BILL ANALYSIS                                                                                                                                                                                                    






                             SENATE JUDICIARY COMMITTEE
                           Senator Ellen M. Corbett, Chair
                              2009-2010 Regular Session


          SB 1274 (Committee on the Judiciary)
          As Amended: March 23, 2010 
          Hearing Date: April 13, 2010
          Fiscal: Yes
          Urgency: No
          KB/GW
                    

                                        SUBJECT
                                           
                            Electronic Service of Process

                                      DESCRIPTION  

          This bill, sponsored by the Judicial Council, would amend  
          Government Code Section 1010.6, which authorizes electronic  
          service of documents, to re-define electronic service to include  
          both methods of electronic transmission and electronic  
          notification.  Parties may only consent to electronic service  
          for documents which are not currently required to be served  
          personally.  

                                      BACKGROUND  

          Electronic mail, or e-mail, has become a popular form of  
          communication all over the world.  To some, the internet is  
          considered to be a necessity, allowing instantaneous  
          communication with friends, family, and businesses.  It has  
          become a part of every day office life, allowing companies to  
          communicate cheaply, effectively, and efficiently.  In the  
          litigation context, parties have increasingly begun  
          electronically serving documents in civil cases, and it is  
          likely electronic service will become the principal method of  
          service in the years to come.   

          Until recently, attorneys and parties primarily utilized two  
          methods of electronic service:  electronic transmission and  
          electronic notification.  Electronic transmission occurs when a  
          document is electronically sent to the party to be served.   
          Electronic notification occurs when a notification, not a  
          document, is sent to the party, informing the party that the  
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          document is available electronically, and providing the  
          hyperlink where the document may be accessed.  However, recent  
          case law has interpreted the authorization of electronic service  
          to include only electronic transmission.  (Inyst, Ltd. v.  
          Applied Materials Inc. ( 2009) 170 Cal.App.4th 1129.)  SB 1274  
          has been introduced to address this gap between statute and  
          actual practice.  


                                CHANGES TO EXISTING LAW
           
           Existing law  permits a trial court to adopt local rules  
          regarding electronic filing and service of documents.  Documents  
          which may be sent by mail, express mail, overnight delivery, or  
          facsimile transmission, may also be served electronically as  
          long as both parties have agreed to electronic service for that  
          action.  Documents that are filed electronically have the same  
          legal implications as the original document and must be filed in  
          compliance with specified conditions.   (Code Civ. Proc. Sec.  
          1010.6(a) et seq.)

           Existing case law  has distinguished between electronic  
          transmission of a document and electronic notification of a  
          document, holding that the electronic transmission method is  
          considered to be the only valid method of electronic service  
          under current California law.  (Inyst, Ltd. v. Applied Materials  
          Inc. ( 2009) 170 Cal.App.4th 1129.)

           This bill  would allow parties to consent to electronic service  
          of documents, pursuant to filing rules mandated by the local  
          trial court and service rules mandated by the Judicial Council.   


           This bill  would require the Judicial Council to adopt uniform  
          rules relating to the integrity of  electronic filing and  
          service of documents in the trial courts of the state.   

           This bill  would provide that documents cannot be served  
          electronically if they are required to be served personally.   
          Documents that can be served electronically may include  
          documents which may be served by mail, express mail, overnight  
          mail, or facsimile transmission.  

           This bill  would provide that the court may also electronically  
          serve court issued documents, provided that the documents are  
          not required to be personally served.
                                                                      



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           This bill  would define "electronic service" to include both  
          electronic notification and electronic transmission as follows:
           electronic notification:  occurs when a party receives  
            notification through an electronic message specifying the  
            exact name of the document being served, and is provided a  
            hyperlink at which the document may be viewed and downloaded.
           electronic transmission:  occurs when a document is sent  
            through electronic means to an electronic address that has  
            been provided by the receiving party.  

           This bill  would provide that electronic service of documents  
          would be considered complete at the time the electronic  
          transmission or the electronic notification is sent. 

           
             



                                        COMMENT
          
           1.Stated need for the bill

           The author states:
           
             Under current law, if a document may be served by mail,  
            express mail, overnight delivery, or a facsimile transmission,  
            electronic service of the notice and its attached documents  
            may be utilized [if] the parties have consented to accept the  
            service electronically.  (Code of Civ. Proc. Sec.  
            1010.6(a)(6).)  A document that is filed electronically is  
            said to have the same legal effect as an original paper  
            document.  (Code of Civ. Proc. Sec. 1010.6(a).)  However,  
            current California statutes authorize for [electronic] service  
            by electronic transmission, but not by electronic  
            notification.  

            ?  This bill would update California statutes to reflect  
            advances in modern technology and provide a more efficient,  
            paperless option of serving notice.  Code of Civil Procedure  
            Section 1010.6 would be amended to redefine electronic service  
            to include both electronic transmission and electronic  
            notification ? .  The party to be served must have consented  
            to being served electronically.

                                                                      



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            Additionally, this bill would provide that once a party has  
            consented to accept electronic service, the court has  
            authorization to electronically serve any document issued by  
            the court which is not required to be personally served.  This  
            bill would have no effect on other California statues which  
            require specific notices to be served personally.

          The Judicial Council, sponsor of this bill, states that SB 1274  
          "expands the court's ability to serve certain documents  
          electronically, which promotes its use and increases the overall  
          efficiency of the service process."  

           2.SB 1274 specifically addresses the issue presented in InSyst,  
            Ltd. v. Applied Materials, Inc, by redefining electronic  
            service to include both electronic transmission and electronic  
            notification
           
          In January 2009, the California Court of Appeals 4th District  
          examined the issue of valid electronic service under California  
          law.  In InSyst, Ltd. v. Applied Materials, Inc., a party was  
          electronically given instructions to access a document on the  
          internet and given a hyperlink leading to a description of the  
          document.  That description also included an additional  
          hyperlink that opened a file-stamped copy of the judgment.    
          Citing to California's Rules of Court Rule 2.250(6), the court  
          said that "[e]lectronic service is the electronic transmission  
          of a document to a party's electronic notification address ? ."   
          (InSyst., Ltd. v. Applied Materials, Inc., supra,  170  
          Cal.App.4th at p. 1139.)   The court reasoned that neither Rule  
          2.250(6) of the California Rules of Court, nor Section 1010.6 of  
          California's Code of Civil Procedure, authorized a party to  
          electronically serve another party by providing a hyperlink.   
          Therefore, the court rejected the defendant's argument and found  
          that notifying the recipient electronically about the  
          availability of a document, and including a hyperlink at which  
          the document could be accessed, would not be considered valid  
          electronic service under California law.  

          However, as discussed above (See Background), electronic service  
          of documents has become an increasingly common practice in civil  
          cases.  Until recently, "electronic notification" and  
          "electronic transmission" were the methods primarily being used  
          to electronically serve documents.  Although both methods occur  
          differently, they essentially accomplish the same objective - to  
          electronically serve a document onto another party.   However,  
          pursuant to InSyst, Ltd, the only method which is now considered  
                                                                      



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          an acceptable form of electronic service is the electronic  
          transmission method.  SB 1274 would re-define existing law's  
          definition of "electronic service" to include both electronic  
          transmission and electronic notification, updating California  
          law to more accurately reflect modern practices.  

          Modern technological advances of e-mail, have given law offices  
          and courts the opportunity to communicate effectively and  
          efficiently with clients, parties, and other lawyers, without  
          the costs of paper.  In 2000, SB 367 (Dunn, Ch. 514, Stats.  
          1999) amended Code of Civil Procedure Section 1010 to reflect  
          current practices and modern technology by permitting the filing  
          of papers by facsimile transmission.  Likewise, this bill would  
          update the code to better reflect the most recent technological  
          advances and common usage of internet transmission and  
          communication.  

           3.This bill would allow parties to consent to receive service  
            electronically, without the formal adoption of a local trial  
            court rule

           Under current law, parties may consent to being served  
          electronically but only if the local trial court has authorized  
          electronic service.  (Code Civ. Proc. Sec. 1010.6.)  SB 1274  
          would allow for parties to opt into receiving electronic  
          service, as long as both parties consent and the document is not  
          required to be personally served; a local rule authorizing  
          electronic service would no longer be required.  Instead, SB  
          1274 would require the Judicial Council to adopt rules to ensure  
          that electronic notification using hyperlinks is a reliable and  
          cost effective means of service, and to maintain the integrity  
          of the document served and the process of the service.  These  
          rules would provide uniformity of electronic service throughout  
          the state, instead of having each county develop its own rules.   


          It is important to note, however, that SB 1274 will have no  
          effect on documents which are required to be served personally.   
          SB 1274 will only affect those documents which may be sent by  
          mail, express mail, over night delivery, or facsimile  
          transmission.  


           Support  :  None Known 

           Opposition  :  None Known
                                                                      



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                                        HISTORY
           
           Source  :  Judicial Council of California

           Related Pending Legislation  :  None Known

           Prior Legislation  :  None Known

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