Central Source LLC v. freeannualcreditreports.club, et al.
This text of Central Source LLC v. freeannualcreditreports.club, et al. (Central Source LLC v. freeannualcreditreports.club, et al.) is published on Counsel Stack Legal Research, covering District Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Central Source LLC, No. CV-25-01610-PHX-KML
10 Plaintiff, ORDER
11 v.
12 freeannualcreditreports.club, et al.,
13 Defendants. 14 15 Plaintiff Central Source LLC seeks default judgment in this in rem action against 16 twelve domain names. (Doc. 13.) The court must consider seven factors when deciding 17 whether to enter default judgment. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 18 1986). The seven factors are: 19 (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 20 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 21 policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 22 23 Id. These factors establish default judgment is appropriate. 24 1. Possibility of Prejudice 25 The first factor regarding the prejudice to Central Source weighs in favor of default 26 judgment because if “default judgment is not granted, [Central Source] will likely be 27 without other recourse for recovery.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 28 1172, 1177 (C.D. Cal. 2002). 1 2. Merits of the Claims and Sufficiency of the Complaint 2 The second and third factors require assessing the merits of Central Source’s claims 3 and the sufficiency of its complaint.1 These factors “are often analyzed together and require 4 courts to consider whether a plaintiff has state[d] a claim on which [he] may recover.” 5 Vietnam Reform Party v. Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948, 962 (N.D. 6 Cal. 2019). 7 The complaint asserts a single claim under the Anti-Cybersquatting Consumer 8 Protection Act (“ACPA”). (Doc. 1 at 13.) “A plaintiff pursuing a cybersquatting claim 9 under the ACPA must show that: (1) the defendant registered, trafficked in, or used a 10 domain name; (2) the domain name is identical or confusingly similar to a protected mark 11 owned by the plaintiff; and (3) the defendant acted with bad faith intent to profit from that 12 mark.” Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1219 (9th Cir. 2012) 13 (simplified). Central Source’s complaint contains sufficient allegations establisahing these 14 elements. 15 Central Source has used the mark “AnnualCreditReport” since 2004. (Doc. 1 at 9.) 16 Since that time, the mark “has become famous and/or distinctive throughout the United 17 States.” (Doc. 1 at 11.) And “consumers immediately associate[] the AnnualCreditReport 18 mark . . . with Central Source.” (Doc. 1 at 9). Accepting the complaint’s factual allegations 19 as true, Central Source has common law trademark rights as well as statutory trademark 20 rights in its mark. And the defendant domain names, registered in 2025, contain the full 21 mark or small variations of it. The domain names easily satisfy the requirement of being 22 identical or confusingly similar to the mark. 23 Finally, Central Source has adequately alleged the defendant domain names were 24 registered with bad faith intent to profit from Central Source’s mark. The governing statute 25 provides a list of factors a court may consider when determining if bad faith exists, and 26 1 The current registrants of the various domain names may have no connection to each 27 other but as recognized in a similar case involving multiple domain names, “the principles underlying permissive joinder support granting it here.” PragmaticPlay Int’l Ltd. v. 28 Agenpragmaticplay.live, No. CV-23-00497-PHX-DLR, 2024 WL 113306, at *4 (D. Ariz. Jan. 10, 2024). 1 those factors establish bad faith in this case. 15 U.S.C. § 1125(d)(1)(B))(i). In particular, 2 the defendant domain names do not reflect trademark or intellectual property rights of the 3 registrants, do not reflect the registrants’ legal names, the registrants have not engaged in 4 bona fide commercial or noncommercial use of the domain names, the registrants are using 5 the domain names to divert and confuse consumers, and the registrants did not provide 6 correct contact information when registering the domain names. 7 Central Source has stated a strong claim for relief under the ACPA. The second and 8 third factors support entry of default judgment. 9 3. Amount in Controversy 10 The fourth default judgment factor “requires that the court assess whether the 11 recovery sought is proportional to the harm caused by defendant’s conduct.” Landstar 12 Ranger, Inc. v. Parth Enterprises, Inc., 725 F. Supp. 2d 916, 921 (C.D. Cal. 2010). When 13 a large sum is at stake, this factor may weigh against default judgment. Curtis v. 14 Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1212 (W.D. Wash. 2014). The only relief 15 Central Source seeks is an order requiring the registrars take all necessary steps to list 16 Central Source as the registrant of each defendant domain name. This limited relief is 17 proportional to the harm and this factor supports entry of default judgment. 18 4. Dispute Over Material Facts 19 The fifth factor is whether there are any disputes over material facts. The current 20 registrants of the domain names chose not to participate in this suit, meaning there is no 21 indication of such disputes. This factor weighs in favor of default judgment. 22 5. Excusable Neglect 23 Central Source served the complaint in the manner authorized by the governing 24 statute. 15 U.S.C. § 1125(d)(2)(B). With no response from an interested party, there is no 25 indication of excusable neglect, and this factor supports default judgment. See Shanghai 26 Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001) 27 (defendants’ failure to respond to complaint could not “be attributable to excusable 28 neglect” because “[a]ll were properly served with the Complaint, the notice of entry of 1 default, as well as the papers in support of the instant motion.”). 2 6. Policy Favoring Decisions on the Merits 3 The seventh factor recognizes a preference for resolving matters on their merits. 4 This factor, as always, weighs against entry of default judgment. “However, the mere 5 existence of Fed.R.Civ.P. 55(b) indicates that this preference, standing alone, is not 6 dispositive.” PepsiCo, 238 F. Supp. 2d at 1177 (quotation marks and citation omitted). 7 7. Default Judgment is Merited 8 The factors considered together establish default judgment is appropriate. 9 8. Damages 10 Although it is Central Source’s burden to prove the amount of its damages, Central 11 Source is not requesting monetary relief. Blumenthal Distrib., Inc. v. Comoch Inc., 652 F. 12 Supp. 3d 1117, 1131 (C.D. Cal. 2023). Rather—as required by statute—Central Source 13 requests only “the transfer of the domain name[s].” 15 U.S.C. § 1125(d)(2)(D). That is, 14 Central Source seeks an order directing it be listed as the registrant of defendant domain 15 names.
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