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High Tech Pet Products, Inc v. Juxin Pet Product Company

March 27, 2013

HIGH TECH PET PRODUCTS, INC.,
PLAINTIFF,
v.
JUXIN PET PRODUCT COMPANY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Gary S. Austin United States Magistrate Judge

ORDER DIRECTING COUNSEL TO SHOW CAUSE WHY THIS COURT SHOULD NOT RECOMMEND TO THE DISTRICT COURT THAT PLAINTIFF'S APPLICATION FOR DEFAULT JUDGMENT BE DENIED, AND THE CASE DISMISSED, WITHOUT PREJUDICE, FOR LACK OF PERSONAL LTD., JURISDICTION AND FAILURE TO STATE A CLAIM (Doc. 52)

INTRODUCTION

This is a trademark infringement and unfair competition action, brought by a California corporation, High Tech Pet Products, Inc., against thirty-three corporate and individual defendants located in the People's Republic of China. *fn1 Plaintiff Hi Tech Pet Products, Inc. ("Plaintiff") designs and manufactures electronic pet fences, which are marketed and sold in the United States. According to the First Amended Complaint ("complaint"), Plaintiff "seeks to stop acts of unfair competition" by Juxin Pet Product Company, Ltd., Juxin International, Inc., Juxin Electronic Factory, and Jun Hu, the chief executive officer of the Juxin entities. (Doc. 10, Prelim. Stmt.). The complaint further alleges that the remaining twenty-nine defendants are companies "believed to be secondary wholesalers and contributory infringers" and their respective "legal representatives." *fn2 (Doc. 10, Prelim. Stmt.).

On March 4, 2013, Plaintiff filed the instant Application for Default Judgment by Court, seeking a default judgment and a permanent injunction against six of the named defendants: Huatuowei Electronic Co., Ltd.; New Tide Import & Export Co., Ltd.; Shenzhen Artech Electronic Co., Ltd.; Shenzhen Topfun Electronic Co., Ltd.; Yuyao Hualun Import & Export Co., Ltd.; and He Li, "Legal Representative" of Yuyao Hualun Import & Export Co, Ltd. (Doc. 52). The Juxin entities are not among the defendants against whom Plaintiff seeks a default judgment, as Plaintiff was unable to locate and/or serve those entities in China.

PROCEDURAL BACKGROUND

On March 26, 2010, Plaintiff filed an initial complaint against Juxin Pet Product Company, Juxin International, Inc., Juxin Electronic Factory, Jun Hu and Does 1-20. (Doc. 2). On September 15, 2010, Plaintiff filed a First Amended Complaint listing fifteen additional corporate defendants and fourteen additional individual defendants.

Plaintiff determined that every defendant named in the First Amended Complaint was "domiciled or lives in the People's Republic of China." (Doc. 25). As detailed in periodic status reports filed with this Court, Plaintiff undertook extensive efforts to serve the defendants through the Chinese Ministry of Justice, pursuant to the Hague Convention on the Service Abroad of Judicial and Extra-judicial Documents ("Hague Convention"). See Federal Rule of Civil Procedure 4(f)(1). The Plaintiff encountered problems on several fronts: in obtaining accurate Mandarin Chinese translations of the legal documents to be served; in obtaining correct addresses for various defendants for purposes of service of process; and in communicating with the relevant departments within the Chinese Ministry of Justice. (Docs. 25, 30, 33, 35, 36, 37, 45). The Court allowed Plaintiff well over two years to resolve these difficulties, setting a final deadline of December 31, 2012 for completion of service of process on defendants. On January 15, 2013, Plaintiff's counsel informed the Court that several defendants located in China remained unserved, and that Plaintiff intended to seek entry of default against the few defendants who had been properly served. *fn3 (Doc. 50).

On August 8, 2012, Plaintiff filed requests for entry of default against five corporate defendants (Huatuowei Electronic Co., Ltd.; New Tide Import & Export Co, Ltd.; Shenzhen Artech Electronic Co., Ltd.; Shenzhen Topfun Electronic Co., Ltd.; Yuyao Hualun Import & Export Co., Ltd.) and one individual defendant (He Li). (Docs. 39-44). The Clerk entered default against all six defendants on August 9, 2012. (Doc. 46). Thereafter, Plaintiff filed the instant application for default judgment.

DISCUSSION

I. Personal Jurisdiction

A. The Court's Sua Sponte Consideration of Personal Jurisdiction

As a preliminary matter, this Court must determine whether it has personal jurisdiction over the five corporate and one individual defendant against whom the Clerk has entered default. *fn4 "In most circumstances, a defect in personal jurisdiction is a defense that may be asserted or waived by a party." In re Tuli , 172 F.3d 707, 712 (9 th Cir. 1999) (citing Fed.R.Civ.P. 12(h)(1)). However, "[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." *fn5 Id. "To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place." Id. ; Wood v. Santa Barbara Chamber of Commerce, Inc. , 705 F.2d 1515, 1522 (9 th Cir. 1983) (court correct in not entering default judgment where it lacked personal jurisdiction against defendants); DFSB Kollective Co., Ltd. v. Bing Yang , 2012 WL 1835710, *2-3 (N.D. Cal. May 21, 2012) (ordering plaintiffs, on motion for default judgment, to show cause why the magistrate should not recommend to the district court that the matter be dismissed for lack of personal jurisdiction).

B. The Standard For Determining Personal Jurisdiction

Generally, personal jurisdiction over a nonresident defendant is proper if it is permitted by the forum's long-arm statute and the exercise of that jurisdiction does not violate federal due process (as ...


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