Tapatio Foods, LLC v. Ingrid Veronica Ponce et al

Filing 39

MINUTES (IN CHAMBERS) ORDER GRANTING SECOND MOTION FOR ENTRY OF DEFAULT JUDGMENT AGAINST DEFENDANT INGRID VERONICA PONCE AND PERMANENT INJUNCTION 36 by Judge Michael W. Fitzgerald. Tapatio's request for entry of a permanent injunction is GRANTED. The Motion is GRANTED. A separate judgment will issue. (iv)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
Present: The Honorable MICHAEL W. FITZGERALD, U.S. District Judge
Deputy Clerk:
Rita Sanchez

Court Reporter:
Not Reported

Attorneys Present for Plaintiff:
None Present

Attorneys Present for Defendant:
None Present

Proceedings (In Chambers): ORDER GRANTING SECOND MOTION FOR
ENTRY OF DEFAULT JUDGMENT AGAINST
DEFENDANT INGRID VERONICA PONCE AND
PERMANENT INJUNCTION [36]
Before the Court is Plaintiff Tapatio Foods, LLC.’s (“Tapatio”) Second Motion
for Entry of Default Judgment against Defendant Ingrid Veronica Ponce and
Permanent Injunction, filed on March 15, 2018. (the “Motion”) (Docket No. 27). The
Court has read and considered the Complaint and the papers filed in connection with
the Motion and held a hearing on April 16, 2018.
For the reasons set forth below, the Motion is GRANTED. Tapatio has satisfied
all procedural and substantive requirements for a default judgment against Ponce. In
light of the fact that Defendant Ponce appeared at the hearing on February 26, 2018, on
Tapatio’s original motion for entry of default judgment against her and her codefendants but did not answer the Complaint by March 12, 2018, as the Court ordered,
it is now appropriate to enter default judgment against Ponce. The Court further notes
that Ms. Ponce did appear at the hearing today, and stated she did not object to the
relief requested.
I.

BACKGROUND

The Complaint contains the following allegations, which are accepted as true for
purposes of the Motion. See Fed. R. Civ. P. 8(b)(6); NewGen, LLC v. Safe Cig, LLC,
840 F.3d 606, 617 (9th Cir. 2016) (“[U]pon default the factual allegations of the
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
complaint, except those relating to the amount of damages, will be taken as true.”)
(internal quotation marks and citations omitted).
Tapatio is a California limited liability company with its principal place of
business in Vernon, California. (Complaint ¶ 1). Tapatio is in the business of making,
selling, and distributing hot sauce. (Id. ¶ 14). The United States Patent and Trademark
Office (“USPTO”) has issued to Tapatio at least 3 trademark registrations covering
their name, seasonings, and other products (collectively, the “Tapatio Marks”). (Id. ¶
9-12). Tapatio has expended significant time, effort, and money marketing,
advertising, and promoting the Tapatio Marks throughout the United States. (Id. ¶ 1417). Through these efforts, Tapatio has established significant name recognition and
goodwill among consumers. (Id.).
Below is an image of the design for one of the Tapatio Marks:

(Id. ¶ 12).
Defendants are California residents. (Id. ¶ 2-4). Defendants started
manufacturing, selling, advertising, and distributing their own hot sauce and other
related products bearing confusingly similar marks to the Tapatio Marks. (Id. ¶ 18).
Defendants’ hot sauce bears the label “Trapatio.” (Id. ¶ 21). The font that Defendants
use for their hot sauce labels is also very similar to the font use in the Tapatio Marks.
(Id. ¶ 24). The images featured on Defendants’ hot sauce labels are also confusingly
similar to the images in the Tapatio’s Marks. (Id. ¶ 26).
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
Below is an image of the label that Defendants affix to their products:

(Id. ¶ 18).
As suggested on the label, Defendants’ hot sauce is infused with cannabis and
contains THC. (Id. ¶ 32). Given that THC is a Schedule 1 drug under federal law,
Tapatio claims that Defendants tarnish Tapatio’s reputation by using logos, names, and
lettering that is confusingly similar to that used in the Tapatio Marks. (Id. ¶¶ 32-40).
Defendants’ actions are likely cause consumers to mistakenly believe that there is
some affiliation between Tapatio and Defendants’ hot sauce. (Id.). Defendants have
interfered with Tapatio’s ability to ensure the quality of its products and consumers’
experience, and have harmed Tapatio’s goodwill among consumers. (Id.).
Tapatio alleges that Mendizabal advertises and sells the “Trapatio” sauce on
social media platforms, that Huerta is one of the distributors, and that Ponce applied to
trademark the “Trapatio” mark in July 2017. (Id. ¶¶ 30-37).
Tapatio asserts four claims against the Defendants: (1) willful trademark
infringement, 15 U.S.C. § 1114; (2) unfair competition under the Lanham Act, 15
U.S.C. § 1125; (3) violation of California’s Unfair Competition Law (“UCL”), Cal.
Civ. Code § 17200; and (4) dilution by tarnishment under the Lanham Act, 15 U.S.C
§1125(c)(2)(C)). (Id. ¶¶ 41-61).
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
II.

DISCUSSION
A.

Service and Other Procedural Requirements

Having reviewed the filings in this action, the Court is satisfied that Tapatio has
met all procedural requirements for obtaining a default judgment against Ponce.
Tapatio served the Summons and Complaint upon Ponce, Huerta, and
Mendizabal in accordance with Federal Rule of Civil Procedure 4(e)(1) and section
415.20 of the California Code of Civil Procedure. Specifically, on October 18, 2017,
Tapatio personally served Ponce at her home. (Docket No. 11)
As a matter of discretion, the Court also requires that a plaintiff serve a motion
for default judgment on the relevant defendant(s). The Court does not require service
under Rule 4, but does require that the service is reasonably likely to provide notice to
the defendants. On March 16, 2018, Tapatio mailed copies of the Motion papers to
Ponce at the same address that it served the Summons and Complaint. (Docket No.
37). The Court is satisfied that Ponce received sufficient notice of the Motion.
Federal Rule of Civil Procedure 55(b) permits a court-ordered default judgment
following the entry of default by the clerk under Rule 55(a). Upon review of the
record and the documents filed in connection with the Motion, all five of the
procedural requirements imposed by Federal Rule of Civil Procedure 55 and Local
Rule 55-1 are met: (1) the Clerk entered default against the Ponce on March 14, 2018;
(2) Ponce failed to respond to the Complaint; (3) Tapatio has served Ponce with notice
of the Motion and supporting papers in a manner deemed appropriate by the Court; (4)
Ponce is not an infant or incompetent person; and (5) Ponce is not in the military, so
the Service Members Civil Relief Act does not apply. (See Docket Nos. 34, 37;
Declaration of Drew Wilson in Support of Tapatio Foods, LLC’s Motion for Entry of
Default Judgment Against Defendant Ingrid Veronica Ponce and Permanent Injunction
(Docket No. 36-2), ¶ 9).

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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
Accordingly, Plaintiff has satisfied the procedural requirements for obtaining
entry of a default judgment.
B.

The Eitel Factors

The choice as to whether a default judgment should be entered is at the sole
discretion of the trial court. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).
The Ninth Circuit has determined that a court should consider seven discretionary
factors before rendering a decision on motion for default judgment. Eitel v. McCool,
782 F.2d 1470, 1471–72 (9th Cir. 1986).
The seven factors are: (1) the possibility of prejudice to the plaintiff, (2) the
merits of the plaintiff’s substantive claim, (3) the sufficiency of the Complaint, (4) the
sum of money at stake in the action, (5) the possibility of a dispute concerning material
facts, (6) whether the default was due to excusable neglect, and (7) the strong policy
underlying the Federal Rules of Civil Procedure favoring a decision on the merits. Id.
If the Court determines that default judgment is appropriate, it may consider
extrinsic evidence or conduct an evidentiary hearing in determining the amount of
damages. Fed. R. Civ. P. 55(b)(2).
The Court determines that, with the exception of the strong policy favoring a
decision on the merits, which is not dispositive, the Eitel factors weigh in favor of
granting the Motion. By way of example, the Court specifically ordered Ponce to
answer the Complaint by a date certain. Her failure to do so demonstrates a willful
refusal to contest this action, completely satisfying factor (6) and greatly lessens any
concerns about the lack of a decision on the merits.
In light of the fact that Tapatio has stated a viable trademark infringement claim
under 15 U.S.C. § 1114, Tapatio is entitled to the injunctive relief it seeks, as discussed
below. The Court thus has no occasion to reach the merits of Tapatio’s trademark
infringement claim under 15 U.S.C. § 1125 or its UCL claim.
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CIVIL MINUTES—GENERAL
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
C.

Remedies

Tapatio requests entry of a permanent injunction. “Under the Lanham Act, ‘the
district court has the power to grant injunctions according to principles of equity and
upon such terms as the court may deem reasonable, to prevent the violation of any
right of the trademark owner.’” Wecosign, Inc. v. IFG Holdings, Inc., 845 F. Supp. 2d
1072, 1083 (C.D. Cal. 2012) (quoting Reno Air Racing Ass’n v. McCord, 452 F.3d
1126, 1137 (9th Cir. 2006)). Indeed, “[i]njunctive relief is the remedy of choice for
trademark and unfair competition cases, since there is no adequate remedy at law for
the injury caused by a defendant’s continuing infringement.” Century 21 Real Estate
Corp. v. Sandlin, 846 F.2d 1175, 1180 (9th Cir. 1988).
Tapatio requests entry of a permanent injunction requiring Ponce to:
(1) Permanently cease using and refrain from adopting for any product or
service, or in any marketing material:
(a) any trademarks containing the words Tapatio, Trapatio, or any
marks confusingly similar to Tapatio;
(b) the Trapatio Salsa Picante Mark and Design Mark;
(c) the Trapatio Mark; or
(d) any trademarks that bear an image of a Charro (meaning a
traditional horseman from Mexico);
(2) Recall and destroy any of her marketing material, letterhead, business
cards, signs, banners, clothing, or other media whether physical or digital
bearing the trademarks identified above;
(3) Change any username, under her control, for all social media and
email accounts to one that does not contain the phrase “Trapatio” and/or
“Tapatio” or ay marks confusingly similar to Tapatio;
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UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES—GENERAL
Case No. CV 17-7530-MWF (MRWx)
Date: April 16, 2018
Title:
Tapatio Foods, LLC. v. Ingrid Veronica Ponce, et al.
(4) Refrain from telling any customer, vendor, distributor or other person
or business that she is in any way related to or affiliated with Tapatio.
Tapatio has demonstrated that, absent entry of a permanent injunction, it is
possible that Ponce or her affiliates will continue to attempt to sell infringing products.
“Failure to grant the injunction would needlessly expose [Tapatio] to the risk of
continuing irreparable harm.” Philip Morris USA, Inc. v. Castworld Prods., Inc., 219
F.R.D. 494, 502 (C.D. Cal. 2003). The Court finds that the above terms are
reasonable.
Accordingly, Tapatio’s request for entry of a permanent injunction is
GRANTED.
III.

CONCLUSION
For the foregoing reasons, the Motion is GRANTED. A separate judgment will

issue.
IT IS SO ORDERED.

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CIVIL MINUTES—GENERAL
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