initiating documents on TII and delivered the 18 same by email to their overlapping Target Integration executives and shared Indian counsel.” Dkt 19 21. at 8. Finally, they contend that TICPL “has actual notice of Zoho’s claims and this lawsuit.” Id. 20 Further, plaintiffs request authorization for alternative service to prevent service through the Hague 21 Convention, “which would only unnecessarily delay these proceedings . . . [because service through 22 the] Hague [Convention] is expected to take at a minimum six months.” Dkt. No. 21 at 8. 23 24 A. International Agreement 25 The Ninth Circuit has stated that Rule 4(f) provides three independent and permissible 26 grounds for serving foreign defendants. Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1015 27 (9th Cir. 2002). “Rule 4(f)(3) is merely one means among several which enables service of process 1 4(f)(3), which allows service “by other means not prohibited by international agreement, as the court 2 orders,” is seen as either as last resort or extraordinary relief. Id. 3 “Federal Rule of Civil Procedure 4(h)(2) authorizes service of process on a foreign business 4 entity in the manner prescribed by Rule 4(f) for individuals” where service is “(1) directed by the 5 court; and (2) not prohibited by international agreement.” Rio Props., Inc., 284 F.3d at 1015. “[A]s 6 long as court-directed and not prohibited by international agreement, service of process offered 7 under Rule (4)(f)(3) may be accomplished in contravention of the laws of the foreign country.” Id. 8 at 1014. 9 Although India is a signatory to the Hague Convention,1 India has “formally objected to 10 service under Article 10, and does not permit service via postal channels.” U.S. Dep’t of State– 11 Bureau of Consular Affs., Judicial Assistance Country Information: India, Travel.State.Gov (Nov. 12 15, 2013) https://travel.state.gov/content/travel/en/legal/Judicial-Assistance-Country-Information/ 13 India.html (last visited Mar. 24, 2023). “However, numerous courts have authorized alternative 14 service under Rule 4(f)(3) even where the Hague Convention applies. This is true even in cases 15 involving countries that, like India, have objected to the alternative forms of service permitted under 16 Article 10 of the Hague Convention.” Richmond Techs., Inc. v. Aumtech Bus. Sols., No. 11-CV- 17 02460-LHK, 2011 WL 2607158 at *12 (N.D. Cal. July 1, 2011). 18 This Court granted a motion authorizing alternative service to U.S.-based counsel in 19 Cadence Design Systems, Inc., v. Syntronic AB, et al., despite China’s objections under Article 10 20 of the Hague Convention. See Cadence Design Sys., Inc. v. Syntronic AB, No. 21-cv-03610-SI, 21 2021 WL 4222040, at *3 (N. D. Cal. Sept. 16, 2021). In that case, defendant Syntronic Beijing 22 stated that it did not have an office in the United States. Id. It claimed to have separate financials 23 from Syntronic U.S., but the Syntronic website referred to the corporations as unified, listing a 24 1 The Hague Convention is a multi-state treaty formed “to create appropriate means to ensure that 25 judicial and extrajudicial documents to be served abroad shall be brought to the notice of the addressee in sufficient time, [and] desiring to improve the organisation of mutual judicial assistance 26 for that purpose by simplifying and expediting the procedure . . . .” Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial 27 Matters, Nov. 15, 1965, HCCH. 1 “Group CEO.” Id. Prior to filing the action, the plaintiff communicated with all Syntronic entities. 2 Id. The plaintiff filed a proof of service of their summons and complaint on Syntronic Beijing at 3 Syntronic U.S.’s principal place of business. Id. The defendants argued that the plaintiff needed to 4 “attempt service through the Hague Convention.” Id. at *5. However, this Court found that “there 5 is no hierarchy of preferred methods of service of process,” and that “service of process under Rule 6 4(f)(3) is one means among several which enables service of process on an international defendant.” 7 Id. at *4–5 (cleaned up) (quoting Rio Props., Inc., 284 F.3d at 1014–15). 8 Although the plaintiffs here have not attempted service on TICLP through the Hague 9 Convention, they are not required to do so. Rio Props., Inc., 284 F.3d at 1014–15. Zoho attempted 10 to serve TICLP through TII’s registered agent but was unsuccessful. Marton Decl. Dkt. No. 21-1 ¶ 11 7, Ex. F. TICPL does not have counsel in the United States, and therefore there has not been a 12 waiver of service by counsel. Id. ¶ 15. Although India has objected to alternative service under 13 Article 10 of the Hague Convention, the Court finds that alternative service by email is permitted 14 by Rule 4(f)(3) and is not barred by international agreement. 15 16 B. Reasonableness of Alternative Service 17 Service of process must be “reasonably calculated . . . to apprise interested parties of the 18 pendency of the action and afford them an opportunity to present their objections.” Rio Props., Inc. 19 v. Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002) (quoting Mullane v. Cent. Hanover Bank 20 & Trust Co., 339 U.S. 306, 314 (1950)). 21 In Rio Properties, the plaintiff attempted to serve the defendant at an address in Miami, 22 Florida, which was used to register the allegedly infringing domain names. Rio Props., Inc., 284 23 F.3d at 1013. The plaintiff discovered that the address “housed [defendant’s] international courier, 24 IEC, which was not authorized to accept service on [defendant’s] behalf.” Id. However, IEC agreed 25 to forward the summons and complaint to defendant’s Costa Rician courier. Id. The plaintiff 26 received a call from a Los Angeles attorney with whom defendant consulted after receiving the 27 summons and complaint; the attorney refused to accept service on defendant’s behalf but asked for 1 The plaintiff could not find the defendant’s address in Costa Rica but learned that the defendant’s 2 preferred communication was email. Id. The plaintiff then filed an emergency motion for alternate 3 service of process. Id. 4 The Ninth Circuit explained, “we commit to the sound discretion of the district court the task 5 of determining when the particularities and necessities of a given case require service of process 6 under Rule 4(f)(3).” Id. at 1016. “[T]rial courts have authorized a wide variety of alternative 7 methods of service . . . most recently email.” Id. The Ninth Circuit found that the plaintiffs 8 “attempted to serve [defendant] by conventional means in the United States” but that the defendant’s 9 courier and consulted attorney refused service. Id. The Ninth Circuit found based on the facts that 10 service of process by email was reasonably calculated to apprise the defendant of the pendency of 11 the action and afford it an opportunity to respond. Id. at 1017. The Ninth Circuit reasoned that the 12 defendant “structured its business such that it could be contacted only via its email address.” Id. at 13 1018. Since the Ninth Circuit decided Rio Properties in 2002, there has been a dramatic increase 14 in email usage as a form of professional communication. 15 This Court is tasked with balancing the limitations of alternative service against the benefits 16 to determine whether alternative service is reasonable based on the circumstances. Id. at 1016. 17 Zoho’s attempts of service on TICPL are similar to the attempts made by the plaintiff in Rio 18 Properties. Zoho attempted to serve TICPL through TII’s registered address in Delaware but were 19 unsuccessful. Dkt. No. 21-1 ¶ 15 Ex. F. Zoho contacted Target Integration’s counsel located in 20 India and asked them to waive service, they would not do so. Dkt. No. 21-1 ¶ 15. Neither TII nor 21 TICPL have U.S. counsel who will accept service. Dkt. No. 21-1 at ¶¶ 5, 15. Further, TICPL does 22 not have a principal place of business in the United States. Id. And TICPL’s CEO has received and 23 responded to plaintiffs’ communications about the proceeding. Id. ⁋⁋ 15–16. Therefore, the Court 24 finds TICPL structured its business in a manner that it could best be contacted through email. 25 While the Ninth Circuit identified that alternative service by email has certain limitations 26 because there is “no way to confirm receipt of an email” and there is “limited use of electronic 27 signatures,” Rio Props., Inc., 284 F.3d at 1018, here Target Integration’s CEO is already aware of 1 respond to it. Marton Decl. Dkt. No. 21-1 4] 16. Further, the Court finds that alternative service by 2 || email comports with due process because it will give TICPL actual notice and an opportunity to 3 respond. Therefore, the Court finds that the benefits of alternative service by email outweigh the 4 || limitations, service by email comports with due process, and service by email is reasonable. 5 6 CONCLUSION 7 Plaintiffs’ motion to authorize alternative service through email is GRANTED. 8 9 10 IT IS SO ORDERED. 11 Dated: April 7, 2023 12 | M i SUSA O 13 United States District Judge

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