Safari Programs, Inc. v. Collecta International Limited
686 F. App'x 737
| 11th Cir. | 2017Background
- Safari sued CollectA (a Hong Kong toy manufacturer) under the Lanham Act and Florida common law for alleged false advertising and sought disgorgement, an accounting, and injunctive relief.
- Safari filed two substantially identical suits in the Southern District of Florida; CollectA was served in the first suit (June 24, 2015) but believed the second suit superseded the first and did not timely respond.
- Clerk’s default was entered against CollectA (Aug. 25, 2015); Safari moved for final default judgment and submitted an affidavit from its CEO to establish damages by extrapolation.
- CollectA submitted a pro se letter after default was entered; the district court struck that letter (corporations may not appear pro se), granted final default judgment without an evidentiary hearing, awarded about $5.9 million, and entered a permanent injunction.
- CollectA timely appealed and also filed a Rule 60(b) motion seeking relief for mistake/excusable neglect and other grounds; the district court denied Rule 60(b) relief, finding no good reason for delay.
- The Eleventh Circuit vacated both the denial of the Rule 60(b) motion and the final default judgment, holding the district court abused its discretion by (1) failing to apply the proper equitable (Pioneer) analysis for excusable neglect and (2) entering final judgment on damages and injunctive relief without an evidentiary hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused discretion denying Rule 60(b)(1) relief for excusable neglect | Safari: CollectA’s late response was inexcusable attorney negligence and insufficient to reopen judgment | CollectA: Confusion from Safari filing a duplicative second suit caused a reasonable factual mistake; it has meritorious defenses and acted in good faith | Court vacated denial; remanded for application of the full Pioneer totality-of-circumstances test and proper Rule 60(b)/Rule 55(c) analysis |
| Whether relief was available under Rule 60(b)(6) | Safari: CollectA’s reasons fall within (b)(1), so (b)(6) is unavailable | CollectA: Alternatively sought relief under (b)(6) as exceptional circumstances | Court: (b)(6) unavailable because grounds fall within (b)(1); (b)(1) is the proper vehicle |
| Whether district court could enter damages without a hearing after default | Safari: Damages can be established by affidavit and are calculable | CollectA: Entitled to opportunity to contest damages and injunction before final judgment | Court vacated judgment; held that Lanham Act damages are not liquidated and an evidentiary hearing (or other proceedings) was required to determine damages and injunctive relief |
| Whether striking CollectA's pro se letter and entering judgment without notice was proper | Safari: Corporations cannot appear pro se; court properly struck the letter and proceeded | CollectA: Was confused and sought to notify court; striking the letter without warning denied meaningful opportunity to obtain counsel | Court emphasized district court should have given notice/opportunity regarding counsel and considered that CollectA did attempt to respond prior to entry of final judgment |
Key Cases Cited
- Palazzo v. Gulf Oil Corp., 764 F.2d 1381 (11th Cir. 1985) (corporations cannot appear pro se and must be represented by counsel)
- Seven Elves, Inc. v. Eskenazi, 635 F.2d 396 (5th Cir. 1981) (defaults disfavored; Rule 60(b) should be liberally construed to do substantial justice)
- Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P'ship, 507 U.S. 380 (U.S. 1993) (totality-of-circumstances test for excusable neglect)
- In re Worldwide Web Sys., Inc., 328 F.3d 1291 (11th Cir. 2003) (three-part test for vacating default and discussion of excusable neglect standards)
- S.E.C. v. Smyth, 420 F.3d 1225 (11th Cir. 2005) (Rule 55(b)(2) requires evidentiary hearing on damages except in limited circumstances)
- Solaroll Shade & Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130 (11th Cir. 1986) (Rule 60(b)(1) and (b)(6) are mutually exclusive)
- Conn. State Dental Ass’n v. Anthem Health Plans, Inc., 591 F.3d 1337 (11th Cir. 2009) (district court must consider Pioneer factors when evaluating excusable neglect)
- Sloss Indus. Corp. v. Eurisol, 488 F.3d 922 (11th Cir. 2007) (length of delay relevant; longer delays require more compelling excuse)
- United Artists Corp. v. Freeman, 605 F.2d 854 (5th Cir. 1979) (default judgment may not be entered without a hearing unless amount is liquidated)
- Advanced Estimating Sys., Inc. v. Riney, 77 F.3d 1322 (11th Cir. 1996) (remand required to apply correct standard when district court misapplies Rule 60(b))