United States District Court, N.D. Texas, Dallas Division
DR. PEPPER SNAPPLE GROUP, INC. and MANANTIALES PEÑAFIEL, S.A. DE C.V., Plaintiffs,
BEBIDAS PURIFICADAS DE TEHUACAN, S.A. DE C.V. and CENTAURO DISTRIBUTION, LLC, Defendants.
MEMORANDUM OPINION AND ORDER
LINDSAY UNITED STATES DISTRICT JUDGE.
the court are: Plaintiffs' Motion to Reconsider
Appointment of Special Process Service, Motion for Entry of
Management Plan, and Request for Special Summons, filed June
27, 2017 (“Plaintiffs' Motion to Reconsider”)
(Doc. 12); Motion of Defendant Centauro Distribution, LLC to
Set Aside Entry of Default, filed September 28, 2017 (Doc.
21); and Plaintiffs' Motion for Entry of Final Default
Judgment Against Centauro Distribution, LLC, filed August 22,
2017 (Doc. 16). Having considered the motions, [*] record, and
applicable law, the court denies
Plaintiffs' Motion to Reconsider (Doc. 12);
grants Motion of Defendant Centauro
Distribution, LLC to Set Aside Entry of Default (Doc. 21);
and denies as moot Plaintiffs' Motion
for Entry of Final Default Judgment Against Centauro
Distribution, LLC (Doc. 16).
March 31, 2017, Plaintiffs Dr. Pepper Snapple Group, Inc. and
Manantiales Peñafiel, S.A. de C.V.
(“Plaintiffs”) brought this action alleging trade
dress infringement and unfair competition under the Lanham
Act, violations of Texas's Anti-Dilution Law, and common
law unfair competition. Plaintiffs allege that Defendants
Bebidas Purificadas de Tehuacan, S.A. de C.V.
(“Tehuacan”) and Centauro Distribution, LLC
(“Centauro”) have adopted packaging for their
sparkling mineral water that copies Plaintiffs' unique
packaging trade dress for its Peñafiel line of
sparkling mineral water. Plaintiffs allege Defendant Tehuacan
is involved in the design of packaging for, marketing of,
production, and distribution in Texas of Tehuacan beverages.
Plaintiffs further allege that Defendant Centauro is the
United States distributor for Tehuacan's beverages and is
directly responsible for the distribution of Tehuacan's
beverages in this district.
Plaintiffs' Motion to Reconsider
have yet to effect service of process on Tehuacan in Mexico.
On May 12, 2017, Plaintiffs moved the court to appoint and
authorize APS International, Ltd., including its designated
agents (“APS International”), to effect service
of process on Tehuacan in Mexico via the Hague Convention. On
June 20, 2017, the court denied the motion, explaining that
Mexico is a signatory to the Hague Convention and, therefore,
service through Mexico's Central Authority is “the
exclusive method of service of process[.]” Order (Doc.
11) (citing Compass Bank v. Katz, 287 F.R.D. 392,
397 & n.6 (S.D. Tex. 2012)). Plaintiffs now ask the court
to reconsider this Order, stating that “Plaintiffs
intend to effect service in accordance with Fed.R.Civ.P.
4(h)(2) and the Hague Service Convention's procedures . .
. and have engaged APS International-a litigation services
support firm specializing in international service of
process-to assist with service of process.” Mot. to
Hague Convention sets forth the permissible methods of
effecting service abroad. Nuovo Pignon, SpA v. STORMAN
ASIA M/V, 310 F.3d 374, 383 (5th Cir. 2002). As noted by
the court in its initial order denying Plaintiffs' motion
to appoint APS International, the primary method of service
authorized by the Hague Convention requires service through a
member state's “Central Authority.” Order
(Doc. 11) (citation omitted). It is unclear from
Plaintiffs' motion how appointing APS International to
effect service of process in Mexico would not violate the
Hague Convention. While Plaintiffs attach numerous cases as
exhibits to the motion in which courts have appointed APS
International as special process servers and authorized it to
assist with service of process in countries that are
signatories to the Hague Service Convention (see
Exs. A-G to Plaintiffs' Mot. to Reconsider), none of the
cases is decided by a court located in the Fifth Circuit.
Further, according to Plaintiffs, “[b]efore Mexico will
allow APS International to assist Plaintiffs [to] effect
service, it requires an order appointing and authorizing APS
International to do so.” Mot. to Reconsider 2. In
support of this proposition, Plaintiffs cite to Exhibit F to
their motion, which the court has reviewed. Exhibit F is an
order appointing APS International as special process server
issued by a United States District Court for the Eastern
District of Wisconsin in an unrelated case. It provides no
support for Plaintiffs' contention that Mexico would
allow APS International to assist Plaintiffs in effecting
service, let alone that it requires a court order appointing
and authorizing APS International to do so. For these
reasons, and for those stated in its initial Order denying
Plaintiffs' Motion to Appoint Special Process Service
(see Order (Doc. 11), the court
denies Plaintiffs' Motion to Reconsider.
Centauro's Motion to Set Aside the Clerk's Entry of
8, 2017, Plaintiffs effected service of process on Centauro.
After Centauro did not answer or otherwise respond within
twenty-one days of service, on July 21, 2017, Plaintiffs
moved for an entry of default by the clerk as to Defendant
Centauro. On July 24, 2017, the clerk entered default against
Centauro. On August 22, 2017, Plaintiffs moved for entry of a
default judgment against Centauro. Centauro filed an Answer
on September 11, 2017. On September 28, 2017, Centauro filed
its motion asking the court to set aside the clerk's
entry of default.
may set aside an entry of a default for good cause shown.
Fed.R.Civ.P. 55(c); Lacy v. Sitel Corp., 227 F.3d
290, 291-92 (citing Fed.R.Civ.P. 55(c)). In determining
whether good cause is present to set aside a default, a court
considers “whether the default was willful, whether
setting it aside would prejudice the adversary, and whether a
meritorious defense is present.” Id. at 292
(citation and quotation marks omitted). A court also
considers whether the defaulting party “acted
expeditiously” to cure the default. Id.
(citation omitted). If the court determines that a default is
willful-that is, intentional failure to answer or otherwise
respond-such “[w]illful failure alone may constitute
sufficient cause for the court to deny [the] motion [to set
aside default].” Matter of Dierschke, 975 F.2d
181, 184-85 (5th Cir. 1992).
states that setting aside the default will not prejudice
Plaintiffs; that it has a meritorious defense; that it took
quick action to remedy the default as soon as it learned of
it; and that its failure to answer (since cured) was not
willful. Plaintiffs have not filed a response,
notwithstanding that Centauro agreed to an extension of time
for a response to its motion until October 26, 2017.
See Agreed Stipulation for Extension of Time to
Respond to Centauro's Motion to Set Aside Default (Doc.
consideration of the record and applicable law, the court
concludes that Centauro's failure to
appear was not willful. Centauro has submitted an affidavit
from Jose H. Teran, who explains that, at the time he was
served with process in this case, he was no longer affiliated
with Centauro and believed he was no longer its registered
agent. See Ex. A to Mot. to Set Aside Default
(Affidaivt of Jose H. Teran). Teran further states that
Centauro was essentially shut down in March 2017, before
service of process. Id. When Centauro learned of the
lawsuit, it promptly filed an answer. Id.
Additionally, and having reviewed Centauro's Answer (Doc.
18), the court cannot say at this early stage of the
litigation that Centauro does not have a meritorious defense.
Further, the court sees no prejudice to Plaintiffs in lifting
the default, as this case is still in its initial stages and
Tehuacan has not yet been served. Plaintiffs' ability to
litigate its claims has not been materially impaired. The
court, therefore, determines that good cause exists to set
aside the default entered by the clerk on July 24, 2017, and
grants Centauro's Motion to Set Aside
the Clerks Entry of Default. In light of the court's
decision to set aside the default, the court denies
as moot Plaintiffs' Motion for Entry of Final
Default Judgment Against Centauro Distribution, LLC.