General Steel Domestic Sales, LLC v. Chumley, 1:13-cv-00769

General Steel sued multiple defendants (Chumley, Armstrong Steel, PRQ Inet KB, and Gottfrid Swartholm) for Lanham Act false advertising and sought injunctive relief and damages against some defendants.
PRQ and Swartholm were personally served on April 4, 2013, failed to respond, and the Clerk entered their default on July 11, 2013.
The disputed websites (e.g., steelbuildingscomplaints.com) contained allegedly false and misleading content; PRQ/Swartholm were registrants/hosts of these domains and are alleged agents of the other defendants.
General Steel moved for default judgment against PRQ and Swartholm; the Magistrate Judge recommended denying the motion until liability of nondefaulting codefendants is resolved.
General Steel objected, arguing default judgment is appropriate because it does not seek monetary damages from the defaulting defendants and Frow’s rule against entering default where joint liability exists should not apply.
The District Court reviewed the objection de novo and adopted the Magistrate Judge’s recommendation, denying the default-judgment motion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether default judgment may be entered against some codefendants before resolving liability of remaining defendants	Default judgment is proper because plaintiff does not seek monetary damages from defaulting defendants, so the Frow rule (concerned with inconsistent damage awards) does not bar entry	Entering default against some jointly accused defendants risks inconsistent adjudications of liability and should await resolution of claims against nondefaulting defendants	Denied: default judgment against PRQ/Swartholm is improper until claims against remaining defendants are adjudicated to avoid logically inconsistent judgments

Frow v. de la Vega, 82 U.S. 552 (1872) (entry of judgment against some joint defendants may be improper because it can produce inconsistent judgments)
Hunt v. Inter-Globe Energy, Inc., 770 F.2d 145 (10th Cir. 1985) (consistent liability and damage determinations among joint tortfeasors support denying partial default judgment)
Bixler v. Foster, 596 F.3d 751 (10th Cir. 2010) (default does not automatically entitle plaintiff to default judgment; court must assess sufficiency of unchallenged facts)
Cottrell, Ltd. v. Biotrol Int'l, Inc., 191 F.3d 1248 (10th Cir. 1999) (outlines Lanham Act false-advertising elements applied by the court)