2:15-cv-02111
D. Nev.Sep 14, 2016Background
- SATA (German company) sued WUFU (Chinese manufacturer) and Prona (Canadian distributor) for trademark counterfeiting, trademark infringement, false designation of origin, common-law infringement, and (against WUFU) design-patent infringement based on alleged sales of counterfeit spray guns at Las Vegas trade shows in November 2015.
- SATA served WUFU’s business manager, Della Chen, at WUFU’s trade-show booth and also emailed documents at her request; WUFU denied she had authority to accept service and did not timely respond, leading to clerk’s default.
- SATA served Prona by handing documents at Prona’s SEMA booth to a representative, Jierong Cao, who wore a name badge reading “Jason Jiang.” Prona’s general manager Jason Jiang says he was in Toronto that day; Prona says Cao was a non-employee supplier representative without authority to accept service.
- WUFU moved to quash service and to set aside the clerk’s default; SATA moved for default judgment. Prona moved to quash service. Factual disputes centered on whether the persons served had actual or apparent authority and whether defendants received notice.
- The court found service on Ms. Chen valid under Rule 4(h) (implied authority/apparent authority), denied WUFU’s motion to quash, but granted WUFU’s motion to set aside the clerk’s default (good cause, no culpable conduct, meritorious defenses, no prejudice) and denied SATA’s default-judgment motion as moot.
- The court quashed service as to Prona (insufficient apparent/actual authority of Cao) but granted SATA an additional 90 days to effect proper service under Rule 4(m).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of service on WUFU (Ms. Chen) | Service was proper: Chen accepted process, requested emailed copies; she was WUFU’s business manager and sole booth representative, so implied authority existed | Chen lacked officer/manager status or authority; mere presence at trade show insufficient; she didn’t read English or understand documents | Service on Chen was valid under Rule 4(h): implied authority/apparent authority satisfied; motion to quash denied |
| Setting aside clerk’s default for WUFU | Default should stand; WUFU had notice and intentionally declined to respond; prejudice and fees incurred | WUFU acted in good faith contesting sufficiency of service, promptly retained counsel, has meritorious defenses, and SATA not prejudiced | Default vacated: good cause shown (no culpable conduct, meritorious defenses, no undue prejudice); default-judgment motion denied as moot |
| Validity of service on Prona (Cao) | Cao appeared to be in charge, wore "Jason Jiang" badge, and conduct justified process server’s belief he had authority; actual notice followed | Cao was a supplier representative, not a Prona employee; he told servers he was not Jiang and showed passport; plaintiff should have further investigated | Service on Prona was quashed: Cao lacked actual/apparent authority; once he denied being Jiang and disclaimed employment, implication of authority was unreasonable |
| Relief after defective service on Prona | If service quashed, request amendment of summons to reflect person served or only quash and allow new service | Quash service; defective service not cured by later notice or settlement discussions | Court quashed service as to Prona but exercised discretion to extend time to serve: SATA given 90 days under Rule 4(m) to re-serve |
Key Cases Cited
- Direct Mail Specialists, Inc. v. Eclat Computerized Tech., Inc., 840 F.2d 685 (9th Cir.) (service on representative sufficient when representative is so integrated that it is fair to imply authority)
- R. Griggs Grp. Ltd. v. Filanto Spa, 920 F. Supp. 1100 (D. Nev.) (quashing trade-show service where plaintiff failed to show served person was officer, managing agent, or authorized)
- Crowley v. Bannister, 734 F.3d 967 (9th Cir.) (actual notice does not cure defective Rule 4 service)
- Mesle (United States v. Signed Personal Check No. 730 of Yubran S. Mesle), 615 F.3d 1085 (9th Cir.) (standard and factors for setting aside default)
- TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691 (9th Cir.) (burden on movant to show lack of culpability, meritorious defense, and absence of prejudice to set aside default)
- Efaw v. Williams, 473 F.3d 1038 (9th Cir.) (district court’s discretion to extend time for service under Rule 4(m))
- Henderson v. United States, 517 U.S. 654 (U.S.) (90-day service period under Rule 4(m) is substantial and guides court discretion)