Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_16-cv-01110/USCOURTS-cand-3_16-cv-01110-3/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:44 Trademark Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

MISSION TRADING COMPANY, INC.,

Plaintiff,

v.

DAVID VINCENT LEWIS, et al.,

Defendants.

Case No. 16-cv-01110-JST 

ORDER GRANTING MOTION TO SET 

ASIDE DEFAULT

Re: ECF No. 29

Before the Court is Defendant David Vincent Lewis’ Motion to Set Aside Default. ECF 

No. 29. The Court will grant the motion.

I. BACKGROUND

On March 4, 2016, Plaintiff Mission Trading Company, Inc. filed a Complaint against 

Defendants David Vincent Lewis and Sandra Gallagher Lewis, asserting claims for false 

advertising, trademark infringement, unjust enrichment, negligent interference with contractual 

relations, intentional interference with prospective economic advantage, and unfair competition. 

ECF No. 2. The thrust of the Complaint alleges that “Defendants have used Amazon.com and 

other websites to sell their own products using the [Mission Trading Company] trademarks and to 

promote Defendant[s’] own company as a supplier of said [Mission Trading Company] trademark 

products.” Id. ¶ 24.

On April 1, 2016, Defendant Sandra Lewis, proceeding pro se, filed an “Answer and 

Counterclaim” to the Complaint. ECF No. 8. Defendant David Lewis, who contests being 

properly served with the Complaint, ECF No. 29 at 10–11, did not answer the Complaint. As a 

result, on June 8, 2016, Plaintiff filed a Request for Entry of Default. ECF No. 24. The Clerk of 

the Court entered default as to Defendant David Lewis on June 10, 2016. ECF No. 25. 

On June 20, 2016, an attorney appeared on behalf of both defendants. ECF No. 26. On 

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June 29, 2016, Defendant David Lewis filed a Motion to Vacate Default, ECF No. 29, which 

motion the Court now considers.

II. LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 55(c), “[t]he court may set aside an entry of 

default for good cause.” “[W]hile the same test applies for motions seeking relief from default 

judgment under both Rule 55(c) and Rule 60(b), the test is more liberally applied in the Rule 55(c) 

context,” as where no judgment has been entered, “there is no interest in the finality of the 

judgment with which to contend.” United States v. Signed Pers. Check No. 730 of Yubran S. 

Mesle, 615 F.3d 1085, 1091 n.1 (9th Cir. 2010). 

In assessing whether to set aside a default for good cause, a court looks to whether “(1) the 

plaintiff would be prejudiced if the judgment is set aside, (2) defendant has no meritorious 

defense, or (3) the defendant’s culpable conduct led to the default.” In re Hammer, 940 F.2d 524, 

525–26 (9th Cir. 1991)). As “[t]his tripartite test is disjunctive,” a showing of any one of the three 

prongs is enough to justify a refusal to set aside the default. Id. Nonetheless, the Ninth Circuit 

has consistently emphasized that “judgment by default is a drastic step appropriate only in extreme 

circumstances; a case should, whenever possible, be decided on the merits.” Falk v. Allen, 739 

F.2d 461, 463 (9th Cir. 1984). “[W]here there has been no merits decision, appropriate exercise of 

district court discretion under Rule 60(b) requires that the finality interest should give way fairly 

readily, to further the competing interest in reaching the merits of a dispute.” TCI Grp. Life Ins. 

Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2001).

III. DISCUSSION

A. Prejudice to Plaintiff

“To be prejudicial, the setting aside of a judgment must result in greater harm than simply 

delaying resolution of the case,” as “being forced to litigate on the merits” is not considered 

prejudice. TCI, 244 F.3d at 701. Examples of prejudice that courts have concluded weigh against 

the setting aside of a default include “tangible harm such as loss of evidence, increased difficulties 

of discovery, or greater opportunity for fraud or collusion.” Id. (quoting Thompson v. Am. Home 

Assur. Co., 95 F.3d 429, 433–34 (6th Cir. 1996)). Plaintiff has identified no such prejudice that 

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would result from the Court’s setting aside default. See ECF No. 30 at 3 (“Based on the time and 

resources spent on litigating this case so far and Defendant‘s continuing to engage in conduct 

complained of in the complaint, Plaintiff continues to suffer monetary damage, loss of reputation 

and increasing liability for MTC from consumers based on Defendant‘s actions.”). This factor 

weighs in favor of vacating default.

B. Meritorious Defenses

“A defendant seeking to vacate a default judgment must present specific facts that would 

constitute a defense.” TCI, 244 F.3d at 700. Still, “the burden on a party seeking to vacate a 

default judgment is not extraordinarily heavy.” Id. Defendant raises several potential defenses in 

his Motion to Set Aside Default, including lack of personal jurisdiction and failure to state a claim. 

ECF No. 29 at 8–19. At this stage, the Court need not determine definitively whether any of

Defendant’s defenses would be successful. Rather, the Court asks only whether “some possibility 

exists that the outcome of the suit after a full trial would differ from the result reached by the 

default.” Hutchings v. Snell & Co., LLC, No. 09-cv-4680-JCS, 2010 WL 1980165, at *4 (N.D. 

Cal. Apr. 23, 2010) report and recommendation adopted sub nom. Hutchins v. Snell & Co., LLC, 

No. 09-cv-04680-JSW, 2010 WL 1980162 (N.D. Cal. May 17, 2010) (citing Sokolsky v. Voss, 

No. 07-cv-00594, 2009 WL 2705741, at *3 (E.D. Cal. Aug. 25, 2009)). 

The Court finds that Defendant has raised a potentially successful personal jurisdiction 

defense. Although the Court declines to conduct a full-blown personal jurisdiction analysis at this 

stage, the Court notes that the first prong of the Ninth Circuit’s three-prong specific personal 

jurisdiction test asks whether the defendant “purposefully directed” its activities at the forum or 

“purposefully availed” itself of the privilege of conducting activities in the forum. 

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004). Defendant argues 

that this Court lacks personal jurisdiction over him because his online sales through Amazon.com 

were not expressly aimed at California. ECF No. 29 at 9. Plaintiff offers essentially no 

substantive response beyond the conclusory assertion that Defendant “has deliberately initiated 

and maintained contact with California and purposefully availed himself of the benefits of the laws 

and privileges of California.” ECF No. 30 at 10. However, Plaintiff fails to identify any factual 

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allegations in the Complaint from which the Court could conclude that Defendant “purposefully 

directed” his conduct at California, as opposed to purposely directing his conduct at nationwide 

customers generally. Schwarzenegger, 374 F.3d at 802. Accordingly, the Court concludes 

Defendant has a potentially meritorious defense, which counsels in favor of vacating default.1

C. Defendant’s Culpable Conduct

“[A] defendant’s conduct is culpable if he has received actual or constructive notice of the 

filing of the action and intentionally failed to answer.” TCI, 244 F.3d at 697. However, the Ninth 

Circuit has cautioned that the definition of “intentional” in this context differs from that used in 

other areas of the law, such as tort law. Id. In the default context, “the term ‘intentionally’ means 

that a movant cannot be treated as culpable simply for having made a conscious choice not to 

answer; rather, to treat a failure to answer as culpable, the movant must have acted with bad faith, 

such as an ‘intention to take advantage of the opposing party, interfere with judicial 

decisionmaking, or otherwise manipulate the legal process.’” Mesle, 615 F.3d at 1092 (quoting 

TCI, 244 F.3d at 697). 

Even assuming Defendant was properly served by Plaintiff—a contention that Defendant 

disputes, see ECF No. 29 at 9–10—Plaintiff fails to argue how Defendant “intentionally failed to 

answer” the Complaint in such a way that his conduct should be deemed “culpable.” ECF No. 30 

at 4–8. The Court declines to make such arguments for Plaintiff. Accordingly, this factor also 

weighs in favor of vacating default.

Ultimately, because all three factors support vacating default, the Court grants Defendant’s 

motion.2

 

1

Plaintiff argues that “[t]he reality of the situation is that [Defendant’s] wife, Sandra Gallagher 

Lewis [who is] also a Defendant in this action has already submitted to this Court’s jurisdiction by 

filing an answer and counter-claim on April 1, 2016. Thus, it would appear that the issue of 

jurisdiction is moot.” ECF No. 30 at 9. Without expressing any opinion on the merits of 

Plaintiff’s argument with respect to Defendant Sandra Lewis’s purported waiver of a personal 

jurisdiction defense, the Court finds that even if Sandra Lewis waived a defense based on personal 

jurisdiction by filing an Answer, such waiver would not apply to Defendant Davis Lewis because 

he has not filed an Answer. At the very least, Plaintiff has cited no authority to support such a 

contention. Accordingly, the Court rejects this argument.

2

The Court denies Plaintiff’s request for attorneys’ fees. ECF No. 30 at 14–15. While 

“reasonable conditions may be imposed in granting a motion to vacate a default judgment,” 

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CONCLUSION

Defendant’s Motion to Vacate Default is granted. ECF No. 29. 

IT IS SO ORDERED.

Dated: August 15, 2016

______________________________________

JON S. TIGAR

United States District Judge

 

Nilsson, Robbins, Dalgarn, Berliner, Carson & Wurst v. Louisiana Hydrolec, 854 F.2d 1538, 1546 

(9th Cir. 1988), the Court concludes that requiring Defendant to pay Plaintiff’s attorneys’ fees here 

would not be just, especially given that the Court has already concluded that it likely lacks 

personal jurisdiction over Defendant.

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