Viet. Reform Party v. Viet Tan Viet. Reform Party

• Decision Date: 26 August 2019
• Docket Number: Case No. 17-cv-00291-HSG
• Citation: 416 F.Supp.3d 948
• Court: U.S. District Court — Northern District of California
• Parties: VIETNAM REFORM PARTY, Plaintiff, v. VIET TAN - VIETNAM REFORM PARTY, et al., Defendants.

416 F.Supp.3d 948

VIETNAM REFORM PARTY, Plaintiff,

v.VIET TAN - VIETNAM REFORM PARTY, et al., Defendants.

Case No. 17-cv-00291-HSG

United States District Court, N.D. California.

Signed August 26, 2019

Frank Mathew Radoslovich, Joseph Franklin Klatt, Omid Shabani, Radoslovich | Parker | Turner, PC, Sacramento, CA, for Plaintiff.

ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

Re: Dkt. No. 86

HAYWOOD S. GILLIAM, JR., United States District Judge

On January 20, 2017, Plaintiff Vietnam Reform Party filed this trademark action against Defendants Viet Tan—Vietnam Reform Party ("VT Corp."), as well as individuals Nguyen Thanh Tu and Michelle Duong. Dkt. No. 1. Since then, only Defendant Tu has appeared. See Dkt. No. 50. Defendant Tu and Plaintiff entered into a settlement agreement, and Defendant Tu has since been dismissed with prejudice from this action. Dkt. No. 84. Plaintiff now seeks default judgment against the remaining Defendants, VT Corp. and Ms. Duong. Dkt. No. 86 ("Mot."). For the reasons detailed below, the Court GRANTS IN PART AND DENIES IN PART Plaintiff's motion.

I. BACKGROUND

A. Plaintiff's Allegations

Plaintiff describes itself as an unincorporated organization that "aims to establish democracy [in] and reform Vietnam through peaceful and political means." Dkt. No. 1 ("Compl.") ¶¶ 1, 15. According to Plaintiff, the organization is well-known within the Vietnamese community in the United States and internationally under the names "Vietnam Reform Party," "Viet Nam Canh Tân Cách M?ng Dang " (purportedly the Vietnamese translation of "Vietnam Reform Party"), "Viet Tan," and "Viêt Tân" (purportedly the Vietnamese spelling of "Viet Tan") (collectively, the "Marks"). Id. ¶ 21. Plaintiff broadcasts a daily radio program to audiences in Vietnam (also available online), organizes political seminars in the United States, and disseminates information through pamphlets and other publications. Id. ¶¶ 24–26.

Plaintiff alleges that in August 2016, Defendant Tu formed and incorporated VT Corp. in California "for the sole, improper purpose of interfering with Plaintiff's ongoing business and political activities and attempting to usurp control of Plaintiff's Marks." Id. ¶ 30. Defendant Tu purportedly chose the name to create confusion among the public and interfere with Plaintiff's business and political activities. Id. ¶ 31. To that end, Defendants began contacting various individuals and entities which had relationships with Plaintiff and threatened to commence legal action against them, unless they removed all mention of Plaintiff's Marks. Id. ¶¶ 32–38. Based on these facts, Plaintiff asserts the following causes of action: (1) federal trademark infringement in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ; (2) unfair competition under Cal. Bus. & Prof. Code §§ 17200 et seq. ; (3) unfair competition under California common law; (4) trademark infringement under California common law; (5) trademark dilution under Cal. Bus. & Prof. Code § 14247 ; (6) and declaratory relief. Id. ¶¶ 41–76. Plaintiff seeks declaratory relief confirming that it owns the Marks at issue and Defendants have infringed on those Marks, as well as injunctive relief enjoining Defendants' future infringement. Id. , Prayer for Relief ¶¶ 1–7.

B. Procedural History

Plaintiff filed this action on January 20, 2017. Dkt. No. 1. It did not purport to complete service on all Defendants until the end of April 2017. Dkt. Nos. 14, 15, 24. Although Defendants had not appeared at that time, Plaintiff's counsel indicated that he had been in contact with at least Defendant Tu's attorney for purposes of settlement. See Dkt. Nos. 17, 25. In July 2017, Plaintiff reported that it had not been successful in settling with Defendant Tu. Dkt. No. 34. Plaintiff then filed a motion for entry of default on July 27, 2017, and on July 31, 2017, the clerk entered default as to all Defendants. Dkt. Nos. 37, 38.

Defendant Tu appeared in October 2017 and moved to set aside default. Dkt. No. 44. At the hearing on Plaintiff's motion for default judgment on January 4, 2018, the Court informed Plaintiff that Plaintiff did not properly serve Defendants VT Corp. and Duong, with the consequence that the Court would not grant its motion for default judgment. Dkt. No. 66 at 3:7–24, 9:21–10:4. Counsel for Plaintiff agreed to withdraw the motion and remedy the service issue. Id. at 10:5–6. On January 12, 2018, Plaintiff filed a certificate of service purporting to reflect successful and proper service of Defendants VT Corp. and Duong. Dkt. Nos. 68, 69.

Defendant Tu and Plaintiff entered into a settlement agreement with the assistance of Magistrate Judge Joseph C. Spero. See Dkt. No. 79. They then filed a stipulation to dismiss with prejudice Defendant Tu, which the Court granted on December 27, 2018. Dkt. Nos. 84, 85. Plaintiff then filed this motion for default judgment against Defendants VT Corp. and Duong. See generally Mot. Neither Defendant VT Corp. or Defendant Duong appeared at the hearing on Plaintiff's current motion for default judgment. See Dkt. No. 39. And as of the date of this order, those Defendants still have yet to make an appearance.

II. LEGAL STANDARD

When a party has failed to plead or defend against a complaint, the clerk "must enter the party's default." Fed. R. Civ. P. 55(a). Following an entry of default, the Court may enter a default judgment upon request. Fed. R. Civ. P. 55(b)(2). However, the Court's decision to enter a default judgment is "discretionary." Aldabe v. Aldabe , 616 F.2d 1089, 1092 (9th Cir. 1980). When default has been entered, the "factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." TeleVideo Sys., Inc. v. Heidenthal , 826 F.2d 915, 917–18 (9th Cir. 1987).

In assessing a request for default judgment, the Court has an "affirmative duty" to examine its jurisdiction over "both the subject matter and the parties." In re Tuli , 172 F.3d 707, 712 (9th Cir. 1999). The Court must also determine whether service of process on Defendants was proper. Craigslist, Inc. v. Naturemarket, Inc. , 694 F. Supp. 2d 1039, 1054 (N.D. Cal. 2010) ; cf. Mason v. Genisco Tech. Corp. , 960 F.2d 849, 851 (9th Cir. 1992) (holding default judgment invalid due to improper service, even where defendant had actual notice of the action). Upon determination of jurisdiction, the Court then evaluates the merits of the default judgment request based on seven factors (the "Eitel factors"): (1) the possibility of prejudice to Plaintiff; (2) the merits of Plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. See Eitel v. McCool , 782 F.2d 1470, 1471–72 (9th Cir. 1986).

III. DISCUSSION

A. Jurisdiction and Service of Process

In considering an entry of default judgment, a district court has an "affirmative duty" to examine its jurisdiction over "both the subject matter and the parties." In re Tuli , 172 F.3d at 712. A court must also assess whether there was proper service of process on the defendant. Craigslist , 694 F. Supp. 2d at 1054.

i. Subject Matter Jurisdiction

Federal district courts have original jurisdiction over all civil actions "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Because Plaintiff alleges federal trademark infringement under the Lanham Act, the Court has subject matter jurisdiction over this cause of action. As a result, the Court also has supplemental jurisdiction over the related state law claims. See 28 U.S.C. § 1367 ("[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.").

ii. Personal Jurisdiction and Service of Process

Defendant VT Corp. is incorporated in California and Defendant Duong is a resident of California. Compl. ¶¶ 10, 12; see also Dkt. No. 86-1, Ex. H.¹ Consequently, the Court has general jurisdiction over both Defendants. See Daimler AG v. Bauman , 571 U.S. 117, 134, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) ("The paradigm all-purpose forums for general jurisdiction are a corporation's place of incorporation and principal place of business."); Goodyear Dunlop Tires Operations, S.A. v. Brown , 564 U.S. 915, 924, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) ("For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile."). However, "[s]ervice of process is the mechanism by which the court [actually] acquires the power to enforce a judgment against the defendant's person or property." S.E.C. v. Ross , 504 F.3d 1130, 1138 (9th Cir. 2007) (quotations omitted and alterations in original). Service of process is "the means by which a court asserts its jurisdiction over the person." Id. Without proper service, the Court "has no power to render any judgment against the defendant's person or property unless the defendant has consented to jurisdiction or waived the lack of process." Id. at 1138–39.

Under Federal Rule of Civil Procedure 4(h), a domestic corporation may be served "by delivering a copy of the summons and the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process." Fed. R. Civ. P. 4(h)(1)(B). Similarly, under Federal Rule of Civil Procedure 4(e)(2), individuals may be served personally, through a designated agent, or by leaving a copy at their "dwelling or usual place of abode with someone of suitable age and discretion who resides...