City of Clarksdale v. Bellsouth Telecommunications

• Decision Date: 05 October 2005
• Docket Number: No. 04-61057. Summary Calendar.,04-61057. Summary Calendar.
• Citation: 428 F.3d 206
• Parties: CITY OF CLARKSDALE, Acting by and through the Clarksdale Public Utilities Commission, Plaintiff-Appellant, v. BELLSOUTH TELECOMMUNICATIONS, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

428 F.3d 206

CITY OF CLARKSDALE, Acting by and through the Clarksdale Public Utilities Commission, Plaintiff-Appellant, v. BELLSOUTH TELECOMMUNICATIONS, INC., Defendant-Appellee.

No. 04-61057. Summary Calendar.

United States Court of Appeals, Fifth Circuit.

October 5, 2005.

Gerald H. Jacks, Jacks, Adams & Norquist, Cleveland, MS, David R. Hunt, Hunt & Ross, Clarksdale, MS, for City of Clarksdale.

John C. Henegan, Sr., Butler, Snow, O'Mara, Stevens & Cannada, Thomas Bruce Alexander, BellSouth Telecommunications, Inc., Jackson, MS, Dorian S. Denburg, BellSouth Corp., Atlanta, GA, for BellSouth Telecommunications, Inc.

Appeal from the United States District Court for the Northern District of Mississippi.

Before DAVIS, SMITH and DENNIS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

The City of Clarksdale, acting by and through the Clarksdale Public Utilities Commission, appeals the denial of a motion to remand to state court for failure by defendant BellSouth Telecommunications, Inc. ("BellSouth"), to file its notice of removal timely. After denying the city's motion for reconsideration, the district court certified the issue of timeliness of removal for interlocutory appeal.

The timeliness of removal turns on when, if at all, service was effected on BellSouth.¹ We conclude that service of process was not effected when the city's process server left the citation and other papers at the office of BellSouth's authorized agent for service, but on a day when the authorized agent's office was closed. The result is that even if service was effected on the date when the authorized agent's office reopened for business, BellSouth's removal was timely, and if service was never effected, BellSouth voluntarily appeared in federal court by answering after removal. We therefore affirm the district court's denial of the city's motion to remand to state court, and we remand to the district court for further proceedings.

I.

A.

In 1954, the city entered into a contractual agreement with BellSouth's predecessor in interest. After years of dispute between the two corporations over the obligations arising from the agreement, the city sued in state court on December 23, 2003, seeking declaratory and injunctive relief, damages, and attorney's fees.

BellSouth is incorporated in Georgia and does business in Mississippi. Prentice-Hall Corporation ("Prentice-Hall") acts as BellSouth's Mississippi registered agent for service of process.

On Wednesday December 24, 2003, the city's process server, Sally Green, sought to serve process on BellSouth through Prentice-Hall. She entered the multi-tenant building where Prentice-Hall keeps an office. On the front door of the building, a sign stated that Prentice-Hall's offices were closed for the Christmas Holidays on Wednesday through Friday, December 24-26, 2003, and the record is undisputed that it was closed on December 24 and did not reopen until Monday, December 29.

Inside the building, Green stated her purpose to an unidentified man who pointed out an office, the door to which was open, and indicated the inbox where papers could be deposited for Prentice-Hall. Green placed the summons and complaint in this inbox. Both documents show the date of filing with the court (December 23) but not the date Green attempted service (December 24). Five days later, Green filed the return of service with the state Chancery Court, stating that service of process had been accomplished on December 24 by personal service on Prentice-Hall.

On January 28, 2004, BellSouth filed an answer and notice of removal.² The precise date on which service was legally accomplished is relevant, because if it is December 24, then BellSouth's attempted removal on January 28 was untimely as outside the thirty-day limit.

B.

BellSouth claims to have filed the notice of removal within the thirty-day window for removal, see 28 U.S.C. § 1446(b) (1994), because it alleges that service of process occurred on December 29. Supporting this allegation, the service documents BellSouth received from Prentice-Hall are stamped with that date. Additionally, BellSouth reasons that Prentice-Hall could not have received service when it was closed for the holiday; therefore, after the holiday started, the first possible day for Prentice-Hall to receive service was December 29, when employees returned to the office.

The district court made no findings of fact regarding who accepted service, and the record shows confusion on this matter. The employee designated to receive service for BellSouth testified by affidavit that his inbox was empty on both December 24 and December 29. Neither party offers evidence establishing in whose inbox Green placed the service documents or explaining how service was received without the appointed employees' ever laying hands on it. Nonetheless, the district court reasoned that Prentice-Hall received service of process because employees were present in the office on December 29.

Some evidence was submitted to the district court that Green had acted in accordance with "the custom and practice of Prentice-Hall to accept service of process of papers placed in a basket located in Prentice-Hall's office for that purpose." Prentice-Hall denies the existence of such custom and practice. The district court disallowed further discovery on the issue, finding it irrelevant to the issue of on what date the corporation accepted service. In denying the city's motion to remand, the court held that because a corporation can act only through its human employees, service of process could have occurred only on December 29, when employees of Prentice-Hall returned to the office. Therefore BellSouth argues that its notice of removal was timely.³

II.

A.

1.

We review de novo the denial of a motion to remand to state court.⁴ Title 28 U.S.C. § 1446 governs the procedure for removal from state to federal court and requires the defendant in a civil action to file a notice of removal within thirty days "after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based ...."⁵ 28 U.S.C. § 1446(b). The Supreme Court clarified this language in Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48, 119 S.Ct. 1322, 143 L.Ed.2d 448 (1999), holding that a defendant's thirty-day removal period commences on formal service of process, not merely on receipt of actual notice of the complaint through informal channels.

Although federal law requires the defendant to file a removal motion within thirty days of service, the term "service of process" is defined by state law.⁶ So, to determine whether the city complied with § 1446(b), we must look to see what constitutes service of process on a foreign corporation under Mississippi law.

2.

Mississippi law prescribes how a plaintiff is to serve process on a defendant corporation. MISS. CODE ANN. § 13-3-49 (2002).⁷ "If the defendant in any suit or legal proceeding be a corporation, process may be served on the president or other head of the corporation, upon the cashier, secretary, treasurer, clerk, or agent of the corporation, or upon any one of the directors of such corporation." Id. (emphasis added). The state statute defines "agent of the corporation" for service of process as the registered agent of the foreign corporation.⁸ Foreign corporations authorized to transact business in Mississippi are required to maintain, within the state, a registered office and a registered agent.⁹ MISS.CODE ANN. § 79-4-15.07 (2001). A registered agent is defined as an individual, a not-for-profit, or a corporation. Id.¹⁰

These statutes authorize service on any agent of a corporation, and an agent includes the registered agent, which itself may be a corporation. Therefore, the statute authorizes service on a registered-agent corporation itself—not a human employee thereof. It appears that the statutes have drawn a distinction between corporations, in general, and registered-agent corporations.

Title 13 of the Mississippi Code also stipulates that the rules of process contained therein are subordinate to the Mississippi Rules of Civil Procedure. MISS.CODE ANN. § 13-3-1 (2002). Though several rules address service of various types, service of process is entirely controlled by rule 4.¹¹

Rule 4(d) is entitled "Summons and Complaint: Person to be Served." The rule permits service on a foreign or domestic corporation by "delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized ... by law to receive service of process." MISS. R. CIV. P. 4(d)(4). As stated above, the Mississippi Code defines the agents authorized to receive process as including registered agents.¹²

3.

BellSouth contends that under rule 4, service on Prentice-Hall, as registered agent, must be made by handing the process papers directly to a person at Prentice-Hall's offices who is authorized to accept service. As we will explain, we find it unnecessary to decide that specific question. We determine, instead, that under the facts of this case, service was effected on BellSouth through Prentice-Hall no earlier than December 29, when Prentice-Hall's offices reopened for business after the holiday.

The opinion in Anderson Mercantile Co. v. Cudahy Packing Co., 127 Miss. 301, 90 So. 11 (1921), is helpful. There, an individual received service for the corporation (apparently, though the case does not provide detailed facts). The return of service indicated personal delivery on the corporation, without identifying who received service. The court determined that service was insufficient, so there was no personal jurisdiction over the defendant corporation.¹³

The Mississippi Supreme Court reiterated this understanding in First Jackson,¹⁴ in which the issue was which employees may accept service of process, not whether a human being need accept...