Global Brother SRI v. Altun

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WO
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
Global Brother SRI,
Plaintiff,
v.
Sinun Altun,
Defendant.
No. CV-25-00426-TUC-SHR
ORDER DENYING MOTION FOR
DEFAULT JUDGMENT
Pending before the Court is Plaintiff’s Motion for Default Judgment (Doc. 12) filed
pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. For the following
reasons, the Court will deny the Motion.
I. PROCEDURAL BACKGROUND
Plaintiff alleges it is a worldwide publisher of books, including The Lost Book of
Herbal Remedies and The Lost Book of Herbal Remedies II. (Doc. 1 at 2.) Plaintiff claims
Defendant, without authorization, advertised and sold these books online, including
through Amazon and other marketplaces, labeling their condition as “new” and selling
them at a “significantly inflated” price, thereby misleading consumers to believe “the
listing reflects a premium authorized version or a limited official release.” (Id.) Plaintiff
alleges Defendant’s representations constitute false advertising in violation of the Lanham
Act because they are “likely to mislead a significant portion of consumers” and “resale of
these works without Plaintiff’s quality control, branding oversight, or packaging integrity
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renders the products materially different.” (Doc. 1 at 9.)
In July 2025, Plaintiff filed a Complaint against Defendant asserting the following
claims: false advertising and unfair competition under the Lanham Act; unjust enrichment;
tortious interference with business relationships; and violation of the Arizona Consumer
Fraud Act. (Doc. 1 at 9–11.) Defendant did not respond or otherwise appear. In October,
Plaintiff filed an application for entry of default, attaching proof of service showing
Plaintiff had served Defendant by leaving a copy of the summons, Complaint, and exhibits
with Defendant’s spouse on September 13. (Docs. 10, 10-1.) The Clerk of Court entered
default against Defendant pursuant to Rule 55(a) of the Federal Rules of Civil Procedure.
(Doc. 11.) Plaintiff now seeks default judgment in its favor pursuant to Rule 55(b). (Doc.
12.)
II. LEGAL STANDARD
“A defendant’s default does not automatically entitle the plaintiff to a court-ordered
judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002)
(citing Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir. 1986)). Instead, the decision to
grant or deny an application for default judgment under Rule 55(b) lies within the district
court’s sound discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). The
district court’s “starting point is the general rule that default judgments are ordinarily
disfavored.” Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986).
In considering whether to enter default judgment against parties that have “failed to
plead or otherwise defend, a district court has an affirmative duty to look into its
jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 712
(9th Cir. 1999). A default judgment entered by a district court devoid of personal or subject
matter jurisdiction is void. Id. A court has personal jurisdiction over a party where that
party has sufficient “minimum contacts” with the territory “such that the maintenance of
the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457,
463 (1940)). A court has federal-question subject matter jurisdiction where, “on the face
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of the plaintiff’s properly pleaded complaint,” the civil action in question “aris[es] under
the Constitution, laws, or treaties of the United States.” Caterpillar Inc. v. Williams, 482
U.S. 386, 392, 392 n.6 (1987) (quoting 28 U.S.C. § 1331).
If personal and subject matter jurisdiction are established, the Court must then
consider whether default judgment is proper under the Eitel factors. These factors are: (1)
the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s substantive
claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action;
(5) the possibility of a dispute concerning the material facts; (6) whether the defendant’s
default was the product of excusable neglect; and 7) the strong public policy favoring
decisions on the merits. See Eitel, 782 F.2d at 1471–72. In applying the Eitel factors for
default judgment purposes, “well-pled allegations in the complaint regarding liability are
deemed true.” Ariz. Bd. of Regents v. Doe, 555 F. Supp. 3d 805, 815 (D. Ariz. 2021), aff’d
sub nom. Ariz. Bd. of Regents for and on behalf of Ariz. State Univ. v. Doe, No. 21-16525,
2022 WL 1514649 (9th Cir. May 13, 2022) (quoting Fair Hous. of Marin v. Combs, 285
F.3d 899, 906 (9th Cir. 2002)). “However, necessary facts not contained in the pleadings,
and claims which are legally insufficient, are not established by default.” Cripps v. Life
Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992). Allegations relating to damages
are not taken as true upon default, and the plaintiff must prove damages sought. TeleVideo
Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987); Geddes v. United Fin. Grp.,
559 F.2d 557, 560 (9th Cir. 1977).
III. DISCUSSION
As a threshold matter, the Court has original and federal-question subject matter
jurisdiction over Plaintiff’s Lanham Act claim pursuant to 15 U.S.C. § 1121, 28 U.S.C.
§ 1331, and 15 U.S.C. § 1051 et seq. Defendant is subject to this Court’s jurisdiction
because he appears to be a resident of Arizona and service was effected upon him pursuant
to Rule 4 of the Federal Rules of Civil Procedure at his residence in Tucson, Arizona. (Doc.
1 at 4; Doc. 10-1.) See Fed. R. Civ. P. 4(k)(1)(A) (stating service of process is effective to
establish personal jurisdiction over a defendant “who is subject to the jurisdiction of a court
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of general jurisdiction in the state where the district court is located”). Further, because
Defendant appears to be an Arizona resident, and because the acts giving rise to Plaintiff’s
claims occurred in Arizona, venue is satisfied. See 28 U.S.C. § 1391(b)(1), (2).
The Court now turns to the Eitel factors as they apply to Plaintiff’s claims under the
Lanham Act. As discussed, the second and third Eitel factors focus on the merits of
Plaintiff’s substantive claims and the sufficiency of the Complaint. See Eitel, 782 F.2d at
1471. These factors, often analyzed together, require courts to determine whether a
plaintiff has “state[d] a claim on which [it] may recover.” PepsiCo, 238 F. Supp. 2d at
1175. Courts often consider these factors “the most important.” Doe, 555 F. Supp. 3d at
816 (quoting Vietnam Reform Party v. Viet Tan – Vietnam Reform Party, 416 F. Supp. 3d
948, 962 (N.D. Cal. 2019)). If a district court has “serious reservations” about the merits
of a plaintiff’s claims based on the pleadings, these factors weigh in favor of denying
default judgment. See Eitel, 782 F.2d at 1472. “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). “Where the
allegations in a complaint are not ‘well-pleaded,’ liability is not established by virtue of
the defendant’s default and default judgment should not be entered.” See Adobe Sys., Inc.
v. Tilley, No. C09-1085 PJH, 2010 WL 309249, at *3 (N.D. Cal. Jan. 19, 2010).
To state a Lanham Act false-advertising claim under 15 U.S.C. § 1125(a), a plaintiff
must show: “(1) a false statement of fact by the defendant in a commercial advertisement
about its own or another’s product; (2) the statement actually deceived or has the tendency
to deceive a substantial segment of its audience; (3) the deception is material, in that it is
likely to influence the purchasing decision; (4) the defendant caused its false statement to
enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result
of the false statement, either by direct diversion of sales from itself to defendant or by a
lessening of the goodwill associated with its products.” Southland Sod Farms v. Stover
Seed Co., 108 F.3d 1134, 1139 (9th Cir. 1997). “To demonstrate falsity within the meaning
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of the Lanham Act, a plaintiff may show that the statement was literally false, either on its
face or by necessary implication . . . .” Id. The standard for proving literal falsity is
rigorous. Buetow v. A.L.S. Enters., Inc., 650 F.3d 1178, 1185 (8th Cir. 2011). To be
“literally false” the statement must be unambiguously false. In re Century 21–RE/MAX
Real Estate Advert. Claims Litig., 882 F. Supp. 915, 923 (C.D. Cal. 1994); accord Time
Warner Cable, Inc. v. DIRECTV, Inc., 497 F.3d 144, 158 (2d Cir. 2007) (“[O]nly an
unambiguous message can be literally false. Therefore, if the language or graphic is
susceptible to more than one reasonable interpretation, the advertisement cannot be literally
false.” (citation and internal quotation marks omitted)). Alternatively, a plaintiff may show
the statement was literally true or ambiguous but likely to mislead or confuse consumers.
Southland, 108 F.3d at 1139.
Even taking the allegations in Plaintiff’s Complaint as true, see Doe, 555 F. Supp.
3d at 815, Plaintiff’s claim is unlikely to succeed on its merits. Although Plaintiff claims
“the resale of goods as ‘new’ where the seller lacks affiliation or control over the product’s
quality constitutes a material misrepresentation under 15 U.S.C. § 1125(a), particularly
where the sale impairs the goodwill of the original manufacturer or publisher,” Plaintiff
fails to show Defendant’s selection of “new” from a dropdown menu provided by Amazon
to describe the books’ condition is literally false. Indeed, Plaintiff makes no allegations
the books were used, counterfeit, or altered in any way that might render Defendant’s
chosen label unambiguously and literally false. See Steeplechase Arts & Prods., L.L.C. v.
Wisdom Paths, Inc., 652 F. Supp. 3d 481, 490–92 (D.N.J. 2023) (finding Amazon listing
of books as “new” not “literally” and “unambiguously” false even though books had been
rebound with spiral bindings by third-party seller). While Plaintiff could also show the
characterization is likely to mislead or confuse consumers, see Southland, 108 F.3d at 1139,
Plaintiff fails to allege Defendant is selling anything other than a genuine copy of Plaintiff’s
book in unused, unaltered condition. Instead, Plaintiff asserts Defendant’s resale of the
books “without Plaintiff’s quality control, branding oversight, or packaging integrity
renders the products materially different” but points to no actual differences or dissatisfied
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customers. (Doc. 1 at 9.) Plaintiff’s lack of authorization or involvement in Defendant’s
reselling of the books, without more, does not constitute a violation of the Lanham Act.
See NEC Elecs. v. CAL Cir. Abco, 810 F.2d 1506, 1509 (9th Cir. 1987) (holding sale of
genuine trademarked product by seller unauthorized to sell not a violation of Lanham Act).
Because the second and third Eitel factors have not been met with respect to
Plaintiff’s claim under the Lanham Act, the Court will deny Plaintiff’s Motion for Default
Judgment with respect to this claim.1 See GS Holistic, LLC v. Ravens Smoke Shop, Inc.,
No. CV 22-7199-MWF (Ex), 2023 WL 5504964, at *3 (C.D. Cal. July 10, 2023) (“[T]he
Court may render judgment based on an assessment of the second and third Eitel factors
alone.”). As such, the Court declines to exercise supplemental jurisdiction over Plaintiff’s
remaining state-law claims pursuant to 28 U.S.C. § 1367(c). See Carnegie-Mellon Univ.
v. Cohill, 484 U.S. 343, 350 n.7 (1988) (When “all federal-law claims are eliminated before
trial . . . judicial economy, convenience, fairness, and comity . . . point toward declining to
exercise jurisdiction over the remaining state-law claims.”); Ewing v. Auto Transp. Grp.,
Inc., 3:20-cv-01964-WQH-AGS, 2021 WL 12181319, at *6 (S.D. Cal. May 28, 2021)
(finding plaintiff was not entitled to default judgment on federal claims and declining to
exercise supplemental jurisdiction over state-law claims). The Court will dismiss
Plaintiff’s Complaint with leave to amend because Plaintiff may be able to cure its defects
with respect to the Lanham Act claim. Any amended pleading must cure the defects
identified in this Order to ensure Plaintiff carries its burden on any subsequent motion for
default judgment.
. . . .
1 The Court will nevertheless briefly address the remaining Eitel factors, though its
conclusion default judgment is unwarranted remains unchanged. The first factor weighs
in favor of granting default judgment because denying the motion would unduly prejudice
Plaintiff by requiring it to litigate this action even though Defendant has not appeared.
United States v. $27,800 in U.S. Currency, No. 17-CV-00533-AJB-KSC, 2017 WL
6345394, *4 (S.D. Cal. 2017). The fifth and sixth factors also weigh in favor of granting
default judgment because there is no dispute over material facts and no indication default
is due to excusable neglect. The seventh factor weighs against default judgment because
cases generally “should be decided upon their merits whenever reasonably
possible.” Eitel, 782 F.2d at 1472. Finally, with respect to the fourth Eitel factor, damages
in the current matter remain uncertain, and the Court finds this factor is neutral.
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IV. CONCLUSION
IT IS ORDERED Plaintiff's Motion for Default Judgment (Doc. 12) is DENIED
WITHOUT PREJUDICE.
IT IS FURTHER ORDERED Plaintiff's Complaint (Doc. 1) is DISMISSED
WITH LEAVE TO AMEND.
IT IS FURTHER ORDERED Plaintiff may file a first amended complaint within
thirty (30) days of the date this Order is filed. If Plaintiff fails to file a first amended
complaint within 30 days, the Clerk of Court must, without further order of the Court, enter
a judgment of dismissal of this action without prejudice and deny any pending unrelated
motions as moot.
Dated this 20th day of May, 2026.
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