California Court of Appeal, Grosz v. California Dept. of Tax and Fee Administration, Docket No. B309418

Sales and Use Taxes

 

Amazon

 

Taxpayer Action Under Code of Civil Procedure Section 526a

 

Tax Law

 

Standing

 

California Law

 

 

 

 

In addition to its own products, Amazon fulfills orders for products sold by third-party merchants through a program it calls “Fulfillment by Amazon” (FBA). The trial court in this action described the program as alleged in the First Amended Complaint (FAC): “To support this program, Amazon contracts with merchants (‘FBA Merchants’) who supply the products ordered by consumers through Amazon’s website. Amazon provides advertising, packaging, and delivery of the products supplied by the FBA Merchants. [Citation.] Amazon also processes payments for sales on behalf of the FBA Merchants.” According to the FAC, the state agency responsible for collecting sales and use tax (currently the California Department of Tax and Fee Administration (DTFA)) has historically not collected from Amazon sales and use taxes for products sold through the FBA program. Stanley Grosz filed a taxpayer actionunder Code of Civil Procedure section 526a (Section 526a) seeking a declaration that the DTFA “has a mandatory duty to assess and collect” sales and use tax specifically from Amazon for products sold through the FBA program, and an injunction requiring the DTFAto do so. The DTFA and its Director, Nicolas Maduro, and the Amazon entities that Grosz named in his FAC as Real Parties in Interest all demurred to the FAC. The trial court sustained the respondents’ demurrers without leave to amend. The trial court reasoned that the Revenue and Taxation Code vests the DTFA with discretion to determine whether the FBA Merchant or Amazon is the “retailer” in any given FBA transaction for purposes of collecting sales and use tax. Because the determination is discretionary and not ministerial, the trial court reasoned that Grosz had no standing to pursue his action. (See Silver v. Watson (1972) 26 Cal.App.3d 905, 909 (Silver).) We agree with the trial court, and will affirm the trial court’s order sustaining the respondents’ demurrers without leave to amend.

 

 

(Before July 1, 2017, the agency responsible for collecting sales and use taxes was the State Board of Equalization. The Taxpayer Transparency and Fairness Act of 2017 created the DTFA and transferred the Board of Equalization’s authority and responsibility for sales and use taxes (among other things) to the DTFA. (Stats. 2017, ch. 16, §§ 5, 14, 15; Gov. Code, §§ 15570, 15570.20, 15570.22; Rev. & Tax. Code, § 20.) (Fn. 3).

 

 

In his opening brief, Stanley Grosz—the taxpayer who filed suit against the DTFA—explains that this appeal is limited to DTFA’s “failure to collect tax from Amazon on FBA sales transacted prior to October 1, 2019. . . .” In 2019, the Legislature passed and the Governor signed Assembly Bill No. 147, which the Legislature called the Marketplace Facilitator Act (MFA). (Stats. 2019, ch. 5, § 2.) The bill made the MFA operative on October 1, 2019. (Stats. 2019, ch. 5, § 2; Rev. & Tax. Code, § 6049.5, subd. (a).) The MFA appears on its face to relate to transactions like the FBA transactions alleged in the FAC. We do not construe any part of the MFA here, but note only that it appears that Grosz has attempted to expressly exclude from his lawsuit any transactions occurring after the MFA’s operative date. (Fn. 4).

 

 

(…) The trial court (…) explaining: “The determination of which party—FBA Merchants or Amazon—was the retailer necessarily entailed consideration of all sections of the vast statutory scheme and required discretion especially considering ‘the “highly technical,” “intensely detailed and fact-specific sales tax system governing an enormous universe of transactions.”’”

 

 

Code of Civil Procedure Section 526a: “The purpose of Section 526a, ‘which applies to citizen and corporate taxpayers alike, is to permit a large body of persons to challenge wasteful government action that otherwise would go unchallenged because of the standing requirement. [Citation.]  . . . Although by its terms the statute applies to local governments, it has been judicially extended to all state and local agencies and officials. [Citations.]’ [Citation.] ‘ “The individual citizen must be able to take the initiative through taxpayers’ suits to keep government accountable on the state as well as on the local level.” ’ ” (Vasquez v. State of California (2003) 105 Cal.App.4th 849, 854, fn. omitted.) “It is established that an action lies under Section 526a not only to enjoin wasteful expenditures, but also to enforce the government’s duty to collect funds due the State. ‘ “A taxpayer may sue a governmental body in a representative capacity in cases involving its . . . failure . . . to perform a duty specifically enjoined.” [Citation.] This well-established rule ensures that the California courts, by entertaining only those taxpayers’ suits that seek to measure governmental performance against a legal standard, do not trespass into the domain of legislative or executive discretion. [Citations.] This rule similarly serves to prevent the courts from hearing complaints which seek relief that the courts cannot effectively render; the courts cannot formulate decrees that involve the exercise of indefinable discretion; their decrees can only restrict conduct that can be tested against legal standards. [Citations.]’ ” (Vasquez v. State of California, supra, 105 Cal.App.4th at pp. 854-855, italics added.) “The cases have . . . been careful to note that Section 526a has its limits. In particular, the courts have stressed that the statute should not be applied to principally ‘political’ issues or issues involving the exercise of the discretion of either the legislative or executive branches of government.” (Humane Society of the United States v. State Bd. of Equalization (2007) 152 Cal.App.4th 349, 356, italics added; see Silver, supra, 26 Cal.App.3d at p. 909 [“if the governing body has discretion in the matter, the taxpayer may not interfere”].)

 

 

Sales and Use Tax “Retailer”: “The California Sales and Use Tax Law (Rev. & Tax. Code, § 6001 et seq.) embodies a comprehensive tax system created to impose an excise tax, for the support of state and local government, on the sale, use, storage or consumption of tangible personal property within the state. [Citation.] The two taxes, sales and use, are mutually exclusive but complementary, and are designed to exact an equal tax based on a percentage of the purchase price of the property in question. In essence ‘ “a sales tax is a tax on the freedom of purchase. . . a use tax is a tax on the enjoyment of that which was purchased.’ ” Citations. The use tax supplements the sales tax by imposing on those subject to it the same tax burden as would otherwise be assessed under the sales tax.” (Wallace Berrie & Co. v. State Bd. of Equalization (1985) 40 Cal.3d 60, 66-67, fns. omitted.) Specifically, California law imposes a tax on “the gross receipts of any retailer from the sale of all tangible personal property sold at retail in this state. . . .” (Rev. & Tax. Code, § 6051.) The sales tax is imposed on and collected from “retailers.” (Ibid.) California law also imposes a tax on the “storage, use, or other consumption in this state of tangible personal property purchased from any retailer. . . .” (Rev. & Tax. Code, § 6201.) This tax is imposed on the retail purchaser, but is collected from the purchaser by the “retailer” and remitted to the state. (Rev. & Tax. Code, §§ 6202, 6203.) Pertinent to this appeal, the Sales and Use Tax Law states that “ ‘retailer’ includes,” among other things, “every seller who makes any retail sale or sales of tangible personal property . . .” and “every person engaged in the business of making sales for storage, use, or other consumption . . . .” (Rev. & Tax. Code, § 6015, subd. (a)(1) & (2).) A “ ‘seller’ includes every person engaged in the business of selling tangible personal property of a kind the gross receipts from the retail sale of which are required to be included in the measure of the sales tax.” (Rev. & Tax. Code, § 6014.) “A ‘retail sale’ . . . means a sale for a purpose other than resale in the regular course of business in the form of tangible personal property.” (Rev. & Tax. Code, § 6007.) And a “ ‘sale’ ” means, among other things, “any transfer of title or possession, exchange, or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration. ‘Transfer of possession’ includes only transactions found by the DTFA to be in lieu of a transfer of title, exchange, or barter.” (Rev. & Tax. Code, § 6006, subd. (a).)

 

 

(…) Pawnbrokers, storage men, mechanics, artisans, or others selling the property to enforce a lien thereon, are retailers with respect to sales of the property to consumers and tax applies to the receipts from such sales.

 

 

(…) Grosz concedes that a sales or use tax can only be applied once to a retail transaction—that Amazon and any particular FBA Merchant “cannot both be held liable for tax on the same . . . sale.” (Fn. 8).

 

 

(…) On the statutory interpretation question, we conclude, as did the trial court, that the determination of who is a “retailer” under the Sales and Use Tax Law and relevant regulations is one that invokes the discretion of the DTFA; making that designation is not a ministerial task (…) as opposed to a discretionary action.

 

 

(…) Here, by contrast, the question is not whether the law imposes a tax, but rather on whom, based on language in several interrelated statutes. The question here, as the trial court pointed out, is not whether the DTFA has discretion, but rather how it must exercise that discretion. That is the critical distinction between this case and Sonoma (195 Cal.App.3d 982).

 

 

(…) In addition to expressly giving the DTFA discretion to determine who “may be regarded . . . as retailers” for purposes of the Sales and Use Tax Law under the circumstances outlined in Revenue and Taxation Code section 6015, subdivision (b), we note the broad discretion the Legislature has given the DTFA generally. (Gov. Code, §§ 15570 et seq.).

 

 

The statutory framework of the Sales and Use Tax Law and the statutes vesting the DTFA with authority to administer that statutory framework also generally lead us to conclude that whether a taxpayer is a retailer for purposes of the Sales and Use Tax Law is a discretionary determination and not a ministerial task. Consistent with those conclusions, we agree with the trial court that Grosz’s lawsuit may not proceed under Section 526a.

 

 

We affirm the trial court’s order sustaining the DTFA’s and Amazon’s demurrers and dismissing the lawsuit.

 

 

 

 

(California Court of Appeal, Jan. 9, 2023, Grosz v. California Dept. of Tax and Fee Administration, Docket No. B309418, Certified for Publication)

U.S. Court of Appeals for the Ninth Circuit, Vincent de Fontbrune v. Alan Wofsy, Docket No. 19-16913

Recognition and Enforceability of a Foreign Judgment

 

International Diversity Case

 

Comity

 

Standing (Federal v. California Courts)

 

Subject Matter Jurisdiction

 

Service of Legal Process

 

Notice of the Proceeding

 

Mail Service

 

Summons

 

California Law

 

 

California version of the Uniform Foreign-Country Money Judgment Recognition Act, Cal. Civ. Proc. Code §§ 1713–1725

 

Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638

 

 

 

(…) Wofsy maintains that he was never served with process in the Astreinte Proceeding. Sicre de Fontbrune asserts that a huissier—a bailiff-like officer of the French court—sent the complaint and French equivalent of a summons to Wofsy through procedures consistent with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638. The French court official requested service at addresses that the French courts already had on file: 401 China Basin Street in San Francisco, and P.O. Box 2210 in San Francisco. The U.S. process server, however, failed to effect service.

 

 

(…) Before Wofsy filed the Review Proceeding, though, Sicre de Fontbrune brought the instant action in the Superior Court of California in Alameda County in November of 2013, seeking recognition of the astreinte judgment. After Wofsy removed the action to federal court, the district court dismissed the case with prejudice pursuant to Federal Rule of Civil Procedure 12(b)(6). We reversed, holding that the astreinte was not a penalty but rather a judgment for “a sum of money” cognizable under the Recognition Act. Sicre de Fontbrune, 838 F.3d at 1007.

 

 

“In international diversity cases such as this one, ‘enforceability of judgments of courts of other countries is generally governed by the law of the state in which enforcement is sought.’” Naoko Ohno v. Yuko Yasuma, 723 F.3d 984, 990 (9th Cir. 2013) (quoting Yahoo! Inc. v. La Ligue Contre Le Racisme et L’Antisemitisme, 433 F.3d 1199, 1212 (9th Cir. 2006)). In this removed action, California law—the Recognition Act—governs.

 

 

California’s Recognition Act is modeled on the 2005 version of the Uniform Foreign-Country Money Judgments Recognition Act. AO Alfa-Bank v. Yakovlev, 230 Cal. Rptr. 3d 214, 221 (Ct. App. 2018), as modified on denial of reh’g (Apr. 3, 2018); see Unif. Foreign-Country Money Judgments Recognition Act (Nat’l Conf. of Comm’rs on Unif. State L. 2005). Amendments to California’s Recognition Act became effective in 2018. See Alfa-Bank, 230 Cal. Rptr. 3d at 221. But those amendments apply only to claims commenced after their effective date. Id. at 222. The district court was thus correct to apply the version of the state Recognition Act effective at the time Sicre de Fontbrune filed this action in 2013. A majority of states have adopted either the 1962 version of the Uniform Foreign-Country Money Judgments Recognition Act, or its 2005 update. Ohno, 723 F.3d at 990 n.8. Non-California authorities that interpret the 1962 or the 2005 uniform acts, or that apply principles of comity-based recognition to foreign judgments, carry persuasive value in the application of California’s Recognition Act. Alfa-Bank, 230 Cal. Rptr. 3d at 222–23 (citing Cal. Civ. Proc. Code § 1722). “Once coverage under the Uniform Act is established,” as it has been here,7 “the presumption in favor of enforcement applies,” and the party resisting recognition must establish a ground for nonrecognition. Ohno, 723 F.3d at 991 (quoting Cal. Civ. Proc. Code § 1716(d)). The Recognition Act lists several grounds for nonrecognition. Some grounds, if established, preclude recognition, Cal. Civ. Proc. Code § 1716(b), but others only confer discretion on courts to deny recognition, Cal. Civ. Proc. Code § 1716(c).

 

 

7 Given our previous opinion, the parties no longer dispute that the 2012 Astreinte Judgment falls within the coverage of the Recognition Act. See Sicre de Fontbrune, 838 F.3d at 1007.

 

 

Public Policy

 

The California Recognition Act allows a court to decline to recognize a foreign-country money judgment if the “judgment or the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of California or of the United States.” Cal. Civ. Proc. Code § 1716(c)(3). The United States undoubtedly has robust public policy favoring free expression. See Cohen v. California, 403 U.S. 15, 24 (1971) (“The constitutional right of free expression is powerful medicine.”). But “some restriction on expression is the inherent and intended effect of every grant of copyright.” Golan v. Holder, 565 U.S. 302, 327–28 (2012). The fair use defense to copyright infringement is one of the “built-in First Amendment accommodations” that ease the apparent tension between free expression and U.S. copyright law. See Eldred v. Ashcroft, 537 U.S. 186, 219 (2003).

 

 

Lack of Subject Matter Jurisdiction

 

The applicable version of the California Recognition Act provides that a court “shall not” recognize a foreign-country judgment if the “foreign court did not have jurisdiction over the subject matter.” Cal. Civ. Proc. Code § 1716(b)(3). “Courts and commentators agree that subject matter jurisdiction must be assessed with reference to foreign law.” Tanya J. Monestier, Whose Law of Personal Jurisdiction? The Choice of Law Problem in the Recognition of Foreign Judgments, 96 B.U. L. Rev. 1729, 1747 (2016). “In determining foreign law, the court may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence.” Fed. R. Civ. P. 44.1; Sicre de Fontbrune, 838 F.3d at 997.

 

 

(…) The plain language of California’s Recognition Act requires a proponent of the subject matter jurisdiction defense to establish that the foreign court “did not have jurisdiction over the subject matter.” Cal. Civ. Proc. Code § 1716(b)(3). We are aware of no authority holding that a procedural defect that produces a similar practical result can suffice.

 

 

(…) Even if we were to assess subject matter jurisdiction with reference to domestic law, we could not say that a lack of standing necessarily deprives a court of subject matter jurisdiction. To be sure, a party must show the “irreducible constitutional minimum of standing” to vest an Article III federal court with subject matter jurisdiction. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). But California is one of numerous states whose judiciaries’ subject matter jurisdiction does not depend on standing. Jasmine Networks, Inc. v. Super. Ct., 103 Cal. Rptr. 3d 426, 432 (Ct. App. 2009); Weatherford v. City of San Rafael, 395 P.3d 274, 278 (Cal. 2017) (observing that California’s “state constitution has no case or controversy requirement imposing an independent jurisdictional limitation on our standing doctrine”); Tax Found. of Hawai’i v. State, 439 P.3d 127, 143 (Haw. 2019) (collecting examples of states where “standing is a prudential concern and not an issue of subject matter jurisdiction”).

 

 

Lack of Personal Jurisdiction

 

A court applying California’s Recognition Act must refuse to recognize a foreign-country judgment if the “foreign court did not have personal jurisdiction over the defendant.” Cal. Civ. Proc. Code § 1716(b)(2). But a court shall not refuse recognition for lack of personal jurisdiction if the defendant “voluntarily appeared in the proceeding, other than for the purpose of protecting property seized or threatened with seizure in the proceeding or of contesting the jurisdiction of the court over the defendant.” Cal. Civ. Proc. Code § 1717(a)(2).

 

 

Courts applying other states’ analogues to Section 1717(a)(2) have recognized that a voluntary appearance may occur “in the proceeding” either before or after judgment. See CIBC Mellon Tr. Co. v. Mora Hotel Corp. N.V., 792 N.E.2d 155, 162 (N.Y. 2003) (quoting Restatement (Second) of Conflict of Laws § 33, cmt. b) (noting that a defendant may be deemed to have submitted to a court’s jurisdiction by “taking steps in the action after judgment either in the trial court or in an appellate court”); S.C. Chimexim S.A. v. Velcro Enters. Ltd., 36 F. Supp. 2d 206, 215 (S.D.N.Y. 1999) (defense waived where one of defendant’s arguments in appellate proceedings in the foreign forum “concerned the merits of the underlying dispute”); In re Transamerica Airlines, Inc., No. CIV.A. 1039-VCP, 2007 WL 1555734, at *10 (Del. Ch. May 25, 2007) (waiver where one of defendant’s arguments on appeal went “to the merits” of the contested judgment). We have confirmed that this principle applies to California’s Recognition Act. See In re Rejuvi Lab’y, Inc., 26 F.4th 1129, 1134 (9th Cir. 2022) (holding that a defendant “waived its personal jurisdiction challenge by voluntarily appearing in the trial court that had entered a default judgment in its attempt to set aside the default judgment”).

 

 

Insufficient Notice

 

The Recognition Act provides that a court may refuse to recognize a foreign judgment if the “defendant in the proceeding in the foreign court did not receive notice of the proceeding in sufficient time to enable the defendant to defend.” Cal. Civ. Proc. Code § 1716(c)(1). The district court determined that issues of fact precluded summary judgment regarding this defense. Only Wofsy challenges that determination. The parties dispute the adequacy of two efforts at notice: a failed effort to serve the summons and complaint for the Astreinte Proceeding, and a letter that the French TGI mailed to Wofsy after the first hearing in the Astreinte Proceeding but before the TGI entered judgment.

 

 

A California Court of Appeal has held that a mere failure of actual notice does not prove the inadequate notice defense. Rather, the proponent of this defense must show the absence of notice “‘reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.’” Alfa-Bank, 230 Cal. Rptr. 3d at 224 (quoting Mullane v. Cent. Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950)). The applicable standard, in other words, aligns with the constitutional minimum for due process. See id. at 233. Under that standard, where “notice is a person’s due,” the “means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.” Id. at 225 (quoting Mullane, 339 U.S. at 315).

 

 

(…) In Isack, the Court of Appeals of Michigan—interpreting the analogous provision of that state’s codification of the Uniform Act—concluded that “recognition of a judgment may be declined where the defendant was aware, or waived notice, of the litigation, but where the defendant was not notified of certain actions taken within the suit.” 733 N.W. 2d at 86–87; see also Restatement (Fourth) of Foreign Relations Law § 484 (2018) (recognizing that “the notice requirement governs not just the initiation of a proceeding, but relevant actions taken within the suit”).

 

 

(…) We begin by considering whether the attempts to serve Wofsy before the October 2011 hearing constituted sufficient efforts at notice, despite their failure. An officer of the French TGI attempted to serve both defendants through procedures established in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, Nov. 15, 1965 (“Hague Service Convention”), 20 U.S.T. 361, T.I.A.S. No. 6638. The Hague Service Convention was “intended to provide a simpler way to serve process abroad, to assure that defendants sued in foreign jurisdictions would receive actual and timely notice of suit, and to facilitate proof of service abroad.” Volkswagenwerk Aktiengesellschaft v. Schlunk, 486 U.S. 694, 698 (1988). Its “primary innovation” is a requirement that each state party designate a “Central Authority” that can receive foreign requests for service of process and arrange for service on an addressee. Id. at 698–99; Hague Service Convention, 20 U.S.T. 361, art. 2.

 

 

In accordance with that procedure, the French court’s officer sent the complaint and the French equivalent of a summons to the United States’ Central Authority, and requested service on the defendants at their addresses as listed in the summons. The summons listed the address of Alan Wofsy & Associates as 401 China Basin Street in San Francisco. For Alan Wofsy himself, the summons listed Post Office Box 2210 in San Francisco. Article 6 of the Hague Convention requires the Central Authority (or another designee of the state where process is to be served) to send to the applicant for service a certificate stating the method, place, date, and recipient of service, or the reasons that have prevented service. Hague Service Convention, 20 U.S.T. 361, art. 6. Accordingly, the huissier’s requests for service also included requests for these certificates. The U.S. process server’s attempt to serve Alan Wofsy & Associates failed. The process server—a contractor of the U.S. Central Authority—issued a certificate of non-service dated August 12, 2011, attesting that service had been attempted at 401 China Basin Street; that no such address existed; and that the process server had confirmed on the U.S. Postal Service website that the address was “non deliverable.”

 

 

(The delivery trouble apparently arose from the fact that San Francisco renamed the old China Basin Street as “Terry Francois Boulevard” in the 1990s, and reassigned the name “China Basin Street” to a newly built road at some point after 2010. But it is undisputed that Wofsy continued to receive mail addressed to 401 China Basin Street for years after the Astreinte Proceeding. In any event, Sicre de Fontbrune offers no indication that Wofsy was obligated to apprise Sicre de Fontbrune or the French courts of any change of address at the time the Astreinte Proceeding commenced. Thus, there is no indication that Wofsy is to blame for the huissier’s use of an outdated address or for the process server’s failure to effect service. Cf. Alfa-Bank, 230 Cal. Rptr. 3d at 230 (holding that a Russian court’s mail service to a defendant’s last known address was adequate notice, where the defendant was required by a surety agreement to keep his address up to date with the Russian government). (Fn. 14).)

 

 

Upon learning of a failure of notice, “deciding to take no further action is not what someone desirous of actually informing the addressee would do; such a person would take further reasonable steps if any were available.” Jones v. Flowers, 547 U.S. 220, 230 (2006) (internal quotation omitted). The Supreme Court accordingly held that a state failed to afford constitutionally adequate notice where the state sold a tax-delinquent property after the state’s certified-mail notice to the property owner was returned unclaimed and the state failed to take further reasonable and available steps to accomplish notice. Id. at 239. “Although the State may have made a reasonable calculation” of how to reach the property owner, the state had “good reason to suspect when the notice was returned that the addressee was ‘no better off than if the notice had never been sent.’” Id. at 230.

 

 

(…) (Quoting Malone v. Robinson, 614 A.2d 33, 37 (D.C. 1992)); see also United States v. Ritchie, 342 F.3d 903, 911 (9th Cir. 2003) (“When initial personal notice letters are returned undelivered, the government must make reasonable additional efforts to provide personal notice.”). Since the French huissier had requested a certificate of service in accordance with the Hague Service Convention, the absence of any confirmation of successful service signaled a problem. And the issuance of a certificate of non-service left no doubt that service had failed. It thus triggered an obligation to take any available and reasonable further steps to give notice of the proceeding to Alan Wofsy & Associates. See Jones, 547 U.S. at 230.

 

 

Before considering whether such steps were available or pursued, we turn to the process server’s attempt to inform Alan Wofsy himself. It unfolded similarly. When the Astreinte Proceeding was filed in July 2011, the U.S. Central Authority received a request to serve process at “POB 2210 San Francisco”—the address listed for Alan Wofsy on the French summons. The U.S. process server eventually issued a certificate of non-service, indicating that a server had attempted to contact Alan Wofsy at 401 China Basin Street on October 22, 2011, but had found “no such address.” The certificate of nonservice did not issue until October 31—six days after the October merits hearing in the TGI. Under these circumstances, the failed service on Alan Wofsy was as insufficient an attempt at notice as was the failed service on Alan Wofsy & Associates. The request for a certificate of service was unfulfilled at the time of the first astreinte hearing. That should have alerted the huissier that Wofsy might have lacked notice of the proceedings, and that actual notice therefore might require further reasonable efforts if any were available. Moreover, the certificate of non-service issued more than two months before the TGI entered judgment.

 

 

(…) The Supreme Court has “repeatedly recognized that mail service is an inexpensive and efficient mechanism that is reasonably calculated to provide actual notice.” Tulsa Pro. Collection Servs., Inc. v. Pope, 485 U.S. 478, 490 (1988). The Hague Service Convention allows mail service directly to a defendant—circumventing the Central Authority—if the receiving country has not objected to mail service and if mail service is authorized by otherwise applicable law. Water Splash, Inc. v. Menon, 137 S. Ct. 1504, 1513 (2017). The applicable law in California permits service via mail, with acknowledgment of receipt, at a Post Office box. Cal. Civ. Proc. Code § 415.30.

 

 

(…) 39 C.F.R.  § 265.6(d)(5)(ii) (2011) (current version at 39 C.F.R. § 265.14(d)(5)(ii)) (permitting disclosure of post office boxholder name and information to a person authorized to serve legal process).

 

 

(…) Wofsy directs us to Julen v. Larson, 101 Cal. Rptr. 796, 798 (Ct. App. 1972), for the proposition that notice, to be adequate, must be given in the “language of the jurisdiction in which the defendant is served,” among other requirements. In Julen—unlike here—the foreign legal documents were written in German, which no one argued the defendant could read. Id. And Alfa-Bank later clarified that Julen did not “define constitutional ‘requirements’ for adequate notice.” 230 Cal. Rptr. 3d at 232. (Fn. 16).

 

 

 

 

(U.S. Court of Appeals for the Ninth Circuit, July 13, 2022, Vincent de Fontbrune v. Alan Wofsy, Docket No. 19-16913, for Publication)

U.S. Supreme Court, Uzuegbunam v. Preczewski, Docket No. 19–968, J. Thomas

 

Nominal Damages v. Actual, Compensatory or Statutory Damages

 

Article III Standing

 

Common Law

 

 

 

To establish Article III standing, the Constitution requires a plaintiff to identify an injury in fact that is fairly traceable to the challenged conduct and to seek a remedy likely to redress that injury. Spokeo, Inc. v. Robins, 578 U. S. 330, 338.

 

 

We granted certiorari to consider whether a plaintiff who sues over a completed injury and establishes the first two elements of standing (injury and traceability) can establish the third by requesting only nominal damages.

 

 

The dispute here concerns whether the remedy Uzuegbunam sought—nominal damages—can redress the completed constitutional violation that he alleges occurred when campus officials enforced the speech policies against him. The Court looks to the forms of relief awarded at common law to determine whether nominal damages can redress a past injury. The prevailing rule at common law was that a party whose rights are invaded can always recover nominal damages without furnishing evidence of actual damage. By permitting plaintiffs to pursue nominal damages whenever they suffered a personal legal injury, the common law avoided the oddity of privileging small economic rights over important, but not easily quantifiable, nonpecuniary rights.

 

 

The common law did not require a plea for compensatory damages as a prerequisite to an award of nominal damages. Nominal damages are not purely symbolic. They are instead the damages awarded by default until the plaintiff establishes entitlement to some other form of damages. A single dollar often will not provide full redress, but the partial remedy satisfies the redressability requirement.

 

 

(…) An award of nominal damages constitutes relief on the merits.

 

 

A request for redress in the form of nominal damages does not guarantee entry to court. In addition to redressability, the plaintiff must establish the other elements of standing and satisfy all other relevant requirements, such as pleading a cognizable cause of action. Uzuegbunam experienced a completed violation of his constitutional rights when respondents enforced their speech policies against him. Nominal damages can redress Uzuegbunam’s injury even if he cannot or chooses not to quantify that harm in economic terms.

 

 

(…) The parties here agree that courts at common law routinely awarded nominal damages. They, instead, dispute what kinds of harms those damages could redress.

 

 

(…) Dissenting, Lord Holt argued that the common law inferred damages whenever a legal right was violated. Observing that the law recognized “not merely pecuniary” injury but also “personal injury,” Lord Holt stated that “every injury imports a damage” and that a plaintiff could always obtain damages even if he “does not lose a penny by reason of the violation.” Id., at 955, 92 Eng. Rep., at 137. Although Lord Holt was in the minority, the House of Lords overturned the majority decision, thus validating Lord Holt’s position, 3 Salk.17, 91 Eng. Rep. 665 (K. B. 1703), and this principle “laid down . . . by Lord Holt” was followed “in many subsequent cases,” Embrey v. Owen, 6 Exch. 353, 368, 155 Eng. Rep. 579, 585 (1851).

 

 

The dissent correctly notes that English courts differed in some respects from courts under our system, but Lord Holt’s position also prevailed in courts on this side of the Atlantic. Applying what he called Lord Holt’s “incontrovertible” reasoning, Justice Story explained that a prevailing plaintiff “is entitled to a verdict for nominal damages” whenever “no other kind of damages be proved.” Webb v. Portland Mfg. Co., 29 F. Cas. 506, 508–509 (No. 17,322) (CC Me. 1838). Because the common law recognized that “every violation imports damage,” Justice Story reasoned that “the law tolerates no farther inquiry than whether there has been the violation of a right.” Ibid. Justice Story also made clear that this logic applied to both retrospective and prospective relief. Id., at 507 (stating that nominal damages are available “wherever there is a wrong” and that, “a fortiori, this doctrine applies where there is not only a violation of a right of the plaintiff, but the act of the defendant, if continued, may become the foundation, by lapse of time, of an adverse right”).

 

 

Respondents and the dissent thus get the relationship between nominal damages and compensatory damages backwards. Nominal damages are not a consolation prize for the plaintiff who pleads, but fails to prove, compensatory damages. They are instead the damages awarded by default until the plaintiff establishes entitlement to some other form of damages, such as compensatory or statutory damages.

 

 

(…) A plaintiff must maintain a personal interest in the dispute at every stage of litigation, including when judgment is entered, Lujan v. Defenders of Wildlife, 504 U. S. 555, 561 (1992), and must do so “separately for each form of relief sought,” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U. S. 167, 185 (2000).

 

 

Because nominal damages were available at common law in analogous circumstances, we conclude that a request for nominal damages satisfies the redressability element of standing where a plaintiff’s claim is based on a completed violation of a legal right.

 

 

 

Secondary sources: D. Laycock & R. Hasen, Modern American Remedies 636 (5th ed. 2019).

 

 

 

(U.S. Supreme Court, March 8, 2021, Uzuegbunam v. Preczewski, Docket No. 19–968, J. Thomas)

 

 

U.S. Court of Appeals for the Federal Circuit, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526

Trademark

Cancellation of Trademark Registrations

15 U.S.C. § 1064

Lexmark Analytical Framework

 

False Advertising Provided in 15 U.S.C. § 1125(a)

 

Standing v. Statutory Cause of Action

 

 

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 92060308.

 

(…) We conclude that appellee SFM was entitled to bring and maintain a petition under 15 U.S.C. § 1064, the statutory cause of action for cancellation of trademark registrations, and that the Board did not otherwise abuse its discretion in imposing default judgment as a sanction. We affirm.

 

SFM filed a petition with the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB” or “Board”) to cancel Corcamore’s registration for SPROUT. J.A. 98–104.

 

(…) Corcamore moved to dismiss SFM’s petition for lack of standing under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See J.A. 136–40. Corcamore argued that SFM lacked standing to bring a petition for cancellation of a registered trademark, citing the analytical framework established by the Supreme Court in Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), for determining whether the requirements for maintaining a statutory cause of action have been satisfied.

 

(…) We first address the standing issue.

 

In this appeal, we review de novo whether SFM pleaded sufficient facts to establish entitlement to challenge Corcamore’s registered trademark under § 1064.

 

We first observe that there exists confusion in the law stirred by the inconsistent use of the term “standing.” As Justice Scalia observed, certain issues often discussed in terms of “standing” are more appropriately viewed as requirements for establishing a statutory cause of action. Lexmark, 572 U.S. at 128 n.4. That is the case here. To be clear, this appeal does not involve the traditional legal notions of Article III standing. This appeal focuses instead on the requirements that a party must satisfy to bring or maintain a statutory cause of action, such as a petition to cancel a registered trademark under 15 U.S.C. § 1064.

 

We hold that the Lexmark analytical framework is the applicable standard for determining whether a person is eligible under § 1064 to bring a petition for the cancellation of a trademark registration. However, because we discern no meaningful, substantive difference between the analytical frameworks expressed in Lexmark and Empresa Cubana, we do not agree that the Board reached the wrong result in this case.

 

In Lexmark, the Supreme Court established two requirements for determining whether a party is entitled to bring or maintain a statutory cause of action: a party must demonstrate (i) an interest falling within the zone of interests protected by the statute and (ii) proximate causation. 572 U.S. at 129–34. The Court explained that those two requirements “supply the relevant limits on who may sue” under a statutory cause of action. Id. at 134. The Court made clear that the zone-of-interests requirement applies to all statutory causes of action, and that proximate causation generally applies to all statutory causes of action. Id. at 129, 133.

 

In Lexmark, the Court addressed the cause of action for false advertising provided in 15 U.S.C. § 1125(a). Id. at 129–37. The Court held that in order for a person to “come within a zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales.” Id. at 131–32. The Court explained that the zone-of-interests test is “not especially demanding,” and that “the benefit of any doubt goes to the plaintiff.” Id. at 130.

 

(…) While our precedent does not describe the causation requirement as one of “proximate causation,” it nonetheless requires petitioner’s belief of damage to have “a sufficiently close connection,” Lexmark, 572 U.S. at 133, to the registered trademark at issue.

 

 

(U.S. Court of Appeals for the Federal Circuit, October 27, 2020, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526)

Byrd v. United States, Docket No. 16-1371

Fourth Amendment: Probable cause: Standing:

(…) It is worth noting that most courts analyzing the question presented in this case, including the Court of Appeals here, have described it as one of Fourth Amendment “standing,” a concept the Court has explained is not distinct from the merits and “is more properly subsumed under substantive Fourth Amendment doctrine.”

The concept of standing in Fourth Amendment cases can be a useful shorthand for capturing the idea that a person must have a cognizable Fourth Amendment interest in the place searched before seeking relief for an unconstitutional search; but it should not be confused with Article III standing, which is jurisdictional and must be assessed before reaching the merits. Arizona Christian School Tuition Organization v. Winn, 563 U. S. 125, 129 (2011) (“To obtain a determination on the merits in federal court, parties seeking relief must show that they have standing under Article III of the Constitution”). (…) Because Fourth Amendment standing is subsumed under substantive Fourth Amendment doctrine, it is not a jurisdictional question and hence need not be addressed before addressing other aspects of the merits of a Fourth Amendment claim. On remand, then, the Court of Appeals is not required to assess Byrd’s reasonable expectation of privacy in the rental car before, in its discretion, first addressing whether there was probable cause for the search, if it finds the latter argument has been preserved.

Though new, the fact pattern here continues a well-traveled path in this Court’s Fourth Amendment jurisprudence. Those cases support the proposition, and the Court now holds, that the mere fact that a driver in lawful possession or control of a rental car is not listed on the rental agreement will not defeat his or her otherwise reasonable expectation of privacy. The Court leaves for remand two of the Government’s arguments: that one who intentionally uses a third party to procure a rental car by a fraudulent scheme for the purpose of committing a crime is no better situated than a car thief; and that probable cause justified the search in any event. The Court of Appeals has discretion as to the order in which these questions are best addressed.

(U.S.S.C., May 14, 2018, Byrd v. United States, Docket No. 16-1371, J. Kennedy)

La notion de "standing" dans le cadre des affaires relatives au IVè Amendement n'est pas à confondre avec la notion juridictionnelle de "standing" au sens de l'Art. III.

La présente espèce se situe dans la continuité de la jurisprudence rendue par la Cour en application du IVè Amendement. Dans le contexte de cet Amendement, un Tribunal doit déterminer si le prévenu pouvait raisonnablement compter sur le respect, par l'autorité, de ses affaires privées, et doit déterminer s'il existait une "cause probable" permettant la "search" sans se soucier de l'"expectation of privacy" du prévenu. L'ordre dans lequel le Tribunal traite ces deux questions est sans importance.