BILL ANALYSIS                                                                                                                                                                                                    Ó






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                                   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).) 








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          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  







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             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  







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                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.) 







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          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  







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          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  







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            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


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