United States District Court, S.D. California
LEFT COAST WRESTLING, LLC, a California limited liability company, Plaintiff,
DEARBORN INTERNATIONAL LLC, a California limited liability company, a/k/a and/or d/b/a TRI TITANS; DUKE MINH LE, an individual, Defendants.
REPORT AND RECOMMENDATION FOR ORDER GRANTING DEFAULT
NITA L. STORMES UNITED STATES MAGISTRATE JUDGE.
the Court are Plaintiff's Motion to Dismiss, ECF No. 23,
(referred in part as set forth in ECF No. 30) and Application
for Default Judgment by Court, Permanent Injunction and
Attorneys' Fees and Costs, ECF No. 37 (referred as set
forth in ECF No. 38). Plaintiff also submitted Supplemental
Documents for consideration. ECF No. 40.
case is centered on the use of “Battle on the
Midway” as a trademark, and alleges claims for False
Designation of Origin under the Lanham Act, with attendant
state law claims including violation of the California
Business & Professions Code, § 17200, common law
trademark infringement, conversion, breach of fiduciary duty
and declaratory relief. ECF No. 1. Plaintiff alleges that
“Battle on the Midway” was developed by and is a
common law trademark of plaintiff, Left Coast Wrestling, LLC
(“Left Coast”), an LLC of which defendant Mr.
Duke Le was once a member. Id. at 4.
alleges that Left Coast was formed for the purpose of running
an annual youth wrestling tournament in San Diego with the
final round to occur on the deck of the USS Midway, resulting
in the title “Battle on the Midway.” Id.
Plaintiff alleges that it developed, marketed, planned and
carried out the first tournament in 2016. Id. at
5-10. Plaintiff alleges that after the first tournament,
Defendants usurped Plaintiff's idea, mark, tournament,
social media accounts, website and other items, and began
promoting a “Battle on the Midway” tournament on
behalf a “Tri Titans.” Tri Titans is the dba of
defendant Dearborn International, LLC and the alleged alter
ego of defendant Mr. Le (Dearborn and Mr. Le are collectively
referred to as “Defendants”). Id. at
complaint alleges its damages include lost profits and loss
of goodwill, and seeks to enjoin Defendants from further use
of “Battle on the Midway” in any capacity.
Id. at 17-18. Plaintiff also requests disgorgement
of any and all profits attributable to Defendants'
trademark infringement, rescission of Defendant's pending
USPTO trademark application, as well as attorneys' fees
and costs. Id. at 25-27.
complaint was filed March 7, 2017 and served on both
Defendants March 14, 2017. ECF Nos. 1, 5. In response,
Defendants filed an answer and counterclaims. ECF No. 8. The
parties, all represented by counsel at the time, participated
in an Early Neutral Evaluation, which was unsuccessful. ECF
No. 14. The Court issued a Scheduling Order regulating
discovery and pretrial proceedings. ECF No. 15.
time later, counsel for the Defendants moved to withdraw
based on Defendants' “failure to communicate with
counsel and breach of agreement to pay fees.” ECF No.
17 at 2:9-10. The District Judge issued an order to
Defendants to respond and explicitly advised the Defendants
of the consequences of failure to do so, as well as the
inability of an entity such as defendant Dearborn to proceed
without counsel. ECF No. 18. Defendants did not respond and
the District Judge granted the motion to withdraw. ECF No.
proceeded to file a request for entry of default, and then a
motion to dismiss Defendants' counterclaims. ECF Nos. 21,
23. The District Judge did not immediately grant the request
for entry of default, and instead issued an order to show
cause, again requiring written response from the Defendants
and advising that failure to respond would result in the
dismissal of Defendants' counterclaims and entry of
default. ECF Nos. 22, 25. No. response was filed.
District Judge dismissed Defendants' counterclaims, and
ordered entry of default against both Defendants. ECF No. 30,
31. In the same order, the District Judge referred the
request for discovery sanctions and default judgment, to the
extent it was requested as a discovery sanction pursuant to
Rules 16, 37, and 41, to the undersigned. ECF No. 30.
Plaintiff thereafter also moved for default judgment pursuant
to Rule 55 and served the motion on Defendants by overnight
delivery. ECF No. 37. This motion was also referred to the
undersigned. ECF Nos. 38. Defendants did not respond to the
motion and have not moved to set aside the default. The
docket reflects no attempt on the part of Defendants to file
any document of any kind since the motion of their prior
counsel to withdraw in July of 2017. ECF No. 17 (Motion to
Withdraw, filed July 31, 2017).
Legal Standard for Default Judgment
to Federal Rule of Civil Procedure 55, the Court may enter
default judgment against a defendant who has “failed to
plead or otherwise defend” an action. Entry of default
does not “automatically entitle the plaintiff to a
court-ordered judgment, ” granting relief remains
“entirely within the court's discretion.”
PepsiCo, Inc. v. California Sec. Cans, 238 F.Supp.2d
1172, 1174 (C.D. Cal. 2002) (citing Draper v.
Coombs, 792 F.2d 915, 924-25 (0th Cir. 1986).
Entry of Default is Proper
of default may be entered as either a sanction or for “failure to
plead or otherwise defend.” Fed.R.Civ.P. 55(a)
(“When a party … has failed to plead or
otherwise defend …”); Fed R. Civ. P. 16(f)(1)(C)
(“On motion or on its own, the court may issue any just
orders, including those authorized by Rule
37(b)(2)(A)(ii)-(vii), if a party … fails to obey a
scheduling or other pretrial order.”); Fed.R.Civ.P.
37(b)(2)(C) (“If a party ... fails to obey an order to
provide or permit discovery, ... the court ... may ...
render[ ] a judgment by default against the disobedient
party.”); Dreith v. Nu Image, Inc., CV054146
SVW MANX, 2007 WL 9658786, at *3 (C.D. Cal. Mar. 2, 2007)
(“A district court may enter default against a
defendant as a sanction for engaging in discovery
abuse.”); Adriana Intl. Corp. v. Thoeren, 913
F.2d 1406, 1410 (9th Cir. 1990) (dismissing plaintiff's
complaint, striking answers to cross claims, and entering
default judgment as an evidentiary sanction after plaintiff
repeatedly failed to obey discovery orders). Where the
drastic sanctions of dismissal or default are imposed, the
party's non-compliance must be due to willfulness or bad
faith. Id. at 1412, n. 5; Sigliano v.
Mendoza, 642 F.2d 309, 310 (9th Cir. 1981). All that is
required to show willfulness or bad faith is
“disobedient conduct not shown to be outside the
control of the litigant.” Henry v. Gill
Industries, 983 F.2d 943, 948 (9th Cir. 1993).
Ninth Circuit employs a balancing test of five factors for
the court to consider before declaring default: (1) the
public's interest in expeditious resolution of
litigation; (2) the court's need to manage its docket;
(3) the risk of prejudice to the other party; (4) the public
policy favoring the disposition of cases on their merits; and
(5) the availability of less drastic sanctions. Dreith v.
Nu Image, Inc., 2007 WL 9658786, at *3 (quoting factors
from Malone v. United States Postal Service, 833
F.2d 128, 130 (9th Cir. 1987). “Where a court order is
violated, the first two factors support sanctions and the
fourth factor cuts against a default. Therefore, it is the
third and fifth factors that are decisive.” Adriana
Intern. Corp. v. Thoeren, 913 F.2d 1406, 1412 (9th Cir.
Defendants' failure to respond to discovery, appear for
deposition, or otherwise meaningfully participate in the
either the discovery process or comply with Court's
direction to respond or oppose the Plaintiff's
submissions constitutes a failure “to plead or
otherwise defend” within the meanings of Rules 16 and
55. Defendants have also ignored at least two orders of this
Court: the Scheduling Order (ECF No. 15) which directed the
timing and compliance with discovery procedures; and the
Order to Show Cause (ECF No. 25) as to why the counterclaim
should not be dismissed. In light of the explicit direction of the
court to Defendants, on multiple occasions, explaining that
Dearborn must be represented by counsel, and the consequences
of failure to act, coupled with service of every motion and
order upon Mr. Le, the Defendants actions can only be
construed as “within their control” and thus,
willful and bad faith non-compliance.
both the third and fifth Malone factors, risk of
prejudice and availability of less drastic sanctions, weigh
in favor of default. In sum, neither the Plaintiff nor the
court have been able to meaningfully engage Defendants in
this case. Plaintiff alleges it sent a cease and desist
letter to the Defendants prior to bringing this action, to no
avail. ECF No. 1 at 14. ¶ 37. Initiation of the present
lawsuit does not appear to have impacted Defendants, who
refuse to participate. The orders of this court directing
Defendants to respond, oppose, or otherwise take part have
gone unanswered. Accordingly, there is a possibility of
prejudice to the Plaintiff absent default judgment, as the
Plaintiff would be left without recourse. PepsiCo, Inc.
v. California Sec. Cans, 238 F.Supp.2d at 1177
(“[i]f Plaintiffs' motion for default judgment is
not granted, Plaintiffs will likely be without other recourse
for recovery.”) Nor is there a lesser sanction
available; there is no other means remaining to the Plaintiff
or the Court to persuade Defendants to respond, participate,
or otherwise permit this case to proceed in the normal
four factors weighing in favor entry of default, conduct
within the apparent control of Defendant, and complete
failure to participate in litigation, entry of default is
supported by the Malone factors.
“entry of default does not entitle the non-defaulting
party to a default judgment as a matter of right.”
Dreith v. Nu Image, Inc., 2007 WL 9658786, at *5
(quoting In re Villegas, 132 B.R. 742, 746 (BAP 9th
Plaintiff requests default judgment as either (1) a sanction
under Rules 16 and 37 or (2) for failure to appear and defend
under Rule 55. ECF No, 37-1 at 6-8. While total failure to
participate in a case and comply with the Scheduling Order is
sanctionable by default judgment under Rule 16 (which
incorporates all remedies provided by Rule 37), the
circumstances presented in this case are more analogous to
the cases wherein the defendants never appeared than those
cases where discovery abuses included misleading conduct or
those where defendants act in direct defiance of court orders
that resulted in default judgment as a discovery sanction.
See Canon Sols. Am., Inc. v. Gungap, SACV141990 JLS
RNBX, 2016 WL 9108916, at *4 (C.D. Cal. Feb. 8, 2016)
(collecting cases, noting terminating sanctions appropriate
when “misconduct includes knowingly deceiving the court
with manipulated or fabricated evidence [citation omitted],
consistently violating … orders, rules, and
procedures…[citation omitted], or engaging in a
‘consistent, intentional, and prejudicial practice of
obstructing discovery' [citation omitted]); Schudel
v. Searchguy.com, Inc., 07CV0695 BEN BLM, 2010 WL
1945743, at *1 (S.D. Cal. May 13, 2010) (default judgment
ordered after defendant, who appeared at the pretrial
conference, was ordered to appear for deposition and produce
specific discovery, and failed to do so); Dreith v. Nu
Image, Inc., 2007 WL 9658786 at *2 (default judgment
appropriate as sanction for failing to produce documents as
directed at an MSJ hearing, and later appearing at pre-trial
conference and again ordered to produce documents).
Accordingly, the Court finds it appropriate to address
default judgment in the context of Rule 55 and the
determining whether default judgment is appropriate, the
Ninth Circuit considers the following seven factors:
“(1) the possibility of prejudice to the plaintiff, (2)
the merits of plaintiff's substantive claim, (3) the
sufficiency of the complaint, (4) the sum of money at stake
in the action; (5) the possibility of a dispute concerning
material facts; (6) whether the 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). When assessing the
Eitel factors, all factual allegations in the
complaint are taken as true, except those with regard to
damages. Televideo Sys., Inc. v. Heidenthal, 826
F.2d 915, 917-18 (9th Cir. 1987). Although a decision on the
merits is always preferred, in this case, the Eitel
factors weigh in favor of entering default judgment.
Possibility of Prejudice to Plaintiff
factor is duplicative of the Malone factor analyzing
the risk of prejudice. As discussed, Plaintiff sent a cease
and desist letter, initiated litigation, and used proper
channels to seek redress. Without default judgment, Plaintiff
would be prejudiced by being left without recourse for the
claims alleged. PepsiCo, Inc. v. California Sec.
Cans, 238 F.Supp.2d at 1177.
Substantive Merits and Sufficiency of the
substantive merits and the sufficiency of the claims share a
close relationship and are commonly discussed together.
PepsiCo, Inc. v. California Sec. Cans, 238 F.Supp.2d
at 1175. “The Ninth Circuit has suggested that these
two factors require that a plaintiff ‘state a claim on
which the plaintiff may recover.'” Id.
(quoting Kloepping v. Fireman's Fund, C 94-2684
TEH, 1996 WL 75314, at *2 (N.D. Cal. Feb. 13, 1996)).
not dispositive to the analysis, most often when a party
seeks default judgment, the defendant has not appeared and
had no opportunity to challenge the complaint. In this case
Defendants were represented by counsel at the outset of this
case and, when presented with an opportunity to challenge the
sufficiency of the complaint, submitted an answer rather than
a motion to dismiss. See ECF No. 8. Nonetheless, the
Court will review the well pled allegations, accepted as
true, to ensure the substantive merits and sufficiency of the
claims are adequately stated.
Lanham Act § 43(a) Violation & Declaratory
first claim for relief alleges false designation of origin
and unfair competition in violation of Section 43(a) the
Lanham Act. ECF No. 1 at 18. Section 43(a) of the Lanham Act
prohibits using in commerce in connection with goods or
services “any word, term, name, symbol, or device, or
any combination thereof, or any false designation of origin,
false or misleading description of fact, or false or
misleading representation of fact, which is likely to cause
confusion, or to cause mistake, or to deceive as to the
affiliation, connection, or association of such person with
another person, or as to the origin, sponsorship, or approval
of his or her goods, services, or commercial activities by
another person….” 15 U.S.C. § 1125(a)(1). A
mark need not be registered to be protected under Section
43(a) of the Lanham Act. Kendall-Jackson Winery, Ltd. v.
E.&.J. Gallo Winery, 150 F.3d 1042, 1047, n.7 (9th
Cir. 1998) (“Registration is not a prerequisite for
protection under § 43(a).”). However, to prevail
on its claim for false designation of origin for an
unregistered mark, Plaintiff still must show that “owns
protectable trademark rights and that [the defendants']
activities are likely to confuse consumers as to the source
of the goods.” HTS, Inc. v. Boley, 954
F.Supp.2d at 942 (citing Brookfield Commc'ns., Inc.
v. West Coast Entm't Corp., 174 F.3d 1036, 1046 (9th
Cir.1999)). Ownership of the mark can be established by
priority of use. Sengoku Works Ltd. v. RMC Int'l,
Ltd., 96 F.3d 1217, 1219 (9th Cir. 1996) (“the
standard test of ownership is priority of use.... the party
claiming ownership must have been the first to actually use
the mark in the sale of goods or services.”).
state a valid claim under Section 43(a) of the Lanham Act, a
plaintiff show that the defendant (1) uses a designation or
false designation of origin, (2) in interstate commerce, and
(3) in connection with goods or services, that (4) is likely
to cause confusion, mistake or deception as to either the
affiliation, connection, or association of defendant with
another person, or the origin, sponsorship, or approval of
defendant's goods, services, or commercial activities by
another person, that (5) has or will damage the plaintiff. 5
McCarthy on Trademarks and Unfair Competition § 27:13
Section 43(a), “the ultimate test is whether public is
likely to be deceived or confused by the similarity of the
marks.” HTS, Inc. v. Boley, 954 F.Supp.2d 927,
942 (D. Ariz. 2013) (citing Jada Toys, Inc. v. Mattel,
Inc., 518 F.3d 628, 632 (9th Cir.2008)); see also,
Starbuzz Tobacco, Inc. v. Melnick, SACV 15 0224 DOC
RNBX, 2015 WL 12656925, at *3 (C.D. Cal. July 31, 2015)
(“Whether the violation is called infringement, unfair
competition or false designation of origin, the test is
identical -whether there is a likelihood of
confusion.”) (citing Two Pesos, Inc. v. Taco
Cabana, Inc., 505 U.S. 763, 781 (1992)); Celebrity
Chefs Tour, LLC v. Macy's, Inc., 16 F.Supp.3d 1159,
1166 (S.D. Cal. 2014) (“[a] claim for false designation
of origin is subject to the same standard, except a claim for
false designation of origin does not require that the mark be
registered.”) (internal quotation omitted). “The
likelihood of confusion is the central element of trademark
infringement, and the issue can be recast as the
determination of whether ‘the similarity of the marks
is likely to confuse customers about the source of the
products.'” GoTo.com, Inc. v. Walt Disney
Co., 202 F.3d 1199, 1205 (9th Cir. 2000) (quoting
Official Airline Guides v. Goss, 6 F.3d 1385, 1391
Ninth Circuit has developed eight factors, the
Sleekcraft factors, to analyze the likelihood of
confusion: (1) the similarity of the marks; (2) the
relatedness of the two companies' services; (3) the
marketing channels used; (4) the strength of the
plaintiff's mark; (5) the defendant's intent in
selecting its mark; (6) evidence of actual confusion; (7) the
likelihood of expansion into other markets; and (8) the
degree of care likely to be exercised by purchasers.
Id. (citing AMF Inc. v. Sleekcraft Boats,
599 F.2d 341, 348-49 (9th Cir.1979)). The eight-factor test
is “pliant.” When the relevant marketing channel
is the internet, the three Sleekcraft factors that
are most relevant are: (1) the similarity of the marks; (2)
the relatedness of the goods or services; and, (3) the
“simultaneous use of the Web as a marketing
channel.” Brookfield, 174 F.3d at 1055 n. 16
(citing Comp Exam'r Agency, Inc. v. Juris, Inc.,
1996 WL 376600, *1 (C.D. Cal. Apr. 26, 1996)); but see
Network Automation, Inc. v. Adv. Sys. Concepts, Inc.,
638 F.3d 1137, 1148 (9th Cir. 2011) (“we did not intend
Brookfield to be read so expansively as to forever
enshrine these three factors…as the test for trademark
infringement on the Internet … Depending on the facts
of each specific case arising on the Internet, other factors
may emerge as more illuminating on the question of consumer
complaint for violation of the Lanham Act based upon false
designation of origin states a claim, establishes priority of
use, and likelihood of confusion. Plaintiff alleges that
Plaintiff developed and used the phrase “Battle on the
Midway” to nationally and internationally promote a
wrestling tournament presented by Plaintiff in 2016,
primarily via the internet and social media. ECF No. 1 at
¶¶ 15, 19, 21-23. Plaintiff alleges that Defendants
then used the phrase “Battle on the Midway” to
nationally and internationally promote a wrestling tournament
presented by “Tri Titans, ” a dba of Defendants,
in 2017- also primarily via the internet. ECF No. 1 at
¶¶ 29-31. The Plaintiff's complaint establishes
a claim for false designation of origin by showing use of the
phrase “Battle on the Midway” as being presented
by Tri Titans, which is likely to cause confusion, or to
cause mistake, or to deceive as to the affiliation,
connection, or association of Defendants with Plaintiff, or
as to the origin, sponsorship, or approval of the
Defendants' goods and services by Plaintiff. 15 U.S.C.
1125(a)(1)(A); see also PepsiCo, Inc. v. California Sec.
Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002).
Plaintiff also alleges damages in the form of lost sales,
lost profits, loss of goodwill, and customer confusion. ECF
No. 1 at ¶¶ 44-53.
admitted allegations of the complaint also establish
ownership of the “Battle on the Midway” mark
through Plaintiff's first use for the 2016 tournament,
and establish likelihood of confusion as the identical mark
is being used to promote an identical wrestling tournament,
via the same social media and internet providers. These
allegations easily satisfy the three most relevant
Sleekcraft factors identified in
Brookfield. Brookfield, 174 F.3d at 1055 n.
facts of this specific case are also strongly influenced by
the fifth Sleekcraft factor, Defendants' intent
in selecting its mark, as “more illuminating on the
question of consumer confusion.” Network
Automation, Inc. v. Adv. Sys. Concepts, Inc., 638 F.3d
at 1148. This factor weighs strongly in favor a finding of
likelihood of confusion because both the timing of the events
and use of the Plaintiff's own marketing channels
(Facebook and Instagram) provides strong evidence that
Defendants' intentionally aimed to confuse consumers into
the belief that Defendants were the originators of the Battle
on the Midway mark and tournament.
remaining Sleekcraft factors are also satisfied. The
degree of care likely to be exercised by consumers as to the
“presenter” of a wrestling tournament is low, and
the occurrence of the event as put on by Defendants in 2017
is evidence of actual confusion. See ECF No. 37-1 at
12. Plaintiff has established a likelihood of confusion, and
a claim under the Lanham Act. Likewise, Plaintiff adequately
alleges an actual controversy exists regarding ownership of
the mark and would be aided by judicial determination.
See ECF No. 1 at 88-91.
California Business and Professions Code Violations &
Common Law Trademark Claims
Ninth Circuit “has consistently held that state common
law claims of unfair competition and actions pursuant to
California Business and Professions Code § 17200 are
‘substantially congruent' to claims made under the
Lanham Act.” Cleary v. News Corp., 30 F.3d
1255, 1262-63 (9th Cir. 1994) (citing Academy of Motion
Pictures Arts & Sciences v. Creative House Promotions,
Inc., 944 F.2d 1446, 1457 (9th Cir. 1991). “This
also applies to common law trademark infringement
claims.” Starbuzz Tobacco, Inc. v. Melnick,
2015 WL 12656925, at *4; see also, Grateful Palate, Inc.
v. Joshua Tree Imports, LLC, 220 Fed.Appx. 635, 637 (9th
Cir. 2007) (“California trademark law is
‘substantially congruent' to federal trademark law
under the Lanham Act.”); Monte Carlo Shirt, Inc. v.
Daewoo Intern. (Am.) Corp., 707 F.2d 1054, 1058 (9th
Cir. 1983) (“A showing of likely buyer confusion as to
the source, origin, or sponsorship of goods is part of a
cause of action for infringement of a registered trademark,
” but also “applies to common-law trademark
infringement claims brought under California law.”).
where Plaintiff's allegations as set forth above also
establish priority of use and a likelihood of confusion
sufficient to support a false designation of origin claim,
Plaintiff has also established claims under California common
law trademark law and California Business and Professions
Code §§ 17200 and 17500.
California law, the elements of a conversion claim are (1)
plaintiff's ownership or right to possession of the
property at the time of the conversion; (2) defendants'
conversion by a wrongful act or dispossession of
plaintiff's property rights; and (3) damages. Miles,
Inc. v. Scripps Clinic and Research Found., 810 F.Supp.
1091, 1094 (S.D. Cal. 1993).
complaint establishes Plaintiff's ownership and thus,
right to possession of the “Battle on the Midway”
mark, the websites and social media pages associated with the
tournament, as well as apparel and profits derived from the
2016 tournament of which Defendants retained possession. ECF
No. 1 at ¶¶ 13, 15-17, 23-25, 74-79.
Breach of Fiduciary Duty
state a claim for breach of fiduciary duty under California
law, a plaintiff must allege (1) the existence of a fiduciary
relationship; (2) breach of the fiduciary duty; and (3)
damage proximately caused by that breach. Sunrider Corp.
v. Bountiful Biotech Corp., SACV 08 1339 DOC
AJWX, 2010 WL 11596235, at *5 (C.D. Cal. June 4, 2010)
(citing Roberts v. Lomanto, 112 Cal.App.4th 1553,
alleges Mr. Le was a member of the member-managed limited
liability corporation, Left Coast Wrestling, LLC. ECF No. 1
at ¶ 11. The Plaintiff's operating agreement is not
a part of the record, but members of member-managed LLCs owe
fiduciary duties of care and loyalty. Cal. Corp. Code §
17704.09 (a) (“The fiduciary duties that a member owes
to a member-managed limited liability company and the other
members of the limited liability company are the duties of
loyalty and care under subdivisions (b) and (c)”);
§ 17701.10(c) (“an operating agreement shall not
do any of the following… [e]liminate the duty of
loyalty…[u]nreasonably reduce the duty of
care…”). The duties of loyalty and care are
enumerated by the California Corporations code as requiring
members to “account to the limited liability company
and hold as trustee for it any property, profit, or benefit
derived by the member in the conduct … of the
activities of a limited liability company” and
“[t]o refrain from competing with the limited liability
company in the conduct or winding up of the activities of the
limited liability company.” Cal. Corp. Code §
17704.09 (b) (1, 3).
adequately alleges that Mr. Le, at a minimum, retained entry
fees and profits from the sale of apparel, all of which are
alleged to have occurred during the time Mr. Le remained an
active member of the LLC. ECF No. 1 at ¶¶ 11, 13,
undersigned finds the substantive merits of each claim are
sufficiently stated, and this factor weighs in favor of entry
of default judgment.
Sum of Money at Stake in the Action
Eitel factor examines “the amount of money at
stake in relation to the seriousness of Defendant's
conduct.” PepsiCo, 238 F.Supp.2d at 1176. If
the sum of money at stake is completely disproportionate or
inappropriate, then default judgment is disfavored.
Twentieth Century Fox Film Corp. v. Streeter, 438
F.Supp.2d 1065, 1071 (D. Ariz. 2006). When evidence is
presented that shows the damages are “proportional to
the harm caused” and “otherwise appropriate,
” this factor weighs in favor of entry of default
judgment. Landstar Ranger, Inc. v. Parth Enters.,
Inc., 725 F.Supp.2d 916, 921 (S.D. Cal. 2010) (damages
consistent with terms of contract are appropriate); see
also, Moroccanoil, Inc. v. Allstate Beauty Products,
Inc., 847 F.Supp.2d 1197, 1202 (C.D. Cal. 2012)
(judgment amount sought pursuant to statute, 15 U.S.C. §
1117, and “consistent with the allegations in the first
amended complaint” weighs in favor of default
Plaintiff's complaint seeks both injunctive relief and
damages under 15 U.S.C. § 1117. See ECF No. 1. Plaintiff
seeks damages in the amount of $232, 755.70. ECF No. 37-1 at
9. Damages are addressed in detail in subsequent sections,
but this amount is reasonable and consistent with the
allegations of the complaint. See also, Weeks v.
Fresh-Pic Produce Co., Inc., 08CV02058 BTM WVG, 2012 WL
1815648, at *4 (S.D. Cal. May 17, 2012), amended in
part, 08CV02058 BTM WVG, 2013 WL 990827 (S.D. Cal. Mar.
12, 2013) (“the sum of money that would be awarded is
not unreasonable… the total damages award that the
Court is willing to entertain  pales in comparison to the
three million dollars at issue in Eitel.”)
Possibility of Dispute Concerning Material
operation of default, the material allegations of the
complaint are accepted as true. Televideo Sys., Inc. v.
Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)
(“The general rule of law is that upon default the
factual allegations of the complaint, except those relating
to the amount of damages, will be taken as true.”).
Likewise, the District Judge dismissed, without leave to
amend, Defendants' counterclaims. ECF No. 30 (“The
Court construes their non-opposition as consent to the
motion's being granted. … The Court deems their
counterclaims abandoned, and DISMISSES them without leave to
amend.”). Finally, Defendants have refused to
participate in litigation and there is no indication
Defendants intend to so. The possibility of dispute is
therefore remote and this factor weighs in favor of default
Whether Default was Due to Excusable Neglect
is no question that Defendants were properly served and are
aware of the litigation, having answered the complaint and
previously participated. See ECF Nos. 8, 14.
Defendants' refusal to participate following the
withdrawal of counsel and despite direction from the District
Judge cuts against any finding of excusable neglect.
Strong Policy Favoring a Decision on the Merits
the strong policy favoring a decision on the merits is
outweighed by the other factors. See Moroccanoil, Inc. v.
Allstate Beauty Products, Inc.,847 F.Supp.2d 1197, 1203
(C.D. Cal. Mar. 2, 2012) (“Although default judgment is
disfavored, a decision on the merits is impractical, if not
impossible, when the defendant takes no part in the
action”). Defendants have refused to respond, oppose,
appear for deposition, or otherwise ...