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CrossFit Incorporated v. Cueto

United States District Court, D. Arizona

February 5, 2018

CrossFit Incorporated, Plaintiff,
Javier del Cueto, et al., Defendants.



         Plaintiff CrossFit Incorporated moves for default judgment against Defendants Javier del Cueto and Alfa Extreme Fitness S.A. de C.V. (“Alfa”) pursuant to Federal Rule of Civil Procedure 55(b). (Doc. 39.) No response has been filed and the time for filing one has passed. For reasons stated below, default judgment is appropriate.

         I. Background[1]

         Plaintiff is a Delaware corporation that offers a distinct fitness program through a worldwide network of affiliates licensed to open CrossFit gyms (generally referred to as a “Box”) and use Plaintiff's trademarks. Through its website, Plaintiff disseminates daily workout information known as the “Workout of the Day” or “WOD.” Plaintiff has used the mark “CrossFit” since at least 1985, and the marks “Workout of the Day, ” “WOD, ” and “Box” since at least 2003. Additionally, the mark “CrossFit” has been registered with the United States Patent and Trademark Office since at least 2005.

         Del Cueto entered into an affiliate agreement with Plaintiff in November 2011, which authorized him to create a CrossFit affiliate called “CrossFit BETA” and to offer the program at a single location in Mexico. As part of the agreement, Plaintiff granted del Cueto a non-transferable and non-sublicenseable license to use the CrossFit mark solely for purposes outlined in the affiliate agreement, including in the internet domain name Del Cueto also agreed that, if his gym provides non-CrossFit services, he would in no way imply that those services are endorsed by Plaintiff.

         Despite these terms, del Cueto (operating through Alfa) began using the CrossFit mark to build a competing business in a manner prohibited by the affiliate agreement. For example, Defendants registered the domain name “, ” began using it to advertise and distribute an unaffiliated “Wodbox” fitness program and “Wodbox Training Centers, ” and caused their internet domain to redirect visitors to Defendants also caused CrossFit-related domain name registered by del Cueto's brother, Andres Del Cueto Davalos, who also executed a CrossFit affiliate agreement-to redirect visitors to Defendants' affiliate agreement later expired in November 2013.

         In February 2014, Plaintiff brought this action, alleging that Defendants breached the terms of the affiliate agreement and violated the Lanham Act, 15 U.S.C. § 1125(d).[2](Doc. 1.) Defendants were served with the summons and complaint pursuant to the Hague Convention on February 16, 2017 (Doc. 33), but failed to appear or otherwise respond to the complaint. The Clerk of the Court entered default as to Defendants on June, 6, 2017. (Doc. 36.) Plaintiff now seeks entry of a default judgment against them. (Doc. 39.)

         II. Default Judgment Standard

         After default is entered by the clerk, the district court may enter default judgment pursuant to Rule 55(b). The court's “decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Although the court should consider and weigh relevant factors as part of the decision-making process, it “is not required to make detailed findings of fact.” Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002).

         The following factors may be considered in deciding whether default judgment is appropriate: (1) the possibility of prejudice to the plaintiff, (2) the merits of the claims, (3) the sufficiency of the complaint, (4) the amount of money at stake, (5) the possibility of factual disputes, (6) whether default is due to excusable neglect, and (7) the policy favoring decisions on the merits. See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). In considering the merits and sufficiency of the complaint, the court accepts as true the complaint's well-pled factual allegations, but the plaintiff must establish all damages sought in the complaint. See Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977).

         III. Discussion

         The first Eitel factor weighs in favor of default judgment. Defendants failed to respond to the complaint or otherwise appear in this action despite being served with the complaint, the application for default, and the motion for default judgment. If default judgment is not granted, Plaintiff “will likely be without other recourse for recovery.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. 2002). The prejudice to Plaintiff in this regard supports the entry of default judgment.

         The second, third, and fifth Eitel factors favor default judgment where, as in this case, the complaint sufficiently states a plausible claim for relief under the pleading standards of Rule 8. See Id. at 1175; Danning v. Lavine, 572 F.2d 1386, 1388-89 (9th Cir. 1978). A review of the complaint's well-pled allegations shows that Plaintiff has stated plausible breach of contract and Lanham Act claims against Defendants. Moreover, given the sufficiency of the complaint and Defendants' default, “no genuine dispute of material facts would preclude granting [Plaintiff's] motion.” PepsiCo, 238 F.Supp.2d at 1177.

         Under the fourth Eitel factor, the Court considers the amount of money at stake in relation to the seriousness of the defendants' conduct. See PepsiCo, 238 F.Supp.2d at 1176. Here, Plaintiff seeks statutory damages in the amount of $200, 000.00, representing the statutory maximum of $100, 000 per offending domain name. 15 U.S.C. ยง 1117(d). ...

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