SAMSUNG SDS AMERICA, INC. v. PHYSIQ INC., 2:23-cv-21593

Samsung SDS America, Inc. (SDSA) and PhysIQ, Inc. entered into a Device Distributor Agreement in 2017 under which PhysIQ purchased 5,000 smartphones.
SDSA alleges PhysIQ failed to fully pay a 2022 invoice totaling $892,473.75; as of January 2024, an outstanding balance of $718,918.04 (with interest) purportedly remains.
On October 27, 2023, SDSA sued PhysIQ for breach of contract and related claims after alleged nonpayment.
SDSA attempted service on PhysIQ by delivering process to Marilyn Conkright at the CEO’s residence in Illinois, claiming compliance with the rules for serving corporations.
The Clerk entered default against PhysIQ when it failed to respond, and SDSA moved for default judgment; PhysIQ made no appearance or response.
The central procedural dispute relates to the adequacy of service of process on PhysIQ under the Federal Rules, New Jersey, and Illinois law.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Was service of process on PhysIQ sufficient?	Service at CEO's residence met the rules for serving a corporation.	No argument presented.	Service was not proper under federal, NJ, or IL rules; default vacated.
Is default judgment appropriate absent proper service?	Yes, based on failure to respond post-service.	No argument presented.	Court will not grant default judgment without valid service.
Did SDSA comply with state law options for service?	Service valid under Illinois/New Jersey rules.	No argument presented.	Plaintiff did not comply with service rules of either state.
Should the court vacate the entry of default?	No; service was valid and default should stand.	No argument presented.	Clerk’s entry of default vacated due to improper service.

Hritz v. Woma Corp., 732 F.2d 1178 (3d Cir. 1984) (articulates court's preference for resolving cases on the merits and the discretionary nature of default judgments)
U.S. v. One Toshiba Color Television, 213 F.3d 147 (3d Cir. 2000) (default judgment is void if service of process is improper)