BILL ANALYSIS Ó
AB 844
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Date of Hearing: April 14, 2015
Counsel: Stella Choe
ASSEMBLY COMMITTEE ON PUBLIC SAFETY
Bill Quirk, Chair
AB
844 (Bloom) - As Introduced February 26, 2015
SUMMARY: Authorizes a foreign corporation and foreign limited
liability company to consent to service of process for a search
warrant by email or submission to a designated Internet Web
portal.
EXISTING LAW:
1)Requires, when properly served with a search warrant issued by
the California court, a foreign corporation subject to this
section to provide to the applicant, all records sought
pursuant to that warrant within five business days of receipt,
including those records maintained or located outside this
state. (Pen. Code, § 1524.2, subd. (b)(1).)
2)Defines a "search warrant" as an order in writing in the name
of the People, signed by a magistrate, directed to a peace
officer, commanding him or her to search for a person or
persons, a thing or things, or personal property, and in the
case of a thing or things or personal property, bring the same
before the magistrate. (Pen. Code, § 1523.)
3)States that a California corporation that provides electronic
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communication services or remote computing services to the
general public, when served with a warrant issued by another
state to produce records that would reveal the identity of the
customers using those services, data stored by, or on behalf
of, the customer, the customer's usage of those services, the
recipient or destination of communications sent to or from
those customers, or the content of those communications, shall
produce those records as if that warrant had been issued by a
California court. (Pen. Code, § 1524.2, subd. (c).)
4)Provides that the terms "electronic communication services"
and "remote computing services" shall be construed in
accordance with applicable federal law. (Pen. Code, § 1524.2,
subd. (a)(1).)
5)Defines "properly served" as a search warrant has been
delivered by hand, or in a manner reasonably allowing for
proof of delivery if delivered by United States mail,
overnight delivery service, or facsimile to a person or entity
listed. (Pen. Code, § 1524.2, subd. (a)(6).)
6)States that a provider of wire or electronic communication
services or a remote computing service, upon the request of a
peace officer, shall take all necessary steps to preserve
records and other evidence in its possession pending the
issuance of a search warrant or a request in writing and an
affidavit declaring an intent to file a warrant to the
provider. Records shall be retained for a period of 90 days
which shall be extended for an additional 90-day upon a
renewed request by the peace officer. (Pen. Code, § 1524.3,
subd. (d).)
7)Requires any domestic or foreign corporation, before it may be
designated as the agent for the purpose of service of process
of any entity, to file a certificate executed in the name of
the corporation by an officer thereof stating all of the
following:
a) The complete street address of its office or offices in
this state, wherein any entity designating it as such agent
may be served with process;
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b) The name of each person employed by it at each such
office to whom it authorizes the delivery of a copy of any
such process; and
c) Its consent that delivery thereof to any such person at
the office where the person is employed shall constitute
delivery of any such copy to it, as such agent. (Corp.
Code, § 1505.)
8)Provides that delivery by hand of a copy of any process
against the corporation (a) to any natural person designated
by it as agent or (b), if a corporate agent has been
designated, to any person named in the latest certificate of
the corporate agent filed with the Secretary of State at the
office of such corporate agent shall constitute valid service
on the corporation. (Corp. Code, § 1701.)
9)Prohibits a foreign corporation from transacting intrastate
business without having first obtained from the Secretary of
State a certificate of qualification. To obtain that
certificate it shall file, on a form prescribed by the
Secretary of State, a statement and designation signed by a
corporate officer or, in the case of a foreign association
that has no officers, signed by a trustee stating:
a) Its name and the state or place of its incorporation or
organization;
b) The street address of its principal executive office;
c) The street address of its principal office within this
state, if any;
d) The mailing address of its principal executive office,
if different from the addresses specified above;
e) The name of an agent upon whom process directed to the
corporation may be served within this state, as specified;
f) Its irrevocable consent to service of process directed
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to it upon the agent designated and to service of process
on the Secretary of State if the agent so designated or the
agent's successor is no longer authorized to act or cannot
be found at the address given; and
g) If it is a corporation which will be subject to the
Insurance Code as an insurer, it shall so state that fact.
(Corp. Code, § 2105, subd. (a).)
10)Specifies that consent extends to service of process directed
to the foreign corporation's agent in California for a search
warrant issued pursuant to Section 1524.2 of the Penal Code,
or for any other validly issued and properly served search
warrant, for records or documents that are in the possession
of the foreign corporation and are located inside or outside
of this state. This subparagraph shall apply to a foreign
corporation that is a party or a nonparty to the matter for
which the search warrant is sought. For purposes of this
subparagraph, "properly served" means delivered by hand, or in
a manner reasonably allowing for proof of delivery if
delivered by United States mail, overnight delivery service,
or facsimile to a person or entity listed as specified. (Corp.
Code, § 2105, subd. (a)(6)(B).)
11)States that delivery by hand of a copy of any process against
a foreign corporation (a) to any officer of the corporation or
its general manager in this state, or if the corporation is a
bank to a cashier or an assistant cashier, (b) to any natural
person designated by it as agent for the service of process,
or (c), if the corporation has designated a corporate agent,
to any person named in the latest certificate of the corporate
agent filed with the Secretary of State shall constitute valid
service on the corporation. (Corp. Code, § 2110.)
12)Provides that a foreign limited liability company may apply
for a certificate of registration to transact business in this
state by delivering an application to the Secretary of State
for filing on a form prescribed by the Secretary of State.
The application shall state all of the following:
a) The name of the foreign limited liability company, or an
alternate name, as specified;
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b) The state or other jurisdiction under whose law the
foreign limited liability company is organized and the date
of its organization in that state or other jurisdiction,
and a statement that the foreign limited liability company
is authorized to exercise its powers and privileges in that
state or other jurisdiction;
c) The street address of the foreign limited liability
company's principal office and of its principal business
office in this state, if any;
d) The name and street address of the foreign limited
liability company's initial agent for service of process in
this state who meets the qualifications specified. If a
corporate agent is designated, only the name of the agent
shall be set forth;
e) A statement that the Secretary of State is appointed the
agent of the foreign limited liability company for service
of process if the agent has resigned and has not been
replaced or if the agent cannot be found or served with the
exercise of reasonable diligence; and
f) The mailing address of the foreign limited liability
company if different than the street address of the
principal office, or principal business office in this
state. (Corp. Code, § 17708.02, subd. (a).)
EXISTING FEDERAL LAW: The Stored Communications Act regulates
access to electronic communications from providers of electronic
communications services. Under the Act a person is prohibited
from (1) intentionally accessing without authorization a
facility through which an electronic communication service is
provided; or (2) intentionally exceeding an authorization to
access that facility; and thereby obtaining, altering or
preventing the authorized access to a wire or electronic
communication while in electronic storage in such a system. The
Act requires governmental entities to obtain a warrant prior to
requiring a provider of electronic communication service or
remote computing service to disclose a record or other
information pertaining to a subscriber to or customer of such
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service. (18 U.S.C. § 2701 et seq.)
FISCAL EFFECT: Unknown
COMMENTS:
1)Author's Statement: According to the author, "AB 844 would
amend the definition of 'properly served' in PC§1524.2(a)(6)
to reflect the common and increasingly prevalent practice of
communications and computing service companies to insist on
electronic service of process. Such policies may request that
service be by email, or via a web portal provided by the
company."
2)Service of Process: Existing law requires both a domestic and
foreign corporation to designate an agent for the purpose of
service of process when the corporation files a certificate in
the office of the Secretary of State to transact business in
California. (Corp. Code, §§ 1505 and 2105.) An agent for
service of process is an individual who resides in the state,
or a corporation, designated to accept court documents if the
business entity is sued. Designating a person or an entity to
receive service of process ensures that the corporation has
formal notice of a law suit and any related court documents.
The designated agent for service of process is also the entity
upon whom a search warrant would be served for records or
documents that are in the possession of the foreign
corporation.
In order to be "properly served," the applicable statutes
require the court documents to be "delivered by hand, or in a
manner reasonably allowing for proof of delivery if delivered
by United States mail, overnight delivery service, or
facsimile to a person or entity listed as specified." (Pen.
Code, § 1524.2, subd. (a)(6); Corp. Code, § 2105, subd.
(a)(6)(B).)
This bill adds other means of notice as specified by the foreign
corporation or the foreign limited liability company,
including email or submission via an Internet web portal
designated by the corporation for the purpose of service of
process. According to the author of this bill, this addition
reflects the common and increasingly prevalent practice of
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communications and computing service companies to insist on
service of process through electronic means.
3)Argument in Support: According to the Los Angeles County
District Attorney's Office, the sponsor of this bill, "Federal
law governs the collection of electronic communications from
providers of electronic communications services (ECS) and
remote computing services (RCS). The Stored Communications
Act governs the collection of such evidence when it is in
storage (i.e., in situations other than a wiretap). The SCA
requires covered entities to honor government requests to
preserve and turn over information about subscribers and their
transactions and stored communications. The SCA requires that
a covered entity honor a properly issued search warrant from
any state court of 'general criminal jurisdiction' authored by
the law of that State to issue search warrants.
"California has a complimentary statute governing the collection
of such evidence from remote computing and electronic
communication services. California Penal Code Section 1524.2
requires that California corporations and foreign corporations
qualified to do business in our state to honor search warrants
for information about subscribers and their transactions and
stored communications, wherever those records are stored. For
good measure, California Corporations Code Section 2105
specifically requires foreign corporations to consent to
service pursuant to Penal Code Section 1524.2.
"A problem is that the statute's definition of 'properly served'
is out-of-date. The following forms of service are permitted:
'delivery by hand, or in a manner reasonably allowing for
proof of delivery if delivered by the United States mail,
overnight delivery service, or facsimile?" It is becoming
increasingly common for ISP's and others to insist on
electronic service, either by email or via a web portal
established for this purpose.
4)Related Legislation: SB 178 (Leno) would prohibit a government
entity from compelling the production of or access to
electronic communication information or electronic device
information, as defined, without a search warrant or wiretap
order, except for emergency situations, as defined. SB 178
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is pending hearing by the Senate Committee on Appropriations.
5)Prior Legislation:
a) SB 467 (Leno), of the 2013-2014 Legislative Session,
would have required a search warrant when a governmental
agency is seeking the contents of a wire or electronic
communication that is stored, held or maintained by a
provider, as specified. AB 467 was vetoed.
b) SB 1980 (McPherson), Chapter 864, Statutes of 2002,
created state procedures, similar to those in federal law,
for a governmental entity to gather specified records, not
including the contents of stored communications, from a
provider of electronic communication service or a remote
computing service by search warrant.
c) SB 662 (Figueroa), Chapter 896, Statutes of 1999,
established a procedure for obtaining and serving a search
warrant on a foreign corporation that provides electronic
communication services or remote computing service to the
general public and is registered to do business in
California.
REGISTERED SUPPORT / OPPOSITION:
Support
Los Angeles County District Attorney's Office (Sponsor)
California District Attorneys Association
California State Sheriffs' Association
Opposition
None
Analysis Prepared
by: Stella Choe / PUB. S. / (916) 319-3744
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