United States v. S Hackett Mktg. LLC
| Decision Date | 30 August 2018 |
| Docket Number | Civil Action No. 17-04911 (MAS) (TJB) |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. S HACKETT MARKETING LLC d/b/a JUST ENHANCE, et al., Defendants. |
| Court | U.S. District Court — District of New Jersey |
NOT FOR PUBLICATION
This matter comes before the Court on Plaintiff United States of America's (the "Government") Motion for Default Judgment. (ECF No. 14.) Defendants S Hackett Marketing LLC d/b/a Just Enhance ("Just Enhance"), R Thomas Marketing LLC ("R Thomas Marketing"), Shawn Hackett, president and owner of Just Enhance ("Hackett"), and Roger Thomas, president and founder of R Thomas Marketing ("Thomas") (collectively, "Defendants") failed to file an answer to the Complaint (ECF No. 1), any responsive motion, opposition to the instant motion, or to appear in this action. The Court has carefully considered the Government's motion and decides the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, Plaintiff's motion for default judgment is granted.
The Government's action stems from Defendants' distribution of sexual enhancement drugs (the "Illicit Drugs") in violation of the Federal Food, Drug, and Cosmetic Act ("FDCA"). (See generally id.) Defendants market, sell, and distribute Illicit Drugs that purportedly increase sexual function and manage hundreds of websites through which the drugs are sold. (Compl. ¶¶ 1-8, ECF No. 1.) The Food and Drug Administration ("FDA") tested the Illicit Drugs and detected sildenafil, which is an ingredient in Viagra, an FDA-approved prescription drug used to treat erectile dysfunction. (Id. ¶ 10.) Sildenafil may create significant health risks to those with certain medical issues, but the labelling does not disclose that the Illicit Drugs contain this ingredient. (Id.)
In January and March 2015, the FDA made undercover purchases of various Illicit Drugs from Defendants' websites and on July 31, 2015, the FDA sent Defendants a Warning Letter that informed them that they were distributing "unapproved new drugs and misbranded drugs in violation of the FDCA and its regulations." (Id. ¶ 33.) Defendants failed to respond. In January 2016, Defendants recalled certain Illicit Drugs and Thomas told the FDA that the recalled drugs would be sent to Hackett in New Jersey. (Id. ¶ 35.) In that same month, the FDA inspected the business address of R Thomas Marketing, and during the inspection, Thomas told investigators that he would cease distribution of the Illicit Drugs. (Id. ¶ 36.) During the ongoing inspection, however, the FDA made an undercover purchase of one of the Illicit Drugs. (Id.) In February 2016, Defendants' consulting firm told the FDA that Defendants terminated fifty-seven websitesand eight remained active with a posted recall notice. (Id. ¶ 37.) In June 2016, the consulting firm, on Defendants' behalf, told the FDA that Defendants had not sold the Illicit Drugs since November 2015; however, in July 2016, the FDA made another round of undercover purchases of the Illicit Drugs. (Id. ¶ 38.) Thomas and Hackett represented on an August 2016 telephone call with the FDA that Defendants had not distributed the Illicit Drugs since November 2015. (Id. ¶ 40.) Yet, in September 2016: (i) R Thomas Marketing sent an e-mail message to an FDA undercover account soliciting a sale, and the FDA purchased some Illicit Drugs; and (ii) Hackett and Just Enhance sent a solicitation e-mail message to another FDA undercover account that contained a link to purchase Illicit Drugs on a website registered to Thomas. (Id. ¶ 41.) Finally, in December 2016: (i) Hackett and Just Enhance sent another e-mail solicitation to an FDA undercover account and in response, the FDA made an undercover purchase of Illicit Drugs, shipped from Hamilton, New Jersey; and (ii) R Thomas Marketing sent a solicitation e-mail to an FDA undercover account, and the FDA purchased Illicit Drugs. (Id. ¶ 42).
On July 5, 2017, the Government filed a Complaint against Defendants that seeks a permanent injunction pursuant to the FDCA 21 U.S.C. § 332(a) to permanently enjoin Defendants from violating 21 U.S.C. § 331(d) by introducing or delivering for introduction, or causing to be introduced or delivered for introduction, into interstate commerce new drugs that are neither approved under 21 U.S.C. § 355, nor exempt from approval; and violating 21 U.S.C. § 331(a) by introducing or delivering for introduction, or causing to be introduced or delivered for introduction, into interstate commerce drugs that are misbranded within the meaning of 21 U.S.C. § 352(f)(1) and (a). (Compl. ¶ 1.)
All Defendants were served: R Thomas Marketing LLC and Roger Thomas on August 28, 2017 (Affs. of Service, ECF Nos. 7, 8); S Hackett Marketing LLC and Shawn Hackett onSeptember 16, 2017 (Affs. of Service, ECF Nos. 9, 10). R Thomas Marketing LLC's and Thomas's answers to the Complaint were due by September 18, 2017, and S Hackett Marketing LLC's and Shawn Hackett's answers to the Complaint were due by October 10, 2017; however, none of Defendants responded. Accordingly, on September 20, 2017 and October 11, 2017, the Government requested entry of default. (ECF Nos. 11, 12.) The Government subsequently obtained a Clerk's entry of default against each Defendant. The Government now moves for final entry of default judgment. (ECF No. 14.)2
Rule 55(b) of the Federal Rules of Civil Procedure allows for the entry of default judgment against a party who has failed to plead or otherwise defend claims asserted against it after default has been entered by the Clerk of Court. Fed. R. Civ. P. 55(b). "[D]efendants are deemed to have admitted the factual allegations of the Complaint by virtue of their default, except those factual allegations related to the amount of damages." Doe v. Simone, No. 12-5825, 2013 WL 3772532, at *2 (D.N.J. July 17, 2013) ().
Prior to entering default judgment, the Court must determine whether it has subject matter jurisdiction over the claims asserted and personal jurisdiction over the parties. Mark IV Transp. & Logistics v. Lightning Logistics, Inc., No. 16-3572, 2017 WL 3668946, at *4 (3d Cir. Aug. 25, 2017) (citing Prudential Ins. Co. of Am. v. Bramlett, No. 08-119, 2010 WL 2696459, at *1 (D.N.J. July 6, 2010)). Further, the Court must determine "whether the moving party's complaint establishes a legitimate cause of action." La. Counseling and Family Servs., Inc. v.Makrygialos, LLC, 543 F. Supp. 2d 359, 365 (D.N.J. 2008) (citation omitted). If these initial requirements are met, then the Court must consider three factors to determine whether entry of a default judgment is appropriate: "(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct." Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir. 1984)).
Section 332(a) of the FDCA, titled "Injunction proceedings," provides that "[t]he district courts of the United States . . . shall have jurisdiction, for cause shown[,] to restrain violations of [21 U.S.C. § 331]." 21 U.S.C. § 332(a). The Court, therefore, exercises subject matter jurisdiction over the Government's federal claims pursuant to 28 U.S.C. § 1331.
In addition, the Court has personal jurisdiction over Defendants. Just Enhance operates out of this state, where it distributes and receives the Illicit Drugs from multiple New Jersey locations. (Compl. ¶ 4.) Hackett, president and owner of Just Enhance, receives and ships the Illicit Drugs and manages hundreds of websites, websites used to sell the Illicit Drugs, within New Jersey. (Id. ¶¶ 5, 8.) Hackett was personally served with process in New Jersey.3 See Fed. R. Civ. P. 4(e); (Aff. of Service, ECF No. 9). Moreover, Hackett accepted service on behalf of Just Enhance as its owner. See Fed. R. Civ. P. 4(h); (Aff. of Service, ECF No. 10). R Thomas Marketing operates out of a Bronx. New York address but distributes sexual enhancement drugs to Hackett in New Jersey. (Id. ¶ 6.) Thomas, president and founder of R Thomas Marketing,handles day-to-day shipping and receiving, manages websites, and provides customer service. (Id. ¶ 7.) Thomas was personally served pursuant to Federal Rule of Civil Procedure 4(e)(2)(A), and through Thomas, R Thomas Marketing was served pursuant to Federal Rule of Civil Procedure 4(h)(1)(B). (See ECF Nos. 7-10.) This action arises out of Thomas and R Thomas Marketing's marketing, sale, and distribution of the Illicit Drugs to locations in New Jersey; accordingly, the Court has specific jurisdiction over Thomas and R Thomas Marketing. See Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)) ("Specific jurisdiction over a defendant exists when that defendant has 'purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities.'").
A "drug" under the FDCA is a substance "intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man," 21 U.S.C. § 321(g)(1)(B), or "intended to affect the structure or any function of the body of man." 21 U.S.C. § 321(g)(1)(C). An intended use can be determined in any relevant manner, including through its labeling, see 21 C.F.R. § 201.128, which includes "all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such articl...
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