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Nike, Inc. v. Fujian Jialaimeng Shoes Co., Ltd.

United States District Court, D. Nevada

March 6, 2019

NIKE, INC., Plaintiff,
v.
FUJIAN JIALAIMENG SHOES CO., LTD, et al., Defendants.

          REPORT AND RECOMMENDATION

          GEORGE FOLEY, JR. UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Plaintiff's Motion for Default Judgment Pursuant to Fed.R.Civ.P. 55(b)(2) (ECF No. 30), filed on July 10, 2018. No response to the motion was filed. This proceeding is referred to the undersigned pursuant to 28 U.S.C. 636(a) and (b) and LR IB 1-3 and 1-4 of the Local Rules of Practice.

         BACKGROUND

         On February 22, 2017, Plaintiff filed its complaint (ECF No. 1) alleging claims of patent infringement, trademark infringement, false designation of origin/unfair competition, dilution under the Lanham Act, and common law trademark infringement against Defendants. On March 2, 2017, Plaintiff filed a certificate of service (ECF No. 15) of the complaint, summonses, and other pleadings such as Plaintiff's motion for entry of a temporary restraining order on Defendants Fujian Jialameng Shoes Co., Ltd. and Daeast-Asia Sports Production Co., Ltd. Defendants did not file a responsive pleading. On May 5, 2017, the Clerk of the Court entered default against Defendants. ECF No. 28. Based on Defendant's failure to answer or otherwise respond, Plaintiffs now seek a default judgment against Defendants.

         DISCUSSION

         I. Adequacy of Service of Process

         As a preliminary matter, a court must determine whether the service of process was adequate. A federal court does not have jurisdiction over a defendant unless the defendant has been properly served. See Direct Mail Specialists, Inc. v. Eclat Computerized Tech., Inc., 840 F.2d 685, 688 (9th Cir. 1988). Rule 4 of the Federal Rules of Civil Procedure governs service of process in a federal action. According to Rule 4, an individual may be served by “delivering a copy of the summons and of the complaint to the individual personally.” Fed.R.Civ.P. 4(e)(2)(A). A corporation, partnership, or association may be served by delivering a copy of the summons and complaint to “an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process.” Fed.R.Civ.P. 4(h)(1)(B).

         Here, the executed summonses indicate that a process server served the complaint and summonses on Defendant Fujian Jialameng Shoes Co., Ltd. and Defendant Daeast-Asia Sports Production Co., Ltd. via their agents on February 22, 2017. See ECF No. 15. Therefore, service of process on Defendants was adequate.

         II. Default Judgment

         Rule 55 of the Federal Rules of Civil Procedure sets forth the two-step procedure for obtaining a default judgment “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise." Fed.R.Civ.P. 55(a); see also Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, the clerk of the court must enter default against the party. Fed.R.Civ.P. 55(a). Second, the party seeking default judgment must then petition the district court for entry of a default judgment. Fed. R. Civ. 55(b)(2).

         The grant or denial of a motion for the entry of default judgment is within the discretion of the district court. Liberty Ins. Underwriters Inc. v. Scudier, 53 F.Supp.3d 1308, 1317 (D. Nev. 2013) (citing Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980)). The Ninth Circuit has identified the following factors as relevant to the exercise of the court's discretion in determining whether to grant default judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the 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 material facts; (6) whether the default was due to the excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel, 782 F.2d at 1471-72.

         In applying the Eitel factors, the well-pleaded factual allegations of the complaint are taken as true after the court clerk enters a default, except for the allegations relating to damages. See, e.g., TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987); Liberty Ins., 53 F.Supp.3d at 1317. “Rule 55 gives the court considerable leeway as to what it may require as a prerequisite to the entry of a default judgment.” TeleVideo Sys., 826 F.2d at 917. In particular, a court may require a moving party to “establish the truth of any allegation by evidence.” Fed.R.Civ.P. 55(b)(2)(c). The Clerk entered default against Defendants on May 5, 2017. See ECF No. 28. Thus, the Court will evaluate the Eitel factors.

         A. Possibility of Prejudice to the Plaintiff

         The first Eitel factor favors default judgment where the plaintiff will suffer prejudice if default judgment is not entered. 782 F.2d at 1471. Simply delaying the resolution of the case is not prejudicial under this standard. See TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001). The standard is whether plaintiff's ability to pursue the claim will be hindered. Id. (quoting Falk v. Allen, 739 F.2d 461, 462 (9th Cir. 1984)).

         Defendants have failed to appear since being served. As a result, Plaintiffs “will likely be without other recourse for recovery” if default judgment is not entered in their favor. Liberty Ins., 53 F.Supp.3d at 1318 (quoting Pepsico, Inc. v. Cal. Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002)). In addition, by failing to answer or otherwise respond to the complaint, Defendants are deemed to have admitted the truth of Plaintiff's averments as to liability. Philip Morris USA, Inc. v. ...


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