SEBO America, LLC v. Mega Mart Warehouse LLC

CourtDistrict Court, D. Colorado
DecidedMarch 25, 2024
Docket1:22-cv-02898
StatusUnknown

This text of SEBO America, LLC v. Mega Mart Warehouse LLC (SEBO America, LLC v. Mega Mart Warehouse LLC) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
SEBO America, LLC v. Mega Mart Warehouse LLC, (D. Colo. 2024).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Chief Judge Philip A. Brimmer

Civil Case No. 22-cv-02898-PAB-KAS

SEBO AMERICA, LLC,

Plaintiff,

v.

MEGA MART WAREHOUSE LLC,

Defendant. ____________________________________________________________________

ORDER _____________________________________________________________________

This matter is before the Court on Plaintiff’s Motion for Default Judgment [Docket No. 23]. I. BACKGROUND A. Factual Allegations1 Plaintiff SEBO America, LLC (“SEBO”) is a Colorado limited liability company with a principal place of business in Englewood, Colorado. Docket No. 1 at 4, ¶ 12. Defendant Mega Mart Warehouse LLC (“Mega Mart”) is a limited liability company with a principal place of business in Kansas City, Missouri. Id., ¶ 13. The Missouri Secretary of State’s website lists Vincent Darnell Jones as Mega Mart’s registered agent. Id. at 11, ¶ 56.

1 Because of the Clerk of Court’s entry of default against defendant, see Docket No. 17, the factual allegations in plaintiff’s complaint, Docket No. 1, are deemed admitted. See Olcott v. Del. Flood Co., 327 F.3d 1115, 1125 (10th Cir. 2003). Throughout the United States, SEBO markets “floor maintenance equipment,” including vacuum cleaners, dust bags, filters, and related accessories. Id. at 7, ¶ 29. SEBO is the exclusive United States licensee or owner of the following registered trademarks: “SEBO,” “SEBO (and design),” “FELIX,” “DART,” “AIRBELT,” “WORKS

FOR ME,” and “AERAPURE” (collectively, the “SEBO Trademarks”). Id. at 2, 4, 7-8, ¶¶ 3, 12, 30-36. SEBO’s floor maintenance equipment bears the SEBO Trademarks. Id. at 7, ¶ 29. SEBO distributes and markets goods bearing the SEBO Trademarks through a closed network of authorized dealers in the United States. Id. at 3, ¶ 4. Authorized dealers receive training and are required to maintain quality control over the goods. Id. at 10, ¶ 48. Goods sold by authorized dealers are also covered under SEBO’s warranty. Id. at 10, 13, ¶¶ 49, 65. The SEBO warranty is a relevant factor in consumer purchasing decisions. Id. at 22, ¶ 138. Mega Mart is not an authorized dealer of goods bearing the SEBO Trademarks. Id. at 3, 11, ¶¶ 4, 57. Mega Mart is not authorized to use the SEBO Trademarks or hold

out to the public that Mega Mart is associated in any way with SEBO. Id. at 12, ¶ 58. Mega Mart maintains a seller account on Amazon with the username “Mega Mart Warehouse” and the seller identification number A1WB9YXIQ5Z549. Id. at 4, 11, ¶¶ 13, 54. On Amazon, Mega Mart advertises goods bearing the SEBO Trademarks (the “Infringing Goods”). Id. at 3, ¶ 5. Mega Mart advertises the Infringing Goods at prices below the minimum prices that authorized dealers can sell genuine goods for. Id. at 16, ¶ 90. Mega Mart “has sold goods bearing the SEBO Trademarks and shipped such goods to Colorado.” Id. at 5, ¶ 16. When consumers search on Amazon for goods bearing the SEBO Trademarks, the Amazon platform displays Mega Mart’s listings simultaneously with the listings by authorized dealers. Id. at 6, ¶ 26. Consumers are unable to determine whether a particular vendor on Amazon is authorized to sell goods bearing the SEBO Trademarks. Id. at 7, ¶ 27. On Amazon, Mega Mart markets the Infringing Goods using the SEBO

Trademarks and indicates that the condition of the goods is “new” and “genuine.” Id. at 13, ¶ 66. Mega Mart also advertises the Infringing Goods as “warranteed.” Id. at 30, ¶ 195. However, the Infringing Goods are not genuine and are not covered under SEBO’s warranty. Id. at 3, 13, 23, ¶¶ 8, 65, 68, 144. Mega Mart’s unauthorized use of the SEBO Trademarks has caused “confusion, mistake, and deception among the general consuming public” that Mega Mart’s Infringing Goods “originate from, are associated with, approved by, or are otherwise authorized by Plaintiff.” Id. at 16, ¶ 93. In September 2022, SEBO sent a cease-and-desist letter to Mega Mart’s business address listed on Amazon’s website. Id. at 12, ¶ 62. SEBO advised Mega Mart that its continued sale of goods bearing the SEBO Trademarks infringes upon

SEBO’s legal rights. Id., ¶ 61. Mega Mart knows that products bearing the SEBO Trademarks are sold in the United States through a closed network of dealers, and that Mega Mart is not an authorized dealer. Id., ¶ 60. Mega Mart has “willfully” used the SEBO Trademarks. Id. at 16, ¶ 87. The SEBO Trademarks have substantial value and goodwill. Id. at 11, ¶ 53. However, consumers have posted negative reviews on Mega Mart’s listings, which tarnishes the goodwill that SEBO has established in the marketplace. Id. at 14, ¶ 75. B. Procedural History SEBO filed this lawsuit on November 7, 2022. Docket No. 1. SEBO asserts eight claims against Mega Mart for (1) federal trademark infringement under 15 U.S.C. § 1114; (2) false designation of origin under 15 U.S.C. § 1125(a)(1)(A); (3) false

advertising under 15 U.S.C. § 1125(a)(1)(B); (4) unfair competition under 15 U.S.C. § 1125(a); (5) unfair competition under Colorado common law; (6) trademark infringement under Colorado common law; (7) violations of the Colorado Consumer Protection Act (“CCPA”), Colo. Rev. Stat. § 6-1-101 et. seq.; and (8) unjust enrichment under Colorado common law. Id. at 15-32. On November 8, 2022, SEBO served Mega Mart. Docket No. 9. Mega Mart has not made an appearance in this action. On January 31, 2023, the Clerk of the Court entered default against Mega Mart. Docket No. 17. On April 5, 2023, SEBO filed the motion for default judgment. Docket No. 23.

II. LEGAL STANDARD In order to obtain a judgment by default, a party must follow the two-step process described in Fed. R. Civ. P. 55. First, the party must seek an entry of default from the Clerk of the Court under Rule 55(a). Second, after default has been entered by the Clerk, the party must seek judgment under the strictures of Rule 55(b). See Williams v. Smithson, 57 F.3d 1081, 1995 WL 365988, at *1 (10th Cir. June 20, 1995) (unpublished table decision) (citing Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981)). The decision to enter default judgment is “committed to the district court’s sound discretion.” Olcott, 327 F.3d at 1124 (citation omitted). In exercising that discretion, the Court considers that “[s]trong policies favor resolution of disputes on their merits.” Ruplinger v. Rains, 946 F.2d 731, 732 (10th Cir. 1991) (quotation and citations omitted). “The default judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party.” Id. It serves to protect a plaintiff against “interminable delay and continued uncertainty as to his rights.”

Id. at 733. When “ruling on a motion for default judgment, the court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment.” Seme v. E&H Prof’l Sec. Co., Inc., No. 08-cv-01569-RPM-KMT, 2010 WL 1553786, at *11 (D. Colo. Mar. 19, 2010). A party may not simply sit out the litigation without consequence. See Cessna Fin. Corp. v.

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SEBO America, LLC v. Mega Mart Warehouse LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sebo-america-llc-v-mega-mart-warehouse-llc-cod-2024.