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Thermolife International, LLC v. Sechel Holdings, Inc.

United States District Court, D. Arizona

April 3, 2015

ThermoLife International, LLC, an Arizona limited liability company, Plaintiff,
v.
Sechel Holdings, Inc., a Delaware corporation, and Ergogenix, Inc., a Delaware corporation, Defendants.

ORDER

JAMES A. TEILBORG, Senior District Judge.

Pending before the Court are three interrelated motions: Plaintiff ThermoLife International, LLC's Rule 55(b)(1) Request for Default Judgment Against Sechel Holdings, Inc. and Ergogenix, Inc. (Doc. 16); Defendant Ergogenix, Inc.'s Motion to Set Aside Entry of Default (Doc. 19); and Defendant Ergogenix, Inc.'s Motion for Leave to File Answer to Plaintiff's Complaint (Doc. 22). The Court now rules on the motions.

I. Background

On October 15, 2014, Plaintiff filed its original complaint. (Doc. 1). Service was executed on Ergogenix two days later on October 17, 2014. (Doc. 8). On November 13, 2014, the Clerk of Court, upon Plaintiff's request, entered default against Sechel Holdings and Ergogenix pursuant to Federal Rule of Civil Procedure 55(a) ("Rule"). (Doc. 10). Due to a pleading deficiency in Plaintiff's complaint, the Court ordered Plaintiff to "file a supplement to the complaint properly alleging federal subject matter jurisdiction." (Doc. 11). Instead of filing a supplement, Plaintiff filed its Amended Complaint on December 30, 2014. (Doc. 12). Plaintiff properly served the Amended Complaint by electronic service via the Clerk's Office. ( Id. )[1] On January 9, 2015, Plaintiff filed its motion for default judgment. (Doc. 16).[2] The Court subsequently found that the Amended Complaint adequately pleads jurisdiction. (Doc. 26).

II. Effect of the Amended Complaint

The Court ordered Plaintiff to file a "supplement" to its original complaint due to Plaintiff's failure to adequately plead subject matter jurisdiction. (Doc. 11). Rather than file a supplement, Plaintiff filed its Amended Complaint. (Doc. 12). "As a general rule, when a plaintiff files an amended complaint, the amended complaint supersedes the original, the latter being treated thereafter as non-existent.'" Rhodes v. Robinson, 621 F.3d 1002, 1005 (9th Cir. 2010) (quoting Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967)).[3]

Consequently, when Plaintiff filed the Amended Complaint its original complaint became ineffectual. See Ferdik v. Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992) (noting that an "amended pleading supersedes the original pleading" such that "after amendment the original pleading no longer performs any function and is treated thereafter as non-existent" (quotations omitted) (emphasis added)). Because Plaintiff's original complaint "no longer performs any function, " a default based on the original complaint must also be rendered ineffectual and non-existent. See Best W. Int'l, Inc. v. Melbourne Hotel Investors, LLC, 2007 WL 2990132, at *1 (D. Ariz. Oct. 11, 2007) (noting that the filing of an amended complaint subsequent to a motion for default judgment "mooted" the default judgment motion); Ogunsalu v. Nair, 264 F.Appx. 672, 674 (9th Cir. 2008) (unpublished) (noting that motions directed at superseded pleadings are to be denied as moot); Nelson v. Nationwide Mortg. Corp., 659 F.Supp. 611, 615 (D.D.C. 1987) ("In light of [the plaintiff's] filing of an amended complaint, her [previous] motions for entry of default judgments against [the defendants] must be denied as moot.").

In this case, the Clerk of Court entered default on Plaintiff's original complaint. At this time, default has not been entered on Plaintiff's Amended Complaint. Consequently, default judgment on the Amended Complaint would be improper because no default has been entered on the Amended Complaint. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986) (discussing the two-step process under Rule 55).

For these reasons, the Court will deny Plaintiff's motion for default judgment (Doc. 16) as moot. Furthermore, Ergogenix's Motion to Set Aside Entry of Default (Doc. 19) is also moot because Plaintiff's original complaint "no longer performs any function" making the entry of default on the original complaint "non-existent." If Plaintiff wishes to pursue an entry of default judgment based on the Amended Complaint, it must first obtain an entry of default from the Clerk of Court pursuant to Rule 55(a).

III. Ergogenix's Motion to Set Aside Entry of Default

As discussed, the Court holds that Ergogenix's Motion to Set Aside Entry of Default (Doc. 19) was rendered moot by the filing of Plaintiff's Amended Complaint. Nonetheless, assuming arguendo that the Amended Complaint merely supplemented Plaintiff's original complaint, the Clerk of Court's entry of default on the original complaint would remain operative. Consequently, if the entry of default were to be set aside as Ergogenix requests, default judgment would be improper. See Eitel, 782 F.2d at 1471 (discussing the two-step process under Rule 55). The Court, therefore, will consider whether the entry of default could be set aside pursuant to Rule 55(c).

A. Legal Standard

The Court may set aside an entry of default if good cause is shown. Fed.R.Civ.P. 55(c). In determining whether good cause has been shown, the Court considers: 1) whether there was culpable conduct on the part of the defendant; 2) whether any meritorious defenses are available, and 3) whether there is any prejudice to the plaintiff. United States v. Signed Personal Check No. 730 of Yubran S. Mesle ("Mesle"), 615 F.3d 1085, 1091 (9th Cir. 2010). "[T]he party seeking to vacate a default judgment bears the burden of demonstrating that these factors favor vacating the judgment." TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001). This burden, however, is not "extraordinarily heavy." Id. at ...


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