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Cytosport, Inc., A California Corporation v. Monster Muscle

January 22, 2013

CYTOSPORT, INC., A CALIFORNIA CORPORATION, PLAINTIFF,
v.
MONSTER MUSCLE, INC., A NEW YORK BUSINESS ENTITY, DEFENDANT.



FINDINGS AND RECOMMENDATIONS

This matter came before the court on July 20, 2012, for hearing on plaintiff's motion for default judgment. (Doc. No. 20.) Attorney Glenn Peterson appeared telephonically on behalf of the plaintiff. No appearance was made on behalf of the defendant. Having considered all written materials submitted with respect to the motion, and after hearing oral argument, the undersigned recommends that the motion for default judgment be denied.

PROCEDURAL BACKGROUND

Plaintiff commenced this action on April 27, 2011, by filing a complaint and paying the required filing fee. (Compl. (Doc. No. 1.)) Therein, plaintiff alleges claims for trademark infringement in violation of 15 U.S.C. § 1114(A) and California Business & Profession Code § 14245, trademark infringement and unfair competition in violation of 15 U.S.C. § 1125(A) and California Business & Profession Code § 17200, trademark infringement and unfair competition in violation of California common law, trademark dilution in violation of 15 U.S.C. § 1125(C) and California Business & Profession Code § 14247, and cyberpiracy in violation of 15 U.S.C. § 1125(D). (Compl. (Doc. No. 2) at 7-10.*fn1 Plaintiff's complaint seeks declaratory and injunctive relief, monetary damages, reasonable attorneys' fees and costs, and prejudgment and post-judgment interest. Despite being served with process, defendant Monster Muscle, Inc. has failed to appear in this action. (Doc. No. 9.) Pursuant to plaintiff's request, the Clerk of the Court entered defendant's default on December 9, 2011. (Doc. Nos. 12 & 13.)

Plaintiff filed the motion for default judgment now pending before the court on June 1, 2012, noticing it to be heard on June 29, 2012, pursuant to Local Rule 302(c)(19). (Doc. No. 20.) The matter came before the undersigned on June 29, 2012, oral argument was heard, and the matter continued to July 20, 2012. (Doc. No. 21.) Despite being served with all papers filed in connection with the pending motion, there was no opposition filed by defendant and no appearance made on behalf of defendant at the July 20, 2012 hearing. (Doc Nos. 23, 26 & 27.)

On December 13, 2012, the court ordered plaintiff to submit within thirty days a supplemental memorandum addressing the issue of whether this court has personal jurisdiction over the defendant. (Doc. No. 35.) The thirty-day period has expired and plaintiff has not filed the supplemental declaration.

LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for default judgment. Granting or denying default judgment, however, is within the court's sound discretion, see Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986) (citations omitted), and the court is free to consider a variety of factors in exercising that discretion. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Upon entry of default, the complaint's factual allegations regarding liability are taken as true, while allegations regarding the amount of damages must be proven. Dundee Cement Co. v. Howard Pipe & Concrete Products, 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987).

Although after the Clerk of the Court enters a defendant's default the court must take the well-pleaded factual allegations found in the plaintiff's complaint as true, the "'defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.'" DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (quoting Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). Moreover, and of particular importance in resolving the pending motion, "[w]hen entry of judgment is sought against a party who has failed to plead or otherwise defend, a district court has an affirmative duty to look into its jurisdiction over both the subject matter and the parties." In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).

ANALYSIS

Here, plaintiff's complaint alleges that defendant Monster Muscle, Inc. is a business entity operating in the state of New York. (Compl. (Doc. No. 2) at 2.) As one court has recently stated:

In determining whether the exercise of personal jurisdiction over a nonresident defendant is proper, a district court must apply the law of the state in which it sits when there is no applicable federal statute governing personal jurisdiction. Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998). District courts in California may exercise personal jurisdiction over a nonresident defendant to the extent permitted by the Due Process Clause of the Constitution. CAL. CODE CIV. P. § 410.10. The Due Process Clause requires that the defendant have "certain minimum contacts" with the forum "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. State of Washington, 326 U.S. 310, 316 (1945) (citations and internal quotation marks omitted). The party seeking to invoke jurisdiction has the burden of establishing that jurisdiction exists. Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1392 (9th Cir. 1984). Personal jurisdiction may be founded on either general jurisdiction or specific jurisdiction.

Facebook, Inc. v. Pedersen, 868 F. Supp.2d 953, 957 (N.D. Cal. 2012). Here, plaintiff's complaint alleges that "this Court has personal specific jurisdiction over Defendants since Defendants conduct business directly related to the trademarks at issue in this case which do harm to Plaintiff in this judicial district." (Compl. (Doc. No. 2) at 2.)

When a nonresident defendant's contacts with the forum are insufficiently pervasive to subject him to general personal jurisdiction, the court must ask whether the "nature and quality" of his contacts are sufficient to exercise specific personal jurisdiction over him. Data Disc, Inc. v. Sys. Tech. Assoc., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977). A court may exercise specific personal jurisdiction over a nonresident defendant if: (1) the nonresident defendant purposefully directs his activities at the forum or performs some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the plaintiff's claim arises out of the forum-related activities of the nonresident defendant; and (3) the exercise of jurisdiction over the nonresident defendant is reasonable. Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010); Schwarzenegger, 374 F.3d at 802. The plaintiff bears the burden of satisfying the first two of these three elements and if the plaintiff fails to establish either of them, specific personal jurisdiction over the nonresident defendant does not exist. Schwarzenegger, 374 F.3d at 802. (citations omitted). If the plaintiff satisfies the first two elements, the burden then shifts to the defendant to "present a compelling case" that the exercise of jurisdiction would not be reasonable. Id. (citations and internal quotation marks omitted).

In order to satisfy the purposeful-direction element in cases in which tortious conduct is alleged by the plaintiff, the Ninth Circuit requires that the actions of the nonresident defendant be purposefully directed at the forum based on an "effects test that focuses on the forum in which the defendant's actions were felt, whether or not the actions occurred within the forum." Mavrix Photo, Inc. v. Brand Technologies, Inc., 647 F.3d 1218, 1228 (9th Cir. 2011) (citations and internal quotation marks omitted). See also Washington Shoe Co. v. A-Z Sporting Goods Inc., --- F.3d ---, --- , 2012 WL 6582345, at *2 (9th Cir. Dec. 17, 2012) ("The plaintiff may satisfy this prong by demonstrating that the defendant either purposefully availed itself of the privilege of conducting activities in the forum, or purposefully directed its activities at the forum."). This "effects test," which is based on the Supreme Court's decision in Calder v. Jones, 465 U.S. 783 (1984), requires that the nonresident defendant (1) commit an intentional act, (2) that was expressly aimed at the forum state, and (3) that ...


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