Reflex Media, Inc. v. Richard Easton Limited

District Court, D. Nevada·Decided September 15, 2023·No. 2:20-cv-00051·Unknown

Opinion

REFLEX MEDIA, INC. et al., ) ) Plaintiffs, ) Case No.: 2:20-cv-00051-GMN-EJY vs. ) ) ORDER RICHARD EASTON LIMITED, et al., ) ) Defendants. ) ) Pending before the Court is the Motion for Default Judgment, (ECF No. 77), filed by Plaintiffs Reflex Media, Inc. (“RMI”) and Clover8 Investments (collectively, “Plaintiffs”). Defendants Richard Easton Limited, Maria Jose Diaz, Nelida Tejeda Alvarez, and Jorge Osbaldo Rodriguez (collectively, “Defendants” or “Defaulting Defendants”) did not file a Response. For the reasons discussed below, the Court DENIES Plaintiffs’ Motion for Default Judgment. This case demonstrates what can happen when business competitors take things too far. Plaintiffs allege that the Defendants, in an attempt to grow their own online dating service, unlawfully used Plaintiffs’ trademarks, brand reputation, and membership lists. (See generally Compl., ECF No. 1). RMI operates several dating websites that use federally registered trademarks owned by Clover8. (Id. ¶¶ 3–4). Plaintiffs allege that the Defendant Corporation Richard Easton Limited (“REL”), owner Richard Easton (“Easton”), and employees or agents Maria Jose Diaz, Nelida Tejada Alvarez, and Jorge Osbaldo Rodriguez infringed on Plaintiffs’ trademarks and joined RMI’s dating platform to recruit RMI’s customers to their own dating platform, First Date Club. (Id. ¶¶ 5–10). Plaintiffs allege that the Defendants “systematically and willfully” infringed on their registered trademarks by adopting identical counterfeit marks for use on their dating site and social media accounts. (Id. ¶¶ 18, 42–49). Plaintiffs’ additional causes of action derive from the Defendants’ scheme to sign up for RMI’s dating service and message their members with the purpose of luring them to First Date Club. (Id. ¶¶ 41–87). These messages violated RMI’s Terms of Use because Defendants used RMI’s site for commercial purposes, created a confusingly similar logo, provided inaccurate registration information, and copied trademarks and member information. (Id. ¶ 89). Plaintiffs filed a Complaint asserting nine causes of action: five federal trademark infringement claims, one federal unfair competition claim, one breach of contract claim, one intentional interference with contractual relations claim, and one Computer Fraud and Abuse Act claim under 18 U.S.C. § 1030. (Id. ¶¶ 90–150). REL, a Delaware Company, was validly served with a copy of the Summons and Complaint via the Delaware Secretary of State. (Aff. Serv., ECF No. 20). After the time to respond expired, Plaintiffs filed a Request for Entry of Default, (ECF. No 27), and the Clerk of Court entered default, (Entry Default, ECF No. 30). The individuals in this case proved more difficult to serve. On April 8, 2020, Plaintiffs filed a Notice Regarding Service to Individual Defendants, stating that while Richard Easton and wife Maria Jose Diaz lived in the United States when the case was filed, they appeared to have since moved to Mexico. (Not. Regarding Serv., 1:19–25, ECF No. 21). Plaintiffs attached

exhibits demonstrating proof of non-service to Easton’s last known address in New York. (Ex. 1–3 to Not. Regarding Serv.,). Due to this difficulty, Plaintiffs filed a motion requesting to serve all individual Defendants via email, with additional service to Easton and Diaz by mail and social media. (Mot. Permit Alt. Method Serv., ECF No. 29). The Court granted Plaintiffs’ request. (Order, ECF No. 31). On February 5, 2021, Plaintiffs filed a Notice of Compliance with the Court’s Order Granting Alternative Methods of Service to which they attached proof of alternate service to the four individual Defendants. (ECF No. 32). On March 31, 2021, Plaintiffs filed a Motion for Default Judgment against the four individuals. (First Mot. Default J., ECF No. 33). The Court denied this motion because Easton, in his individual capacity, appeared in the case for the first time. (Denial First Mot. Default Judgment, ECF No. 53). Easton filed a Motion to Dismiss, (Mot. Dismiss, ECF No. 34 at 2), which the Court denied as untimely. (Order, ECF No. 68). On January 11, 2022, Plaintiffs filed their second Motion for Default Judgment against the three individuals who had not yet appeared in the case: Nelida Tejeda Alvarez, Jorge Osbaldo Rodriguez, and Maria Jose Diaz. (Second Mot. Default J., ECF No. 54). The Clerk entered default. (Entry Default, ECF No. 59). Meanwhile, on April 6, 2022, Plaintiffs filed a Motion for Partial Summary Judgment on Claims I-VII against Easton. (Mot. Partial Summ. J., ECF No. 58). The Court granted summary judgment as to Plaintiffs’ claims and awarded Plaintiffs $1,756,799.43 plus attorneys’ fees. (Order Granting Partial Mot. Summ. J., ECF No. 68).1 The Court also permanently enjoined the Defendants from infringing on Plaintiffs’ trademarks. (Id.). Plaintiffs now move for Default Judgment against the remaining Defaulting Defendants. They seek to recover monetary damages and ask the Court to permanently enjoin the Defaulting Defendants from using RMI’s website. (Id. 2:17–19).

Obtaining default judgment is a two-step process governed by Rule 55 of the Federal Rules of Civil Procedure (“FRCP”). See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986). First, the moving party must seek an entry of default from the clerk of court. FRCP 55(a).

1 The parties then stipulated to dismiss Plaintiffs’ eighth and ninth causes of action, which the Court granted. (Stip. Dismiss, ECF No. 73; Order, ECF No. 84). Entry of default is only appropriate when a party “has failed to plead or otherwise defend.” Id. Additionally, the FRCP 55(a) advisory note indicates that it is inappropriate to enter a default against a party who has indicated their intent to defend. Id. After the clerk enters the default, a party must then separately seek entry of default judgment from the court in accordance with Rule 55(b). Upon entry of a clerk’s default, the court takes the factual allegations in the complaint as true, except those relating to the amount of damages. See TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per curiam). In determining whether to grant default judgment, courts are guided by the following seven Eitel factors: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s substantive claims; (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 public policy favoring decisions on the merits. Eitel, 782 F.2d at 1471–72. A. Default Judgment As an initial matter, the Plaintiffs have met the first step of the two-step process for obtaining default judgment. Pursuant to FRCP 55(a), the Clerk of the Court correctly entered default against the Defendants because they have not appeared in the case. (See Entry Default, ECF Nos. 30, 59). Thus, the Court, in its discretion, may order a default judgment after a

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Reflex Media, Inc. v. Richard Easton Limited, (D. Nev. 2023).

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