Case of the Day: In re China Intelligent Lighting and Electronics Sec. Litig.

The case of the day is In re China Intelligent Lighting & Electronics, Inc. Securities Litigation (C.D. Cal. 2012). The plaintiffs, Perritt Emerging Opportunities Fund, Universal Invest Quality SICAV, Acero SA, and Antoine de Sejournet, brought a putative class action against China Intelligent Lighting, a Delaware corporation doing business in China, and several officers or directors, Li Xuemei, Wu Shiliang, Kui Jiang, Michael Askew, Zhang Hongfeng, and Su Yang, each of whom signed the offering documents at the heart of the plaintiffs’ Securities Act claim.

The plaintiffs did not know the address of any of the individual defendants. They sought leave to serve them by serving CIL’s registered agent in the US, or its US lawyer, or in the alternative, for relief from the stay of discovery to allow it to seek to discover the individual defendants’ addresses.

The judge refused to allow the plaintiffs to make service by serving CIL’s registered agent or lawyer. As the officers and directors no longer worked for CIL, the service was not reasonably calculated to provide notice and thus was inconsistent with due process. But the judge did permit the plaintiffs to take targeted discovery from CIL aimed at discovering the defendants’ addresses. This all seems correct and well-reasoned.

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