Wallach v. Johnson

          ORDER

          Honorable Diane J. Humetewa, United States District Judge

         Before the Court is Plaintiffs' Motion for Default Judgment (Doc. 15). Defendant Nicole Johnson was served with the Complaint, Summons, and this Motion; however, she has not answered or otherwise appeared and did not respond to Plaintiffs' Motion.

         I. BACKGROUND

         A. Plaintiffs' Allegations

         Plaintiffs Dr. Joel Wallach (“Dr. Wallach”), Steve Wallach (“Mr. Wallach”), Michelle Wallach (“Ms. Wallach”), and Dave Briskie (“Mr. Briskie”) initiated this action by filing a Complaint naming Nicole Johnson, and several John Does, as Defendants. (Doc. 1). Plaintiffs' Complaint contains two causes of action: (1) Defamation Per Se and (2) Defamation Per Quod. Plaintiffs are or have been affiliated with Youngevity, a publicly traded, multi-level marketing company that engages in the business of selling various health supplements through a network of independent distributors. Dr. Wallach is a resident of California and the founder of Youngevity, Mr. Wallach is a resident of California and is Youngevity's Chief Executive Officer, Ms. Wallach is a resident of California and is Youngevity's Chief Operating Officer, and Mr. Briskie is a resident of Florida and is Youngevity's President and Chief Financial Officer.

         In 2016, certain Youngevity executives and distributors left Youngevity to form a competing multi-level marketing company, Wakaya Perfection LLC (“Wakaya”). Wakaya sells its products through a network of distributors known as “Ambassadors.” Defendant Johnson is a resident of Maryland and is a Wakaya Ambassador. On or about May 26, 2019, Defendant Johnson registered the website www.realmlmnews.com (the “Website”) using GoDaddy.com LLC (“GoDaddy”). Defendant Johnson also used Domains by Proxy, LLC (“Domains by Proxy”) to hide her identity as the owner and operator of the Website.^[1]Both GoDaddy and Domains by Proxy, who are not parties to this action, maintain their principal place of business in Maricopa County, Arizona.

         Plaintiffs allege that Defendant Johnson's Website contained defamatory statements about Plaintiffs. Specifically, Plaintiffs allege that the Website included the following defamatory statements under the heading “Youngevity Facts”:

(a) [Mr. Wallach] has managed to not only acquire the companies, but he duplicated their products, so he no longer has to pay royalties to the owners. After the company comes over, he does a bait and switch because he has their network.

(b) [Mr.] Briskie is the master manipulator when it comes to [Youngevity] stock.

(c) [Ms. Wallach] verbally abuses women and sexually harasses men. [Mr. Wallach] and [Ms. Wallach] paid off Chris Nelson the old CFO an undisclosed amount to keep him quiet. There are at least two other men besides Chris she has done inappropriate things to.

(d) [Dr. Wallach] is big on sexually harassing the rep force.

(Id. ¶ 34; Doc. 1-2 at 4-7). Plaintiffs claim that all of these statements are false and were disseminated through the Website to third parties. Plaintiffs further allege that Defendant Johnson posted those statements with “actual malice” because she knew the statements were false or “offered those statements with reckless [dis]regard for the truth.” (Doc. 1 ¶ 38). Additionally, Plaintiffs allege that they have suffered damages as a result of defamatory statements on the Website.

         B. Procedural History

         After filing the Complaint on June 26, 2019, Plaintiffs retained Monumental Process Servers, Inc. (“Monumental”) to effect service of process on Defendant Johnson. Monumental attempted to serve Defendant Johnson at her Maryland home on June 27, June 30, July 1, and July 10. (Doc. 8). Monumental confirmed with Defendant Johnson's neighbor that she did in fact live at that address. Additionally, the Monumental process server left a note on Defendant's door during the June 27 and June 30 service attempts, which asked Defendant Johnson to call Monumental. On June 30, 2019, Defendant Johnson called Monumental and asked to be served the following day after 6:00 pm. Yet, when the process server returned after 6:00 pm on July 1, 2019, Defendant Johnson refused to answer the door and texted Monumental that she was not at home. Plaintiffs then retained a second company, Legal Process Servers LLC (“LPS”), to serve Defendant Johnson. LPS ...