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Yeti Coolers, LLC v. Zhejiang Zhuosheng Industry & Trade Co., Ltd.

United States District Court, W.D. Texas, Austin Division

June 21, 2019

YETI COOLERS, LLC, Plaintiff,
v.
ZHEJIANG ZHUOSHENG INDUSTRY & TRADE CO., LTD., d/b/a/ WUYI ZHUOSHENG HOUSEHOLD METAL PRODUCTS CO., LTD., d/b/a ZHEJIANG ZHUOSHENG CO., LTD., Defendant.

          ORDER

          ROBERT PITMAN UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiff YETI Coolers, LLC's (“YETI”) Motion for Default Judgment. (Mot., Dkt. 17). Having considered the motion, the record, and applicable law, the Court finds that the motion should be granted.

         I. BACKGROUND

         YETI alleges the following facts in its complaint. (Compl., Dkt. 1). YETI has for several years sold its 20 oz. and 30 oz. RamblerTM Tumblers (collectively, “Rambler Drinkware”) throughout the United States. (Id. ¶ 8). YETI claims trade dress rights in the “overall look, design, and appearance” of its Rambler Drinkware and alleges that it has become famous and acquired substantial goodwill and secondary meaning in the marketplace. (Id. ¶¶ 11, 13-14). Defendant Zhejiang Zhuosheng Industry & Trade Co., Ltd. (“Zhuosheng”) is a Chinese company that sells drinkware that YETI claims infringes its trade dress rights in its Rambler Drinkware. (Id. ¶ 15). YETI therefore brings this action against Zhousheng for trade dress dilution, trade dress infringement, unfair competition and false designation of origin, misappropriation, and unjust enrichment under state and federal law. (Id. 11-22).

         YETI filed its complaint on August 23, 2017. YETI alleges that it attempted to serve Zhuosheng for several months, and on August 3, 2018, moved to serve Zhuosheng by alternative means. (Dkt. 8, at 2-3). The Court granted YETI's motion on September 28, permitting YETI to serve Zhuosheng by email. (Dkt. 9). Zhuosheng was so served October 8, 2018. (Dkt. 10). Subsequently, on November 20, the Chinese Ministry of Justice informed YETI that Zhuosheng had been served pursuant to the Hague Convention on February 7, 2018. (Jungels Decl., Dkt. 17-1, ¶ 4). Zhuoshong was thus served twice; its answer based on the Hague Convention service was due on April 9, 2018, and its answer based on the email service was due on October 29, 2018. See Fed. R. Civ. P. 6 & 12(a)(1)(A). Zhuosheng never submitted an answer.

         On December 19, 2018, YETI moved the Court for an entry of default against Zhuosheng. (Dkt. 15). The Clerk entered default against Zhuosheng the next day, (Dkt. 16), and the instant motion for default judgment followed on January 10, 2018, (Mot., Dkt. 17). As of this date, Zhuosheng has not appeared in this litigation.

         II. DISCUSSION

         Under Rule 55 of the Federal Rules of Civil Procedure, federal courts have the authority to enter a default judgment against a defendant that has failed to plead or otherwise defend itself. Fed.R.Civ.P. 55(a)-(b). That said, “[d]efault judgments are a drastic remedy, not favored by the Federal Rules and resorted to by courts only in extreme situations.” Sun Bank of Ocala v. Pelican Homestead & Sav. Ass'n, 874 F.2d 274, 276 (5th Cir. 1989). A party is not entitled to a default judgment simply because the defendant is in default. Ganther v. Ingle, 75 F.3d 207, 212 (5th Cir. 1996). Rather, a default judgment is generally committed to the discretion of the district court. Mason v. Lister, 562 F.2d 343, 345 (5th Cir. 1977).

         In considering YETI's motion, the Court must determine: (1) whether default judgment is procedurally warranted, (2) whether YETI's complaint sets forth facts sufficient to establish that it is entitled to relief, and (3) what form of relief, if any, YETI should receive. See United States v. 1998 Freightliner Vin #: 1FUYCZYB3WP886986, 548 F.Supp.2d 381, 384 (W.D. Tex. 2008); J & J Sports Prods., Inc. v. Morelia Mexican Rest., Inc., 126 F.Supp.3d 809, 813 (N.D. Tex. 2015).

         A. Procedural Requirements

         To determine whether entry of a default judgment is procedurally warranted, district courts in the Fifth Circuit consider six factors: “[1] whether material issues of fact are at issue, [2] whether there has been substantial prejudice, [3] whether the grounds for default are clearly established, [4] whether the default was caused by a good faith mistake or excusable neglect, [5] the harshness of a default judgment, and [6] 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).

         Every Lindsey factor weighs in favor of entering a default judgment against Zhuosheng. Because Zhuosheng has failed to file a responsive pleading, there are no material facts in dispute. See Nishimatsu Const. Co., Ltd. v. Hous. Nat. Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact.”). Zhuosheng's failure to appear and respond to YETI's complaint has halted the adversary process and prejudiced YETI's interest in pursuing its claims for relief. J & J Sports, 126 F.Supp.3d at 814 (“Defendants' failure to respond threatens to bring the adversary process to a halt, effectively prejudicing Plaintiff's interests.”) (citation and quotation marks omitted). The grounds for default are established: YETI was twice properly served but has still not appeared or participated in this litigation. There is also no evidence before the Court that Zhuosheng's default was caused by a good faith mistake or excusable neglect, and the harshness of a default judgment in this case is mitigated by Zhuosheng's failure to respond to YETI's complaint or otherwise appear in the last 22 months. Id.; Epic Tech, LLC v. Lara, 2017 U.S. Dist. LEXIS 196705, at * 12 (S.D. Tex. Nov. 29, 2017). Finally, the Court is not aware of any facts that would obligate it to set aside the default if challenged by Zhuosheng. The Court therefore finds that default judgment is procedurally warranted.

         B. Sufficiency of YETI's Complaint

         Default judgment is proper only if the well-pleaded factual allegations in YETI's complaint establish a valid cause of action. Nishimatsu, 515 F.2d at 1206. By defaulting, a defendant “admits the plaintiff's well-pleaded allegations of fact.” Id. To determine whether factual allegations are sufficient to support a default judgment, the Fifth Circuit employs the same analysis used to determine sufficiency under Rule 8. Wooten v. McDonald Transit Assocs., Inc., 788 F.3d 490, 498 (5th Cir. 2015). A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). The factual allegations in the complaint need only “be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Wooten, 788 F.3d at 498 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, ...


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