Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-03113/USCOURTS-casd-3_16-cv-03113-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1125la Trademark Infringement (Lanham Act)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

NUTRITION DISTRIBUTION LLC,

Plaintiff,

v.

MUSCLEGEN RESEARCH INC., et al,

Defendants.

Case No.: 16-CV-3113-JLS (JMA)

ORDER GRANTING PLAINTIFF’S 

MOTION FOR LEAVE TO 

CONDUCT DISCOVERY ON 

DAMAGE ISSUES

(ECF No. 11)

Presently before the Court is Plaintiff Nutrition Distribution LLC’s Motion for 

Leave to Conduct Discovery on Damage Issues (“MTN,” ECF No. 11). Plaintiff’s Motion 

is unopposed. The Court vacated the scheduled hearing and took the Motion under 

submission without oral argument pursuant to Civil Local Rule 7.1(d)(1). (ECF No. 12.) 

For the following reasons, the Court GRANTS Plaintiff’s Motion.

BACKGROUND

Plaintiff filed its Complaint against Defendants for false advertising in violation of 

section 43(a)(1)(B) of the Lanham Act. (“Compl.,” ECF No. 1, at 7.)1 In its Complaint, 

Plaintiff requests, among other things, an award of compensatory damages, of Defendants’

profits arising from the alleged improper acts pursuant to 15 U.S.C. § 1117, and restitution 

of Defendants’ ill-gotten gains. (Compl. 8.) Plaintiff obtained a default against Defendants 

on June 6, 2017. (ECF No. 10.) The Clerk of Court entered the default as it appeared from 

 

1 Pin citations refer to the CM/ECF page numbers electronically stamped at the top of each page.

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the record that summons of the Complaint had been served on Defendants, and Defendants 

failed to plead or otherwise defend the action. (Id.) Plaintiff now moves for leave to 

conduct discovery in order to establish Defendants’ profits for purposes of its anticipated 

second motion for default. (MTN 1.) 

LEGAL STANDARD

Under Rule 55 of the Federal Rules of Civil Procedure, entering a default judgment 

is a two-step process. See Fed. R. Civ. P. 55; see also Eitel v. McCool, 782 F.2d 1470, 1471 

(9th Cir. 1986). Prior to entry of a default judgment, there must be an entry of a default. 

Upon entry of a default, the factual allegations of the complaint, except for those relating 

to the amount of damages, are taken as true. Fed. R. Civ. P 8(b)(6); Geddes v. United Fin. 

Grp., 559 F.2d 557, 560 (9th Cir. 1977). 

After entry of default, a district court has discretion to grant or deny a motion for 

default judgment. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The court may 

conduct hearings if it needs to determine the amount of damages to be awarded. Fed. R. 

Civ. P. 55(b)(2); Taylor Made Golf Co. v. Carsten Sports, 175 F.R.D. 658, 661 (S.D. Cal. 

1997) (“In assessing damages, the court must review facts of record, requesting more 

information if necessary, to establish the amount to which plaintiff is lawfully entitled upon 

judgment by default.”).

Trademark infringement plaintiffs may recover (1) defendant’s profits; (2) damages 

sustained by the plaintiff; and (3) the costs of the action. See 15 U.S.C. § 1117(a). Plaintiffs 

must meet a heightened level of proof of injury to recover money damages. See Porous 

Media Corp. v. Pall Corp., 110 F.3d 1329, 1335 (8th Cir. 1997). “In a suit for damages 

under section 43(a) [of the Lanham Act] . . . actual evidence of some injury resulting from 

the deception is an essential element of plaintiff’s case.” Harper House, Inc. v. Thomas 

Nelson, Inc., 889 F.2d 197, 210 (9th Cir. 1989).

ANALYSIS

Plaintiff requests leave to conduct discovery in order to ascertain the existence and 

amount of damages. (MTN 3.) Plaintiff states it intends to seek discovery on the online 

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payment gateway services used by Defendants (such as PayPal), and any institutions with 

which Defendants hold financial accounts, in order to ascertain Defendants’ revenue from 

its sales of allegedly falsely advertised products. (Id. at 4.)

Federal Rule of Civil Procedure 26 governs the scope and timing of discovery. A

party “may not seek discovery from any source before the parties have conferred as 

required by Rule 26(f) . . . [unless] authorized by these rules, by stipulation, or by court 

order.” Fed. R. Civ. P. 26(d)(1). Federal Rule of Civil Procedure 55(b)(2) also provides 

that “[t]he court may conduct hearings or make referrals . . . when, to enter or effectuate

[default] judgment, it needs to: . . . determine the amount of damages.” Fed. R. Civ. P. 

55(b)(2). Other courts have allowed discovery on the issue of damages after the entry of 

default. See Oakley Inc. v. Moda Collection, LLC, No. SACV 16-160-JLS (JCGx), 2016 

WL 7495835, at *8 (C.D. Cal. June 9, 2016) (granting leave to conduct limited discovery); 

Alstom Power, Inc. v. Graham, No. 3:15–cv–174, 2016 WL 354754, at *3 (E.D. Va. Jan, 

27, 2016) (allowing the plaintiff to “engage in discovery limited to ascertaining the 

existence and amount of damages for its three causes of action”); Tristrata Tech., Inc. v. 

Medical Skin Therapy Research, Inc., 270 F.R.D. 161, 163 (D. Del. 2010) (noting the 

plaintiff was granted same); DIRECTV, Inc. v. Guzzi, 308 F. Supp. 2d 788,790–91 (E.D. 

Mich. 2004) (granting same); Advantage Media Grp. v. Debnam, No. 1:10cv95, 2011 WL 

2413408, at *1 (M.D.N.C. June 10, 2011) (noting that the court had previously declined to 

enter a default judgment until after plaintiffs had engaged in discovery on damages). 

Further, attached to Plaintiff’s Request for Judicial Notice are two orders by the District 

Court of Arizona authorizing Plaintiff to conduct discovery to ascertain damages after entry 

of default in two other Lanham Act matters. (MTN RJN, ECF No. 5-2.) 

Accordingly, the Court GRANTS Plaintiff leave to conduct discovery to ascertain 

the existence and amount of damages. The Court ORDERS Plaintiff to file a discovery 

/ / /

/ / /

/ / /

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motion with the magistrate judge assigned to this matter within ten days of the date on 

which this Order is electronically docketed. 

IT IS SO ORDERED.

Dated: October 3, 2017

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