Entertainment USA Incorporated v. Baldinsky

1 WO — 2 — — 3 — — 4 — — 5 — 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA — 8 — 9 Entertainment USA Incorporated, No. CV-22-00970-PHX-DWL 10 Plaintiff, ORDER 11 v. 12 Tadeusz Baldinsky, et al., 13 Defendants. — 14 — 15 Pending before the Court is a motion for default judgment filed by Plaintiff 16 Entertainment USA, Inc. dba Christie’s Cabaret (“Plaintiff”). (Doc. 29.) For the following 17 reasons, the motion is granted and this action is terminated. 18 BACKGROUND 19 As alleged in the operative pleading, the First Amended Complaint (“FAC”), 20 Plaintiff owns and operates several so-called “gentlemen’s clubs” under the “Christie’s 21 Cabaret” brand. (Doc. 20 ¶ 19.) Since at least June 2003, Plaintiff has been the owner of 22 the Christie’s Cabaret Service Mark for use in connection with nightclub services in the 23 nature of adult entertainment (the “Christie’s Mark”). (Id. ¶ 22.) Plaintiff has devoted 24 significant resources and efforts to promoting the brands and reputation of Christie’s 25 Cabaret within the industry. (Id. ¶¶ 26, 27.) 26 In or around 2020, Plaintiff’s owner and CEO, Steve Cooper, acquired title to two 27 existing so-called gentlemen’s clubs in Tucson, Arizona. (Id. ¶¶ 4, 29-30.) Afterward, 28 “neighborhood residents in and around [one of those clubs] began publishing false, 1 defamatory statements about activities going on at the club, including false accusations of 2 criminal conduct.” (Id. ¶ 31.) During an ensuing state-court lawsuit, “it was revealed that 3 several of these residents used the website registered at www.christiescabarettucson.com 4 to further false claims of ongoing illegal conduct at the [club’s] location, including 5 accusations of prostitution.” (Id. ¶ 33.) This website “directs users to [other] websites . . . 6 where users can pay for access to ‘chat rooms’ with ‘online strippers.’” (Id. ¶ 34.) 7 However, Plaintiff “has never offered these services nor associated itself with websites that 8 offer such services” and never gave “permission to use the Christie’s Cabaret tradename in 9 connection with the sale or advertisement of its services.” (Id. ¶¶ 36-37.) 10 In June 2022, Plaintiff initiated this action by filing a complaint. (Doc. 1.) The 11 defendant named in the initial complaint was the individual believed to be the registrant of 12 the www.christiescabarettucson.com domain name. (Id. ¶ 5.) However, Plaintiff later 13 sought (and was granted) leave to convert this action into an in rem action. (Doc. 16.) 14 Accordingly, the sole defendant named in the FAC is the www.christiescabarettucson.com 15 domain name (“Defendant”). (Doc. 20 ¶¶ 10, 16.) 16 In the order granting Plaintiff’s motion to convert this action into an in rem action, 17 the Court held that service by publication was not required and that service of process was 18 deemed effectuated. (Doc. 16 at 10.)1 Accordingly, on June 1, 2023, after Defendant failed 19 to answer or otherwise respond to the FAC, Plaintiff filed an application for entry of 20 default. (Doc. 27.) The next day, the Clerk entered default. (Doc. 28.) 21 On October 11, 2023, Plaintiff filed the pending motion for default judgment. (Doc. 22 29.) The time to respond has expired and Defendant did not file a response. 23 … 24 1 The Court’s rationale for not requiring service by publication was as follows: “Where, as here, the registrant of a domain name has concealed his or her identity by 25 registering the domain name under a fictitious name and has made himself or herself impossible to find by listing an inaccurate postal address and phone number, and possibly 26 an inaccurate email address as well, and there is no way to know the city or even the country in which he or she might reside, there is simply no manner of publication that reasonably 27 could be expected to reach the registrant. Impossibility is reason enough for the Court to decline to direct publication. The Court further notes that the registrant’s efforts to make 28 himself or herself unfindable cut against imposing upon Plaintiff a burdensome publication requirement.” (Doc. 16 at 9-10.) 1 DISCUSSION 2 I. Legal Standard 3 The “decision whether to enter a default judgment is a discretionary one.” Aldabe 4 v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The following factors, known as the Eitel 5 factors, may be considered when deciding whether default judgment is appropriate: (1) the 6 possibility of prejudice to the plaintiff, (2) the merits of the claims, (3) the sufficiency of 7 the complaint, (4) the amount of money at stake, (5) the possibility of factual disputes, (6) 8 whether the default was due to excusable neglect, and (7) the policy favoring decisions on 9 the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 10 “[T]he general rule” for default judgment purposes “is that well-pled allegations in 11 the complaint regarding liability are deemed true.” Fair Housing of Marin v. Combs, 285 12 F.3d 899, 906 (9th Cir. 2002). “The district court is not required to make detailed findings 13 of fact.” Id. “However, necessary facts not contained in the pleadings, and claims which 14 are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., — 15 — 980 F.2d 1261, 1267 (9th Cir. 1992). 16 II. The First, Fifth, Sixth, And Seventh Eitel Factors 17 “In cases like this one, in which Defendants have not participated in the litigation at 18 all, the first, fifth, sixth, and seventh [Eitel] factors are easily addressed.” Zekelman Indus. 19 Inc. v. Marker, 2020 WL 1495210 , *3 (D. Ariz. 2020). 20 The first factor weighs in favor of default judgment. If Plaintiff’s motion were 21 denied, it would be without other recourse for recovery. PepsiCo, Inc. v. Cal. Sec. Cans., — 22 — 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). 23 The fifth and sixth factors weigh in favor of default judgment or are neutral. Due 24 to Defendant’s failure to respond to the FAC, there is no dispute over material facts and no 25 indication that default is due to excusable neglect. (See also Doc. 16.) 26 The seventh factor generally weighs against default judgment, given that cases 27 “should be decided on their merits whenever reasonably possible.” Eitel, 782 F.2d at 1472 . 28 However, the existence of Rule 55(b), which authorizes default judgments, “indicates that 1 this preference, standing alone, is not dispositive.” PepsiCo, 238 F. Supp. 2d at 1177 . 2 III. The Fourth Eitel Factor—The Amount Of Money At Stake 3 Under the fourth factor, the Court considers the amount of money at stake in relation 4 to the seriousness of the defendant’s conduct. Here, Plaintiff “does not seek actual 5 damages or lost profits, but instead seeks statutory damages of $10,000.00 under 15 U.S.C. 6 § 1117(d) and transfer of the Infringing Domain.” (Doc. 29-1 at 8.) This request is 7 relatively modest (and reasonable), given that § 1117(d) authorizes “an award of statutory 8 damages in the amount of not less than $1,000 and not more than $100,000 per domain 9 name, as the court considers just,” and the alleged misconduct here was serious. 10 Accordingly, the fourth Eitel factor either favors default judgment or is at worst neutral. 11 IV. The Second And Third Eitel Factors—Merits And Sufficiency 12 That leaves the second and third Eitel factors—the merits of the claim and the 13 sufficiency of the complaint. “These two factors are often analyzed together and require 14 courts to consider whether a plaintiff has stated a claim on which it may recover.” Vietnam 15 Reform Party v. Viet Tan - Vietnam Reform Party, 416 F. Supp. 3d 948 , 962 (N.D. Cal. 16 2019) (internal quotation marks omitted). “Of all the Eitel factors, courts often consider 17 the second and third factors to be the most important.” Id. 18 Here, both factors weigh in favor of granting default judgment. Taken as true, the 19 factual allegations in the FAC establish that Plaintiff has valid claims for cybersquatting 20 and trademark infringement, for the reasons set forth in Plaintiff’s memorandum. (Doc. 21 29-1 at 6-7.) 22 V. Balancing The Factors 23 Having considered all of the Eitel factors, the Court concludes that default judgment 24 is appropriate. 25 … 26 … 27 … 28 … 1 Accordingly, 2 IT IS ORDERED that Plaintiff's motion for default judgment (Doc. 29) is granted. || A separate judgment shall issue, after which the Clerk shall terminate this action. 4 Dated this 27th day of November, 2023. — 5 — FLL "Dominic W. Lanza 8 United States District Judge — 9 — — 10 — — 11 — — 12 — — 13 — — 14 — — 15 — — 16 — — 17 — — 18 — — 19 — — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 — — 27 — — 28 — -5-