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Facebook, Inc. v. Grunin

United States District Court, N.D. California

October 30, 2014

FACEBOOK, INC., Plaintiff,


WILLIAM ALSUP, District Judge.


In this action involving alleged computer fraud and abuse, defendant moves to set aside entry of default. For the reasons stated herein, the motion is DENIED.


Plaintiff Facebook, Inc. commenced this action in May 2014. The only named defendant, Martin Grunin, was personally served on May 22, 2014 (Dkt. No. 13). Mr. Grunin then voluntarily appeared in May 2014, by filing a hodgepodge of materials, including a document allegedly conferring "special limited power of attorney" on an individual named "Brian-Robert: Costello" (Dkt. No. 8). Mr. Grunin also filed various documents from this action, such as the summons and complaint, on which an individual wrote (Dkt. No. 8):


Mr. Costello then filed a letter, dated June 4, 2014, entitled "Constructive Notice of Conditional Acceptance, " stating, inter alia, that Mr. Grunin had received the complaint, that Mr. Grunin would accept Facebook's "offer to stop deleting any/all files" upon receipt of a check for $100, 000, and that future attempts by Facebook to "communicate or summon" Mr. Grunin to "any public court" would require consideration of one million dollars (Dkt. No. 10). The action was reassigned to Judge Charles Breyer in June 2014.

Default was recorded against Mr. Grunin on June 23, 2014 (Dkt. No. 22). Mr. Grunin then filed a letter titled "Notice of Offer to Settle, " appending a copy of a check to Facebook for the amount of $250 (Dkt. No. 23). Other documents filed by Mr. Grunin purported to penalize Facebook monetarily for non-compliance with Mr. Grunin's "terms." A July 2014 order by Judge Breyer prohibited Mr. Costello, a non-attorney, from appearing on behalf of Mr. Grunin (Dkt. No. 33). Docket numbers 8, 10, and 17 were stricken. For the record, docket numbers 23, 26, 27, and 31 are hereby stricken for the same reasons outlined in the July 2014 order, as they fail to satisfy FRCP 8(b), and are otherwise immaterial under 12(f).

On July 30, 2014, pro se Mr. Grunin filed an "Affidavit of Specific Negative Averment" purporting to deny, inter alia, the allegations in the complaint (Dkt. No. 35). In pertinent part, the document stated that Mr. Grunin "denies that the UNITED STATES DISTRICT COURT is the district court for the United States." On August 7, Mr. Grunin filed another affidavit stating, inter alia, that "LAWYERS and LAWYER-JUDGES: Created unconstitutional lawyer system' pre-trial motions' and Hearings' to have external EXTORTIONISTIC litigation's [sic]...." (Dkt. No. 39).

On August 18, Mr. Grunin moved via counsel, Seth Weinstein at the Law Offices of Seth Weinstein, located in Sherman Oaks, and Andrew B. Gordon at Gordon Law Group, Ltd., located in Lake Zurich, Illinois, to set aside entry of default. This action was reassigned to the undersigned judge in September 2014. No motion for a default judgment has been filed yet, although Facebook has opposed Mr. Grunin's motion. This order will now briefly summarize the allegations in the complaint.

The complaint alleges that Mr. Grunin violated the terms of Facebook's Statement of Rights and Responsibilities by using multiple user accounts to repeatedly place ads containing sexually provocative material on Facebook's website. Mr. Grunin also allegedly used unauthorized or fraudulent means to obtain and sell access to advertising accounts unaffiliated with him. Additionally, Mr. Grunin allegedly impersonated representatives from other companies in order to access and profit from their advertising accounts. Facebook alleges that since 2011, it has disabled at least seventy accounts linked to Mr. Grunin. The complaint alleges the following claims for relief: (1) breach of contract, (2) fraud, (3) violations of the Computer Fraud and Abuse Act, 18 U.S.C. 1030, and (4) violations of the California Comprehensive Computer Data Access and Fraud Act, Cal. Penal Code 502(c). Facebook seeks, inter alia, damages and injunctive relief.


FRCP 55(c) permits the court to set aside entry of default for good cause. The "good cause" standard considers three factors: (1) whether defendant engaged in culpable conduct that led to the default, (2) whether defendant presents a meritorious defense, or (3) whether reopening the default judgment would prejudice the plaintiff. Franchise Holding II, LLC. v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925-26 (9th Cir. 2004). Defendant bears the burden of showing that these factors favor setting aside the entry of default.

This order finds that Mr. Grunin has failed to present a meritorious defense. He has failed to show good cause for setting aside the default and, indeed, it would be ...

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