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Star Fabrics, Inc. v. DKJY, Inc.

United States District Court, Ninth Circuit

January 9, 2014

STAR FABRICS, INC., Plaintiff,
v.
DKJY, INC.; TOUCH ME FASHION, INC.; MJC CONNECTION, INC.; DOES 1-10, inclusive, Defendants.

ORDER GRANTING IN PART AND DENYING IN PART MOTIONS FOR DEFAULT JUDGMENT [18], [19], [24]

OTIS D. WRIGHT, II, District Judge.

I. INTRODUCTION

Plaintiff Star Fabrics, Inc. has amassed a collection of fabric-pattern copyrights, including United States Copyrights for its 40614, 61619, 61967, and 63390 patterns. After discovering potentially infringing products, Star Fabrics filed suit against Defendants DKJY, Inc.; Touch Me Fashion, Inc.; and MJC Connection, Inc. alleging direct, vicarious, and contributory copyright infringement. Defendants never answered or otherwise responded to the Complaint, and the Clerk of Court entered default. Star Fabrics then moved for entry of default judgment against Defendants. After considering Star Fabrics's allegations and supporting evidence, the Court GRANTS IN PART and DENIES IN PART the Motions for Default Judgment.[1] (ECF Nos. 18, 19, 24.)

II. FACTUAL BACKGROUND

Star Fabrics is a California corporation and textile converter that has compiled a library of copyrighted textile patterns. (Haroni Decl. ¶¶ 3-4.[2]) Star Fabrics owns various fabric patterns including patterns titled 40614, 61619, 61967, and 63390. ( Id. ¶¶ 7-10; Exs. 1-4.) Star Fabrics received United States Copyright Office Certificates of Registration VA X-XXX-XXX, VA X-XXX-XXX, VA X-XXX-XXX, and VA X-XXX-XXX for those patterns, respectively. ( Id. Exs. 1-4.)

Star Fabrics alleges that DKJY, Inc. is a California corporation doing business as "Closet Signature." (Compl. ¶ 5.) Plaintiff alleges that Touch Me Fashion is also a California corporation. ( Id. ¶¶ 6-7.)

Star Fabrics sampled and sold fabric bearing the 40614, 61619, 61967, and 63390 designs and then distributed these fabric patterns. ( Id. ¶¶ 13, 18, 23, 31.) Star Fabrics alleges that Defendants thus had access to the designs through these samples, as well as through access to Plaintiff's showroom, design library, illegally distributed copies, and lawfully printed garments distributed to the public. ( Id. ¶ 33.)

Star Fabrics discovered that DKJY was selling garments Plaintiff alleges are unauthorized copies of 40614, 61619, 61967, and 63390. (Haroni Decl. ¶ 11, Ex. 5.) Plaintiff also contends that Touch Me Fashion was selling unauthorized copies of 63390 and 61967, respectively. ( See Compl. ¶¶ 34-35.)

On October 2, 2013, Star Fabrics filed suit against DKJY, MJC Connection, [3] and Touch Me Fashion alleging claims for direct, vicarious, and contributory infringement. (ECF No. 1.) Star Fabrics served Touch Me Fashion and MJC Connection on November 15, 2013, and DKJY on November 20, 2013. (ECF Nos. 7-9.) Since Defendants never answered or otherwise responded to the Complaint, the Clerk of Court entered default against Defendants. (ECF Nos. 11, 13, 22.) Star Fabrics then moved for entry of default judgment against all Defendants. (ECF Nos. 18, 19, 24.) Those Motions are now before the Court for decision.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b) authorizes a district court to grant default judgment after the Clerk enters default under Rule 55(a). Local Rule 55-1 requires that the movant submit a declaration establishing (1) when and against which party default was entered; (2) identification of the pleading to which default was entered; (3) whether the defaulting party is a minor, incompetent person, or active servicemember; and (4) that the defaulting party was properly served with notice.

A district court has discretion whether to enter default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Upon default, the defendant's liability generally is conclusively established, and the well-pleaded factual allegations in the complaint are accepted as true. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-19 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).

In exercising its discretion, a court must consider several factors, including (1) the possibility of prejudice to plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake; (5) the possibility of a dispute concerning material facts; (6) whether the defendant's default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986).

IV. DISCUSSION

A. Notice

Star Fabrics served DKJY with process on November 20, 2013, in the manner prescribed by California Code of Civil Procedure section 415.20. That section provides that a summons may be served by leaving the summons at a party's office with someone apparently in charge and thereafter mailing a copy of the summons via first-class mail. Star Fabrics's process server left the summons with DKJY's store manager, Laura Reyes, on November 20, 2013, and then mailed a copy of the summons on November 22, 2013. (ECF No. 7.)

Star Fabrics also served Touch Me Fashion by leaving a copy with Jaina Lee, a sales associate, on November 15, 2013, and thereafter mailing a copy of the summons and complaint on November 19, 2013. (ECF Nos. 8, 9.)

The Court therefore finds that Star Fabrics properly served DKJY and Touch Me Fashion under California Code of ...


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