Mitek Systems, Inc. v. Urban Ft, LLC

• Court: District Court, S.D. California
• Decided: January 31, 2020
• Docket: 3:19-cv-01432
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 MITEK SYSTEMS, INC., Case No.: 19-CV-1432-CAB-WVG

12 Plaintiff, ORDER GRANTING MOTION TO 13 v. SET ASIDE DEFAULT AND DENYING MOTION FOR DEFAULT 14 URBAN FT (NORTH AMERICA), LLC, JUDGMENT aka URBAN FT, LLC, 15 Defendant. [Doc. Nos. 29, 30] 16

18 19 Plaintiff Mitek Systems, Inc. filed its complaint in this action on July 31, 2019 [Doc. 20 No. 1], and thereafter filed its first amended complaint (“FAC”) on August 15, 2019. [Doc. 21 No. 8.] On September 25, 2019, Defendant Urban FT (North America), LLC, aka Urban 22 FT, LLC filed its answer to the FAC. [Doc. No. 16.] On October 31, 2019, Defendant’s 23 previous counsel of record, Patrick D. Paschall, Esq., filed a motion to withdraw as counsel. 24 [Doc. No. 18.] Due to the lack of any opposition, the Court granted the motion to withdraw 25 as counsel on November 26, 2019. [Doc. No. 23.] The Court reminded Defendant that it 26 cannot proceed without representation pursuant to Civil Local Rule 83.3(j) and instructed 27 Defendant to obtain new counsel no later than December 17, 2019, otherwise Plaintiff may 28 request entry of default against Defendant. [Id. at 2.] 1 Defendant failed to obtain new counsel by this deadline and Plaintiff requested entry 2 of default on December 23, 2019 [Doc. No. 26], which the clerk entered on December 27, 3 2019. [Doc. No. 27.] On January 24, 2020, Defendant moved to set aside the default [Doc. 4 No. 29], and on January 27, 2020, Plaintiff moved for default judgment. [Doc. No. 30.] 5 For the efficient administration of justice, and to save the parties the cost of unnecessary 6 briefing, the court finds it efficient to immediately address Defendant’s motion to set aside 7 default. 8 A court may set aside a default for good cause shown. Fed. R. Civ. P. 55(c). Factors 9 to consider include whether defendant engaged in culpable conduct, whether defendant has 10 a meritorious defense, and whether setting aside default will prejudice plaintiff. See 11 Franchise Holding, II, LLC v. Huntington Restaurants Group, Inc., 375 F.3d 922, 926 (9th 12 Cir. 2004). The decision whether or not to grant default judgment is within the discretion 13 of district courts. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). “All that is 14 necessary to satisfy the ‘meritorious defense’ requirement is to allege sufficient facts that, 15 if true, would constitute a defense.” United States v. Aguilar, 782 F.3d 1101, 1107 (9th 16 Cir. 2015) (internal quotes omitted). “[J]udgment by default is a drastic step appropriate 17 only in extreme circumstances; a case should, whenever possible, be decided on the 18 merits.” Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984). 19 Here, the court has reviewed defendant’s motion (and supporting memorandum) and 20 finds good cause to grant it. Defendant persuasively contends that it diligently attempted 21 to obtain new counsel and once it came to an agreement of representation its counsel 22 immediately began to prepare the motion to set aside default. Defendant also contends it 23 has a meritorious defense to both the non-infringement and breach of contract claims. 24 Furthermore, Defendant moved to set aside the default within thirty days of entry and the 25 Court does not find this limited tardiness demonstrates extreme circumstances. Finally, 26 the Court favors a decision on the merits. See Eitel v. McCool, 782 F.2d 1470, 1472 (9th 27 Cir. 1986) (holding default judgments generally are disfavored because “cases should be 28 decided on their merits whenever reasonably possible”). 1 Defendant’s motion to set aside the entry of default [Doc. No. 29] is GRANTED. 2 || Plaintiff’s motion for default judgment is therefore DENIED. [Doc. No. 30.] 3 IT IS SO ORDERED. 4 ||Dated: January 31, 2020

6 7 Hon. Cathy Ann Bencivengo United States District Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28