Ray Liotta et al v. Nerium International LLC et al
Filing
41
MINUTES OF DEFENDANT KELLY HEFFERNAN'S Motion to Set Aside Default #23 by Judge Christina A. Snyder: The Court hereby GRANTS Heffernan's motion to set aside the default. Heffernan shall file a responsive pleading to plaintiffs' complaint on or before 8/25/2014. Court Reporter: Laura Elias. (jp)
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
2:14-cv-01632-CAS(AJWx)
Title
RAY LIOTTA ET AL. V. NERIUM INTERNATIONAL LLC ET AL.
Present: The Honorable
Date
‘O’
August 11, 2014
CHRISTINA A. SNYDER
Catherine Jeang
Deputy Clerk
Laura Elias
Court Reporter / Recorder
N/A
Tape No.
Attorneys Present for Plaintiff:
Attorneys Present for Defendants
James Slominski
Edward Rullenberg
Jeffrey Daar
Proceedings:
I.
DEFENDANT KELLY HEFFERNAN’S MOTION TO SET
ASIDE DEFAULT (Dkt. 23, filed July 11, 2014)
INTRODUCTION & BACKGROUND
On March 5, 2014, plaintiffs Ray Liotta and Punky, Inc. (collectively, “Liotta”)
filed this action against defendant Nerium International, LLC (“Nerium”) and eight
individual defendants, including Kelly Heffernan. Plaintiffs assert claims for (1)
violation of the Lanham Act, 15 U.S.C. § 1125(a), (2) violation of the California common
law right of publicity, and (3) violation of the California Statutory Right of Publicity, Cal.
Civil Code § 3344. Dkt. 1. Plaintiffs allege that Nerium is a multilevel marketing
company selling a skin care product called “Nerium AD” with the assistance of
individuals referred to as “Nerium Brand Partners.” Compl. ¶¶ 30-34. Plaintiffs allege
that defendant Nerium misappropriated photographs of Liotta, distributing them to
Nerium Brand Partners, in order to promote sales of Nerium AD. Compl. ¶¶ 46-47
Plaintiffs further allege that defendant Heffernan, a Nerium Brand Partner, posted
Liotta’s photographs on her Facebook page to promote sales of Nerium AD. Compl. ¶
51.
In March 2014, plaintiffs’ counsel contacted Heffernan and requested that she execute
a Waiver of Service. Heffernan Decl. ¶ 5. Heffernan agreed, and on April 8, 2014, she
executed the Waiver. Heffernan Decl. ¶ 11. At that time, Heffernan was not represented by
legal counsel and based on her conversation with plaintiffs’ counsel, erroneously believed
that signing the Waiver excused her from responding to the complaint. Heffernan Decl. ¶
12. Without notifying Heffernan of their intention to request an entry of default against her,
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
‘O’
Case No.
2:14-cv-01632-CAS(AJWx)
August 11, 2014
Title
RAY LIOTTA ET AL. V. NERIUM INTERNATIONAL LLC ET AL.
Heffernan Decl. ¶ 14, plaintiffs’ counsel requested entry of default on June 4, 2014. Dkt.
13. On June 9, 2014, the Clerk of the Court entered default against defendant Heffernan.
Dkt. 14. On July 11, 2014, Heffernan moved to set aside this default and also presented a
Proposed Answer. Dkt. 23. On July 21, 2014, Liotta filed an opposition to this motion and
requested that the Court reject the Proposed Answer or, in the alternative, strike Heffernan’s
affirmative defenses. Dkt. 25. In addition, should the Court vacate the default, Liotta
requests attorneys’ fees for costs incurred to date. Id. On July 28, 2014, Heffernan replied.
Dkt. 26. The Court held a hearing on August 11, 2014. After considering the parties’
arguments, the Court finds and concludes as follows.
II.
ANALYSIS
A.
Motion to Set Aside the Default
The Court begins with Heffernan’s motion to set aside the default. Pursuant to
Fed. R. Civ. P. 55(c), a court may set aside an entry of default “for good cause.” The
Court considers three factors when evaluating whether “good cause” exists: (1) whether
defendant’s culpable conduct led to the default; (2) whether defendant has a meritorious
defense; (3) whether reopening the default judgment would prejudice plaintiff. TCI
Group Life Insurance Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir. 2000) (noting that
courts use the same factors to assess “good cause” under Fed. R. Civ. P. 55(c) as for
reviewing default judgments under Fed. R. Civ. P. 60(b)).
As a general rule, cases should be decided on the merits as opposed to by default,
and therefore “any doubts as to the propriety of a default are usually resolved against the
party seeking a default judgment.” Judge William W. Schwarzer, et al., California
Practice Guide: Federal Civil Procedure Before Trial § 6:11 (The Rutter Group 2009)
(citing Pena v. Seguros La Comercial, S.A. 770 F.2d 811, 814 (9th Cir. 1985)). As such,
the Court has broad discretion to overturn an entry of default. Mendoza v. Wight
Vineyard Management, 783 F.2d 941, 945-46 (9th Cir. 1986). This discretion is “more
liberally applied” where a defendant seeks to set aside an entry of default pursuant to
Rule 55(c) rather than a default judgment pursuant to Rule 60(b). United States v. Signed
Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091, n.1 (9th Cir. 2010).
Moreover, the rules governing motions to set aside defaults “are solicitous towards
movants, especially those whose actions leading to the default were taken without the
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
‘O’
Case No.
2:14-cv-01632-CAS(AJWx)
August 11, 2014
Title
RAY LIOTTA ET AL. V. NERIUM INTERNATIONAL LLC ET AL.
benefit of legal representation.” Id. at 1089. Nonetheless, the defaulting party carries the
burden to demonstrate that the default should be set aside. TCI Group Life Ins. Plan, 244
F.3d at 696.
Here, the Court finds that all three factors support vacating the default. First, it
appears that the default was not the result of Heffernan’s culpable conduct. Although
Heffernan did not respond to plaintiffs’ complaint, she was not represented by counsel
when she agreed to waive service and did not understand her responsibility to respond to
the complaint. Merely choosing not to respond to a complaint does not render a
defendant’s conduct culpable. TCI Group Life Ins. Plan, 244 F.3d at 697. Rather, the
defendant’s failure to respond must be “willful, deliberate, or evidence of bad faith.” Id.
Where a defendant presents a “good faith explanation negating any intention to take
advantage of the opposing party, interfere with judicial decisionmaking, or otherwise
manipulate the legal process,” failure to respond does not, on its own, amount to culpable
conduct. Id. Plaintiffs argue that, because the language of the Waiver provided
Heffernan with actual and constructive notice of her duty to respond, her failure to do so
was unreasonable and thus culpable. The Court finds this argument unpersuasive.
Heffernan did not have legal representation at the time she signed the Waiver, and her
failure to respond appears to be the result of her lack of familiarity with the legal system.
Because Heffernan’s failure to respond did not evidence any intent to take advantage of
plaintiffs or to otherwise manipulate the legal process, the Court finds that Heffernan did
not act culpably.
Second, Heffernan may have meritorious defenses in this action. Heffernan asserts
that she posted Liotta’s photographs because she thought they were “cool” and without
knowledge that Liotta had not authorized such use. Heffernan Decl. ¶ 8. “A defendant
seeking to vacate a default judgment must present specific facts that would constitute a
defense.” TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 700 (9th Cir. 2001). At
this stage, the Court does not determine the ultimate merits of the defense; rather, the
Court merely determines whether a potential defense exists. Yagman v. Galipo, 2013
WL 1287409 at *12 (C.D. Cal. Mar. 25, 2013). Plaintiffs allege that Heffernan violated,
inter alia, California’s statutory right of publicity, Cal. Civil Code § 3344, by posting
photographs of Liotta on her Facebook page in connection with Nerium products.
However, section 3344 only applies where a person “knowingly uses” the likeness of
another without their consent. Cal. Civil Code § 3344(a). Because Heffernan asserts that
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Date
‘O’
Case No.
2:14-cv-01632-CAS(AJWx)
August 11, 2014
Title
RAY LIOTTA ET AL. V. NERIUM INTERNATIONAL LLC ET AL.
she acted without the requisite knowledge, the Court finds that Heffernan may have a
meritorious defense in this action.1
Lastly, the Court cannot discern any reason why vacating the default would
prejudice plaintiff. “To be prejudicial, the setting aside of a judgment must result in
greater harm than simply delaying resolution of the case. Rather, ‘the standard is whether
[plaintiff’s] ability to pursue his claim will be hindered.’” TCI Group Life Ins. Plan, 244
F.3d at 701 (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)) (alteration in
original). In particular, plaintiff is not prejudiced simply because he is deprived of a
“quick victory” and must litigate his claims on the merits. Bateman v. United States
Postal Service, 231 F.3d 1220, 1225 (9th Cir. 2000). Because nothing suggests that
plaintiffs’ pursuit of this action will be hindered should the Court set aside the default,
the Court finds that the default against Heffernan should be set aside.
B.
Ancillary Relief
In their opposition, plaintiffs requested that the Court reject Heffernan’s Proposed
Answer as frivolous, or, in the alternative, strike her affirmative defenses as lacking
sufficient factual support. The Court finds this request is more properly presented in a
Motion to Strike the Answer and DECLINES to strike the Proposed Answer in its
entirety or in part.
Plaintiffs have further requested that, as a condition for setting aside the default,
the Court order Heffernan to pay plaintiffs’ attorneys’ fees incurred to obtain the default
and to oppose the instant motion. Such conditions are intended to serve as a sanction to
rectify “any prejudice suffered by the non-defaulting party as a result of the default and
the subsequent reopening of the litigation.” Nilsson, Robbins, Dalgarn, Berliner, Carson
& Wurst v. Louisiana Hydrolec, 854 F.2d 1538, 1546 (9th Cir. 1988) (approving
imposition of monetary conditions where defendants, including a lawyer, had previously
declined to respond to an arbitration notice). As discussed above, Heffernan did not act
culpably and her failure to respond has not prejudiced plaintiffs. Consequently, the Court
DECLINES to impose monetary conditions on Heffernan.
1
Heffernan’s Proposed Answer sets forth a total of twenty-five separate affirmative
defenses.
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL
Case No.
2:14-cv-01632-CAS(AJWx)
Title
RAY LIOTTA ET AL. V. NERIUM INTERNATIONAL LLC ET AL.
III.
Date
‘O’
August 11, 2014
CONCLUSION
In accordance with the foregoing, the Court hereby GRANTS Heffernan’s motion
to set aside the default. Heffernan shall file a responsive pleading to plaintiffs’ complaint
on or before August 25, 2014.
IT IS SO ORDERED.
00
Initials of Preparer
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:
01
CMJ
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