Thomson

INTRODUCTION

We hold Corporations Code section 31420 (section 31420) does not create an independent basis for personal jurisdiction for claims arising under the Franchise Investment Law, Corporations Code section 31000 et seq. Section 31420 is a service of process statute providing that a nonresident, by engaging in conduct prohibited by or made actionable under the Franchise Investment Law, consents to the appointment of the Commissioner of Corporations as attorney to receive service of process of a complaint brought under the Franchise Investment Law. Notwithstanding section 31420, there still must exist grounds for exercising personal jurisdiction over a nonresident defendant that are not inconsistent with the United States Constitution.

Plaintiff Robert Stephen Thomson brought this action alleging violations of the Franchise Investment Law and asserted defendants Kenneth Anderson, Garrett Boone, Goodhue Smith III, and Roy Terracina (the moving defendants), all Texas residents, were subject to personal jurisdiction in California pursuant to section 31420. The trial court granted the moving defendants’ motion to quash service of summons for lack of personal…