United States District Court, C.D. California
LEADERSHIP STUDIES, INC.
PRESENT: THE HONORABLE CHRISTINA A. SNYDER
CIVIL MINUTES - GENERAL
(IN CHAMBERS) - PLAINTIFF LEADERSHIP STUDIES' NOTICE OF
FAILURE TO COMPLY WITH COURT ORDER TO SHOW CAUSE WHY DEFAULT
JUDGMENT SHOULD NOT BE ENTERED AND REQUEST FOR ENTRY OF
DEFAULT JUDGMENT (Dkt. 90, filed March 29, 2017)
INTRODUCTION AND BACKGROUND
December 8, 2015, plaintiff Leadership Studies, Inc. filed
this action for trademark infringement, copyright
infringement, unfair competition, accounting, and declaratory
relief against Jon Warner; ReadyToManage, Inc.
(“RTM”); Team Publications (“TP”);
Worldwide Center for Organizational Development, LLC
(“WCOD”); and Profiles-R-Us.com, Pty. Ltd
(“PRU”). Dkt. 2 (“Compl.”). Plaintiff
provides leadership training services and materials for major
corporations in the United States and through worldwide
affiliates. See generally id. Plaintiff owns
numerous trademarks, most notably its “Situational
Leadership® Model, ” as well as numerous
copyrighted works. Id. at ¶ 5. Warner is
involved with several entities that publish and offer for
sale leadership training materials directed toward
businesses. Four of those entities--defendants RTM, TP, WCOD,
and PRU--are named as defendants in this action.
August 16, 2016, the Court granted the motion-filed by RTM,
TP, and Warner (“moving defendants”)-to set aside
the Clerk's entry of default against them, conditioned
upon the moving defendants' payment to plaintiff of
associated, reasonable costs. Dkt. 75. WCOD and PRU did not
join the moving defendants' application to set aside the
default or the opposition to plaintiff's motion for the
default judgment. As a result, the Court granted default
judgment as against WCOD and PRU, but reserved its decision
regarding the calculation of damages until the matter was
adjudicated as to all defendants. Id. at 14.
January 17, 2017, the Court concluded that plaintiff's
request for fees and costs was reasonable and, therefore,
granted plaintiff's request for $154, 689.50 in
attorneys' fees and $3, 330.89 in costs from the moving
defendants, for a total of $158, 020.39. Dkt. 84. The Court
ordered defendants to comply within 45 days. Id.
March 7, 2017, plaintiff filed a notice that the moving
defendants had failed to comply with the Court's January
17, 2017 order. Dkt. 88.
March 9, 2017, the Court ordered the moving defendants to
show cause on or before March 24, 2017, why a default
judgment should not be entered against them. Dkt. 89.
March 29, 2017, plaintiff filed a notice that the moving
defendants failed to show cause why a default judgment should
be entered against them. Dkt. 90. Plaintiff reiterated its
request that a default judgment be entered against the moving
defendants and that the Court award full remedies, including
statutory damages, costs, and attorneys' fees as against
all defendants. Id.
the moving defendants' failure to comply with Court's
January 17 and March 9, 2017 orders, the Court DIRECTS the
Clerk of Court to re-enter default against the moving
proceeding on the papers previously filed on plaintiff's
motion for default judgment, see dkts. 50
(“MDJ”), 69, 70, the Court finds that entry of
default judgment against the moving defendants is appropriate
under Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986)
(directing courts to consider seven factors in deciding
whether to enter default judgment).
to Federal Rule of Civil Procedure 55, when a party against
whom a judgment for affirmative relief is sought has failed
to plead or otherwise defend, and the plaintiff does not seek
a sum certain, the plaintiff must apply to the court for a
default judgment. Fed.R.Civ.P. 55.
general rule, cases should be decided on the merits as
opposed to by default, and, therefore, “any doubts as
to the propriety of a default are usually resolved against
the party seeking a default judgment.” Judge William W.
Schwarzer, California Practice Guide: Federal Civil Procedure
Before Trial ¶ 6:11 (The Rutter Group 2015) (citing
Pena v. Seguros La Comercial, S.A., 770 F.2d 811,
814 (9th Cir. 1985)). Granting or denying a motion for
default judgment is a matter within the court's
discretion. Elektra Entm't Grp. Inc. v.
Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 2005); see
also Sony Music Entertainment, Inc. v. Elias, 2004 WL
141959, *3 (C.D. Cal. Jan. 20, 2004).
Ninth Circuit has directed that courts consider the following
factors in deciding whether to enter default judgment: (1)
the possibility of prejudice to plaintiff; (2) the merits of
plaintiff's substantive claims; (3) the sufficiency of
the complaint; (4) the sum of money at stake in the action;
(5) the possibility of a dispute concerning the material
facts; (6) whether defendant's default was the product of
excusable neglect; and (7) the strong policy favoring
decisions on the merits. See Eitel, 782 F.2d at
1471-72; see also Elektra, 226 F.R.D. at 392.
Possibility of Prejudice to Plaintiff
first Eitel factor considers whether a plaintiff
will suffer prejudice if a default judgment is not entered.
PepsiCo, Inc. v. California Sec. Cans, 238 F.Supp.2d
1172, 1177 (C.D. Cal. 2002); see also Eitel, 782
F.2d at 1471-72. Courts have concluded that a plaintiff is
prejudiced if the plaintiff would be “without other
recourse for recovery” because the defendant failed to
appear or defend against the suit. Pepsi, 238
F.Supp.2d at 1177; see also Philip Morris USA, Inc. v.
Castworld Products, Inc., 219 F.R.D. 494, 499 (C.D. Cal.
2003). Given the moving defendants' failure properly to
respond and defend this suit, plaintiff would be prejudiced
if denied a remedy against the moving defendants. As a
result, the first Eitel factor weighs in favor of
the entry of default judgment.
Substantive Merits and ...