United States District Court, E.D. Texas, Tyler Division
ORDER ADOPTING REPORT AND RECOMMENDATION OF UNITED
STATES MAGISTRATE JUDGE
W. SCHROEDER III UNITED STATES DISTRICT JUDGE
above-entitled and numbered civil action was referred to
United States Magistrate Judge K. Nicole Mitchell pursuant to
28 U.S.C. § 636. Before the Court is the Report and
Recommendation of the United States Magistrate Judge (the
“Report”) (Docket No. 37) in which Judge Mitchell
addressed three pending motions: (1) Plaintiff Blue Spike
LLC's Motion for Default Judgment as to ASUS Computer
International (“ASUS”) and ASUSTeK Computer Inc.
(“ASUSTek”) (Docket No. 11); (2) ASUSTeK's
Motion to Dismiss or, in the Alternative, Motion to Quash
Service of Summons and Complaint (Docket No. 16); and, (3)
Plaintiff s Motion to Strike for failure to comply with L.R.
CV-7(a) (Docket No. 26).
the Report was published, Plaintiff voluntarily dismissed
ASUSTeK. Docket Nos. 39 and 40. Therefore, the Court
DENIES AS MOOT ASUSTeK's motion to
dismiss (Docket No. 16) and Plaintiffs Motion to Strike for
failure to comply (Docket No. 26), and DENIES-IN-PART
AS MOOT Plaintiffs Motion for Default Judgment with
respect to ASUSTeK (Docket No. 11).
filed objections to the Magistrate Judge's recommendation
to deny Plaintiff's Motion for Default Judgment against
ASUS. Docket No. 38. Defendant filed a Response.
Docket No. 41. Having reviewed the written objections de
novo, the Court concludes that the findings and
conclusions of the Magistrate Judge are correct and
OVERRULES Plaintiff's objections.
See Fed. R. Civ. P. 72(b)(3); 28 U.S.C. §
has filed two sets of objections to the Report. First,
Plaintiff objects to the recommendation that the entry of
default against ASUS should be set aside. Docket No. 38 at 3.
Plaintiff objects to the recommendation that default judgment
should be denied. Docket No. 38 at 4.
Plaintiff's Objections to the Report's Recommendation
that the Clerk's Entry of Default
Against ASUS Should Be Vacated
argues that entry of default should not be disturbed, and
relies on In re Chinese Manufactured Drywall Prod. Liab.
Litig., 742 F.3d 576, 594 (5th Cir. 2014) to argue that
the Court should have ended its inquiry once it found
Defendant's default was willful. Docket No. 38 at 3.
Plaintiff emphasizes that“[a] finding of willfulness
ends the inquiry, for when the court finds an intentional
failure of responsive pleadings there need be no other
finding.” Id. (citing In re Chinese,
742 F.3d at 594).
argument was previously considered by the Magistrate Judge.
Docket No. 37 at 20 n.7. As the Magistrate Judge correctly
stated in her Report, in In re Chinese, the Fifth
Circuit reviewed whether the district court erred in refusing
to vacate a default judgment. Id.
“In re Chinese does not discuss
whether the entry of default judgment is appropriate.”
Id. In its objections, Blue Spike fails to recognize
the distinction between vacating a clerk's entry of
default, as is the case here, and vacating a default
Plaintiff cites Rogers v. Hartford Life and Accident Ins.
Co., 167 F.3d 933 (5th Cir. 1999), in which the Fifth
Circuit noted that “the policy of resolving cases on
their merits 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.' ” Docket No. 38 at 3 (emphasis
added). Plaintiff's own reliance on Rogers,
though, indicates that vacating an entry of default is
squarely within the trial court's discretion. In its
objections, Plaintiff does not cite to any case law in which
a court has been required to enter default judgment.
other hand, Defendant cites to Hilseweck P'ship v.
Eastern Energy Resources, Inc., No. 3:11-CV-186, 2011 WL
3501719 at *2 (N.D. Tex. 2011) and Parker v. Bill Melton
Trucking, Inc., No. 3:15-CV-2528, 2016 WL 5704172, at *3
(N.D. Tex. Oct. 3, 2016), to argue that district courts have
applied Fifth Circuit law to set aside a clerk's entry of
default even though default was found to be willful. Thus,
Plaintiff's implication that it is entitled to default
judgment because of Defendant's willful default alone is
Parker, the district court explicitly found that
“while willful failure alone may constitute sufficient
cause for refusing to set aside an entry of default, the
court may continue its good cause analysis.” 2016 WL
5704172 at *3 (internal quotations and citations omitted).
The court ultimately found good cause to set aside the
default because there was no unfair prejudice to plaintiff
and because defendant had raised a potentially meritorious
defense. Similarly, in Hilseweck, the court set
aside the clerk's entry of default because the defendant
had met the good cause standard, notwithstanding
defendant's willful default. 2011 WL 3501719 at *2. The
court found good cause in “the lack of prejudice to
plaintiffs, [defendant's] potentially meritorious
defense, and the fact that the court is setting aside an
entry of default, not a default judgment.” Id.
the Magistrate Judge also found that there was no unfair
prejudice to the Plaintiff, that Defendant had raised a
potentially meritorious defense, and that the Court would
only be setting aside an entry of default, not a default
judgment. Docket No. 37 at 18-26. Moreover, the
Magistrate Judge found that there was significant financial
loss at stake and ...