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Origami Owl LLC v. Mayo

United States District Court, D. Arizona

April 11, 2016

Orgami Owl, LLC, a Delaware entity, Plaintiff,
v.
Julie Mayo, a single woman, Ann L. Mayo, a single woman, doing business as West Coast Charms and 5th Avenue Pets, West Coast Charms, LLC, a Nevada entity, Defendants.

DEFAULT JUDGMENT

David G. Campbell, United States District Judge.

Pursuant to this Court’s February 11, 2016 (Doc. 80), Plaintiff filed a motion for default judgment against Defendant West Coast Charms LLC pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. Doc. 82. For the following reasons, the Court will grant Plaintiff’s motion in part.

I. Background.

This case is an intellectual property infringement case involving customizable jewelry. Plaintiff’s amended complaint (Doc. 20) alleges claims for patent infringement pursuant to 35 U.S.C. § 271, trademark infringement pursuant to 15 U.S.C. § 1114, copyright infringement pursuant to 17 U.S.C. § 501, federal unfair competition pursuant to 15 U.S.C. § 1125, and common law unfair competition. On December 18, 2015, the Court held a telephonic hearing to discuss Defendants’ then-counsel’s motion to withdraw. Docs. 74; 75; 76. During the hearing, the Court warned Defendants Julie Mayo and Ann Mayo that their failure to obtain new counsel for Defendant West Coast Charms by January 22, 2016 would result in a default judgment being entered against West Coast Charms. Defendants failed to obtain new counsel for West Coast Charms as ordered by the Court. On February 10, 2016, the Court held a status conference with the parties explaining to Defendants that default judgment would be entered against West Coast Charms because new counsel had not been retained by the January 22, 2016 deadline set by the Court. Doc. 78. Following the hearing on February 10, 2016, the Court entered an order allowing Plaintiff to file a motion setting forth the specific relief it seeks in the default judgment and directing the clerk to enter default judgment as to West Coast Charms. Doc. 80. On February 25, 2016, Plaintiff filed its motion for default judgment. Doc. 82. No response has been filed.

II. Legal Standard.

Once the Clerk has entered default, a plaintiff may request entry of default judgment. Fed.R.Civ.P. 55(b)(2). “The district court’s decision whether to enter default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Factors the court may consider in deciding whether to grant default judgment include: (1) the possibility of prejudice to the plaintiff, (2) the merits of the claim, (3) the sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of a dispute concerning material facts, (6) whether default was due to excusable neglect, and (7) the policy favoring a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In applying the Eitel factors, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citations omitted).

III. Analysis.

A. Eitel Factors.

The first Eitel factor weighs in favor of granting default judgment. Plaintiff served process on Defendant West Coast Charms on March 26, 2015. Doc. 31. West Coast Charms filed an answer to Plaintiff’s amended complaint on March 30, 2015. Doc. 26. Counsel for Defendants subsequently withdrew from representation. Docs. 72; 73; 74; 75; 76. The Court permitted the individual Defendants to proceed pro se, but, consistent with this Circuit’s precedent, required West Coast Charms to appear through counsel. Given that West Coast Charms has failed to secure new counsel, Plaintiff is stymied in its ability to prosecute this action against West Coast Charms. If Plaintiff’s motion for default judgment is not granted, Plaintiff “will likely be without other recourse for recovery.” PepsiCo, Inc. v. Cal. Security Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002).

The second and third Eitel factors favor a default judgment where the complaint sufficiently states a claim for relief. See Cal. Security Cans, 238 F.Supp.2d at 1175-76; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978). A review of Plaintiff’s amended complaint shows that Plaintiff has stated valid causes of action against West Coast Charms. See Doc. 20. Because Plaintiff seeks statutory damages solely on the basis of its copyright claim, the Court will focus on this claim. Plaintiff is the sole owner of a number of copyrights, which it registered with the United States Copyright Office. Doc. 20 at 9. Plaintiff owns registered copyrights for eleven separate charm collections, which include over 40 separate charms. Docs. 20 at 9-10; 20-1 at 1-3. West Coast Charms sells charms that are substantially similar or identical to Plaintiff’s copyrighted charms. Doc. 20 at 4. As Plaintiff has released new collections of charms, West Coast Charms has mimicked those designs in its charms. Id. West Coast Charms has been put on notice of its infringing activity, but has failed to cease this activity. Id. at 4, 9-10. Taking Plaintiff’s allegations in its amended complaint as true, Plaintiff has sufficiently stated a claim for copyright infringement under 17 U.S.C. § 501. The Court is similarly persuaded that Plaintiff has stated valid causes of action for its patent infringement, trademark infringement, federal statutory unfair competition, and common law unfair competition claims.

Under the fourth Eitel factor, the court considers the amount of money at stake in relation to the seriousness of the defendant’s conduct. See Cal. Security Cans, 238 F.Supp.2d at 1176-77. Plaintiff seeks $330, 000.00 in statutory damages for its copyright infringement claim - $30, 000 for each of the eleven copyrighted works infringed by Defendant West Coast Charms. Plaintiff does not seek monetary damages for its trademark, patent infringement, federal statutory unfair competition, and common law unfair competition claims. See Doc. 82 at 9-10. The conduct of West Coast Charms alleged in the complaint - and admitted by the default - it willful, and has occurred over a prolonged period of time even after notice of the infringement. This factor weighs in favor of granting Plaintiff’s motion.

The fifth Eitel factor weighs in favor of default judgment. Given the sufficiency of the complaint and Defendant’s default, after which Plaintiff’s allegations are accepted as true, “no genuine dispute of material facts would preclude granting [Plaintiff’s] motion.” Cal. Security Cans, 238 F.Supp.2d at 1177; see Geddes, 559 F.2d at 560.

The sixth Eitel factor favors default judgment. West Coast Charms was aware that its failure to obtain new counsel by January 22, 2016 would result in default judgment. See Doc. 75. The Court clearly explained this in two separate telephonic hearings with Julie Mayo and Ann Mayo, the owners. Docs. 76; 78. To date, over two months after the Court’s deadline, West Coast Charms has not obtained new counsel. Defendant’s failure to obtain counsel is not due to “excusable neglect.” Gemmel v. Systemhouse, Inc., No. CV 04-187-TUC-CKJ, 2008 WL 65604, at *5 (D. Ariz. Jan. 3, 2008) (citation omitted).

As for the seventh factor, it is true that “[c]ases should be decided upon their merits whenever reasonably possible, ” Eitel, 782 F.2d at 1472, but the mere existence of Rule 55(b) “indicates that this preference, standing alone, is not dispositive, ” California Security Cans, 238 F.Supp. at 1177 (quotation marks and citation omitted). Defendant’s failure to obtain new counsel as directed by the Court to allow this lawsuit to proceed “makes a ...


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