UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA SAN JOSE DIVISION
September 26, 2012
KRISHNA REDDY, PLAINTIFF,
NUANCE COMMUNICATIONS, INC., ET AL., DEFENDANTS.
The opinion of the court was delivered by: Paul S. Grewal United States Magistrate Judge
United States District Court For the Northern District of California
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (Re: Docket No. 88)
Plaintiff Krishna Reddy ("Reddy") moves for default judgment against Defendant Focus
Infomatics, Inc. ("Focus"). Defendant Nuance Communications, Inc. ("Nuance") opposes the motion. Pursuant to Civ. L.R. 7-1(b), the motion was taken under submission. Having reviewed the papers and considered the arguments of counsel,
IT IS HEREBY ORDERED that Reddy's motion for default judgment against Focus is DENIED without prejudice.
Reddy moves for default judgment on the grounds that Focus has never filed a timely response to her complaint and the Court Clerk has already entered default against it.*fn1 She argues 25 that Nuance lacks standing to defend Focus and has failed nevertheless to demonstrate any grounds why default judgment should not be entered against Focus.
REQUEST FOR REASSIGNMENT; REPORT AND RECOMMENDATION
Nuance responds that there is no legal entity named Focus. Instead, Nuance notes that Focus was the predecessor entity to Nuance and is now its wholly-owned subsidiary. Nuance argues that a default judgment is not warranted here because Reddy's claims are weak, she has not amended the complaint as she was authorized to do so, and she will not suffer prejudice if her motion is denied. Nuance also notes that once the status of the operative complaint is resolved, it intends to show that Nuance has been sued twice, once as Nuance and erroneously as Focus.
After entry of default, district courts are authorized to grant default judgment, so long as the judgment does not "differ in kind from, or exceed in amount, what is demanded in the pleadings."*fn2
Entry of default judgment is within the court's discretion,*fn3
and is governed by the following 10 factors: (1) the merits
of plaintiff's substantive claim; (2) the sufficiency of the
Procedure's strong policy favoring decisions on the merits.*fn4
In considering the Eitel factors, all factual allegations
in the complaint are taken as true, except for those relating to
the order granting dismissal of the sixth, ninth and tenth claims
dated March 2, 2012 only dismissed three of the ten alleged claims.
The complaint was not dismissed in its entirety. To the extent that
Reddy has elected not to amend the dismissed claims, she may proceed
on the other claims that have not been dismissed in the case.
Notwithstanding that there is an operative complaint in the case,
the court finds it appropriate to deny default judgment at this
juncture. On balance, the court finds that Reddy will not be
prejudiced if default judgment is not now entered especially in
light of the dispute surrounding Focus's actual corporate status,
prejudice to plaintiff; (4) the sum of money at stake; (5) potential
disputes concerning material
facts; (6) whether default was due to excusable neglect; and (7) the
Federal Rules of Civil 13
As an initial matter, despite Nuance's claim that there is no
operative complaint in the case, regarding material facts, the $31 billion that Reddy seeks in damages,
and the Federal Rules' strong policy favoring decisions on the
Focus shall file a responsive pleading no later than October 5,
IT IS SO ORDERED.