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WILSPEC Technologies Inc. v. Rugao Isen Electronic Co. Ltd.

United States District Court, W.D. Oklahoma

August 8, 2019

WILSPEC TECHNOLOGIES, INC., an Oklahoma Corporation, Plaintiff,
v.
RUGAO ISEN ELECTRONIC CO., LTD., AKA ISEN CONTROLS, a Chinese Company, and CAI ZHANGLING, an Individual, Defendants.

          ORDER

          SCOTT L. PALK UNITED STATES DISTRICT JUDGE

         Before the Court is the Motion for Default Judgment Against Defendants and Brief in Support of Plaintiff WILSPEC Technologies, Inc. (Plaintiff or WILSPEC) [Doc. No. 75]. Defendants have not responded and the time for doing so has expired. The Clerk has previously entered default against Defendant Rugao Isen Electronic Co., Ltd., AKA ISEN Controls (Rugao) [Doc. No. 65] and entered default against Defendant Cai Zhangling (Zhangling) [Doc. No. 61]. For the reasons set forth below, Plaintiff's Motion is granted.

         I. Background

         On December 4, 2016, Plaintiff filed its Complaint alleging infringement of fourteen separate copyrig—hted works (collectively referred to as the Copyrighted Material). Plaintiff also alleged violations of the Lanham Act, 15 U.S.C. § 1125(a) and violations of the Oklahoma Deceptive Trade Practices Act, Okla. Stat. tit. 78, § 53 et seq. Defendants, represented by counsel, moved to dismiss the Complaint for lack of personal jurisdiction or, alternatively, failure to state a claim upon which relief may be granted.

         Plaintiff then filed an Amended Complaint [Doc. No. 31] (as corrected [Doc. No. 41]) and Defendants again moved to dismiss the Amended Complaint. The Court denied the motion to dismiss and found Plaintiff had adequately made a prima facie showing of personal jurisdiction. See Order [Doc. No. 43]. The Court also found Plaintiff had sufficiently stated claims for copyright infringement, Lanham Act violations and violations of the Oklahoma Deceptive Trade Practices Act. Id.

         Thereafter, Defendants' counsel moved to withdraw. Counsel's initial request was granted as to Defendant Zhangling and denied as to Defendant Rugao, but the Court subsequently granted counsel's re-urged motion as to Defendant Rugao. See Orders [Doc. Nos. 49, 57]. The Court specifically advised Defendant Rugao that as a business entity, it could not appear pro se in this matter. See Order [Doc. No. 57]. The Court further specifically advised Defendant Rugao that failure to retain counsel by the established deadline could result in the entry of a default judgment or other sanction. Id.

         To date, Defendant Rugao has taken no further action in this case. Similarly, Defendant Zhangling has taken no action in this case. Defendants have ignored deadlines set forth in the Court's Scheduling Order and have failed to respond to other orders of the Court. Also, Defendants have failed to respond to motions filed by Plaintiff. Most recently, the Court directed Defendants to advise the Court whether they objected to Plaintiff's waiver or withdrawal of its demand for a jury trial. Defendants did not timely respond and per the Court's order, the Court deems Defendants to have consented to the waiver. See Order [Doc. No. 70]. As stated above, Defendants have not responded to Plaintiff's Motion for Default Judgment currently pending before the Court.

         II. Default Judgment is an Appropriate Sanction

         Plaintiff moves for default judgment pursuant to Rule 55 of the Federal Rules of Civil Procedure. Rule 55(a) provides that default must be entered “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Here, Defendants filed motions to dismiss and participated in early stages of this litigation. Thus, the Court declines to grant a default judgment under Rule 55.

         As referenced in the Court's prior orders, however, default judgment may be entered as a sanction against Defendants for failure to comply with the Court's orders. See Fed. R. Civ. P. 16(f)(1)(c). Additionally, “courts have broad inherent power to sanction misconduct and abuse of the judicial process, which includes the power to enter a default judgment.” Klein v. Harper, 777 F.3d 1144, 1147 (10th Cir. 2015) (quotations and citations omitted).

         “Default judgment is a harsh sanction that should be used only if the failure to comply with court orders is the result of willfulness, bad faith, or any fault of the disobedient party rather than inability to comply.” Id. at 1147-48 (quotations and citation omitted). To determine whether entry of default judgment is an appropriate sanction, the court applies the factors identified in Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir. 1992). Those factors are: (1) the degree of actual prejudice to the non-offending party, (2) the amount of interference with the judicial process, (3) the culpability of the disobedient party, (4) whether the court warned the disobedient party in advance that default judgment would be a likely sanction for noncompliance, and (5) the efficacy of lesser sanctions. See id.; see also Klein-Becker USA, LLC v. Englert, 711 F.3d 1153, 1159 (10th Cir. 2013) (applying Ehrenhaus factors in considering whether the sanction of default judgment was appropriate). The Tenth Circuit reviews a “district court's decision to enter default judgment as a sanction for abuse of discretion.” Harper, 777 F.3d at 1148.

         1. Degree of Actual Prejudice

         Plaintiff has been significantly hindered in seeking redress for its alleged injuries because of Defendants' failure to comply with the Court's orders or otherwise participate in ongoing litigation. Thus, Plaintiff has suffered sufficient prejudice and the first factor weighs in favor of default judgment.

         2. Amount of Interference ...


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