Stemedica Cell Technologies, Inc. v. Mohammed ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 STEMEDICA CELL Case No.: 3:19-cv-01214-WQH-BLM TECHNOLOGIES, INC., a 12 Nevada corporation, ORDER 13 Plaintiff, 14 v. 15 ABDULAZIZ BIN MOHAMMED, a natural person; 16 JOSEPH ZIA, a natural person; 17 and DOES 2-10, 18 Defendants. 19 HAYES, Judge: 20 The matter pending before the Court is the Motion for an Order Approving 21 Alternative Means for Service of Summons as to Defendant Abdulaziz Bin Mohammed 22 filed by Plaintiff Stemedica Cell Technologies, Inc. (ECF No. 19). 23 I. PROCEDURAL BACKGROUND 24 On June 28, 2019, Plaintiff Stemedica Cell Technologies, Inc. initiated this action 25 by filing a Complaint against Defendants Abdulaziz Bin Mohammed and DOES 1-10. 26 (ECF No. 1). 27 28 1 On January 22, 2020, Plaintiff filed an Amended Complaint against Defendants 2 Abdulaziz Bin Mohammed, Joseph Zia, and DOES 2-10. (ECF No. 7). Plaintiff alleges 3 that Defendant Mohammed and his agent Defendant Zia violated a Common Stock 4 Purchase Agreement by failing to purchase 27,000,000 shares of Plaintiff’s common stock. 5 See id. at 3-6. Plaintiff brings the following nine causes of action: (1) breach of written 6 contact against Defendant Mohammed; (2) breach of implied contact against Defendant 7 Mohammed; (3) breach of implied covenant of good faith and fair dealing against 8 Defendant Mohammed; (4) intentional misrepresentation against Defendants Mohammed 9 and Zia; (5) promissory fraud against Defendants Mohammed and Zia; (6) promissory 10 estoppel against Defendants Mohammed and Zia; (7) negligent misrepresentation against 11 Defendants Mohammed and Zia; (8) fraud in the purchase of securities pursuant to 17 12 C.F.R. §240.10b-5 against Defendants Mohammed and Zia; and (9) right to attach order 13 and a writ of attachment against Defendant Mohammed. See id. at 6-12. Plaintiff seeks 14 general, special, and exemplary damages; interest; attorneys’ fees and costs; “a right to 15 attach order and writ of attachment in the amount of $270,000,000.00, plus interest at the 16 rate of ten percent (10%) per annum until paid”; and “other and further relief as this Court 17 may deem just and proper.” Id. at 12-13. 18 On April 17, 2020, Defendant Zia filed a Motion to Dismiss of Plaintiff’s fourth, 19 fifth, sixth, seventh, and eighth causes of action for failure to state a claim upon which 20 relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 15). 21 On May 26, 2020, Plaintiff filed a Motion for an Order Approving Alternative 22 Means for Service of Summons as to Defendant Mohammed. (ECF No. 19). 23 On June 25, 2020, the Court granted Defendant Zia’s Motion to Dismiss (ECF No. 24 15). (ECF No. 21). 25 II. DISCUSSION 26 Plaintiff requests that “[t]he Court … order service on [Defendant Mohammed] 27 effected by [Plaintiff]’s certified mailing and emailing of the summons and complaint to 28 him on February 21 and May 22, respectively.” (ECF No. 19-1 at 6). Plaintiff asserts that 1 Defendant Mohammed is “a … Saudi national who fled the United States for Saudi Arabia 2 last September and has not returned.” Id. at 1. Plaintiff asserts that 3 [o]n February 21, 2020, [Plaintiff] mailed the civil cover sheet, summons and first amended complaint to [Defendant Mohammed] by certified mail, using 4 a post office box which is associated with him in Saudi Arabia. [Plaintiff] did 5 not receive a return receipt from [Defendant Mohammed] afterward. 6 Id. at 3. Plaintiff asserts that 7 on March 13, attorney Sloane privately provided [Plaintiff] with this email 8 address for [Defendant Mohammed]: abdulaziz.m.2@aramco.com. This email address supplemented two other email addresses previously given to 9 [Plaintiff] by [Defendant] Zia, i.e., amohammed@gmail.com, and 10 a.mohammed@yahoo.com. 11 Id. at 4-5. Plaintiff asserts that 12 [o]n May 22, 2020, [Plaintiff] emailed copies of the civil cover sheet, 13 summons naming [Defendant Mohammed], and first amended complaint to [Defendant Mohammed] at each of these email addresses. One (sent to the 14 yahoo account) bounced back as undeliverable, but the other two did not, and 15 were presumably received. 16 Id. at 5. 17 Plaintiff contends that “[t]he Court is well within its discretion to approve 18 [Plaintiff]’s prior deliveries of the summons and first amended complaint to [Defendant 19 Mohammed] by certified mail and email at the addresses [Defendant Mohammed]’s own 20 agent, [Defendant] Zia, gave to [Plaintiff] in March of this year.” Id. at 8. Plaintiff asserts 21 that it “has exhausted all other means of trying to serve an elusive defendant who departed 22 the U.S. in order to evade service in the first place.” Id. Plaintiff asserts that “[i]t searched 23 databases, it investigated an address in Miami which housed [Defendant Mohammed]’s 24 international courier, it spoke to a lawyer with whom [Defendant Mohammed] had 25 consulted but who did not have authority to accept service.” Id. at 7. 26 Plaintiff bears the burden of effectuating proof of service. See Butcher’s Union 27 Local No. 498, United Food and Commercial Workers v. SDC Inv., Inc., 788 F.2d 535, 538 28 1 (9th Cir. 1986). To meet the due process requirement, “the method of service crafted by 2 the district court must be reasonably calculated, under all the circumstances, to apprise 3 interested parties of the pendency of the action and afford them an opportunity to present 4 their objections.” Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 5 2002) (internal quotation marks and citation omitted). 6 Federal Rule of Civil Procedure 4(f) states that 7 (f) Serving an Individual in a Foreign Country. Unless federal law provides otherwise, an individual--other than a minor, an incompetent person, or a 8 person whose waiver has been filed--may be served at a place not within any 9 judicial district of the United States: (1) by any internationally agreed means of service that is reasonably 10 calculated to give notice, such as those authorized by the Hague 11 Convention on the Service Abroad of Judicial and Extrajudicial Documents; 12 (2) if there is no internationally agreed means, or if an international 13 agreement allows but does not specify other means, by a method that is reasonably calculated to give notice: 14 (A) as prescribed by the foreign country’s law for service in that 15 country in an action in its courts of general jurisdiction; (B) as the foreign authority directs in response to a letter rogatory 16 or letter of request; or 17 (C) unless prohibited by the foreign country’s law, by: (i) delivering a copy of the summons and of the complaint 18 to the individual personally; or 19 (ii) using any form of mail that the clerk addresses and sends to the individual and that requires a signed receipt; 20 or 21 (3) by other means not prohibited by international agreement, as the court orders. 22 23 Fed. R. Civ. P. 4(f). Service under Rule 4(f)(3) must be (1) directed by the court; (2) not 24 prohibited by international agreement; and (3) comport with constitutional notions of due 25 process. See Rio Props., Inc., 284 F.3d at 1014-16. 26 Plaintiff states in a sworn declaration that 27 At the outset of this action in July 2019, our information was that [D]efendant … Mohammed, a wealthy Saudi national with homes in both 28 1 California and Saudi Arabia, was in Las Vegas, Nevada, at the Wynn Las Vegas Resort, where he was ensconced in a luxury suite and playing baccarat 2 during a planned extended stay. I enlisted the help of a paid private 3 investigator, Cliff Petrovsky, in an effort to find out exactly where [Defendant Mohammed] was, so that he could be served with the summons and complaint 4 at the Wynn. We also communicated privately with a Wynn Las Vegas 5 employee with whom one of my clients had a preexisting relationship in an effort to learn the same information. Neither effort was successful, however, 6 and, after a stay of several weeks, [Defendant Mohammed] departed the Wynn 7 for Beverly Hills, where, I was told, [Defendant Mohammed] resides during a part of the year in a house supposedly owned by his family. Our efforts to 8 learn the address of the house and to detect through public records searches 9 ownership of a Beverly Hills residence by a person named Abdulaziz failed. 10 Lawton Decl. ¶ 2, ECF No. 19-2 at 2. Plaintiff further states that 11 In October 2019, we learned that [Defendant Mohammed] had returned 12 to Saudi Arabia during September, in order to be present for his children at the start of the primary school year (which begins during the first week of 13 September). The source of this information was [Defendant Mohammed]’s 14 own agent and close friend, [Defendant] Zia, who was not then a defendant (but who is a defendant now). I researched the means and practicality of 15 attempting service of [Defendant Mohammed] in Saudi Arabia. My current 16 information is that [Defendant Mohammed] is still there. 17 Id. ¶ 3, ECF No. 19-2 at 2. Plaintiff further states that 18 On February 21, 2020, we mailed the civil cover sheet, summons and 19 first amended complaint to [Defendant Mohammed] by certified mail, using a post office box which is associated with him in Saudi Arabia…. We did not 20 receive a return receipt from [Defendant Mohammed] afterward. 21 Id. ¶ 4, ECF No. 19-2 at 3. Plaintiff further states that 22 [O]n March 13, attorney Sloane privately provided us with this email 23 address for [Defendant Mohammed]: abdulaziz.m.2@aramco.com. This 24 email address supplemented two other email addresses given to [Plaintiff] by [Defendant] Zia, i.e., amohammed@gmail.com, and 25 a.mohammed@yahoo.com[.] [sic] 26 On May 22, 2020, I emailed copies of the civil cover sheet, summons 27 naming [Defendant Mohammed], and first amended complaint to [Defendant 28 Mohammed] at each of these email addresses. One (sent to the yahoo account) 1 bounced back as undeliverable, but the other two did not, and were presumably received. 2 3 Id. ¶¶ 7-8, ECF No. 19-2 at 4. Plaintiff further states that 4 At this writing, I am confident that [Defendant Mohammed] is on full notice of this lawsuit through his former agent, [Defendant] Zia, with whom 5 he was in regular contact in February and March of this year, through our 6 email delivery to him of the summons and complaint, and through the certified mail sent to his P.O. Box in Saudi Arabia on February 21, 2020. 7 8 Id. ¶ 10, ECF No. 19-2 at 4. 9 The Court finds that Plaintiff has been reasonably diligent in seeking to locate 10 Defendant Mohammed. Plaintiff contends that Defendant Mohammed may be served “by 11 other means not prohibited by international agreement, as the court orders.” ECF No. 19- 12 1 at 6 (quoting Fed. R. Civ. P. 4(f)(3)). Plaintiff asserts that “Saudi Arabia is not a party 13 to the Hague Convention.” Id. The Court finds that at this stage in the proceedings, the 14 record does not adequately demonstrate that service on Defendant Mohammed via mail 15 and email is “not prohibited by international agreement.” Rio Props., Inc., 284 F.3d at 16 1014; see e.g., Liberty Media Holdings, LLC v. Mar., No. 10cv1809 WQH (BLM), 2010 17 WL 5349853, at *2 (S.D. Cal. Dec. 20, 2010) (“Plaintiff states that it is ‘unaware’ of any 18 international agreement which prohibit service via email on the Defendants. The Court 19 finds that at th[i]s [sic] stage in the proceedings, the record does not adequately demonstrate 20 that service on Defendants via email is not prohibited by international agreement.”); see 21 also Liberty Media Holdings, LLC v. Mar., No. 10cv1809 WQH (BLM), 2011 WL 197838, 22 at *2 (S.D. Cal. Jan. 20, 2011) (“[T]he Court finds that Plaintiff has been reasonably 23 diligent in seeking to locate the unserved Defendants, the record adequately demonstrates 24 that service on Defendants Ryoichi Watanabe, Jason Phillips, David Smith, and Adrush 25 Media by means of email is not prohibited by international agreement, and service by 26 delivering the summons and Complaint to Defendants’ last known valid email address is 27 ‘reasonably calculated, under all the circumstances, to apprise [Defendants] of the 28 pendency of the action and afford them an opportunity to present their objections.’”); 1 || United States v. Distribuidora Batiz CGH, S.A. de C.V., No. 07cv370-WQH-JMA, 2010 2 || WL 4569895, at *4 (S.D. Cal. Nov. 3, 2010) (‘[T]he Court finds that Plaintiff has been 3 ||reasonably diligent in seeking to serve the thirteen unserved Defendants.... Plaintiff has 4 ||demonstrated that service of the thirteen unserved Defendants by delivering the Summons 5 |}and Complaint via certified mail to Parker, their attorney of record, is not prohibited by 6 ||international agreement and is ‘reasonably calculated, under all the circumstances, to 7 ||apprise [Defendants] of the pendency of the action and afford them an opportunity to 8 || present their objections.”’’). 9 |. CONCLUSION 10 IT IS HEREBY ORDERED that the Motion for an Order Approving Alternativ 11 ||Means for Service of Summons as to Defendant Abdulaziz Bin Mohammed filed 12 || Plaintiff Stemedica Cell Technologies, Inc. (ECF No. 19) is DENIED. 13 |} Dated: July 15, 2020 Nitta Z. A a 14 Hon, William Q. Hayes 15 United States District Court 16 17 18 19 20 21 22 23 24 25 26 27 28