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What's in a name? A wrongful termination suit survives a service of process trap

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San Antonio -- Herlinda Arnold sued Worldwide Clinical Trials, a global medical research company with a clinic in San Antonio, for wrongful termination.

Arnold alleged she was harassed and racially discriminated against. After putting the Equal Employment Opportunity Commission and the Texas Workforce Commission on notice, she was informed by TWC that she had a right to bring a civil action within 60 days.

The clock starts ticking:

  • Oct. 16, 2012: TWC tells Arnold she has until Dec. 15 to file her civil suit.
  • Nov. 7, 2012: Arnold filed suit in Bexar County Court at Law 10, Judge Jason Pulliam, and asked the county clerk to issue a citation to Worldwide Clinical Trials, a/k/a WCT Corporation, through its registered agent, CT Corporation System.
  • Nov. 11, 2012: the county clerk issues the citation as instructed.
  • Nov. 26, 2012: CT Corp. rejects the documents with this excuse, "Our records indicate that we represent more than one entity beginning with the name Worldwide Clinical Trials, etc. In order that we may properly process the enclosed documents, we must be provided with the full name of the entity for which it is intended.

CT Corp. represented Worldwide Clinical Trials Early Phase Services LLC and Worldwide Clinical Trials Early Phase Services/Bioanalytical Services Inc.

By the way, these are all entities of the same company. This process of service exercise is like trying to pick the "correct" rose from the same bush.

  • Jan. 10, 2013: Arnold's attorney tells CT Corp. the correct name is Worldwide Clinical Trials Inc. That's the name registered with the Texas Secretary of State, and CT Corp. is their registered agent.
  • Jan. 16, 2013: CT Corp. responds, saying it was still rejecting service because Worldwide Clinical Trials Inc. withdrew from doing business in Texas on May 28, 2002 and CT Corp. could no longer accept service on its behalf.
  • Feb. 27, 2013: through the Secretary of State, Arnold sought service on Worldwide Clinical Trials, a/k/a WCT Corp. at a Pennsylvania address.
  • March 11, 2013: a return receipt came from the Pennsylvania address, which the Secretary of State verified.

Now, what was the name that WCT Corp. answered with, the "correct" name? It was Worldwide Clinical Trials Early Phase Services LLC, the first of the two names CT Corp. listed as representing.

WCT moved for summary judgment. It claimed the lawsuit should be dismissed because Arnold did not exercise due diligence in serving the proper defendant within the 60-day window.

Judge Pulliam granted WCT's motion. Yes, he did.

Arnold appealed. On Aug. 13, she got her answer. In a split 2-to-1 decision, the appellate panel reversed Pulliam. Chief Justice Catherine Stone wrote the opinion.

According to Stone, it was sufficient for Arnold to sue using the assumed name.

CT Corp. and WCT were playing a kind of Simon Says game where Arnold would have to guess the legal name of the subsidiary of the parent company in order to take a step forward. But they weren't going to help her find out which name that was and she had to shoot at the correct image in this hall of mirrors on her first try, or lose.

"Rule 28 provides 'any partnership, unincorporated association, private corporation, or individual doing business under an assumed name may sue or be sued in its ... assumed or common name for the purpose of enforcing for or against it a substantive right.' Tex. R. Civ. P. 28," Stone wrote.

"Accordingly, Arnold's action was timely filed," she added.

Stone also reminded Pulliam that it was undisputed that CT Corp. was WCT's registered agent all along.

WCT argued that CT Corp. had no obligation to forward the process because CT Corp. was the agent for a second entity that used the same common name.

Stone said, this did not alter that fact that CT Corp. was contracted to act as the agent of WCT.

Justice Marialyn Barnard dissented. Barnard admits that Rule 28 allows Arnold to sue WCT in its assumed name, but she argues this does not then impose upon the registered agent a duty to "know its clients' assumed or common names or accept service in those names."

Barnard then goes on to exaggerate the burden put on these poor registered agents.

"A plaintiff could, under Rule 28, name 'Delta' as a defendant and attempt service on a registered agent that represents: Delta Airlines, Delta Faucets, Delta Dental, Delta College, Delta Marine, Delta Power Equipment, Delta Waterfowl Foundation, Delta Consolidated Industries, Delta Institute, or Delta Children. What mechanism exists to address this situation if, after doing its due diligence, the registered agent is unsure which 'Delta' the plaintiff meant to sue?" Barnard asked.

Gee, is it really that hard? First, Arnold was a little more specific than in the massively sketchy example Barnard tossed up. Arnold worked for Worldwide Clinical Trials. The name on the wall was Worldwide Clinical Trials.

Worldwide Clinical Trials has a very sophisticated website, and this is obviously a huge company.

In this case, WCT was playing a shell game to try to frustrate Arnold from even getting past the very first step in her lawsuit. And Barnard is saying that is perfectly okay.

Food for thought.

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