1 HONORABLE RONALD B. LEIGHTON 2 3 4 5
6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 7 AT TACOMA 8 STANLEY PACE, CASE NO. C18-5965RBL 9 Plaintiff, ORDER 10 v. 11 JORAN LUNDH, 12 Defendant. 13
14 THIS MATTER is before the Court on Plaintiff Pace’s Motions for a Default Judgment, 15 awarding to him the rights to the domain name . Defendant Lundh (a Hong Kong 16 resident using the domain name) commenced an ICANN administrative proceeding under its 17 Uniform Dispute Resolution Policy (UDRP) to determine ownership of the domain name. Pace 18 claims that he properly registered the name here (which he claims is both a common last name 19 and an expression referring to a new Las Vegas - California road and train system). The World 20 Intellectual Property Organization (WIPO) “locked” the domain name and then rendered a 21 decision requiring Pace to transfer it to Lundh. 22 Pace sued here to obtain a declaratory judgment that his use of the domain name did not 23 violate Lundh’s trademark rights under the Anticybersquatting Consumer Protection Act 24 1 (ACPA), 15 U.S.C. § 1125(d), or the Lanham Act of which the ACPA is a part. He claims that 2 Lundh is engaged in “reverse domain name hijacking,” seeking to wrest control of Pace’s 3 domain name by asserting spurious and baseless allegations of trademark 4 infringement. Pace claims that he has not sought to sell the name, but does allege that Lundh 5 repeatedly approached him under false pretenses to attempt to induce him (Pace) into a purchase
6 contract for the name. Pace concedes that he has “thousands” of domain names for sale. 7 This Court reluctantly permitted Pace to serve Lundh by email and Federal Express, 8 under Fed. R. Civ. P. 4(f)(2)(C)(ii) and Rule 4(f)(3). [Dkt. # 8] He did not appear or defend. The 9 Clerk entered Default in October. Pace now seeks a Default Judgment establishing as a matter of 10 law that he did not violate Lundh’s rights under the ACPA, that Lundh is not entitled to transfer 11 of the domain name, and that the domain name belongs to Pace. 12 Entry of default judgment is left to the Court’s sound discretion. Aldabe v. Aldabe, 616 13 F.2d 1089, 1092 (9th Cir.1980). Because granting or denying relief is within the court's 14 discretion, a defendant’s default does not automatically entitle a plaintiff to a Court-ordered
15 judgment. Id. at 1092. In exercising its discretion, the Court considers seven factors (the “Eitel 16 factors”): (1) the possibility of prejudice to the plaintiff if relief is denied; (2) the substantive 17 merits of the plaintiff’s claims; (3) the sufficiency of the claims raised in the complaint; (4) the 18 sum of money at stake in relationship to the defendant’s behavior; (5) the possibility of a dispute 19 concerning material facts; (6) whether default was due to excusable neglect; and (7) the 20 preference for decisions on the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 21 1471–72 (9th Cir.1986). See Getty Images (US), Inc. v Virtual Clinics, 2014 WL 358412 (W.D. 22 Wash. January 31, 2014). 23 24 1 Only the first factor supports the entry of a default judgment here. It may be true that 2 Lundh received actual notice of these claims and through neglect or indifference declined to 3 defend the WIPO decision in his favor, and that absent a default judgment, Pace will not be able 4 to overturn the WIPO decision and use or sell the domain name (one of 5 “thousands” he has stockpiled for sale). But the mere fact that denying a default judgment
6 motion deprives plaintiff of a quick, favorable outcome she might not obtain by litigating the 7 case on the merits is not sufficient prejudice” to warrant entry of a default judgment. Collin v. 8 Zeff, No. CV 12–8156 PSG (AJW), 2013 WL 3273413. 9 The remaining factors persuade the Court to decline to enter the requested default 10 judgment. Even accepting Pace’s purely factual allegations as true, his claim does not appear to 11 have substantive merit. He concedes that Lundh was and is using the domain 12 name, and that he purchased it for speculative use, claiming (1) it is a common name, and (2) 13 that it refers to some unpublicized proposed new road and rail system between Las Vegas and 14 California—but there is no evidence whatsoever supporting either claim. Pace admits he
15 discussed selling the name to Lundh (even if Lundh approached him first). It seems at least as 16 likely as not that Pace seeks to do what he admits does with his other names: sell it to someone 17 who is using the name without a trademark. 18 Third, at several key junctures, Pace’s Complaint contains more legal conclusions than 19 factual allegations: 20 21 22 23 24 l 16. The reasons stated in the ruling of the arbitrator represent a significant 2 departure from the written standards contained in the UDRP in that Defendant did not 3 ||] Prove (1) that Plaintiff did not have bona fide rights in the Domain Name or in terms included in the Domain Name (for purposes of the federal trademark laws that are 4 applicable to the proceeding), (2) that Plaintiff had no legitimate interest in the domain, > or (3) that Plaintiff had registered and/or used the Domain Name in bad faith. 6 17. Plaintiff’s use of the term as a domain name has not traded upon any goodwill 7 ||| or reputation enjoyed by Defendant as it relates to the products or services that g Defendant offers, nor is there any possibility of confusion between Plaintiffs web site and the products offered by Defendant to the general public. 9 18. Plaintiffs use of LASCAL.COM as his chosen domain name is a fair or 10 otherwise lawful use of the term pursuant to his business plan to acquire generic or 11 descriptive domain names. 12 19. At no time did Plaintiff trade upon or use Defendant’s alleged trademark for his business of monetizing domain names. 20. At no time did the Plaintiff register or use the domain name LASCAL.COM in 14 “bad faith” as defined by 15 U.S.C. § 1125. 15 [Dkt. # 1 at 4-5]. The context of the case suggests serious questions as to the veracity of these 16 legal conclusions, under both the ICANN UDRP and the ACPA. 17 And while Pace seeks no monetary relief (and makes no claim about how much the name 18 is worth, even to Lundh) (Eitel factor 4), there are ample indications of disputed material facts 19 (Eitel factor 5). The Court cannot know whether Lundh’s default was due to excusable neglect 20 (Eitel factor 6); it approved alternate foreign service to an email and physical address for Lundh 21 provided by Pace. It is puzzling that Lundh would initiate the WIPO process, win, and then 22 decline to defend his right to the domain name he apparently was using. 23 24
1 The final factor is the obvious preference for a resolution on the merits, where reasonably 2 possible (Eitel factor 7). Judgment by default is a drastic step appropriate only in extreme 3 circumstances; a case should, whenever possible, be decided on the merits. United States v. 4 Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1089 (9th Cir. 2010) (citing 5 Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)); see also Latshaw v. Trainer Wortham & Co.,
6 Inc.,
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1 HONORABLE RONALD B. LEIGHTON 2 3 4 5
6 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 7 AT TACOMA 8 STANLEY PACE, CASE NO. C18-5965RBL 9 Plaintiff, ORDER 10 v. 11 JORAN LUNDH, 12 Defendant. 13
14 THIS MATTER is before the Court on Plaintiff Pace’s Motions for a Default Judgment, 15 awarding to him the rights to the domain name . Defendant Lundh (a Hong Kong 16 resident using the domain name) commenced an ICANN administrative proceeding under its 17 Uniform Dispute Resolution Policy (UDRP) to determine ownership of the domain name. Pace 18 claims that he properly registered the name here (which he claims is both a common last name 19 and an expression referring to a new Las Vegas - California road and train system). The World 20 Intellectual Property Organization (WIPO) “locked” the domain name and then rendered a 21 decision requiring Pace to transfer it to Lundh. 22 Pace sued here to obtain a declaratory judgment that his use of the domain name did not 23 violate Lundh’s trademark rights under the Anticybersquatting Consumer Protection Act 24 1 (ACPA), 15 U.S.C. § 1125(d), or the Lanham Act of which the ACPA is a part. He claims that 2 Lundh is engaged in “reverse domain name hijacking,” seeking to wrest control of Pace’s 3 domain name by asserting spurious and baseless allegations of trademark 4 infringement. Pace claims that he has not sought to sell the name, but does allege that Lundh 5 repeatedly approached him under false pretenses to attempt to induce him (Pace) into a purchase
6 contract for the name. Pace concedes that he has “thousands” of domain names for sale. 7 This Court reluctantly permitted Pace to serve Lundh by email and Federal Express, 8 under Fed. R. Civ. P. 4(f)(2)(C)(ii) and Rule 4(f)(3). [Dkt. # 8] He did not appear or defend. The 9 Clerk entered Default in October. Pace now seeks a Default Judgment establishing as a matter of 10 law that he did not violate Lundh’s rights under the ACPA, that Lundh is not entitled to transfer 11 of the domain name, and that the domain name belongs to Pace. 12 Entry of default judgment is left to the Court’s sound discretion. Aldabe v. Aldabe, 616 13 F.2d 1089, 1092 (9th Cir.1980). Because granting or denying relief is within the court's 14 discretion, a defendant’s default does not automatically entitle a plaintiff to a Court-ordered
15 judgment. Id. at 1092. In exercising its discretion, the Court considers seven factors (the “Eitel 16 factors”): (1) the possibility of prejudice to the plaintiff if relief is denied; (2) the substantive 17 merits of the plaintiff’s claims; (3) the sufficiency of the claims raised in the complaint; (4) the 18 sum of money at stake in relationship to the defendant’s behavior; (5) the possibility of a dispute 19 concerning material facts; (6) whether default was due to excusable neglect; and (7) the 20 preference for decisions on the merits when reasonably possible. Eitel v. McCool, 782 F.2d 1470, 21 1471–72 (9th Cir.1986). See Getty Images (US), Inc. v Virtual Clinics, 2014 WL 358412 (W.D. 22 Wash. January 31, 2014). 23 24 1 Only the first factor supports the entry of a default judgment here. It may be true that 2 Lundh received actual notice of these claims and through neglect or indifference declined to 3 defend the WIPO decision in his favor, and that absent a default judgment, Pace will not be able 4 to overturn the WIPO decision and use or sell the domain name (one of 5 “thousands” he has stockpiled for sale). But the mere fact that denying a default judgment
6 motion deprives plaintiff of a quick, favorable outcome she might not obtain by litigating the 7 case on the merits is not sufficient prejudice” to warrant entry of a default judgment. Collin v. 8 Zeff, No. CV 12–8156 PSG (AJW), 2013 WL 3273413. 9 The remaining factors persuade the Court to decline to enter the requested default 10 judgment. Even accepting Pace’s purely factual allegations as true, his claim does not appear to 11 have substantive merit. He concedes that Lundh was and is using the domain 12 name, and that he purchased it for speculative use, claiming (1) it is a common name, and (2) 13 that it refers to some unpublicized proposed new road and rail system between Las Vegas and 14 California—but there is no evidence whatsoever supporting either claim. Pace admits he
15 discussed selling the name to Lundh (even if Lundh approached him first). It seems at least as 16 likely as not that Pace seeks to do what he admits does with his other names: sell it to someone 17 who is using the name without a trademark. 18 Third, at several key junctures, Pace’s Complaint contains more legal conclusions than 19 factual allegations: 20 21 22 23 24 l 16. The reasons stated in the ruling of the arbitrator represent a significant 2 departure from the written standards contained in the UDRP in that Defendant did not 3 ||] Prove (1) that Plaintiff did not have bona fide rights in the Domain Name or in terms included in the Domain Name (for purposes of the federal trademark laws that are 4 applicable to the proceeding), (2) that Plaintiff had no legitimate interest in the domain, > or (3) that Plaintiff had registered and/or used the Domain Name in bad faith. 6 17. Plaintiff’s use of the term as a domain name has not traded upon any goodwill 7 ||| or reputation enjoyed by Defendant as it relates to the products or services that g Defendant offers, nor is there any possibility of confusion between Plaintiffs web site and the products offered by Defendant to the general public. 9 18. Plaintiffs use of LASCAL.COM as his chosen domain name is a fair or 10 otherwise lawful use of the term pursuant to his business plan to acquire generic or 11 descriptive domain names. 12 19. At no time did Plaintiff trade upon or use Defendant’s alleged trademark for his business of monetizing domain names. 20. At no time did the Plaintiff register or use the domain name LASCAL.COM in 14 “bad faith” as defined by 15 U.S.C. § 1125. 15 [Dkt. # 1 at 4-5]. The context of the case suggests serious questions as to the veracity of these 16 legal conclusions, under both the ICANN UDRP and the ACPA. 17 And while Pace seeks no monetary relief (and makes no claim about how much the name 18 is worth, even to Lundh) (Eitel factor 4), there are ample indications of disputed material facts 19 (Eitel factor 5). The Court cannot know whether Lundh’s default was due to excusable neglect 20 (Eitel factor 6); it approved alternate foreign service to an email and physical address for Lundh 21 provided by Pace. It is puzzling that Lundh would initiate the WIPO process, win, and then 22 decline to defend his right to the domain name he apparently was using. 23 24
1 The final factor is the obvious preference for a resolution on the merits, where reasonably 2 possible (Eitel factor 7). Judgment by default is a drastic step appropriate only in extreme 3 circumstances; a case should, whenever possible, be decided on the merits. United States v. 4 Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1089 (9th Cir. 2010) (citing 5 Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)); see also Latshaw v. Trainer Wortham & Co.,
6 Inc., 452 F.3d 1097, 1103 (9th Cir. 2006); Speiser, Krause & Madole P.C. v. Ortiz, 271 F.3d 7 884, 890 (9th Cir. 2001); TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 695–96 (9th Cir. 8 2001). 9 The Motion for Default Judgment is DENIED. 10 IT IS SO ORDERED. 11 Dated this 4th day of March, 2020. 12 A 13 Ronald B. Leighton 14 United States District Judge
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