Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_16-cv-04315/USCOURTS-cand-4_16-cv-04315-0/pdf.json

Parties Involved:
C.S. Koida LLC
Counter-claimant
Jin Choi
Counter-claimant
LED One Distribution, Inc.
Counter-defendant

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LED ONE DISTRIBUTION, INC.,

Plaintiff,

v.

C.S. KOIDA LLC, et al.,

Defendants.

Case No. 16-cv-4315-PJH 

ORDER GRANTING MOTION TO 

VACATE DEFAULT

Before the court is the motion of defendants C.S. Koida LLC and Jin Choi for an 

order vacating the default entered by the clerk on November 14, 2016. Having read the 

parties’ papers and carefully considered their arguments and the relevant legal authority, 

the court hereby GRANTS the motion.

A federal court may set aside an entry of default for “good cause.” Fed. R. Civ. P. 

55(c). The same standard is used to determine whether a default should be vacated as 

is used to determine whether to set aside a default judgment under Federal Rule of Civil 

Procedure 60(b), except that in the Rule 55(c) context, courts have greater discretion and 

can apply the standard more liberally because there is no interest in the finality of the 

judgment. U.S. v. Signed Personal Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 

1091 n.1.

In determining whether good cause exists, the court considers (1) whether the 

plaintiff will be prejudiced, (2) whether the defendant had a meritorious defense, and 

(3) culpable conduct of the defendant led to the default. Brandt v. Am. Bankers Ins. Co. 

of Fla., 653 F.3d 1108, 1111 (9th Cir. 2011). The court finds that these factors favor 

Case 4:16-cv-04315-DMR Document 44 Filed 01/10/17 Page 1 of 2
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United States District Court

Northern District of California

granting the motion to vacate the default.

First, LED One has not shown that it will be prejudiced by the setting aside of the 

default. Indeed, LED One states in its opposition that “[w]ith respect to the request to 

vacate the default, LED One does not take a substantive position.” 

Second, LED One does not challenge defendants’ argument that, based on certain 

facts set forth in their motion, they have a meritorious defense to the lawsuit. The court 

need not determine whether the facts constituting the defense are true; it is sufficient that 

the defendants present facts, which if true, would constitute a defense. Mesle, 615 F.3d 

at 1094. 

Third, LED One does not argue that defendants engage in culpable conduct. In 

general, “a defendant’s conduct is culpable if [it] has received actual or constructive 

notice of the filing of the action and intentionally failed to answer. TCI Group Life Ins. 

Plan v. Knoebber, 244 F.3d 691, 697 (9th Cir. 2001). In this context, the term 

“intentionally” means that he movant acted in 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 Group, 244 F.3d at 

697). Defendants have explained their failure to file a timely response to the complaint in 

terms that suggest excusable neglect, and LED One has not argued or made any 

showing that defendants acted in bad faith.

The court notes that along with the motion to vacate the entry of default, 

defendants have moved for an order compelling arbitration. The court will rule on that 

motion on the papers and will issue an order as soon as reasonably possible. 

IT IS SO ORDERED.

Dated: January 10, 2017

__________________________________

PHYLLIS J. HAMILTON

United States District Judge

Case 4:16-cv-04315-DMR Document 44 Filed 01/10/17 Page 2 of 2