United States District Court, S.D. California
LIGHTS OUT HOLDINGS, LLC, a California limited liability company Plaintiff,
LIGHTS OUT APPAREL, LLC, a Maryland limited liability company; JACOB LAWSON, individuals d/b/a LIGHTS OUT BILLIARDS APPAREL Defendants.
ORDER (1) GRANTING DEFENDANTS' MOTION TO SET
ASIDE ENTRY OF DEFAULT [DOC. NO. 19]; AND 2) DENYING
PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AS MOOT [DOC. NO.
A. HOUSTON United States District Judge.
before the Court is Defendant Lights Out Apparel LLC
(“Lights Out Apparel”) and Defendant Jacob
Lawson's (“Lawson”) (collectively,
“Defendants”) motion to set aside entry of
default and Plaintiff Lights Out Holding LLC's
(“Plaintiff”) motion for default judgment.
See Doc. Nos. 11, 19. After a thorough review of the
parties' submissions and for the reasons set forth below,
the Court GRANTS Defendants' motion to
set aside entry of default and DENIES
Plaintiff's motion for default judgment as
filed the instant complaint on August 30, 2016. See
Doc. No. 1. Plaintiff alleges seven causes of action for
violations of: (1) Trademark Infringement, 15 U.S.C. §
1114; (2) Federal Trademark Dilution, 15 U.S.C. §
1125(c); (3) Unfair Competition and False Designation of
Origin, 15 U.S.C. § 1125(a); (4) Common Law Trademark
Infringement; (5) California Trademark Dilution, Cal. Bus.
& Prof. § 14247; (6) Unfair Competition, Cal. Bus.
& Prof. § 17200; and (7) Violation of the Federal
Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. §
1125(d). Id. Plaintiff claims Defendants willfully
infringed Plaintiff's LIGHTS OUT mark by using the mark
in connection with their own athletic apparel and related
goods business in the State of Maryland under the names
Lights Out Apparel and Lights Out Billiards Apparel.
Id. Plaintiff alleges Defendants sell the
aforementioned branded athletic clothing in Maryland as well
as online, including to consumers within this district.
Id. Plaintiff seeks damages and an injunction in
connection with Defendants' manufacture, distribution,
and sale of apparel and related accessories with the
allegedly infringing mark. Id.
August 30, 2016, Defendants were served with the summons and
the complaint. See Doc. No. 3. On October 11, 2016,
in accordance with Rule 55 of the Federal Rules of Civil
Procedure, Plaintiff moved for an entry of default against
Defendant Lights Out Apparel LLC and Defendant Jacob
Lawson. See Doc. No. 9. Plaintiff petitioned for an
award of statutory damages, reasonable attorneys' fees
and costs, and a permanent injunction, prohibiting
Defendants' use, or any other colorable variation of,
Plaintiff's LIGHTS OUT mark. See Doc. No. 11. On
October 12, 2016, the Clerk of court entered default as to
Defendant Jacob Lawson. See Doc. No. 12.
filed the pending motion for default judgment against
Defendant Lights Out Apparel LLC and Defendant Jacob Lawson
on November 14, 2016. See Doc. No. 11.
Defendants' filed a motion to set aside the entry of
default on December 15, 2016. See Doc. No. 19. On
January 31, 2017, the Court took the motions under submission
without oral argument. See Doc. No. 28. On February
3, 2017, the parties filed a joint motion to suspend all
proceedings pending settlement negotiations. The motion was
granted on February 6, 2017. See Doc. Nos. 29, 30.
Plaintiff filed a status report on April 5, 2017, declaring a
dissolution of settlement negotiations with Defendants.
See Doc. No. 32.
Rules of Civil Procedure 55(c) provides that a court
“may set aside an entry of default for good
cause.” The district court has the discretion to
determine whether a party demonstrates “good
cause.” Madsen v. Bumb, 419 F.2d 4, 5 (9th
Cir. 1969). “A court's discretion is especially
broad where, as here, it is entry of default that is being
set aside, rather than a default judgment. Mendoza v.
Wight Vineyard Mngmt., 783 F.3d 941, 945 (9th Cir. 1986)
(citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir.
1981)). In evaluating whether a party has demonstrated good
cause, a district court may consider the following factors,
any of which is sufficient reason to grant the motion: (1)
whether the plaintiff would be prejudiced by the setting
aside of the default; (2) whether the defendant has a
meritorious defense; and (3) the defendant's culpability
in the default. TCI Grp. Life Ins. Plan v. Knoebber,
244 F.3d 691, 696 (9th Cir. 2001). The Party seeking to
vacate the entry of default bears the burden of demonstrating
that these factors favor doing so. See TCI Grp. 244
F.3d at 679.
is a strong preference for deciding cases on their merits,
and therefore any doubts should be resolved in favor of
setting aside the default. See Direct Mail Specialists v.
Eclat Computerized Techs., 840 F.2d 685, 690 (9th Cir.
argue that Plaintiff will not be prejudiced by setting aside
the entry of default because any delay incurred resolving the
case on its merits would be nominal and does not impair