BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 844| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 844 Author: Bloom (D) Introduced:2/26/15 Vote: 21 SENATE PUBLIC SAFETY COMMITTEE: 7-0, 6/9/15 AYES: Hancock, Anderson, Glazer, Leno, Liu, Monning, Stone ASSEMBLY FLOOR: 77-0, 5/7/15 - See last page for vote SUBJECT: Search warrants: foreign corporations and foreign limited liability companies SOURCE: Los Angeles County District Attorney's Office DIGEST: This bill 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. ANALYSIS: 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. (Penal Code, § 1524.2 (b)(1).) AB 844 Page 2 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. (Penal Code, § 1523.) 3) States that a California corporation that provides electronic 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. (Penal 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. (Penal Code, § 1524.2 (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. (Penal Code, § 1524.2 (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 AB 844 Page 3 renewed request by the peace officer. (Penal Code, § 1524.3, (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: 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; 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 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. (Corporations Code, § 1505.) 1) 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. (Corporations Code, § 1701.) 2) 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: Its name and the state or place of its incorporation or organization; The street address of its principal executive office; The street address of its principal office within this AB 844 Page 4 state, if any; The mailing address of its principal executive office, if different from the addresses specified above; The name of an agent upon whom process directed to the corporation may be served within this state, as specified; Its irrevocable consent to service of process directed 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 If it is a corporation which will be subject to the Insurance Code as an insurer, it shall so state that fact. (Corporations Code, § 2105 (a).) 1) 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. (Corporations Code, § 2105 (a)(6)(B).) 2) 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. (Corporations Code, § 2110.) AB 844 Page 5 3) 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. (Corp. Code, § 17708.02 (a).) 4) Regulates, under the federal Stored Communications Act, access to electronic communications from providers of electronic communications services. Under the Act a person is prohibited from (a) intentionally accessing without authorization a facility through which an electronic communication service is provided; or (b) 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 service. (18 U.S.C. § 2701 et seq.) This bill allows a foreign corporation or foreign limited liability company to consent to service of process for a search warrant by email or submission to a designated Internet Web portal. Background 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. (Corporations 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 AB 844 Page 6 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." (Penal Code § 1524.2 (a)(6); Corp. Code, § 2105 (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. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified 6/10/15) Los Angeles County District Attorney's Office (source) California Bankers Association California District Attorneys Association California State Sheriffs' Association OPPOSITION: (Verified 6/10/15) None received ASSEMBLY FLOOR: 77-0, 5/7/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark AB 844 Page 7 Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Campos, Roger Hernández, Steinorth Prepared by:Mary Kennedy / PUB. S. / 6/10/15 12:57:45 **** END ****