Sream, Inc. v. Raj

CourtDistrict Court, E.D. California
DecidedAugust 7, 2019
Docket2:18-cv-02534
StatusUnknown

This text of Sream, Inc. v. Raj (Sream, Inc. v. Raj) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sream, Inc. v. Raj, (E.D. Cal. 2019).

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 SREAM, INC. and ROOR No. 2:18-cv-02534-TLN-CKD INTERNATIONAL BV, 12 Plaintiffs, 13 FINDINGS AND RECOMMENDATIONS v. 14 GURMAIL RAJ, 15 Defendant. 16 17 Presently before the court is plaintiffs’ motion for default judgment. This matter was 18 submitted without oral argument. The undersigned has fully considered the briefs and record in 19 this case and, for the reasons stated below, will recommend that plaintiffs’ motion for default 20 judgment be granted. 21 I. BACKGROUND 22 Plaintiffs’ claims arise out of defendant’s alleged unlawful importation, manufacture, 23 retail sale, and/or wholesale sales of counterfeit branded water pipes and related parts bearing 24 plaintiffs’ trademarks. The complaint alleges as follows: Plaintiff RooR International BV is 25 incorporated in the Netherlands and is the registered owner of the trademark for RooR branded 26 water pipes. (ECF No. 1 at ¶ 6.) Plaintiff Sream is a California corporation doing business as 27 RooR USA; and is and has been the exclusive licensee for RooR trademarked products within the 28 United States since 2013. (Id. at ¶¶ 5, 13.) 1 The RooR brand is “the premier manufacturer of glass water pipes by emphasizing the 2 brand’s unwavering use of quality materials and focusing on scientific principles which facilitate 3 a superior smoking experience.” (Id. at ¶ 10.) RooR branded products “are widely recognized 4 internationally and are highly renowned for their ornate and innovative characteristics.” (Id. at 5 ¶ 9.) Sream has marketed and distributed RooR branded products in the United States 6 continuously since 2013. (Id. at ¶ 14.) 7 Defendant Gurmail Raj is an individual doing business as “Cigarettes N Cigars” located in 8 Sacramento, California. (Id. at ¶ 7.) Defendant, “without consent of Plaintiffs, offered to sell and 9 sold . . . water pipes that were neither made by the Plaintiffs nor by a manufacturer authorized by 10 the Plaintiffs.” (Id. at ¶ 23.) On December 9, 2015, plaintiffs’ investigator purchased a glass 11 water pipe with a RooR trademark from defendant for $55.00. (Id. at ¶ 24.) Plaintiffs inspected 12 the purchased item and confirmed that the water pipe defendant sold to plaintiffs’ investigator 13 was a counterfeit good with an infringing trademark. (Id. at ¶ 25.) Neither plaintiffs nor any 14 authorized agents consented to defendant’s “use of the RooR [m]arks, or any use of 15 reproductions, counterfeits, copies and/or colorable imitations thereof.” (Id. at ¶ 27.) “As a 16 proximate result of the unfair advantage accruing to [defendant’s] business from deceptively 17 trading” on plaintiffs’ advertising, sales, and consumer recognition, defendant “has made and will 18 continue to make substantial profits and gains to which they are not in law or equity entitled.” 19 (Id. at ¶ 37.) Based on the allegations in the complaint, plaintiffs seek damages for trademark 20 infringement, counterfeiting, false designation of origin, and unfair competition. (See generally 21 ECF No. 1.) 22 The record reflects that defendant was properly served with process on September 27, 23 2018 and default was entered October 31, 2018. (ECF Nos. 5, 7.) Plaintiff thereafter filed a 24 motion for default judgment. (ECF No. 9.) Plaintiff seeks an entry of default judgment in the 25 amount of $200,000 and an award of attorneys’ fees and costs in the amount of $3,445 and $560, 26 respectively. (Id.) 27 II. LEGAL STANDARD 28 Under Federal Rule of Civil Procedure 55, default may be entered against a party against 1 whom a judgment for affirmative relief is sought who fails to plead or otherwise defend against 2 the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not automatically 3 entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 4 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir. 1986)). 5 Instead, the decision to grant or deny an application for default judgment lies within the district 6 court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this 7 determination, the court considers the following factors: (1) the possibility of prejudice to the plaintiff, (2) the merits of 8 plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a 9 dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the 10 Federal Rules of Civil Procedure favoring decisions on the merits. 11 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Default judgments are ordinarily 12 disfavored. Id. at 1472. 13 As a general rule, once default is entered, well-pleaded factual allegations in the operative 14 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 15 v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 16 Group, 559 F.2d 557, 560 (9th Cir. 1977)); accord Fair Housing of Marin v. Combs, 285 F.3d 17 899, 906 (9th Cir. 2002). In addition, although well-pleaded allegations in the complaint are 18 admitted by a defendant’s failure to respond, “necessary facts not contained in the pleadings, and 19 claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. 20 Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th 21 Cir. 1978)); DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (explaining that a 22 defendant does not admit facts that are not well-pleaded or conclusions of law (quoting 23 Nishimatsu Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)). A party’s 24 default does not establish the amount of damages. Geddes, 559 F.2d at 560 (citations omitted). 25 III. DISCUSSION 26 A. Appropriateness of the Entry of Default Judgment Under the Eitel Factors 27 1. Factor One: Possibility of Prejudice to Plaintiffs 28 The first Eitel factor considers whether the plaintiff would suffer prejudice if default 1 judgment is not entered, and such potential prejudice to the plaintiffs militates in favor of granting 2 a default judgment. Here, plaintiffs would potentially face prejudice if the court did not enter a 3 default judgment. Absent entry of a default judgment, plaintiffs would be without another 4 recourse against defendant. Accordingly, the first Eitel factor favors the entry of a default 5 judgment. 6 2.

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