1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

DELTA SIGMA THETA SORORITY, INC., Plaintiff,

v. LAMITH DESIGNS, INC., Defendant. Civil Action No. 10

- 163 (BAH) Judge Beryl A. Howell

MEMORANDUM OPINION In this case, p laintiff Delta Sigma Theta Sorority (hereinafter “Delta”) alleg es that LaMith Designs, Inc. is infringing its trademarks and service mark s 1 by offering for sale without authorization merchandise bearing Delta’s well

- kn own insignia s. Currently before the Court is plaintif f’s motion for default judgment , the defendant’s motion to vacate the Clerk’s entry of default , as well as the defendant’s motion to dismiss for lack of personal jurisdiction

. For the

reasons set forth below , the Court grants the defendant’s motion to vacate entry of default and therefore denies the plaintiff’s motio n for default judgment

. T he defendant’s motion to dismiss is denied , without prejudice, in order to provide the plaintiff with a period of sixty days for jurisdictional discovery. The defendant may re - submit its motion to dismiss following the sixty

day period of jurisdictional discovery.
I. BACKGROUND
P laintiff Delta Sigma Theta Sorority, Inc. ( hereinafter “Delta”) is a well

- recognized

1 A service ma rk identifies and distinguishes the services of one person from the services of another

. 15 U.S.C. § 1127.2 soro rity with over 900 chapters across the world

. Comp. ¶¶ 10, 12. Founded in 1913 on the campus of Howard University in Washington, D.C., Delta is known not only by its official name, but also as “Delta,” “Delta Sigma Theta,” “Delta Sorority, ” and by its re presentative Greek letter symbols ΔΣΘ. Id. ¶ ¶ 10

- 11

. According to the plaintiff, “ [ a ] ny iteration of Delta’s name or its Greek letter symbols is famous and recognized as a M ark signifying association with Delta. ” Id. ¶ 11. Among the trademarks and se rvice marks (hereinafter “Marks”) associated with its organization and brand, t he plaintiff has registered with the U.S. Patent and Trademarks Office: Delta Sigma Theta (Reg. No. 3,407,876), Delta’s Minerva Crest (Reg. No. 3,465,351 and 2,199,610), Delta Sigma Theta Sorority, Incorporated (Reg. No. 2,197,647), the Greek letter symbol s ΔΣΘ (Reg. No. 3,416,699 and 2,201,178), and the Delta Torch (Reg. No. 3,557,212).
Id. ¶ 15

. Delta also states tha t it owns common law marks, including “Delta” and “Delta Sorority.” Id

. ¶ 16.
G iven its “strong and famous” brand, the plaintiff states that it “vigorously protects its Marks” and employs an individual to monitor and protect its intellectual property. Id. ¶¶ 17

- 18. Delta receives “hundreds of requests” each year from vendors seeking a license to sell merchandise imprinted with Delta’s n ame and M arks, but only grants a license to those meeting the plaintiff’s licensing requirements. Id. ¶ 19. In order to obtain a license to use Delta’s M arks, a vendor must complete an application

. Id. ¶ 20. If approved, the vendor must then execute a Licensee Agreement and agree to Delta’s Guidelines for Operating, which includes a “Code of Conduct.” Id. As part of this process, vendors agree to acquire a license from Delta before “anyone may manufacture, design, make, copy, sell, display, or distri bute” items containing Delta’s Marks. Id. Vendors further agree to3 restrict sales of merchandise bearing Delta Marks “solely to Delta members and solely at Delta

approved e vents.” Id. The plaintiff alleges that defendant LaMith Design, Inc. is selling clothing and merchandise bearing Delta’s Marks without license or authorization through its catalog and its website located at www.lamithdesignonline.com

. Id. ¶¶ 21

- 23

. According to the plaintiff, the defendant has never contacted the plaintiff to seek a license and is “unlawfully trading on Delta ’ s name, reputation, goodwill, and the strength of member and public association of Delta Marks with Delta.” Id. ¶ 22. Among the items the defendant offers for sale are jackets, shoes, scarves, and bags bearing Delta’s ΔΣΘ insignia and other Marks. Id. ¶ 23. The defendant does not restrict s ale of these items to Delta m embers

. Id. Upon learning of the defendant’s alleged infringing activity, the plaintiff unsuccessfully sought to halt the defendant’s sale of Delta merchandise. Id. ¶ ¶ 25

- 27

. The plaintiff states that “[d]espite having been put on notice that it was infringing on Delta’s Marks and directed to cease advert ising for sale and selling the infringing m erchandise, Defendant continues to advertise a nd offer for sale merchandise that infringes on Delta’s intellectual property rights.” Id. ¶ 27. On January 28, 2010, the plaintiff filed a Complaint seeking injunctive relief to halt the defendant’s ongoing violations of its trademark and service mark rights , disgorgement of profits the defendant realized from sale of the infringing goods, and damages for misuse of the plaintiff’s Marks. Id. ¶ ¶ 1

- 2

. Specifically, the plaintiff asserts six causes of action , alleging : infringement of Delta’s trademark s under s ection 32(1) of the Lanham Act , 15 U.S.C. § 1114(1), Fede ral common law, and District of Columbia common law; dilution of its trademark s under

s ection 43(c) of the Lanham Act , 15 U.S.C. § 1125(c); and unfair competition under Federal and District of Columbia c ommo n l aw. Id. ¶¶ 28

- 65.4 Shortly after filing the Complaint , the plaintiff moved on January 28, 2010 , for a preliminary injunction to enjoin the defendant from selling the alleged infringing merchandise and “engaging in activities designed to damage [plaintiff’s] reputation and goodwill.” Pl.’s Mot. Prelim. Inj., ECF No. 2, at 1. The C ourt scheduled a hearing on the motion for February 25,
2010 , but a day before the scheduled hearing, the plaintiff requested a continuance to allow the parties to explore settlement

. Pl.’s Mot. & Mem. P. & A. for Continuance , ECF No. 6, at 1

. Before the defendant had file d a responsive pleading or notice of appearance, the plaintiff stated that the owner of defendant LaMith Designs, A jay Chopra, contacted the plaintiff and “ expressed

an interest in settling this matter and asked whether it could be resolved without the need for him to contact the Court or retain counsel. ” Id. at 2. The plaintiff also informed the Court that the defendant “ represented that he has discont inued all uses of Delta’s Marks

. ” The plaintiff further stated that she informed the defendant, who initially was not proceeding with counsel, that the plaintiff would “ask the Court to delay any scheduled proceedings to allow the parties to exp lore settlement.” 2 Id.
T he Court twice granted the plaintiff’s requests to continue the preliminary injunction hearing from February 25, 2010 to May 7 , 2010

. Minute Order s dated Feb. 24 and April 6 , 2010 (Walton, J.)

. After the second continuance , the Court cancelled the hearing “in light of representation made by the parties , ” and the plaintiff did not renew th e preliminary injunction motion nor attempt to re

- schedule the hearing thereafter. Minute Order dated May 5, 2010 (Walton, J.). The plaintiff explains that parties were engaging “in continuing settlement discussions,” which “were ultimately unsuccessful.” Pl.’s Mem. P. & A. Supp. Mot. Entry of Default, ECF No. 7, at 2

.

2 Plaintiff indicates that, in early May, the defendant finally retained counsel, “who first contacted counsel for Delta on May 6, 2010.” Pl.’s Mem. P. & A. Supp. Mot. Entry of Default, ECF No. 7, at 2.5 In the midst of the settlement discussions, t he defendant was s erved with t he C omplaint on February 17, 2010

. See Return of Service Affidavit, ECF No

. 5

. The defendant’s Answer was therefore due on March 10, 2010

. F ED
. R. C IV
. P. 12(a)(1)(A)(i) (“A defendant must serve an
Answer

. . . within 21 days after being served . . .”). Nevertheless, t he plaintiff states, “ [ b ] y agreement between the parties, Defendant’s Answer was due on June 1, 2010.” Pl.’s Mem. P. & A. Supp. Mot. Entry of Default , ECF No. 7 , at 2; Pl.’s Mot. Entry of Default, ECF No. 7, Ex. 1, Devarieste Curry Aff. (h ereinafter “Curry Aff.”) , ¶ 6 ( plaintiff’s counsel represents that “ [o] n behalf of our clients, [defendant’s counsel] and I reached an agreement whereby Defendant’s Answer would be due on June 1, 2010 to give the parties additional time to try to reach an agreement.”)

. No motion seeking to exten d the time to answer was ever filed nor did the Court grant permission to extend the time for the defendant’s Answer. See F ED
. R. C IV
. P. 6(b)(1). In accordance with the informal agreement between the parties, o n June 1, 2010 , the d efendant submitted to the C lerk of the Court a Motion to Dismiss for Lack of Personal Jurisdiction under F ED
. R. C IV
. P. 12(b)(2)

. Def.’s Mem. Supp. Mot. Vacate Entry of Default , ECF No. 11, at 1. T he defendant’s motion to dismiss was also served on plaintiff’s counsel. Id. Despite the fact that at this time, the defendant was represented by counsel, the motion to dismiss was signed by “Ajay Chopra, Owner, pro se .” Id. According to the plaintiff, the defendant’s counsel explained in a n email message on June 1, 2010, that “Defendant elected to file the motion to dismiss pro se , rather than retain local counsel.” Curry Aff., ECF 7, ¶ 7. On June 23, 2010, the C ourt denied the d efendant leave to file its m otion to d ismiss because the d efe ndant, a corporation, cannot appear pro se . See In re Greater Se. Cmty. Hosp. Found., Inc. v. Potter , 586 F.3d 1, 4

- 5 (D.C. Cir. 2009 ) (“It has been the law for the better part of two centuries

. . . that a corporation may appear in the federal courts on ly through licensed counsel,” quoting Ro wland v.6 Ca l. Men's Colony , 506 U.S. 194, 201

- 02 (1993) )

. On June 18 , 2010, five days prior to the Court denying the defendant leave to file its

m otion to d ismiss, the plaintiff filed a Motion for Entry of Default , stating that because the defendant “failed to file an answer or otherwise respond through license d counsel by the due date . . . [the] Defendant should be treated as having not appeared at all.” Pl.’s Mem. P. & A. Supp. Mot. Entry of Default, ECF No. 7, at 3. Pursuant to Federal Rule of Civil Procedure 55(a), t he Court Clerk entered default against the defendant on June 21, 2010. 3 Notice of Clerk’s Entry of Default, ECF No. 8

. On July 9, 2010, the plaintiff filed the pending Motion for Default Judgme nt and Permanent Injunction and Award of Attorney ’ s Fees and Costs. Pl.’s Mot. Entry of Default J

. , ECF No. 10. Two weeks later, o n July 23, 2010, the d efendant filed the pending Motion to Vacate Entry of Default , 4 and , in accordance with Local R ule 7(g) , simultaneously re

- submitted its motion to dismiss, which was signed by an attorney admitted to practice in this jurisdiction

. Def.’s Mem. Supp. Mot. Vacate Entry of Default , ECF No. 11; Def.’s Mot. Dismiss, ECF No.
12 ; LCvR 7(g) (“ A motion to vacate an entry of default, or a judgment by default, or both, shall be accompanied by a verified answer presenting a defense sufficient to bar the claim in whole or in part.”)

. P laintiff’s motion for default judgment and both the defendant’s motion s to vacate
entr y of defaul t and to dismiss the Complaint are currently before the Court. For the reasons set forth below, the Court concludes that vacatur of the Clerk’s entry of default is proper. Accordingly, the defendant’s motion to vac ate entry of default is gran ted and

3 F ED
. R. C IV
. P. 55( a ) provides that “ [w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwi se, the clerk must enter the party’ s default.”

4 The defendant’s brief in support of its motion to vacate entry of default incorporated its opposition to the plaintiff’ s motion for default judgment.7 the plaintiff’s motion for default judgment is denied. The defendant’s motion to dismiss, is denied , without prejudice , and the plaintiff ’s request for a period of jurisdictional discovery is granted

. II. VACATUR OF THE CLERK’S ENTRY OF DEFAULT On J une 21, 2010, upon plaintiff’s motion , the Court Clerk entered default against the defendant for the defendant’s failure to plead or otherwise defend against the plaintiff’s claims

. Clerk’s Entry of Default, ECF No. 8. The plaintiff subsequently moved fo r entry of default judgment in the amount of $620,656.11 , which represented statutory damages for the defendant’s alleged unlawful use of its Marks, attorney’s fees, and court costs. Pl.’s Mem. P. & A. Supp. Mot. Entry of Default J., ECF No. 10, at 2

. Pr ior to the Court ’s ruling on plaintiff’s motion for entry of default judgment, the defendant filed a motion to vacate the Clerk’s entry of default, ECF No. 11, and simultaneously responded to the Complaint by filing a motion to dismiss for lack of personal jurisdiction

. ECF No. 12. Courts “universally favor trial on the merits

. ” Keegel v. Key West & Caribbean Trading
Co. , 627 F.2d 372, 375 (D.C. Cir. 1980) (quoting Bridoux v. Eastern Air Lines, Inc. , 214 F.2d 207, 210 (D.C. Cir. 1954) ); accord Peterson v. Archstone Communities LLC , 637 F.3d 416 , 418 (D.C. Cir. 2011) (vacating district court’s dismissal of action for lack of prosecution, noting that “disposition of claims on the merits is favored

. ” ) (internal quotations and citations omitted)

. Courts disfavo r default judgments because entering judgment without allowing a party to present a defense is a particularly harsh penalty for filing delays. Keegel , 627 F.2d at 37 5 (“ t he interests of justice

. . . would be ill

- served by resort to a procedural device tha t would unfairly or unnecessarily foreclose resolution of the dispute on its merits.”); J ackson v. Beech , 636 F.2d 831,
835

- 36 (D.C. Cir. 1980) (“Default judgments are not favored by modern courts, perhaps because8 it seems inherently unfair to use the cour t’s power to enter and enforce judgments as a penalty for delays in filing . . . [and] strong policies favor resolution of disputes on their merits.” ).
D efault judgment is usually reserved for “ when the adversary process has been halted because of

an esse ntially unresponsive party . . . [as] the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights." Jackson, 636 F.2d at 836 (quoting H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe , 432 F.2d 689, 691 (D.C. Cir. 1970))

. Pursuant to Federal Rule of Civil Procedure 55(c), the Court may set aside an entry of default “for good cause shown.” To demonstrate good cause, “the moving party [ must ] provide an explanation for the default or give reasons why vacation of the default entry would serve the interests of justice.” Haskins v. U.S. One Transp., LLC , 755 F. Supp. 2d 126, 129 (D.D.C. 2010) (alteration in original) (quoting 10A C HARLES A LAN W RIGHT , A RTHUR R. M ILLER , M ARY K AY K ANE , & R ICHAR D L. M ARCUS , F ED
. P RAC
. & P ROC
. C IV
. § 2696 (3d ed. ) )

. The decision to vacate entry of default lies within th e discretion of the trial court , but exercising this discretion requires consideration of whether “(1) the default was willful, (2) a set

- aside wo uld prejudice plaintiff, and (3) the alleged defense was meritorious.” Mohamad v. Rajoub , 634 F.3d 604, 606 (D.C. Cir. 2011) (quoting Keegel , 627 F.2d at 3 73 )

. “On a motion for relief from the entry of a default or a default judgment, all doubts are reso lved in favor of the party seeking relief.”
J

ackson , 636 F.2d at 836.
A. Defendant’s Default Was Not Wil l ful To determine whether to vacate entry of default, the Court must first ascertain whether the defendant’s failure to respond in a timely manner was wil lful. Bad faith is not necessary to conclude that the defendant acted willfully. Capital Yacht Club v. Vessel Aviva , 228 F.R.D. 389,9 393 (D.D.C. 2005). “The boundary of willfulness lies somewhere between

. . . a negligent filing error, which is normally considered an excusable failure to respond, and a deliberate decision to default, which is generally not excusable. ” Int’l Painters & Allied Trades Union & Indus. Pension Fund v. H.W. Ellis Painting Co. , 288 F. Supp. 2d 22, 26 (D.D.C. 2003)

. In this ca se, the defendant does not dispute that it failed to file a timely response on March 10, 2010, as required by the Federal Rules of Civil Procedure. F ED
. R. C IV
. P. 12(a)(1)(A)(i)

. In fact, both parties generally focus on the date of June 1, 2010 as the “du e date” for the defendant’s responsive pleading since this was the date set by their informal agree ment as the deadline for the defendant ’s respons e . Pl.’s Mem. P

. & A. Supp. Mot. For Entry of Default, ECF No. 7, at 2 (“Defendant’s Answer was due on June 1, 20 1 0”); Def.’s Mem. Supp. Mot. Vacate Entry of Default, ECF No. 11, at 5 (“Defendant believed it properly and timely complied with its obligations to submit a responsive pleading to the Court by June 1, 2010

. . . ”). Absent an extension of time sanctio ned by the Court for filing a response to the Complaint, however, the time limits set forth in the governing rules apply rather than the terms of an informal “agreement ” between t he parties

. I nformal resolutions of dispute s are certainly encouraged , but o nce a case is initiated with the Court, t he parties have an independent obligation to comply with the Federal Rules of Civil Procedure and the local rules of the Court

. The Federal Rules are intended to “ secure the just, speedy, and inexpensive determina tion of every action and proceeding.” F ED
. R. C IV
. P. 1.

“ M ere agreements of counsel or parties cannot alone be sufficient to waive the timeliness

re quirements of the Federal Rules, ” Keegel , 627 F.2d at 374

- 5 , and the Court will not cede to litigants the Court’s prerogative to control its docket. D efault judgment is proper where a defendant “has failed to protect its own interests” and relied on the “mere existence of settlement10 negotiations as an excuse for failing to fulfill its responsibilities to the Court.” Int’l Painters , 288 F. Supp. 2d at 26

. Nevertheless, in assessing whether good cause exists to set aside the entry of default, an informal agreement between the parties is relevant to whether the defendant’s failure to file a responsive pleading was willful

. See id. (refusing to vacate default judgment where defendant ignored plaintiff’s specific threat to file for a default if defendant failed to respond by informal deadline and defendant had no meritorious defense); Flynn v. Pulaski Constr. Co. , No. 02

- cv 2336, 2006 WL 47304 , at *8 (D.D.C. Jan. 6, 2006) (“default is willful when a defendant fails to meet an informal deadline after which plaintiffs specifically threatened to file for default.” ).

“ R eliance upon representations made by opposing cou nsel may mitigate an intentional failure to respond if the court is convinced that such reliance was made in good faith.” Int’l Painters , 288 F. Supp. 2d at 26 (citing Keegel, 627 F.2d at 374)

. In this case, in the weeks preceding the March 10, 2010 date by which the defendant was required to file a responsive pleading, the parties were engaged in settlement negotiations. As part of those negotiations, the plaintiff informed the defendant, who was then proceeding pro se , that the plaintiff would “ask the Court to delay any scheduled proceedings to allow the parties to explore settlement.” Pl.’s Mot. & Mem. P. & A. for Continuance, ECF No. 6, at 2. While this representation by plaintiff does not relieve the defendant from its obligation to comply with app licable rules, the defendant may have reasonably assumed that the plaintiff would seek permission to delay all court proceedings, particularly where the parties had agreed upon a deadline of June 1, 2010 for the defendant to file
an Answer

. See Lambert v. Bd. of Comm ’ rs of Orleans Levee Dist. , No. 05

- cv - 5931, 2006 WL 1581262, at *2 (E.D. La. June 7, 2006) (stating that informal agreements regarding extensions are “without legal effect,” but holding that the defendant’s failure to answer was n ot willful, in11 part, because of defendant’s belief of the informal extension to ans w er ) ; DIRECTV, Inc. v. Meyers , 214 F.R.D. 504, 511

- 12 (N.D. Iowa 2003) ( “[T]he more prudent thing for [ defendant’s ] counsel to do to ensure that [defendant] did not default was to seek an extension of the time to

answer from the court . Nevertheless, it was not necessarily unreasonable for counsel to rely on what counsel believed was an informal agreement concerning the deadline.” (emphasis in original)). Show ing a willful disregard of cour t filing requirements would plainly be difficult to make in circumstances where , as here, a pro se defendant relied on opposing counsel’s representation that court deadlines would be postponed

. The plaintiff does not address this point but instead argues t hat the Court should consider the defendant to have willfully defaulted because, having agreed to an informal deadline of June 1, 2010, the defendant nonetheless failed to file a proper pleading on that date. Although the defendant submitted a motion to d ismiss on June 1, 2010 , plaintiff contends that the d efendant deliberately chose , while represented by counsel not admitted to this jurisdiction’s Bar , to “flout [] well established precedent” by filing its motion pro se in order to avoid retaining counsel admitted in the District of Columbia

. Pl.’s Opp’n Mot. Vacate Entry Default, ECF No 13, at 5. Thus, according to the plaintiff, this “is not a case of simple neglect.” Id.
T he Court agrees with plaintiff that the defendant should have been aware when i t attempted to file a responsive pleading by the informal deadline agreed to by the parties that a corporation may not appear pro se , since it was then rep resented by its current counsel

. It is a stretch, however, to conclude that the failure to file a pr oper responsive pleading was a deliberate decision to default in the face of the defendant’s consistent refrain that it simply wished to avoid or minimize the cost of litigation and local counsel

. See Pl.’s Mot. & Mem. P. & A. for Continuance, ECF No. 6, a t 2 (“[Defendant] expressed an interest in settling this matter and12 asked whether it could be resolved without the need for him to contact the Court or retain counsel.”); Curry Aff. ¶ 5 (same); Def.’s Mem. Supp. Mot. Vacate Entry Default, ECF No. 11, at
1 (“After approximately three (4) [sic] months of attempted settlement discussions . . . Defendant retained Intellectual Property counsel to assist him in fu rther settlement discussions.”). The p laintiff cites Brand v. NCC Corp. , 540 F. Supp. 562 (E.D. Pa. 1982) , to support its contention that d efendant ’s failure to respond was willful. That case, however, is distinguishable on two grounds. First, the defaulting party in Brand was seeking to vacate a default judgment, not merely the entry of default. See id. at 564. The standard to vacate default judgment is significantly greater than the “good cause” standard required to vacate a Clerk’s entr y of default. Compare F ED
. R. C IV
. P. 55(c) with F ED
. R. C IV
. P. 60(b) ; see also Int’ l Painters, 288 F. Supp.
2 d at 26 (“[T] he Rule 60(b) standard is a more rigorous one because ‘ the concepts of finality are more deeply implicat ed’ in default judgment cases.” )

. Second, the defendant in Brand both intentionally ignored the complaint entirely and refused to obtain co unsel after the court stated that it was necessary. See Brand , 540 F. Supp

. at 563

- 64. Here, the d efendant attempted to file a timely responsive pleading and obtained counsel to rectify its procedural error shortly after the Court denied the defendant lea ve to file its motion. The context surrounding entry of default in this case indicate s that the defendant’s default was not willful. T he defendant participat ed in settlement negotiations with the plaintiff from February 2010 until at least early May 2010. It attempt ed to file a responsive pleading by the informal deadline a greed upon by the parties, and it moved to vacate the Clerk’s entry of default and re - file a responsive pleading shortly after it became aware that its June 1, 2010 pleading would not be accepted

. These facts do not suggest willful indifference to this litigation , but

r ather demonstrate defendant’s active efforts to avoid entry of default and present its defense

.13 B. Plaintiff Would Not Suffer Prejudice if Entry of Default is Vacated The second factor the Court must consider when deciding whether to vacate entry of default is the potential p rejudice to the plaintiff . “[D]elay in and of itself does not constitute prejudice.” Haskin s , 755 F. Supp. 2d at 130 (quoting KPS & Assocs., Inc. v. Designs by FMC,
Inc ., 318 F.3d 1, 15 (1st Cir. 2003)). To evaluate prejudice, “a court should consider

– not the mere fact of delay itself

– but rather any effects such delay may have on the plaintiff (for example, loss of evidence or increased difficult ies in o btaining discovery). ” Essroc Cement Corp. v. CTI/D.C., Inc. , 263 F.R.D. 17, 21 (D.D.C. 2009); see also Haskins , 755 F. Supp. 2d at
130

- 31 ( “ The issue is not mere delay, but rather its accompanying dangers: loss of evidence, increased difficulties of discovery, or an enhanced opp ortunity for fraud or collusion , ” quoting KPS & Assocs., Inc. , 318 F.3d at 15)

. To support its contention that it will suffer prejudice from vacatur of the Clerk’s entry of default, the plaintiff states “it appears that evid ence may have been destroyed in the months following the filing of the Complaint.” Pl.’s Opp’n Def.’s Mot. Vacate Entry of Default, ECF No. 13, at 13. Specifically, the plaintiff asserts that the defendant “disabled its websites entirely” rather than “si mply remove the infringing merchandise ,” and this “destruction of evidence related to Defendant’s websites will likely compromise [plaintiff’s] ability to litigate its claims.” Id. Plaintiff supplies no additional information on how loss of this evidence will prevent it from prosecuting its case. The d efendant denies it destroyed evidence , referring to the plaintiff’s allegation s as “potentially libelous” and “grossly false

. ” Def.’s Reply Br., ECF No. 16, at 4. The defendant further argues that even i f disabling the defendant’s website resulted in a loss of evidence, the
p laintiff has not demonstrate d any relationship between the purported destruction of evidence14 and prejudice the plaintiff will suffer if default is vacated. Id. at 4.
E ven if the dis abling of the defendant’s website resulted in the loss of evidence, the plaintiff has not sufficiently demonstrated prejudice in this case since both discovery sanctions and statutory damages remain available to compensate the plaintiff. First, if the de fendant failed to fulfill its obligation to preserve evidence relevant to the claims and defenses in this lawsuit , the plaintiff may seek appropriate sanctions. See, e.g., Talavera v. Shah , 638 F.3d 303, 312

- 314 (D.C. Cir. 2011) ( r evers ing s ummary judgment to defendant on claim for which defendant’s employee destroyed evidence since plaintiff was entitled to more than just “ weak adverse inference ” ); Webb v. District of Columbia , 146 F.3d 964, 976 (D.C. Cir. 1998)(defendant’s failure to ensure that document s relevant to litigation were preserved was “certainly serious” but default judgment vacated for district court to consider appropriate sanctions); Shepherd v. Am. Broad. Cos. , 62 F.3d 1 469, 1475

- 78 (D.C. Cir. 1995) (discussing district court’s power to im pose sanctions for misconduct during discovery) ; Mazloum v. D.C. Metrop. Police Dep’t , 530 F. Supp. 2d 282, 290 (D.D.C. 2008) (where “party having control over evidence had an obligation to preserve it at the time it was destroyed

. . . [and] should have k nown that the evidence might be relevant to future litigation,” adverse inference is appropriate) (internal quotes and citations omitted) ; More v

. Snow , 480 F. Supp. 2d 257, 275 (D.D.C. 2007) (“ a court may employ an adve rse inference due to a party’ s ‘ fail ure to preserve ev idence,’ even if deliberate or reckless conduct is not present, ” quoting Rice v. United States , 917 F. Supp. 1 7, 19

- 20 (D.D.C. 1996) )

. Second, if any loss of evidence occurred that adversely affects the plaintiff’s access to information relating to the amount of actual damages incurred, the plaintiff may be entitled to statutory damages

. Even without any evidence from the defendant’s website establishing actual damages, the plaintiff may move, as it has done in its Motion for Default Judg ment, for statutory15 damages under the Lanham Act, 15 U.S.C. § 1117(c). The Lanham Act allows the trademark holder to recover statutory damages from $1,000 to $200,000 “per counterfeit mark per type of goods or services sold, offered for sale, or distribut ed,” regardless of willfulness, and up to $2,000,000 per counterfeit mark per type of goods if the infringement was willful. 15 U.S.C. § 1117(c). Indeed, the problem of infringer nondisclosure during discovery leaving trademark holders with uncertain dama ges motivated the enactment of the statutory damages provision.
Gucci Am

. , Inc. v. Duty Free Apparel, LTD. , 315 F. Supp. 2d 511 , 520 (S.D.N.Y. 2004) (“Congress added the statutory damages provision of the Lanham Act

. . . because ‘counterfeiters’ records a re frequently nonexistent, inadequate, or deceptively kept

. . . , making proving actual damages in these cases extrem ely difficult if not impossible, ’” quoting S. Rep.
No. 104

- 177, at 20 (1995) ) ; Sara Lee Corp. v. Bags of N.Y. , Inc ., 36 F. S upp. 2d 161, 165 (S.D.N.Y. 1999). In short, t he rec ord currently before the Court does not support the plaintiff’s contention that it will be prejudiced from vacatur of the Clerk’s entry of default

. C. The Defendant Presents a Meritorious Defense Finally, the Court must consider whether the defendant has submitted a meritorious defense. When moving to vacate entry of default, the defendant is not required to prove a defense, but rather must only assert a meritorious defense that it may prove at trial. See Int’l
Painters , 288 F. Supp. 2d at 28

. “ [A] llegations are meritorious if they contain even a hint of a suggestion which, proven at trial, would constitute a complete defense.” Mohamad , 634 F.3d at 606 ( quoting Keegel , 627 F.2d at 374 )

. In this case, in accordance wit h Local R ule 7(g) , the defendant filed simultaneously with its m otion to v acate the Clerk’s e ntry of d efault, a m otion to d ismiss for l ack of p ersonal16 j urisdiction , arguing that the defendant has no contacts or ties to the District of Columbia

. If the def endant is correct and the Court lacks personal jurisdiction, the Court may not enter judgment against the defendant

. In fact, even if the defendant had not appeared to contest entry of default judgment or moved to vacate the Clerk’s entry of default , the Court would have an independent obligation to evaluate personal jurisdiction. Although questions of personal jurisdiction are waived if not raised by motion or responsive pleading , see F ED
. R. C IV
. P. 12 (b) , (h) (1) , where a defendant is in default a cour t must “ satisfy itself that it has personal jurisdiction before entering judgment against an absent defendant.” Mwani v. Bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005); Kline v. Williams , No. 05

- cv - 1102, 2006 WL 758459, at *1 (D.D.C. Mar. 23, 2006) ( “

j urisdict ional defects ‘ are not waived by default when a part y fails to appear or to respond, ’ ” quoting Dennis Garberg & Assocs. , Inc., v. Pack

- Tech Int'l Corp., 11 5 F.3d 767, 772 (10th Cir. 1997)).
T he plaintiff characterizes the defendant’s motion to dismiss for la ck of personal jurisdiction as “lack[ing] merit. ” Pl.’s Op p’n Mot. Vacate Entry Default , ECF No. 13, at 13 . Yet , in support of its motion , the defendant provides an affidavit from the defendant’s owner, who states that he “cannot recall ever conducting a business transaction, including the mailing of catalogues, shipment of products or sourcing of material of Delta Sigma Theta Sorority, Inc. within Washington D.C.” Def.’s Mot. Dismiss, ECF No. 12, Ex. A, Ajay Chopra Aff., ¶ 8. He further avers that “[ u]pon review of accessible documents in [his] possession, [he] cannot find any indication that [the defendant] has ever conducted business in regards to Delta Sigma Theta Sorority, Inc. within Washington, D.C.” Id. Moreover, the description of the defen dant’s website raises issues whether this website alone would support exercise of personal jurisdiction

. Def.’s Mot. Dismiss, ECF No. 12, at 8; Def.’s Mot. Dismiss, ECF No. 12, Ex. A, Ajay Chopra17 Aff., ¶ ¶ 6

- 8. These assertions provide “a hint of a suggest ion” of a meritorious defense , sufficient to meet the defendant’s burden to vacate entry of default. See Keegel , 627 F.2d at 374 (stating that the defendant’s defense was “somewhat broad and conclusory” but “adequately [met] the meritorious defense criter ion”)

. The defendant’s motion to dismiss filed simultaneously with its motion to vacate entry of default supplies, if proven, a meritorious defense to the plaintiff’s claims. Moreover, the defendant’s default was not willful and the plaintiff will not s uffer prejudice if the Clerk’s entry of default is vacated. Accordingly, the defendant’s motion to vacate entry of default is granted and , consequently, the plaintiff’s motion for default judgment is denied. 5
III. DEFENDANT’S MOTION TO DISMISS Concurrently w ith its motion to vacate entry of default, the defendant filed a motion to dismiss for lack of personal jurisdiction. In its opposition to t his motion, the plaintiff states that “[i]n the event the Court grants Defendant’s Motion to Vacate Entry of Defaul t, [the plaintiff] respectfully requests leave to conduct limited jurisdictional discovery related to Defendant’s contacts with the District of Columbia and reserves its right to more fully oppose Defendant’s Motion to Dismiss.” Pl.’s Opp’n Mot. Dismiss, ECF No. 14 , at 1

. Jurisdictional discovery is warranted in this case, and the Court therefore grants the plaintiff’s request. In cases where a party’s contacts with the jurisdiction are unclear and the record before the court is “plainly inadequate,” cou rts have allowed for a discovery period within which to

5 Plaintiff requests that, if the defendant’s motion to vacate entry of default is granted, the Court should order the defendant to pay the plaintiff’s costs in moving for entry of default and default judgment. The Court denies the plaintiff’s request. A court may “impose a reasonable condition on the vacatu r in order to avoid undue prejudice to the opposing party.” Capital Yacht Club v. Vessel Aviva , 228 F.R.D. 389, 395 (D.D.C. 2005) (quoting Powerserve Int'l, Inc. v. Lavi , 239 F.3d 508, 515

- 16 (2d Cir. 2001)). Prior to moving for entry of default, the plaintiff was served with the defendant’s procedurally defective motion to dismiss and was thus aware that the defendant had made efforts to respond to the Complaint in acco rd with the informal time agreement. When plaintiff moved for entry of default and for default judgment, it did so with clear notice that the defendant would likely appear to contest this action. Therefore, the Court concludes that re

- allocation of litig ation costs are not warranted.18 gather evidence to support jurisdiction. See GTE New Media Servs. , Inc

. , v. BellSouth Corp. , 199 F.3d 1343, 1351

- 52 (D.C. Cir. 2000) (reversing lower court’s finding of personal jurisdiction, but sta ting that “[t]his court has previously held that if a party demonstrates that it can supplement its jurisdictional allegations through discovery, then jurisdictional discovery is justified.”). “This Circuit’s standard for permitting jurisdictional discove ry is quite liberal,” Diamond Chem. Co. v. Atofina Chems., Inc., 268 F. Supp. 2d 1, 15 (D.D.C. 2003), and jurisdictional discovery is available when a party has “at least a good faith belief” that the court has personal jurisdiction

. Caribbean Broad. Sys. , Ltd. v. Cable & Wireless PLC , 148 F.3d 1080, 1090 (D.C. Cir. 1998). Courts have permitted discovery even when a party has failed to establish a prima facie case of personal jurisdiction. See GTE New Media Servs. , 199 F.3d at 1351

- 52 (“. . . as the

reco rd now stands, there is absolutely no merit to [plaintiff]’s bold claim that the parent companies and subsidiaries involved in this lawsuit should be treated identically. Jurisdictional discovery will help to sort out these matters.”); s ee also In re Vita mins Antitrust Litig

. , 94 F. Supp. 2d 26, 35 (D.D.C. 2000) (discussing GTE New Media Servs. and stating that “the D.C. Circuit held that although plaintiffs had failed to establish a prima facie case of personal jurisdiction and the court was unable to tel l whether jurisdictional discovery would assist GTE on this score, plaintiffs were entitled to pursue [discovery].”). F aced with the prospect of dismissal, a plaintiff “is entitled to reasonable discovery, lest the defendant defeat the jurisdiction of a f ederal court by withholding information on its contacts with the forum.” Humane Soc’ y of the United States v. Amazon.com, Inc. , No. 07

- cv - 623, 2007 U.S. Dist. LEXIS 31810, at *10 (D.D.C. May 1, 2007) (internal quotation and citation omitted).
T he defend ant has provided a sworn affidavit from the defendant’s owner, A jay Chopra ,19 asserting that he “cannot recall” ever conduct ing business of any kind involving the plaintiff’s Marks in this jurisdiction. Def.’s Mot. Dismiss, Ex. A, Ajay Chopra Aff., ¶ 8. The nature of the defendant’s business operations, however, includes selling merchandise via websites and catalogues and may consequently reach customers outside the local area in New York, New York, where the defendant’s business is physically located. Even i f the defendant’s owner has no present recollection of reaching customers in this jurisdiction, t he plaintiff is entitled to test Mr. Chopra’s memory through discovery

. The Court therefore grants the plaintiff sixty (60) days to conduct discovery regardi ng the defendant’s ties to the District of Columbia

. The defendant’s motion to dismiss is denied , with leave for the defendant to re

- file its motion to dismiss following completion of jurisdictional discovery. On or before the conclusion of the period of jurisdictional discovery, the parties shall submit to the Court an agreed

- upon schedule for further briefing in the issues raised by the defendant’s Motion to Dismiss and otherwise comply with paragraph 1 of the Standing Order.
IV. CONCLUSION For the foregoing reasons, the plaintiff’s motion for default judgment is denied and the defendant’s motion to vacate entry of default is granted. The Court further denies the defendant’s motion to dismiss for lack of personal jurisdiction, and grants the plaintiff sixty (60) days to conduct jurisdictional discovery . An Order consistent with this Memorandum Opinion will be entered.

DATED: June 21 , 2011 /s/ 

## Beryl A. Howell BERYL A. HOWELL United States District Judge