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Service of process, Corporation, Civil litigation, Texas, Technology, Information asymmetry


To sue a firm is to sue an artificial person, making the most reliable service method—physically handing papers to the defendant—unusable. This problem illustrates notice risk: if a plaintiff’s service obligations are loose, it is advantaged (because the defendant may never receive notice), whereas if they are strict, the defendant is advantaged (because the plaintiff may struggle to effect service). For litigation involving corporate defendants, civil procedure and corporate law mitigate this problem through a technology for managing notice risk: registered agency. A firm using this technology, because it cannot be served directly, appoints an agent who will accept papers and forward them to management. By serving an intermediary, the plaintiff shifts to the defendant the risk that actual notice fails. Although registered agency was once an innovative solution to corporate-defendant notice risk, this Article scrutinizes it in a contemporary light, using state corporate data to estimate that it imposes more than a quarter-billion dollars each year in avoidable costs on business, public administration, and civil process. To tackle these costs, it proposes model legislation for a less expensive, more reliable notice technology: email.

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The Journal of Corporation Law