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Jellybean Entertainment, Inc. v. Usnile LLC

United States District Court, Ninth Circuit

June 26, 2013

JELLYBEAN ENTERTAINMENT, INC., Plaintiff,
v.
USNILE LLC, et al., Defendants.

ORDER: 1. GRANTING DEFENDANTS' MOTION TO SET ASIDE DEFAULT; AND [Doc. No. 14] 2. DENYING DEFENDANTS' MOTION FOR EXTENSION OF TIME TO FILE A RESPONSIVE PLEADING. [Doc. No. 32]

IRMA E. GONZALEZ, District Judge.

Before the Court are Defendants' motions to set aside the default, [Doc. No. 14], and for a 30-day extension of time to file a responsive pleading, [Doc. No. 32]. For the reasons below, the Court hereby GRANTS Defendants' motion to set aside default and DENIES Defendants' motion for an extension.

BACKGROUND

On January 17, 2013, Plaintiff filed a complaint alleging copyright infringement and related claims arising from Defendants' purported broadcasting and distribution of Arabic language television channels for which Plaintiff owns exclusive broadcast and distribution rights. [Doc. No. 1.] Defendants were served with the complaint on January 31, 2013. [ See Doc. Nos. 9, 10.]

On March 22, 2013, Plaintiff moved for a preliminary injunction. [Doc. No. 4.] Defendants failed to oppose Plaintiff's motion for preliminary injunction. On April 4, 2013, defense counsel, Aiman Ibrahim applied for admission pro hac vice, which admission was granted on April 5, 2013. [Doc. No. 7.] On April 8, 2013, as Defendants had failed to answer or otherwise respond to the complaint, the Court entered default. [Doc. No. 12.]

On April 18, 2013, Defendants filed the present motion to set aside default as well as a motion to dismiss. [Doc. Nos. 14, 15.] On May 16, 2013, without obtaining a hearing date from chambers or properly moving ex parte, Defendants filed a motion to stay the scheduled hearing on Plaintiff's motion for preliminary injunction pending ruling on Defendants' motion to dismiss. [Doc. No. 27.] That same day, May 16, 2013, the Court denied Defendants' motion to dismiss because it was filed after default, and consequently denied as moot Defendants' motion to stay. [Doc. No. 28.]

On June 11, 2013, Plaintiff filed an opposition to Defendants' motion to set aside default. [Doc. No. 29.] Defendants failed to file a reply brief in support of the motion to set aside default. On June 19, 2013, the Court granted Plaintiff's motion for preliminary injunction. [Doc. No. 31.]

On June 24, 2013, Defendants filed a motion for a 30 day extension for filing a responsive pleading, again without obtaining a hearing date from chambers or properly moving ex parte. [Doc. No. 32.] The Court heard oral argument from the parties on June 25, 2013. [ See Doc. No. 33.]

DISCUSSION

I. Motion to Set Aside Default

Pursuant to Federal Rule of Civil Procedure 55(c), a district court may set aside the entry of default upon a showing of good cause. Fed.R.Civ.P. 55(c). To determine "good cause, " a court considers 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; and (3) whether setting aside the default would prejudice the other party. United States v. Mesle, 615 F.3d 1085, 1091 (9th Cir. 2010). "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. But in considering a motion to set aside entry of default, courts must bear in mind that "judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits." Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984).

1. Culpability

"[A] defendant's conduct is culpable if he has received actual or constructive notice of the filing of the action and intentionally failed to answer." TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001) (emphasis in original). "The term intentionally' means that a movant cannot be treated as culpable simply for having made a conscious choice not to answer; rather, to treat a failure to answer as culpable, the movant must have acted with bad faith, such as an intention to take advantage of the opposing party, interfere with judicial decisionmaking, or otherwise manipulate the legal process.'" Mesle, 615 F.3d at 1092.

Defendants here do not dispute receiving actual notice or being aware of the deadline to respond. Rather, defense counsel attributes the delay to an inability to find local counsel willing to support his pro hac vice admission. Fed.R.Civ.P. 12 generally provides that Defendants must file a responsive pleading within 21 days of receiving service. In this case, Defendants were served January 31, 2013. But defense counsel did not even apply for admission pro hac vice until April 4, 2013, approximately 6 weeks after a responsive pleading was due. While defense counsel's delay ...


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