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Whirlpool Corp. v. Global Purification, LLC

United States District Court, E.D. Texas, Marshall Division

May 15, 2017

WHIRLPOOL CORPORATION, Plaintiff,
v.
GLOBAL PURIFICATION, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          RODNEY GILSTRAP UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiff Whirlpool Corporation's Motion for Entry of Default Judgment and Permanent Injunction and Attorney Fees (Dkt. No. 8 (“Motion”)). Having fully considered the arguments in the Motion, as well as the evidence presented by Plaintiff, the Court finds that this Motion should be and hereby is GRANTED-IN-PART and DENIED-IN-PART.

         I. Background and Procedural Requirements

         Plaintiff filed its Complaint against Global Purification, LLC (“Defendant”) on May 2, 2016. (Dkt. No. 1.) Plaintiff alleges that Defendant sells throughout the United States replacement water filters for refrigerators through online retail outlets such as Amazon. (Compl. ¶¶ 4-5.) The Complaint further alleges that these replacement water filters infringe claims of United States Patent No. 7, 000, 894 (“the '894 Patent”), which is owned by Whirlpool Corporation (“Whirlpool”). (Compl. ¶¶ 5, 6, 11.) Specifically, Plaintiff alleges that Defendant sells filters bearing Model Nos. RFC0800A and RFC1700A that infringe at least claims 1 and 4 of the ʼ894 Patent. (Compl. ¶¶ 5, 15.)

         A copy of the Summons and Complaint was delivered to Defendant on May 9, 2016. (Dkt. No. 5; Motion at 5.) Nonetheless, Defendant has not answered or appeared in this case. On July 7, 2016, the Clerk administratively entered default against Defendant. (Dkt. No. 7.) Subsequently, on September 27, 2016, Plaintiff filed this Motion for Entry of Default Judgment and Permanent Injunction and Attorney Fees. (Dkt. No. 8.) The Court held a hearing regarding Plaintiff's Motion on November 7, 2016.

         II. Legal Standard

         Federal Rule of Civil Procedure 55 governs the procedural requirements related to the entry of default and default judgment. Although default judgments are generally disfavored, the policy against default judgments is “counterbalanced by considerations of social goals, justice and expediency, a weighing process that lies largely within the domain of the trial judge's discretion.” Wooten v. McDonald Transit Associates, Inc., 788 F.3d 490, 496 (5th Cir. 2015) (quoting In re Chinese-Manufactured Drywall Prods. Liab. Litig., 742 F.3d 576, 594 (5th Cir. 2014)). A default judgment becomes appropriate “when the adversary process has been halted because of an essentially unresponsive party.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass 'n, 874 F.2d 274, 276 (5th Cir. 1989) (quoting H.F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)).

         A defaulting defendant “admits the plaintiff's well-pleaded allegations of fact . . . and is barred from contesting on appeal the facts thus established.” Nishimatsu Const. Co. v. Houston Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). However, a defaulting defendant “is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Wooten, 788 F.3d at 496 (quoting Nishimatsu Const. Co., 515 F.2d at 1206). Thus, mere default by a defendant does not necessarily warrant a default judgment, as a default is not “an absolute confession by the defendant of his liability and of the plaintiff's right to recover.” Nishimatsu Const. Co., 515 F.2d at 1206. Instead, a plaintiff's complaint must supply “an adequate foundation” for the default judgment. Wooten, 788 F.3d at 497. To determine whether a complaint is “well-pleaded” in the default judgment context such that it serves as a sufficient foundation for a default judgment, the complaint must provide the defendant with “fair notice” of the claim. Wooten, 788 F.3d at 498-99. However, the allegations in the complaint need not be sufficient to survive a motion to dismiss under Rule 12. Wooten, 788 F.3d at 498 n.3 (“[A] defendant ordinarily must invoke Rule 12 in order to avail itself of that rule's protections. . . . Accordingly, as a default is the product of a defendant's inaction, we decline to import Rule 12 standards into the default-judgment context.”).

         When determining whether to grant a motion for default judgment, courts in this Circuit consider relevant factors, including “whether material issues of fact are at issue, whether there has been substantial prejudice, whether the grounds for default are clearly established, whether the default was caused by a good faith mistake or excusable neglect, the harshness of a default judgment, and whether the court would think itself obliged to set aside the default on the defendant's motion.” Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir. 1998).

         Finally, before entering default judgment, a court should evaluate whether it has jurisdiction over the parties to the case as well as the subject matter of the case. See Sys. Pipe & Supply, Inc. v. M/V VIKTOR KURNATOVSKIY, 242 F.3d 322, 324 (5th Cir. 2001) (“[W]hen entry of default is sought against a party who has failed to plead or otherwise defend, the district court has an affirmative duty to look into its jurisdiction both over the subject matter and the parties.”) (quoting Williams v. Life Savings and Loan, 802 F.2d 1200, 1203 (10th Cir.1986)).

         III. Jurisdictional Analysis

         As to subject matter jurisdiction, this Court clearly has jurisdiction over civil actions regarding patent infringement. 28 U.S.C. § 1338 (2012).

         This Court also has personal jurisdiction over the parties to this suit. According to Plaintiff's Complaint, Defendant is a limited liability company organized and existing under Texas law. (Comp. ¶ 2.) The file number for such entity issued by the Texas Secretary of State is 0802247622, and it maintains its principal place of business in Cypress, Texas. (Compl. ...


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