Boulton v. U.S. Tax Lien Assoc., 2:15-cv-02384

Foreign individual investors sued US Tax Lien Association, LLC (USTLA) and principals alleging misrepresentations and that a third-party vendor, American Transfer Services, Inc. (ATSI), absconded with their investment funds.
USTLA filed a Third-Party Complaint against ATSI and its principal Reuben Sanchez for fraud, indemnity, and contribution, but was unable to effectuate personal service on ATSI/Sanchez.
USTLA attempted service at at least six business and residential addresses, served Delaware authorities for ATSI’s registered agent, and used process servers who contacted persons at several locations who could not locate Sanchez.
USTLA moved (unopposed) for permission to effect service by publication under California Code of Civil Procedure § 415.50, supported by declarations detailing the failed service attempts.
The Court found USTLA had exercised reasonable diligence in attempting service, that a viable cause of action exists against ATSI and Sanchez, and that service by publication was appropriate as a last resort.
The Court granted USTLA’s motion: publication once a week for four successive weeks in a California newspaper likely to give actual notice, to begin within 30 days; mailed copies must be sent if a valid address is found before publication ends.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether service by publication is permissible where defendant cannot be located	USTLA argued it made exhaustive, reasonable-diligence attempts to serve ATSI/Sanchez and thus may resort to publication	ATSI/Sanchez did not oppose (service attempts unsuccessful); implied defense of evasion of service	Court held publication proper after finding reasonable diligence and last-resort necessity
Whether a cause of action exists to justify service by publication	USTLA contended its third-party complaint alleges fraud, indemnity, and contribution supporting service	No opposing argument on existence of claim presented	Court found the TPC alleges legitimate claims, supporting publication

Donel, Inc. v. Badalian, 87 Cal. App. 3d 327 (1978) (defines "reasonable diligence" for service by publication and requires exhaustive attempts to locate defendant)
Watts v. Crawford, 10 Cal. 4th 743 (1995) (service by publication is a last resort; notice concerns and diligence standards explained)
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (due process permits publication for missing or unknown persons when other means are impracticable)