The opinion of the court was delivered by: Dean D. Pregerson United States District Judge
ORDER GRANTING DEFENDANTS' MOTION TO SET ASIDE CLERK'S ENTRY OF DEFAULT [Dkt. No. 56]
Presently before the court is Defendants' Motion to Set Aside Clerk's Entry of Default.
On March 26, 2012, Plaintiffs Law Offices of Amir Soleimanian and Amir Soleimanian, an individual, filed a Complaint against Defendants Kristina Wildeveld, Esq., an individual, and the Law Offices of Kristina Wildeveld, alleging infringement of Plaintiffs' registered trademark MR. TICKET, for legal services. Defendants filed no response to the Complaint, and Default was entered by clerk on June 1, 2012. A corrected default was entered by clerk on June 6, 2012.
On October 9, 2012, Plaintiffs filed a Motion for Permanent
Injunction. On November 13, 2012, Defendants filed a Motion to
Dismiss, alleging that they had not been served with the Complaint and
summons. At the same time, they filed an Answer to the Complaint. On
November 15, 2012, this court continued the hearing on the Permanent
Injunction and set a status conference regarding the Entry of Default
and Filed Answer for November 19, 2012, the date that the hearing on
the Permanent Injunction had been scheduled. Additionally, the court
ordered the parties to meet and confer prior to the status conference.
At the hearing on November 15, 2012, counsel Christien Gaumer appeared
for Plaintiffs. There were no appearances for Defendants.*fn1
The court struck Defendants' Answer.
On November 21, 2012, Defendants filed the present Motion to Set Aside Clerk's Entry of Default. On November 28, 2012, the court denied Defendants' Motion to Dismiss, finding that service of process was proper.
"The court may set aside an entry of default for good cause." Fed. R. Civ. P. 55(c). To determine "good cause," a court must consider three factors: "(1) whether the party seeking to set aside the default engaged in culpable conduct that led to the default; (2) whether it had no meritorious defense; or (3) whether reopening the default judgment would prejudice the other party." U.S. v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010)(internal quotation marks and citation omitted). This standard is disjunctive "such that a finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default." Id. "[J]udgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." Id. (internal quotation marks and citations omitted.)
A. Culpability The court finds that any conduct by Defendants that led to the clerk's entry of default was not culpable. In its Order of November 28, 2012, this court found that service of process on Defendants was proper. However, at the time when process was served, Defendants were in the midst of moving their law offices to a different Las Vegas location. (Decl. Mara Copodonna, ¶ 3.) Such circumstances could explain how papers could have been properly served but nonetheless how Defendants could have failed to receive them, as they assert.
B. Defenses "A defendant seeking to vacate a default judgment must present specific facts that would constitute a defense. But the burden on a party seeking to vacate a default judgment is not extraordinarily heavy. All that is necessary to satisfy the 'meritorious defense' requirement is to allege sufficient facts that, if true, would constitute a defense: the question whether the factual allegation is true is not to be determined by the court when it decides the motion to set aside the default. Rather, that question would be the subject of the later litigation." U.S. v. Signed Personal Check. No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1094 (9th Cir. 2010)(internal quotation marks and citations omitted).
The court finds that Defendants meet this low burden. Defendants assert facts that, if true, would constitute a valid defense to Plaintiffs' trademark infringement claim. To succeed on the merits of a trademark infringement claim, Plaintiffs must establish that "defendant's use of its mark gives rise to a 'likelihood of confusion' in the consuming public." Metro Pub., Ltd. v. San Jose Mercury News, 987 F.2d 637 (9th Cir. 1993). Defendants have offered facts distinguishing their mark from Plaintiffs' mark, pointing out that the marks have different imagery. (Mot. at 10.) Defendants also point out that the geographic scope of their use of the mark differs from that of Plaintiffs, thus reducing the likelihood of confusion. (Id.) The court makes no determination on the merits of these arguments; at this stage, it suffices to say that if these facts are true, they would constitute a defense to Plaintiffs' trademark infringement claim. Thus, Defendants have satisfied their burden.
C. Prejudice Neither party discusses whether Plaintiffs would be prejudiced if the court sets aside the clerk's entry of default, so the court need not address this issue. The court notes that it is unlikely that Plaintiffs would be prejudiced since Defendants assert that they have ...