Don’t Sleep on Service of Process: The Middle District of Pennsylvania Denies Motion to Remand Because Plaintiffs Could Not Justify Out-of-State Service via Certified Mail
A recent decision from the United States District Court for the Middle District of Pennsylvania emphasizes the importance of meticulous adherence to the rules governing service of process. In Fox v. Chipotle, the plaintiffs’ failure to properly serve an out-of-state corporation via certified mail – where the plaintiffs’ service of process did not utilize the restricted delivery option offered by the United States Postal Service – resulted in the denial of the plaintiffs’ motion to remand and the associated loss of any tactical advantage the plaintiffs may have believed to exist in litigating their class action in state court instead of federal court.
The plaintiff filed a class action complaint against Chipotle in the Court of Common Pleas of Allegheny County of Pennsylvania asserting violations of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1, based on claims that Chipotle was “shortchanging” customers who made cash payments. Chipotle is a Delaware corporation with a principal place of business in California, and the plaintiffs’ motion to remand focused on the sufficiency of the plaintiffs’ attempts to serve Chipotle as an out-of-state defendant via certified mail, pursuant to Pennsylvania Rule of Civil Procedure 403.
In particular, the plaintiffs claimed to have served Chipotle by certified mail at its corporate headquarters in California, where the certified mail was signed by a “representative” of Chipotle on August 25, 2020. However, the plaintiffs were unable to provide any information to verify or identify the individual who signed for the certified mailing on August 25, 2020. Personal service was separately made on an adult individual in charge of a Chipotle store in Pittsburgh, Pennsylvania on August 27, 2020 by an Allegheny County Deputy Sheriff. The parties did not dispute the sufficiency of that service of process.
Chipotle filed a notice of removal on September 25, 2020, and the plaintiffs filed a motion to remand based on the argument that the notice of removal was not timely because proper service was made via certified mail on August 25, 2020. Discovery subsequently revealed that the individual who signed for the mailing was a contract security guard “who merely accepted the delivery of the day’s mail because he was near the maildrop.” Discovery further revealed that the contract security agent was not authorized by Chipotle to accept legal process, but instead was simply the only person around to sign for the mailing because of the “pandemic-related office closure.”
The court denied the plaintiffs’ motion to remand and embarked on a technical analysis in finding that under Pennsylvania law, service of process on a foreign corporation by certified mail is not proper. The availability of the restricted delivery option provided by the United States Postal Service was central to the court’s decision. Under the restricted delivery option, the mailer may direct delivery only to the addressee or the addressee’s authorized agent. Based on the record, the court found that the contract security guard was not: (1) an agent of Chipotle; (2) an executive officer, partner, or trustee of Chipotle; (3) authorized to accept service on behalf of Chipotle; and/or (4) a manager, clerk, or other person in charge at the time of service of process.
Often the key to resolving service, venue, or jurisdictional issues is presenting the court with the “nuts and bolts” of the service process. Despite the apparent challenges associated with serving an out-of-state corporation where offices were closed due to the pandemic, the court provided a thorough analysis of the applicable law and the details surrounding the attempted service in denying the plaintiffs’ motion to remand. The decision underscores the importance of a thorough investigation by a defendant immediately on receipt of a complaint and service papers to assess the sufficiency of service of process, including verification of the identity of the individual served. On the flipside, the decision also highlights the attention required of a plaintiff to ensure that a process server understands the need for him or her to determine the identity and responsibilities of the person signing for the mailing (and not simply serving any person who might agree to accept a mailing).