Judge lets metaverse company meta-serve man in lawsuit since they can't find him in person

A federal judge today gave a Los Angeles company building an online "metaverse" permission to formally serve a copy of its lawsuit against its former chief marketing officer through the main way it communicated with him in the past, via messaging on the Discord and Telegram networks.

In a ruling today, US District Court Judge Indira Talwani agreed that XMod Industries had exhausted its attempts to find Dan Kennedy in person, so that a human process server could hand him copies of the company's suit, which alleges fraud and misappropriation of company assets, and a summons to answer the complaint, and that it could therefore simply send him copies via electronic messaging. Proof of service is a requirement for a lawsuit to proceed in court.

At issue is what Kennedy did after XMod hired him as a freelance chief marketing officer - he was never a company employee, XMod says - to help it build out Netvrk, a sort of blockchain-powered Neopets meets Second Life, whose participants can use real cash to buy "tokens" they can then use to rove around a virtual world, where they can buy and sell blockchain-recorded items based on "non-fungible tokens."

In its suit, XMod says it hired Kennedy - supposedly working out of an office at 177 Huntington Ave., the former world headquarters of Christian Science - because of his experience with cryptocurrency.

But the company quickly realized that while Kennedy might know about cryptocurriency, he was "unqualified for the role and inexperienced in critical knowledge
necessary for 3D asset development" and it decided to end his contract, the suit alleges. Even worse:

Shortly after Kennedy was retained as an independent consultant, he began his scheme of deceit and misrepresentations to gain control over integral components of Netvrk, including its social media and marketing outlets and key partner relationships. Kennedy manipulated his consultancy with Netvrk to gain the trust and confidence of Netvrk's founders, employees, and outside partnerships, and in doing so converted nearly $564,000 of Netvrk's assets. Not only did Kennedy wrongfully assume the title of Netvrk's Chief Executive Officer, he has wrongfully retained, despite repeated demands, all of the corporate records and information relating to the services that he performed on Netvrk's behalf. ...

Multiple Netvrk employees even quit citing issues with Kennedy as their primary reason for leaving.

He began to identify himself publicly as Netvrk CEO.

After he was fired, Kennedy used his access to the company's social-media and e-mail accounts to launch broadsides against its founders, the suit alleges.

Despite repeated requests during and following his termination, Kennedy has refused to provide Netvrk with access to or the login credentials for any of Netvrk’s social media accounts including Twitter, Instagram, LinkedIn, Linktree, Twitch, Reddit, Publish0x, Medium, and Tik Tok (the “Netvrk Social Media Accounts”). Plaintiffs depend heavily on their online presence to advertise their businesses, which requires the ability to continuously update their profiles and pages and react to online trends.

XMod filed its suit in US District Court in Boston in September, about two weeks after it fired Kennedy - and his California lawyer sent a letter demanding the company leave his client alone.

According to Talwani's ruling, the lawyer refused to accept a copy of the XMod lawsuit and summons, at first asking in return if the company would be willing to accept his client's impending "labor and defamation" suit, but later saying he could not accept the service because he represented Kennedy in only "a limited capacity," since he is not licensed to practice in Massachusetts, where Kennedy appeared to be living.

XMod then ran into trouble trying to serve Kennedy directly. As the judge wrote:

Plaintiffs state that they regularly communicated with Kennedy through the applications Telegram and Discord while Kennedy was an independent consultant, and that Kennedy did not provide Plaintiffs with his mailing address, personal email address, or phone number.

The company hired a Boston process server to serve a copy of the suit on Kennedy at his Huntington Avenue office, but the process server found he didn't actually have an office there. The company dug up a North Carolina address and hired a process server there, but, again, the server found no Kennedy there.

The company then asked Talwani for permission to serve Kennedy a copy of the lawsuit the one way it knew how to reach him- via Discord or Telegram messaging.

Talwani noted that "courts have authorized alternate service of process by email where the parties had regularly used email to communicate in the past," and that given the company's efforts to find him without success, "alternate service" would be OK by her.

Plaintiffs state that they only communicated with Kennedy through Telegram and Discord, which are semi-private messaging applications that allow users to send messages, files, and audio to other users. Based on this communication history between the parties, the court finds that service to Kennedy via his private Telegram and Discord accounts is appropriate under the circumstances.

Talwani's ruling applies only to Kennedy directly. XMod also sued the supposed LLC he ran - out of that Huntington Avenue office. Talwani ruled, however, that since the LLC was registered in Delaware, the company needs to first try serving it through the "registered agent," Delaware requires companies to have.

Ed note: This is not Northeastern University professor and media critic Dan Kennedy.