GS Holistic, LLC v. Shinwar

• Court: District Court, E.D. California
• Decided: August 20, 2024
• Docket: 2:23-cv-00355
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 GS HOLISTIC, LLC, Case No. 2:23-cv-0355-CSK 12 Plaintiff, ORDER DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR DEFAULT 13 v. JUDGMENT AND DISMISSING FIRST AMENDED COMPLAINT WITH LEAVE TO 14 SAMIULLAH SHINWAR d/b/a SWAG AMEND SMOKES, 15 (ECF No. 24) Defendant. 16 17 Plaintiff GS Holistic, LLC asserts claims for “Federal Trademark Counterfeiting 18 and Infringement, 15 U.S.C. § 1114” and “Federal False Designation of Origin and Unfair 19 Competition, 15 U.S.C. § 1125(a)” against Defendant Samiullah Shinwar d/b/a/ Swag 20 Smokes, seeking monetary damages, restitution, an injunction, and other relief. First 21 Amended Complaint (“FAC”) (ECF No. 10). Defendant has not made an appearance in 22 this action, and a Clerk’s Default was entered on November 3, 2023. (ECF No. 19.) 23 Presently pending before the Court is Plaintiff’s motion for default judgment (Pl. Mot., 24 ECF No. 24), which was taken under submission without argument pursuant to Local 25 Rules 230(c) and (g).1 Plaintiff’s motion for default judgment is DENIED without 26 prejudice, and the FAC is DISMISSED with LEAVE TO AMEND. 27 1 This motion is referred to the undersigned pursuant to Local Rule 302(c)(19) and 28 28 U.S.C. § 636(b)(1)(A). 1 I. BACKGROUND 2 A. Facts 3 The FAC alleges that since 2020, Plaintiff has marketed and sold glass infusers 4 and related accessories using “Stündenglass” trademarks. FAC ¶ 8. Plaintiff has three 5 registered trademarks: (1) Mark 6,633,884 for “the standard character mark 6 ‘Stündenglass’ in association with goods further identified in registration in international 7 class 011”; (2) Mark 6,174,292 for “the design plus words mark ‘S’ and its logo in 8 association with goods further identified in the registration in international class 034”; 9 and (3) Mark 6,174,291 for “the standard character mark ‘Stündenglass’ in association 10 with goods further identified in registration in international class 034.”2 FAC ¶ 11. 11 Plaintiff has used these Marks in commerce throughout the United States 12 continuously since 2020. FAC ¶ 13. The FAC alleges that products branded with these 13 Marks are “widely recognized nationally and internationally” and “known for high quality 14 and innovation.” FAC ¶ 8. The FAC alleges the Marks are famous, distinctive, and 15 popular with consumers, celebrities, and industry professionals. FAC ¶¶ 14, 16, 18-19. 16 The FAC alleges the Marks are exclusive to Plaintiff, clearly displayed on its products, 17 packaging, and advertisements, and the subject of substantial time and money 18 investment for Plaintiff. FAC ¶¶ 15, 17. Plaintiff authorizes stores in the United States to 19 sell products bearing the Marks, which typically sell for a higher price than similar non- 20 branded products. FAC ¶¶ 20-21. Because of the above, the FAC alleges products with 21 these Marks are targeted by counterfeiters, which in turn misleads consumers. FAC ¶¶ 22 22-23. Plaintiff actively enforces its rights to protect its Marks, often through litigation. 23

24 2 The Nice Agreement establishes a classification of goods and services for the purposes of registering trademarks and service marks. Class 11 goods include 25 “apparatus and installations for lighting, heating, cooling, steam generating, cooking, 26 drying, ventilating, water supply and sanitary purposes.” Class 34 goods include “tobacco and tobacco substitutes; cigarettes and cigars; electronic cigarettes and oral 27 vaporizers for smokers; smokers’ articles; matches.” See List of Goods and Services in Class Order, Nice Classification Index, accessed July 29, 2024, 3:53 p.m., available at 28 https://nclpub.wipo.int/enfr/. 1 FAC ¶ 24. 2 Defendant Shinwar is alleged to be an individual who owns, manages, and 3 operates a business known as “Swag Smokes,” a California company/corporation with 4 its principal place of business in Stockton, California. FAC ¶¶ 6-7. The FAC states 5 Defendant has previously offered to sell, has sold, and continues to sell glass infusers 6 bearing reproductions, counterfeits, copies, and/or colorable imitations of Plaintiff’s 7 products that are identically branded with, or are substantially indistinguishable from, 8 Plaintiff’s goods bearing its Marks. FAC ¶¶ 25-28. Specifically, the FAC alleges that on 9 October 26, 2022, Plaintiff’s investigator “purchased a glass infuser with a Stündenglass 10 Mark affixed to it” from Shinwar’s store for $270.00. FAC ¶¶ 29-30. The FAC states that 11 “images and/or the physical unit of the product purchased from [Swag Smokes] were 12 inspected by Plaintiff’s agent to determine its authenticity,” who confirmed the product 13 “was a counterfeit good with an infringing mark affixed to it.” FAC ¶ 31. The FAC 14 concludes Defendant Shinwar willfully “authorized, directed, and/or participated” in Swag 15 Smokes’s sale of the “Counterfeit Goods” and its infringement of the Marks, which 16 occurred without Plaintiff’s authorization and “long after registration” of the Marks. FAC 17 ¶¶ 32-33, 43. 18 Plaintiff contends it has suffered losses and damage to the goodwill and 19 reputation of the Marks because of Defendant’s acts, which “was and is likely to cause 20 confusion, mistake, or deceive consumers who purchase the Counterfeit Goods.” FAC 21 ¶¶ 35-36, 42, 44. Plaintiff prays for statutory and treble damages; costs; an order 22 enjoining Defendant’s sale of any counterfeit product using Plaintiff’s Marks and an order 23 for destruction of products bearing the Marks; an accounting and disgorgement of 24 profits/restitution; among other relief. FAC at 16-18. The FAC prays for joint and several 25 liability between Defendant Shinwar and other, unnamed officers and directors. Id. 26 B. Procedural Posture 27 Plaintiff filed a complaint on February 26, 2023, asserting claims against Swag 28 Smokes for Federal Trademark Counterfeiting and Infringement, 15 U.S.C. § 1114 and 1 Federal False Designation of Origin and Unfair Competition, 15 U.S.C. § 1125(a). 2 Compl. (ECF No. 1.) The Clerk of the Court entered default against Swag Smokes, but 3 after Plaintiff requested leave to amend, this default was set aside. (ECF Nos. 5-9.) The 4 FAC was filed on July 18, 2023, and asserts the same claims against Defendant Shinwar 5 d/b/a Swag Smokes. See FAC. 6 On October 5, 2023, Plaintiff filed a proof of summons indicating Defendant 7 Shinwar d/b/a Swag Smokes was served with process on September 6, 2023. (ECF No. 8 15.) The notice indicates substitute service was made, as the third-party process server 9 left the FAC, summons, and a demand letter, with an employee at Shinwar’s place of 10 business after two prior failed attempts to personally serve Shinwar at this location. (Id.) 11 The process server asserts he mailed a copy of the same documents to Shinwar’s place 12 of business the following day. (Id.) Defendant Shinwar did not respond to the FAC or 13 make an appearance. See Docket. On October 10, 2023, Plaintiff requested entry of 14 default (ECF No. 18), which was entered by the Clerk on November 3, 2023 (ECF No. 15 19). 16 On December 7, 2023, Plaintiff moved for default judgment against Defendant, 17 withdrew it, and requested this filing be stricken. (ECF Nos. 20-21.) Later on December 18 7, 2023, Plaintiff filed a second motion for default judgment, and again struck this filing 19 as well. (ECF Nos. 22-23.) On December 8, 2023, Plaintiff filed the operative and third 20 motion for default judgment, setting it for a January 23, 2024 hearing before the 21 assigned magistrate judge. Pl. Mot. Plaintiff served the operative motion and exhibits on 22 Defendant by mail at Defendant’s place of business. (ECF No. 25.) Defendant did not 23 respond to the motion for default judgment. See Docket. On December 27, 2023, the 24 Court issued a minute order taking Plaintiff’s motion under submission; vacating the 25 hearing; ordering a written response from Defendant by January 23, 2024; and directing 26 Plaintiff to serve Defendant with a copy of the minute order. (ECF No. 26.) A copy of the 27 minute order was served on Defendant by mail the same day. (ECF No. 27.) Defendant 28 did not respond. See Docket. Upon retirement of the assigned magistrate judge, the 1 case was reassigned to the undersigned. (ECF No. 28.) 2 II. LEGAL STANDARDS 3 Under Federal Rule of Civil Procedure 55, default may be entered against a party 4 against whom a judgment for affirmative relief is sought who fails to plead or otherwise 5 defend against the action. See Fed. R. Civ. P. 55(a). However, this default does not 6 automatically entitle the plaintiff to a judgment. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. 7 Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citations omitted). The decision to grant or deny 8 the entry of default judgment is within the district court’s discretion. NewGen, LLC v. 9 Safe Cig, LLC, 840 F.3d 606, 616 (9th Cir. 2016). 10 In determining whether to enter default judgment, courts consider the following 11 factors: 12 1. the possibility of prejudice to the plaintiff; 13 2. the merits of the substantive claim(s); 14 3. the sufficiency of the complaint; 15 4. the amount of money at stake in the lawsuit; 16 5. whether there are any disputes of material fact; 17 6. whether the defendant’s default was due to excusable neglect; and 18 7. the strong policy favoring decisions on the merits. 19 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). The Ninth Circuit has long 20 disfavored default judgments, counseling that cases be decided on the merits “whenever 21 reasonably possible.” Id. at 1472. 22 Once a default is entered, all well-pled allegations in the complaint regarding 23 liability are deemed true. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 24 2002). “On the other hand, a defendant is not held to admit facts that are not well- 25 pleaded or to admit conclusions of law.” United States v. Cathcart, 2010 WL 1048829, at 26 *4 (N.D. Cal. Feb. 12, 2010) (citation omitted). “[I]t follows from this that facts which are 27 not established by the pleadings of the prevailing party, or claims which are not well- 28 pleaded, are not binding and cannot support the judgment.” Danning v. Lavine, 572 F.2d 1 1386, 1388 (9th Cir. 1978). Necessary facts not contained in the pleadings and claims 2 which are legally insufficient are not established by default. DIRECTV, Inc. v. Hoa 3 Huynh, 503 F.3d 847, 854 (9th Cir. 2007). Further, a plaintiff’s allegations regarding 4 damages are not deemed true at default, and the plaintiff bears the burden to prove 5 damages with evidence. See Fed. R. Civ. P. 55(b)(2)(C); Geddes v. United Fin. Grp., 6 559 F.2d 557, 560 (9th Cir. 1977). 7 III. DISCUSSION 8 A. Jurisdiction 9 When default judgment is sought, the “district court has an affirmative duty to look 10 into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 11 712 (9th Cir. 1999) (citations omitted). The Court has subject matter jurisdiction over this 12 action pursuant to 28 U.S.C. § 1331 because it arises under federal trademark law, 13 15 U.S.C. § 1051, et seq. In addition, the Court has personal jurisdiction over Defendant 14 Shinwar, who is alleged to be a California resident. FAC ¶ 6. The Court’s jurisdiction 15 analysis is not a finding that the claims were sufficiently pled. 16 B. Default Judgment 17 1. Service of Complaint 18 In reviewing a motion for default judgment, the Court must determine whether 19 Defendant was properly served with the summons and complaint. Fed. R. Civ. P. 4(c). 20 Under California law, substitute service of process may be had after personal service 21 has failed by “leaving a copy of the summons and complaint” with a competent individual 22 at the person’s usual place of business, then mailing a copy of the summons and 23 complaint to the same address. Cal. Civ. P. § 415.20. 24 Here, a third-party process server attempted to serve Defendant Shinwar with 25 process on August 31 and September 2, 2023, but was told both times Shinwar was not 26 available. (ECF No. 15.) On September 6, 2023, the process server left a copy of the 27 summons and FAC with an employee at Swag Smokes. (Id.) The process server mailed 28 the same documents to Swag Smokes the following day. (Id.) Accordingly, Defendant 1 was properly served through substitute service. See Cal. Civ. P. § 415.20. 2 2. Eitel Factors 3 Turning to the asserted claims, Plaintiff’s first claim is stated as one for “Federal 4 Trademark Counterfeiting and Infringement” under 15 U.S.C. § 1114. FAC at 12-14. The 5 FAC also alleges a claim for “Federal False Designation of Origin and Unfair 6 Competition” under 15 U.S.C. § 1125(a). FAC at 14-16. The Court has carefully 7 reviewed the FAC and finds it deficient because, under the Eitel factors, the second and 8 third factors are not established. These two factors—the merits of the claims and the 9 sufficiency of the complaint—are often analyzed together. Stockfood Am., Inc. v. 10 Sequoia Wholesale Florist, Inc., 2021 WL 4597080, at *3 (N.D. Cal. June 22, 2021), 11 report and recommendation adopted, 2021 WL 4595128 (N.D. Cal. Oct. 6, 2021). This is 12 sufficient grounds for denying a motion for default judgment. See GS Holistic, LLC v. 13 Ravens Smoke Shop, Inc., 2023 WL 5504964, at *3 (C.D. Cal. July 10, 2023) (“[T]he 14 Court may render judgment based on an assessment of the second and third Eitel 15 factors alone.”). 16 a) Trademark Infringement and Counterfeitting 17 To state a claim for trademark infringement, a plaintiff must adequately allege it is 18 the owner of a valid, protectable mark, and the alleged infringer is using a similar mark 19 that is likely to confuse. See Grocery Outlet Inc. v. Albertson’s Inc., 497 F.3d 949, 951 20 (9th Cir. 2007). Courts determine the likelihood of confusion by considering: (1) the 21 strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) the 22 evidence of actual confusion; (5) the marketing channels used; (6) the type of goods and 23 degree of care consumers are likely to exercise in purchasing them; (7) the intent of the 24 defendant in selecting the mark; and (8) the likelihood that the parties will expand their 25 product lines. Lodestar Anstalt v. Bacardi & Co. Ltd., 31 F.4th 1228, 1252 (9th Cir. 2022) 26 (citing AMF Incorporated v. Sleekcraft Boats, 599 F.2d 341, 348-54 (9th Cir. 1979) 27 (abrogated on other grounds by Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 28 (9th Cir. 2003))). When analyzing a claim brought under a counterfeiting theory, courts 1 need not engage in a likelihood of confusion analysis because a defendant who 2 “deliberately copies the dress of his competitors already in the field . . . raises a 3 presumption that customers will be deceived.” Louis Vuitton Malletier, S.A. v. Akanoc 4 Sols., Inc., 658 F.3d 936, 946 (9th Cir. 2011) (citations omitted). Instead, courts examine 5 whether the defendant used a non-genuine mark identical to or substantially 6 indistinguishable from the plaintiff’s registered, genuine mark, and the genuine mark was 7 registered for use on the same goods to which the infringer applied the non-genuine 8 mark. Id. 9 Here, the FAC adequately alleges the existence of one or more valid trademarks 10 to support Plaintiff’s § 1114 infringement/counterfeit claim. The FAC alleges Plaintiff 11 owns three registered trademarks: (1) Mark 6,633,884 for “the standard character mark 12 ‘Stündenglass’ in association with goods further identified in registration in international 13 class 011”; (2) Mark 6,174,292 for “the design plus words mark ‘S’ and its logo in 14 association with goods further identified in the registration in international class 034”; 15 and (3) Mark 6,174,291 for “the standard character mark ‘Stündenglass’ in association 16 with goods further identified in registration in international class 034.” FAC at ¶ 11(a)-(c). 17 Registration of a mark on the Principal Register in the Patent and Trademark Office 18 constitutes prima facie evidence of the validity of the registered mark. Applied Info. Scis. 19 Corp. v. eBAY, Inc., 511 F.3d 966, 970 (9th Cir. 2007). 20 However, even accepting all well-pled factual allegations as true as required for 21 default judgment motions, the FAC does not allege sufficient facts to support plausible 22 allegations that Defendant used Plaintiff’s Marks in an infringing or counterfeiting 23 manner. 24 First, the FAC lacks sufficient factual allegations to plausibly conclude Defendant 25 used Plaintiff’s Marks. The FAC states that on October 26, 2022, Plaintiff’s investigator 26 “purchased a glass infuser with a Stündenglass Mark affixed to it” from Defendant 27 Shinwar’s store for $270.00. FAC ¶¶ 29-30. However, the FAC references three 28 registered Marks (FAC at ¶¶ 11(a)-(c)) and does not indicate whether one, two, or all of 1 these Marks were applied to the infuser purchased at Shinwar’s store. If more than one 2 mark, Plaintiff has not explained how one product can bear trademarks associated with 3 two different international classes of goods. Plaintiff’s motion for default judgment is no 4 help either, as it simply states Defendant used “three of the Plaintiff’s trademarks with 5 the Registration Numbers 6,633,884, 6,174,292 and 6,174,291[.]” Pl. Mot. at 20. Thus, 6 the FAC is deficient for lack of necessary facts. See DIRECTV, 503 F.3d at 854; see 7 also GS Holistic, LLC v. J’s Smoke Shop, 2024 WL 1054899, at *2 (E.D. Cal. Mar. 11, 8 2024) (denying motion for default judgment where, among other things, plaintiff failed to 9 specify which of its three trademarks was used); GS Holistic, LLC v. Pudasaini, 2024 WL 10 710890, at *4 (N.D. Cal. Feb. 21, 2024) (same); GS Holistic, LLC v. Bubbles Smoke 11 Shop, 2023 WL 6787773, at *3 (C.D. Cal. Sept. 5, 2023) (same). 12 Second, the FAC states “images and/or the physical unit of the product purchased 13 from [Swag Smokes] were inspected by Plaintiff’s agent to determine its authenticity,” 14 who confirmed the product “was a counterfeit good with an infringing mark affixed to it.” 15 FAC ¶ 31. But this statement provides no detail as to the process the agent used to 16 confirm the similarities of the trademarks. If, as other courts have noted, Defendant is 17 merely reselling Plaintiff’s products, this would not be infringement. See GS Holistic, LLC 18 v. Ravens Smoke Shop, Inc., 2023 WL 5504964, at *5 (citing NEC Electronics v. CAL 19 Circuit Abco, 810 F.2d 1506, 1509 (9th Cir. 1987) (noting that the sale of a genuine 20 trademarked product by an unauthorized seller is not a violation of the Lanham Act)); 21 see also GS Holistic, LLC v. Bubbles Smoke Shop, 2023 WL 6787773, at *5 (same). 22 Further, mere assertions that the infuser sold at Shinwar’s store is “a counterfeit good 23 with an infringing mark” are conclusory and not taken as true. See Paulsen v. CNF Inc., 24 559 F.3d 1061, 1071 (9th Cir. 2009) (the court is not required to accept as true legal 25 conclusions in a complaint “merely because they are cast in the form of factual 26 allegations”); see also GS Holistic, LLC v. Cigarette Outlet Smoke Shop, 2024 WL 27 519783, at *2 (E.D. Cal. Feb. 9, 2024) (denying plaintiff’s motion for default judgment for, 28 among other reasons, the complaint’s reliance on conclusory statements that “the Glass 1 Infuser [defendant] sold to Plaintiff’s investigator was a Counterfeit Good with an 2 Infringing Mark affixed to it”). 3 Third, though the FAC alleges Defendant’s “use of the counterfeit Stündenglass 4 Trademarks began long after the registration” (FAC at ¶ 33), it does not allege when this 5 allegedly began—much less provide any other details about Defendant’s allegedly 6 infringing actions. The Court cannot supply necessary facts that are omitted from the 7 FAC. DIRECTV, 503 F.3d at 854; see also GS Holistic, LLC v. Puff+ LLC, 2024 WL 8 659362, at *3 (E.D. Cal. Feb. 16, 2024) (rejecting the plaintiff’s default judgment motion 9 where the complaint lacked details on the defendant’s alleged use where only one 10 instance was alleged); GS Holistic, LLC v. Ashes Plus Nine, 2023 WL 5993055, at *4 11 (N.D. Cal. Aug. 25, 2023) (same). 12 Fourth, the FAC does not allege sufficient facts to support a plausible claim for 13 infringement as regarding a consumer’s likelihood of confusion. The FAC contains no 14 photographs or product descriptions demonstrating the similarities between the marks; 15 no allegations of actual confusion; no description of the marketing channels used; and 16 no description of the degree of care consumers are likely to exercise in purchasing the 17 goods. Instead, the FAC makes only conclusory statements, such as that Defendant’s 18 “unauthorized use of counterfeit marks of the registered Stündenglass Trademarks . . . is 19 likely to cause confusion or mistake in the minds of the public.” FAC ¶ 56. Such 20 conclusory allegations lacking in factual support are insufficient for the purposes of 21 default judgment. See Paulsen, 559 F.3d at 1071; DIRECTV, 503 F.3d at 854; see also 22 GS Holistic, LLC v. Bubbles Smoke Shop, 2023 WL 6787773, at *4 (denying default 23 judgment because the complaint failed to allege facts supporting a Sleekcraft analysis 24 and relied on conclusory statements about the likelihood of confusion). While Plaintiff’s 25 motion makes passing reference to the Sleekcraft factors and provides photographs (see 26 Pl. Mot. at 15 and ECF No. 24-2), there is no effort to apply the applicable legal 27 standards to this case. See GS Holistic, LLC v. Linda, 2023 WL 8878140, at *3 (E.D. 28 Cal. Dec. 22, 2023) (denying motion for default judgment where, among other things, the 1 motion relied on similarly conclusory assertions about the likelihood of confusion). 2 Fifth, as to the alleged sale of a counterfeit good, the FAC fails because it never 3 describes the similarities of the marks. Instead, the FAC relies on wholly conclusory 4 statements such as that “[t]he marks affixed to the Counterfeit Goods that the 5 Defendants have offered for sale are spurious marks which are identical with, or 6 substantially indistinguishable from, the Stündenglass Trademarks,” and that “[t]he 7 marks on the Counterfeit Goods are in fact counterfeit marks as defined in 15 U.S.C. 8 § 1116(d).” FAC ¶ 28. Nor does the FAC explain the types of goods Defendant has sold 9 in the past, other than one glass infuser sold to its investigator in October of 2022. FAC 10 ¶¶ 29-30. Thus, the FAC is deficient on Plaintiff’s counterfeit theory as well. See Louis 11 Vuitton, 658 F.3d at 946 (reminding that a ‘counterfeit’ analysis requires analysis of 12 whether the defendant used “a non-genuine mark identical to or substantially 13 indistinguishable from the plaintiff’s registered, genuine mark,” and the genuine mark 14 was registered for use on the same goods to which the infringer applied the non-genuine 15 mark); see also GS Holistic, LLC v. J’s Smoke Shop, 2024 WL 1054899, at *2 (rejecting 16 counterfeit theory on default judgment motion because of the complaint’s failure to allege 17 facts supporting the claim and otherwise reliance on conclusory assertions that 18 defendant’s goods were counterfeit). 19 Therefore, the FAC fails to sufficiently plead facts supporting the trademark 20 infringement and counterfeit claim and fails on the merits. 21 b) False Designation of Origin and Unfair Competition 22 To establish a claim for false designation of origin under 15 U.S.C. § 1125(a), a 23 plaintiff must show defendant used a false designation of origin in interstate commerce 24 that is likely to cause confusion, mistake, or deception as to the origin, sponsorship, or 25 approval of defendants’ goods or services. Freecycle Network, Inc. v. Oey, 505 F.3d 26 898, 902 (9th Cir. 2007). Claims for false designation of origin, as a type of unfair 27 competition claim, are analyzed similarly to infringement claims because the “ultimate 28 test” for these claims are the same: the public’s likelihood of confusion. Jada Toys, Inc. 1 v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008) (using the same likelihood of confusion 2 test to analyze trademark infringement and false designation of origin claims); see also 3 Brookfield Commc’ns, Inc. v. W. Coast Ent. Corp., 174 F.3d 1036, 1046 (9th Cir. 1999) 4 (considering false designation of origin claim as one of “unfair competition”); Champions 5 Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1122-23 (6th Cir. 1996) 6 (“[F]alse designation is simply a species of unfair competition.”) (citing McCoy v. 7 Mitsuboshi Cutlery, Inc., 67 F.3d 917, 923 (Fed. Cir. 1995)). 8 Here, the Court has already determined the FAC is deficient on the likelihood of 9 confusion element for the infringement claim. Plaintiff relies on the exact same 10 allegations for its false designation of origin claim. Pl. Mot. at 13-16. Thus, the result is 11 the same for the false designation of origin claim brought under 15 U.S.C. § 1125(a). 12 See Jada, 518 F.3d at 632; see also GS Holistic, LLC v. J’s Smoke Shop, 2024 WL 13 1054899, at *3 (denying default judgment motion on plaintiff’s false designation claim on 14 the same grounds as on the infringement claim—for failure of the complaint to state 15 sufficient claims and failure on the merits); GS Holistic, LLC v. Puff N Go Gift Shop LLC, 16 2023 WL 4146232, at *5 (N.D. Cal. June 22, 2023) (same). 17 c) Other Issues with Plaintiff’s Complaint 18 In addition to the FAC’s deficiencies regarding the alleged infringing products, the 19 Court is troubled by Plaintiff’s conclusory assertions that Defendant Shinwar and other, 20 unnamed individuals are personally liable for the asserted damages. See FAC at 14-16. 21 “A corporate officer or director is, in general, personally liable for all torts which he 22 authorizes or directs or in which he participates, notwithstanding that he acted as an 23 agent of the corporation and not on his own behalf.” Comm. for Idaho’s High Desert, Inc. 24 v. Yost, 92 F.3d 814, 823 (9th Cir. 1996). However, cases in the Ninth Circuit imputing 25 personal liability on corporate officers “have typically involved instances where the 26 defendant was the ‘guiding spirit’ behind the wrongful conduct” or “the ‘central figure’ in 27 the challenged corporate activity.” Wolf Designs, Inc. v. DHR Co., 322 F. Supp. 2d 1065, 28 1072 (C.D. Cal. 2004) (quoting Davis v. Metro Prods., Inc., 885 F.2d 515, 524 (9th Cir. 1 1989)). 2 Here, Plaintiff’s allegations of personal liability for Shinwar and other officers and 3 directors are wholly conclusory. The FAC alleges Shinwar “owned, managed, and/or 4 operated [Swag Smokes], and regularly exercised the authority to purchase products for 5 resale, decide which products [Swag Smokes] offered for sale, to hire and fire 6 employees, and controlled the finances and operations of [Swag Smokes].” FAC ¶ 7. It 7 concludes Shinwar “authorized, directed, and/or participated in [Swag Smokes’s] offer 8 for sale, in commerce, of the Counterfeit Goods,” and that his acts “were a moving, 9 active, and/or conscious force behind [Swag Smokes’s] infringement[.]” FAC ¶ 32. 10 Similar conclusory statements are made throughout. See FAC at ¶ 34 (alleging the sale 11 by Swag Smokes “under the authority, direction and/or participation of [Shinwar.]”), 12 ¶¶ 43-47 (alleging Shinwar’s “willful” acts causing damages); see also id. at 14-16 13 (requesting damages “jointly and severally for [Shinwar] and other officers and directors, 14 for the knowing participation in the [alleged] counterfeiting activities of Shinwar[.]”). 15 These allegations are wholly insufficient to explain how Shinwar was the ‘guiding spirit’ 16 or ‘central figure’, such that personal liability should be imputed on him (much less other 17 unnamed corporate officers). See Deckers Outdoor Corp. v. Fortune Dynamic, Inc., 2015 18 WL 12731929, at *9 (C.D. Cal. May 8, 2015) (granting motion to dismiss infringement 19 and unfair competition claims against individual defendant where the complaint’s 20 “conclusory pleading [was] insufficient to state a claim for relief”); see also GS Holistic, 21 LLC v. Ashes Plus Nine, 2023 WL 5993055, at *5 (collecting cases, and noting similar 22 issues with this plaintiff’s conclusory allegations on individual defendant’s personal 23 liability). 24 d) High-Frequency Litigant 25 Numerous courts in the Ninth Circuit have found vague and conclusory 26 allegations made by Plaintiff to be insufficient to grant default judgment. See GS Holistic, 27 LLC v. Puff+ LLC, 2024 WL 659362, at *3 (collecting cases where motion for default 28 judgment was denied due to GS Holistic’s wholly insufficient pleadings and motion); GS 1 Holistic, LLC v. Kings Smokeshop, 2024 WL 150217, at *2 (E.D. Cal. Jan. 12, 2024) 2 (denying motion for default judgment because the complaint “has not satisfied the 3 second and third Eitel factors; i.e., the merits of plaintiff’s substantive claim and the 4 sufficiency of the complaint”); GS Holistic, LLC v. Ashes Plus Nine, 2023 WL 5993055, 5 at *5 (“[T]his Court and other district courts in this Circuit have found similar (if not almost 6 identical) allegations by GS Holistic equally insufficient”); GS Holistic, LLC v. Ravens 7 Smoke Shop, Inc., 2023 WL 5504964, at *4 (C.D. Cal. July 10, 2023) (“As currently pled, 8 these factual allegations are vague and conclusory, and need not be accepted as true.”); 9 GS Holistic, LLC v. Alien Smoke Shop, 2023 WL 3402589, at *1 (C.D. Cal. Mar. 17, 10 2023) (“Plaintiff’s allegations of infringement here are insufficient to support a finding that 11 defendants willfully infringed plaintiff’s trademarks”). 12 The undersigned is aware that other courts—including those in this district—have 13 granted motions for default judgment on substantially similar complaints and motions 14 filed by this Plaintiff. See GS Holistic, LLC v. AA 110, 2024 WL 2848455, at *7 (E.D. Cal. 15 June 5, 2024) (granting motion for default judgment in part, but limiting damages to 16 $5,000), report and recommendation adopted sub nom. 2024 WL 3396380 (E.D. Cal. 17 July 12, 2024); GS Holistic, LLC v. Nasher, 2024 WL 1994702, at *1 (E.D. Cal. May 6, 18 2024) (same); GS Holistic, LLC v. Habib’s Disc., 2023 WL 8644103, at *7 (E.D. Cal. Dec. 19 14, 2023) (granting motion for default and awarding $75,000 in damages), report and 20 recommendation adopted sub nom. 2024 WL 495139 (E.D. Cal. Feb. 8, 2024). The 21 undersigned respectfully disagrees, and follows the approach of the many courts that 22 have denied similar motions for default judgment brought by GS Holistic. See, e.g., GS 23 Holistic, LLC v. Puff+ LLC, 2024 WL 659362, at *3; GS Holistic, LLC v. Kings 24 Smokeshop, 2024 WL 150217, at *2; GS Holistic, LLC v. Ashes Plus Nine, 2023 WL 25 5993055, at *5; GS Holistic, LLC v. Ravens Smoke Shop, Inc., 2023 WL 5504964, at *4; 26 GS Holistic, LLC v. Alien Smoke Shop, 2023 WL 3402589, at *1. 27 IV. CONCLUSION 28 In conclusion, the Court finds the second and third Eitel factors are not met, and 1 | denies Plaintiff's motion for default judgment. See Akrura Pte., 2024 WL 2982971, at *1. 2 | The Court therefore dismisses the First Amended Complaint with leave to amend 3 || because Plaintiff may be able to cure its defects. Plaintiff is instructed to ensure that any 4 || amended pleading cures defects identified in this order, if such defects can be cured, 5 || and to ensure that Plaintiff carries his burden on any subsequent motion for default 6 || judgment. 7 lf Plaintiff elects to file an amended complaint, it should be titled “Second 8 | Amended Complaint’ with reference to the appropriate case number. An amended 9 | complaint must be complete in itself without reference to any prior pleading. See Loux v. 10 | Rhay, 375 F.2d 55, 57 (9th Cir. 1967); E.D. Cal. Local Rule 220. If Plaintiff does not 11 | timely file an amended complaint, this will result in a recommendation that this action be 12 | dismissed. 13 ORDER 14 It is HEREBY ORDERED that: 15 1. Plaintiff's motion for default judgment (ECF No. 24) is DENIED WITHOUT 16 PREJUDICE; 17 2. The First Amended Complaint (ECF No. 10) is DISMISSED; and 18 3. Plaintiff is GRANTED LEAVE to file an amended complaint within thirty (30) 19 days of this Order. 20 21 | Dated: August 19, 2024 Cc (i $ □□ 22 CHI SOO KIM 93 UNITED STATES MAGISTRATE JUDGE 24 || 3, gsho.355 25 26 27 28 15