Hard Multiple Choice from the 2005 CivPro Exam
Essay Question from the 2010 CivPro Exam

Multiple Choice Question from the 2008 CivPro Exam

Question 8.

P (a domiciliary of California) is suing D1 (a domiciliary of South Dakota who works in North Dakota for the D2 Corp. as a low-level broker) and the D2 Corp. (a brokerage company incorporated in the state of California with its principal place of business in North Dakota). P’s suit was filed in the federal district court for District of Minnesota and is for federal securities fraud. P is asking for $100,000 alternatively from either D1 or the D2 Corp., for damages due to misrepresentations concerning securities that D1 made (on behalf of her employer) to P in California.

Under Minnesota law, a corporation doing business in the state of Minnesota must appoint the Secretary of State of Minnesota as its agent for service of process. Under Minnesota law delivering the summons and complaint to the Secretary of State is sufficient for service on the corporation. In order to do business in Minnesota, the D2 Corp. has appointed the Secretary of State of Minnesota as its agent for service of process. P has the D2 Corp. served by having a 21-year-old process server deliver a copy of the summons and complaint in hand to the Secretary of State of Minnesota. Which of the following is most accurate.

 a. The D2 Corp. should be able to get P’s action against it dismissed for lack of personal jurisdiction.

b. The D2 Corp. should be able to get P’s action against it dismissed for insufficient service, because Rule 4(h) was not satisfied.

c. The D2 Corp. should be able to get P’s action against it dismissed for lack of subject matter jurisdiction.

d. The D2 Corp. should be able to get P’s action against it dismissed for insufficient service because Minnesota’s service rules violate the 14th Amendment to the United States Constitution.

e. The D2 Corp. should be able to get P’s action against it dismissed for insufficient process.

 

ANSWERS

 

a. The D2 Corp. should be able to get P’s action against it dismissed for lack of personal jurisdiction.

This is not the best answer. Service on a corporation’s agent for service of process is arguably sufficient for PJ over the corporation. Notice that there is an important difference between an agent for service of process and a person who can be given the summons and complaint in order to provide service under FRCP 4(h). Delivering the summons and complaint to the CEO is adequate service on the corporation under 4(h), but that does not mean that there is PJ over the corporation in the state where the CEO got the summons and complaint. But if someone is designated an agent for service of process, then service on the agent is arguably sufficient for PJ in the state of service. It is true that in this case, the service would establish general jurisdiction, because the cause of action is unrelated to the corporation's activities in Minnesota. Some courts have found general PJ on the basis of the appointment of an agent, e.g., Bane v. Netlink, Inc., 925 F.2d 637, 640–41 (3d Cir.1991), others have not, Wenche Siemer v. Learjet Acquisition Corp., 966 F.2d 179, 182 (5th Cir.1992). But the argument for PJ is sufficiently strong that this is not the best answer.

b. The D2 Corp. should be able to get P’s action against it dismissed for insufficient service, because Rule 4(h) was not satisfied.

Wrong. This is what FRCP 4(h) says about service on a corporation:

(h) Serving a Corporation, Partnership, or Association.
Unless federal law provides otherwise or the defendant’s waiver has been filed, a domestic or foreign corporation, or a partnership or other unincorporated association that is subject to suit under a common name, must be served:
(1) in a judicial district of the United States:
    (A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or
    (B) by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process and — if the agent is one authorized by statute and the statute so requires — by also mailing a copy of each to the defendant.

Now you might say that service was inadequate because, although a copy of the summons and complaint was delivered to an agent for service of process, there was no copy mailed to the corporate defendant. So 4(h)(1)(B) was violated. But mailing is required only if the state statute authorizing the agent for service requires such mailing, and the Minnesota statute did not require it.

Another way of getting to the same conclusion is that 4(h)(1)(A) says that service on a corporation is valid if “in the manner prescribed by Rule 4(e)(1) for serving an individual” – that is, if it is in accordance with the state law “where the district court is located or where service is made.” Here the service was in accordance with Minnesota law, where the service was made and where the district court was located.

Of course, the fact that delivery of the summons and complaint was only on the Secretary of State and not on any actual employee of the D2 Corp. is a reason to think that the Minnesota rules violate the due process clause of the 14th Amendment, because such service is not reasonably calculated to apprise the defendant of the pendency of the action. But that does not mean that FRCP 4(h) was not satisfied.

c. The D2 Corp. should be able to get P’s action against it dismissed for lack of subject matter jurisdiction.

Wrong. P’s suit is for federal securities fraud. It clearly has federal question SMJ.

d. The D2 Corp. should be able to get P’s action against it dismissed for insufficient service because Minnesota’s service rules violate the 14th Amendment to the United States Constitution.

Correct. The fact that delivery of the summons and complaint was only on the Secretary of State and not on any actual employee of the D2 Corp. is a clear reason to think that the Minnesota rule violated the due process clause of the 14th Amendment, because such service is not reasonably calculated to apprise the defendant of the pendency of the action.

e. The D2 Corp. should be able to get P’s action against it dismissed for insufficient process.

Wrong. This would mean that there was something wrong with the papers submitted to the Secretary of State (e.g. there was no summons). 

Comments

Matt

Professor, wouldn't the issue in this case be that, while the Minnesota law stipulates that the Secretary of State is appointed as an agent for service of process for any corporation conducting business within the state, none of the corporations in the question actually conduct business within the state and therefore the Minnesota Secretary of State cannot be said to be their appointed agent for service?

I understand why question d is correct, but couldn't answer b also be correct because Rule 4(h)(1)(B) was violated, not for failure to mail the complaint and summons, but for serving an individual that wasn't appointed by law to either corporation?

Michael Green

But I said that the D2 Corp. had in fact appointed the Secretary of State of Minnesota as its agent for service of process, in order to do business within the state. As for D1, service on him is not at issue in this question. (I used the same fact pattern for a number of multiple choice questions, some of which are also posted on this blog. D1 comes up in connection with these questions.)

Matt

Oh I see, I glossed over than and just assumed that they didn't do business in the state. Thank you, Professor.

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