644 F.Supp.3d 963
AVUS DESIGNS, INC., Plaintiff,
v.
GREZXX, LLC, Defendant,
Case No. 22-CV-0173-SWS
United States District Court, D. Wyoming
Signed December 2, 2022
Amy M. Iberlin, Stephenson D. Emery, Williams Porter Day & Neville, Casper, WY, Jesse Lev London, Pro Hac Vice, Miller Intellectual Property Law LLC, Ogden, UT, for Plaintiff.
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
Scott W. Skavdahl, United States District Judge
This matter comes before the Court on the Redacted Motion for Default Judgment (ECF No. 9) filed by Plaintiff Avus Designs, Inc. ("Avus"). A hearing on the motion was held on November 4, 2022. (See ECF Nos. 18-19.) At the Court's request Avus further supplemented the record on November 18, 2022. (ECF No. 20.) Having reviewed the motion, materials submitted in support thereof, and otherwise being fully advised, the Court finds the motion should be GRANTED and ORDERS as follows.
BACKGROUND
Avus is a company organized under the laws of California with a principal place of business in Santa Barbara, California. (ECF No. 1 ¶2.) Defendant Grezxx, LLC ("Grezxx") is a Wyoming limited liability company ("LLC") with its principal office in Sheridan, Wyoming.1 (Id. ¶ 3.) Avus is the exclusive licensee of all right, title, and interest in U.S. Patent No. 7,513,856 (the "Patent") for a weight plate retention collar. (Id. ¶ 7-8.) The Patent is valid and enforceable. (Id.)
The Patent relates to a retention collar for securing weights to a barbell. (Id. ¶9.) Avus launched the weight collar product in 2006, and the Patent was issued by the United States Patent and Trademark Office on April 7, 2009. (Id. at ¶7, 16.) Avus sells its products covered by the Patent on various online platforms—including Amazon.com ("Amazon")—its own website, and in brick-and-mortar retail outlets. (Id. ¶ 16.)
Grezxx sells its product that infringes on the Patent under the name Greententljs ("Infringing Product") online via its Amazon storefront. (Id. ¶18.) Grezxx allegedly designed the Infringing Product after seeing Avus' products covered by the Patent. (Id. ¶20.) Avus alleges Grezxx has infringed, either literally or under the doctrine of equivalents, by manufacturing, offering to sell, and selling Infringing Products covered by one or more claims of the Patent. (Id. ¶26.) Additional facts relevant to Avus' claim will be discussed throughout.
DISCUSSION
A. Legal Standard
In a patent case, the court applies the law of the Federal Circuit to substantive patent issues, and the law of its regional circuit to procedural non-patent issues. In re Cambridge Biotech Corp., 186 F.3d 1356, 1368 (Fed. Cir. 1999); see Front Row Tech., LLC v. NBA Media Ventures, LLC, 204 F.Supp.3d 1190, 1220 n.15 (D.N.M. 2016). Because the decision to enter default judgment is not unique to patent cases, this Court follows Tenth Circuit law. See Iowa State Univ. Rsch. Found., Inc. v. Greater Continents, Inc., 81 F.App'x 344, 347 (Fed. Cir. 2003).
Motions for default judgment are governed by Fed. R. Civ. P. 55(b). Following entry of default by the Clerk of Court,
Default judgment cannot be entered until the amount of damages has been ascertained. Malluk, 2020 WL 1033339, at *2. Damages may only be awarded if the record adequately reflects the basis for the award via a hearing or a demonstration by detailed affidavits establishing the necessary facts. Id. (citing Hermeris, Inc. v. McBrien, No. 10-2483-JAR, 2012 WL 1091581, at *1 (D. Kan. Mar. 30, 2012) (cleaned up).
Prior to entering default judgment, a court must determine whether it has jurisdiction over a defendant. Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1169-70 (10th Cir. 2011) (citing Dennis Garberg & Assocs., Inc. v. Pack-Tech Int'l Corp., 115 F.3d 767, 771 (10th Cir. 1997)). Decisions to enter default judgment are committed to the district court's sound discretion. Garberg, 115 F.3d at 771.
B. Jurisdiction and Entry of Default
When addressing jurisdiction, the court must assess adequacy of service of process, subject matter jurisdiction, and personal jurisdiction.
i. Service of Process and Subject Matter Jurisdiction
The Court analyzes adequacy of service of process on an LLC in the context of Fed. R. Civ. P. 4(h), which establishes service of process for a corporation, partnership, or association. See Kuberski v. Cred X Debt Recovery, LLC, No. 11-cv-03247, 2012 WL 2943726, at *4 (D. Colo. July 2, 2012). Rule 4(h) provides that service on a corporation, partnership, or association is adequate if effected "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or any other agent authorized by appointment or by law to receive service of process ..." Fed. R. Civ. P. 4(h)(1)(B). Here, the Complaint and summons were delivered to Northwest Registered Agent Service, Inc. in Sheridan, Wyoming on August 9, 2022. (ECF No. 5 at 1.) According to the Wyoming Secretary of State, Northwest Registered Agent Service, Inc. is the registered agent for Grezxx.2 The Court therefore finds service of process was appropriate. The Court further finds it has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 1338(a). Marcus Food Co., 671 F.3d at 1169-70.
ii. Personal Jurisdiction
Before proceeding further, the Court pauses to confront a vexing issue that continuously presents itself when analyzing personal jurisdiction over LLCs. Namely, when may a court exercise general personal jurisdiction over an LLC even if specific personal jurisdiction may be lacking?
It is long established that the Fourteenth Amendment limits the personal jurisdiction of state courts. Bristol-Myers Squibb Co. v. Superior Ct. of Cal., S.F. Cnty., 582 U.S. 255, 137 S.Ct. 1773, 1779, 198 L.Ed.2d 395 (2017). By virtue of Fed. R. Civ. P. 4(k)(1)(A), federal courts ordinarily follow state law in determining the bounds of their personal jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 125, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). Like many states, the Wyoming "long arm" statute authorizes the state's courts to exercise personal jurisdiction "on any basis not inconsistent with the Wyoming or United States Constitution." WYO. STAT. § 5-1-107(a); see H&P Advisory Ltd. v. Randgold Resources Ltd., 465 P.3d 433, 437 (Wyo. 2020).
It is also well established there are two primary varieties of personal jurisdiction: "general personal jurisdiction" (sometimes called "all-purpose") and "specific personal jurisdiction" (sometimes called "case-linked"). Bristol-Myers Squibb, 137 S.Ct. at 1779-80. A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different state. Id. (citing Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011)). Conversely, specific jurisdiction requires an "affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the state's regulation." Id. (citing Goodyear, 564 U.S. at 919, 131 S.Ct. 2846)) (emphasis omitted). Put another way, the suit must "arise out of or relate to the defendant's contacts with the forum [state]." Daimler, 571 U.S. at 127, 134 S.Ct. 746.
Since the Supreme Court's canonical decision in Int'l Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), "specific jurisdiction has become the centerpiece of modern jurisdiction theory, while general jurisdiction [has played] a reduced role." Daimler, 571 U.S. at 128, 134 S.Ct. 746. Under Int'l Shoe's well recognized standard, a State may authorize its courts to exercise personal jurisdiction over a defendant if the defendant has "certain minimum contacts with [the State] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Id. at 126, 134 S.Ct. 746 (quoting Int'l Shoe, 326 U.S. at 317, 66 S.Ct. 154). The contacts needed for specific personal jurisdiction often go by the name "purposeful availment," and must include the defendant taking "some act by which it purposefully avails itself to the privilege of conducting activities within the forum state." Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., — U.S. —, 141 S.Ct. 1017, 1024-25, 209 L.Ed.2d 225 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528; Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). While the Supreme Court has consistently held there must be a connection between the contacts and the suit, it has rejected a strict causation-only approach, instead emphasizing the suit must "arise out of or relate to the defendant's contacts with the forum." Ford, 141 S.Ct. at 1026.
In cases such as this—involving an LLC selling products through an online marketplace—application of the specific personal jurisdiction analysis is particularly enigmatic. The jurisdictional allegations in the Complaint are limited to a single paragraph, and are largely vague and conclusory:
5. This Court has general personal...
