Amazon.com Inc v. Yong

District Court, W.D. Washington·Decided September 26, 2023·No. 2:21-cv-00170·Unknown

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON

AMAZON.COM, INC., a Delaware Case No. C21-170-RSM corporation; and SALVATORE FERRAGAMO S.P.A., an Italian ORDER GRANTING PLAINTIFFS’ corporation, MOTION FOR DEFAULT JUDGMENT AND PERMANENT INJUNCTION Plaintiffs, AGAINST DEFENDANT GUOXIN DAI

v.

GUOXIN DAI, an individual d/b/a Selling Accounts: Zhaoha032ojun and Cangzhoushuofengdianzikejizzx; and DOES 1-10,

Defendants.

This matter comes before the Court on Plaintiffs Amazon.com, Inc.’s (“Amazon”) and Salvatore Ferragamo S.P.A.’s (“Ferragamo”) Motion for Default Judgment and Permanent Injunction Against Defendant Guoxin Dai (the “Motion”). Dkt. #55. Having considered the record in this case, including Defendant Guoxin Dai’s failure to appear and the Clerk of Court’s entry of an Order of Default (Dkt. # 54), the Court grants Plaintiffs’ Motion and enters a permanent injunction against Defendants, as described below. II. BACKGROUND On February 11, 2021, Plaintiffs filed two Complaints alleging identical claims for trademark infringement, false designation of origin and false advertising under the Lanham Act, and violation of the Washington Consumer Protection Act. Amazon.com, Inc., et al. v. Yong, et al., Case No. 2:21-cv-00170-RSM, Dkt. # 1 ¶¶ 49-76; Amazon.com, Inc., et al. v. Jun, et al., Case No. 2:21-cv-00171-RSM, Dkt. #1 ¶¶ 48-75. In each case, Plaintiffs’ claims arose from Defendants’ alleged unlawful sale in the Amazon store of counterfeit belts using Ferragamo’s registered trademarks without authorization. On April 29, 2021, the Court granted Plaintiffs’ Motion to Consolidate the two cases (Dkt. #17) and on November 11, 2021, Plaintiffs filed a First Amended Complaint for Damages and Equitable Relief (Dkt #28) (“FAC”) naming Defendant Guoxin Dai (“Defendant” or “Dai”). The Court also granted Plaintiffs’ request to take expedited discovery via third-party subpoenas on financial institutions and email service providers linked to certain Amazon selling accounts that sold counterfeit Ferragamo belts. Yong, Dkts.# 12, 15; Jun, Dkts. #12, 15. Responses from a payment service provider, Payoneer Inc. (“Payoneer”), confirmed that two of the selling accounts named in the Jun action—(1) zhaoha032ojun (“Zhaoha”), and (2) Cangzhou Shuofeng Electronic Technology Co., Ltd. (“Cangzhou”) (together, the “Selling Accounts”)— funneled proceeds of their counterfeit sales to a Payoneer account registered by Dai. Declaration of Scott Commerson, Dkt. #56 (“Commerson Decl.”) ¶¶ 2-3; Yong, Dkt. 32 ¶¶ 2-3.1.1 Based on the discovery linking Dai to the Selling Accounts, Plaintiffs amended the Jun Complaint to name Dai. Dkt. #29, FAC ¶ 13. These subpoena responses did not include the names or other identifying information of the Defendants initially named in the Yong or the Jun actions, 1 Hereafter, all citations to the docket refer specifically to Yong, the lead case in this consolidated matter. Plaintiffs believe that Dai used false information and documentation to mislead Amazon during the selling account registration process. See Dkt #55 at 2, n.1 (citing Dkt. #42 at 5, n. 4, 5). Accordingly, Plaintiffs dismissed the originally-named Defendants. Dkt. #50. Defendant was believed to reside at an unknown location oversees, likely China, and conduct their business through the internet. Dkt. #42. Because Plaintiffs were unable to serve Dai by conventional means; and email service was the most likely means to provide actual notice of this lawsuit to Dai because Dai registered certain email addresses with Amazon that have been used as the primary means of communication from Amazon to Dai, in April 2023, Magistrate Judge S. Kate Vaughan granted Plaintiffs’ Motion to complete service of process by registered email on Defendant Dai. Dkt. #51. On April 28, 2023, Plaintiffs filed proof of service on Dai by registered email. Dkt. #52. Dai has not filed or served an answer, appeared in this action, contacted Plaintiffs’ counsel, or otherwise demonstrate any intention to participate in Plaintiffs’ action. Commerson Decl. ¶ 4. Accordingly, on June 7, 2023, the Clerk entered an Order of Default against Defendant. Dkt. #54. Plaintiffs now move for default judgment under Federal Rule of Civil Procedure 55(b) and Local Rule 55(b). Dkt. #55. The Court has personal jurisdiction over Defendant Dai because, taking the factual allegations in the FAC as true, Dai entered into an ongoing contractual relationship with a Washington State company, Amazon, and then violated that contractual relationship by selling counterfeit products using Amazon as its sales platform to Washington States residents. Dkt. #55 at 4–5; FAC ¶¶ 31–43. Therefore, Defendants “should reasonably anticipate being haled into court” in this state. See Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990). The Court has specific jurisdiction because Defendants’ “contacts with the forum give rise to the cause of action before the court.” Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001). The court also has subject matter jurisdiction over Plaintiffs’ claims. See 28 U.S.C. §§ 1331, 1332, 1338, 1367. A. Default Judgment Given the entry of default in this case, the Court may use its discretion to enter a default judgment under Federal Rule of Civil Procedure 55(b) and Local Rule 55(b). When examining the merits of a default judgment, the Court takes well-pled allegations in a complaint as true. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002) (citing Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). Though default judgments are “ordinarily disfavored,” the Court analyzes seven factors to determine whether default judgment is appropriate. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Those seven factors are: (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (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 excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Id. (punctuation edited.) In applying this test, the Court finds Plaintiffs’ FAC to be well-pled and therefore takes its allegations as true. (1) Possibility of prejudice to Plaintiffs In looking at the first Eitel factor, the Court finds that without a default judgment there is great possibility of prejudice to Plaintiffs. Defendant has not appeared and cannot be physically located. Therefore, without a default judgment Plaintiffs will have no remedy. See Criminal Prods., Inc. v. Gunderman, 2017 WL 664047, at *3 (W.D. Wash. Feb. 17, 2017). (2) Merits of Plaintiffs’ substantive claims; and (3) Sufficiency of the complaint The second Eitel factor, which concern the merits of the claim, is “often analyzed together” with the third Eitel factor, the sufficiency of the complaint. Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1211 (W.D. Wash. 2014). Here, after analyzing each claim in Plaintiffs’ FAC, the Court finds that Eitel factors two and three support default judgment. a. Trademark Infringement

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