Miller v. Facebook, Inc. et al

Filing 152

REPLY (re 141 MOTION to Set Aside Default ) filed byYao Wei Yeo. (Holland, Andrew) (Filed on 5/26/2011)

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Stephen C. Gerrish/Bar No. 061253
[e-mail]
Andrew P. Holland/Bar No. 224737
[e-mail]
THOITS, LOVE, HERSHBERGER & McLEAN
A Professional Law Corporation
285 Hamilton Avenue, Suite 300
Palo Alto, California 94301
Telephone: [phone]
Facsimile:
[phone]
Attorneys for Defendant
Yao Wei Yeo

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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

A PROFESSIONAL LAW CORPORATION

11
285 Hamilton Avenue, Suite 300
PALO ALTO, CALIFORNIA 94301
[phone]

THOITS, LOVE, HERSHBERGER & McLEAN

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SAN FRANCISCO DIVISION

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DANIEL M. MILLER,

No. 3:10-CV-00264 (WHA)
REPLY OF DEFENDANT YAO WEI
YEO IN SUPPORT OF MOTION TO
SET ASIDE DEFAULT

Plaintiff,

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v.

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FACEBOOK, INC. and YAO WEI
YEO,

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Date: June 9, 2011
Time: 8:00 a.m.
Courtroom: 9, 19th Floor
Judge: Hon. William Alsup

Defendants.

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I.

INTRODUCTION

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Plaintiff’s opposition consists primarily of speculative attacks on the credibility and

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character of Yaowei Yeo.

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Since 2009, every time Plaintiff or Plaintiff’s counsel contacted Yeo about this lawsuit, Yeo

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responded immediately, directly, and honestly. Had Plaintiff or his counsel contacted Yeo when

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they were leaving papers in a New York mail box, Yeo would have responded to them. But

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because they did not do so, Yeo did not know about the papers, and so he did not respond to

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them. When Yeo finally was contacted, he once again responded immediately.

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However, the undisputed evidence belies Plaintiff’s arguments.

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REPLY IN SUPPORT OF MOTION TO SET ASIDE DEFAULT

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Plaintiff’s theory of dishonesty rests simply on Plaintiff speculating, without evidence,

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that Yeo is lying when he says he did not visit the New York mailbox. Meanwhile, Plaintiff’s

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novel theory of culpability is apparently that Yeo deviously manipulated the system to his own

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detriment, since not responding sooner simply put Yeo in a procedural hole. None of that adds

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up. Yeo is the only person who actually knows the facts, and his explanation is more obvious

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and more compelling: he simply did not visit the New York mail box.

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II.

ANALYSIS
a. Legal Standard

A PROFESSIONAL LAW CORPORATION

aside an entry of default for good cause." This requires consideration of three factors: (1)

11
285 Hamilton Avenue, Suite 300
PALO ALTO, CALIFORNIA 94301
[phone]

Rule 55(c) of the Federal Rules of Civil Procedure provides that "[t]he court may set

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THOITS, LOVE, HERSHBERGER & McLEAN

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whether the defendant engaged in culpable conduct that led to the default; (2) whether the

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defendant had a meritorious defense; and (3) whether reopening the default judgment would

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prejudice the plaintiff. Franchise Holding II, LLC. v. Huntington Restaurants Group, Inc. 375

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F.3d 922, 925-26 (9th Cir. 2004). That legal standard is not disputed. It is also not disputed

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that default judgments are disfavored, and that trial on the merits is preferred. Eitel v. McCool,

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782 F.2d 1470, 1472 (9th Cir. 1986).

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b. Undisputed Factors: Meritorious Defense and Prejudice

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As detailed in Yeo’s motion, Plaintiff would not be prejudiced by setting aside the

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default. In opposition, Plaintiff does not attempt to argue otherwise. Similarly, Plaintiff does

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not attempt to deny in his opposition that Yeo’s substantive arguments are sufficient to support

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setting aside the default. Yeo has consistently and forcefully denied Plaintiff’s accusations, and

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Yeo’s innocence is evidenced not only by his own declaration, but also by independent sources,

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including the expert declaration of David Crane.

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c. Disputed Factor: Culpability

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For Yeo’s application to be denied, Yeo must be found culpable. Culpability requires

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the willful seeking or obtaining of advantage over, manipulation of or interference with the

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REPLY IN SUPPORT OF MOTION TO SET ASIDE DEFAULT

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court’s process - a devious, deliberate, willful, or bad faith failure to respond. TCI Group Life

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Ins. Plan v. Knoebber, 244 F.3d 691, 697-98 (9th Cir. 2001). No evidence has been presented

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that Yao had such an intent, and his words and actions show he did not:

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In May 2009, Plaintiff e-mailed Yeo.

Yeo responded immediately and denied

wrongdoing.
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Next, also in May 2009, Plaintiff’s counsel e-mailed Yeo.

Yeo again responded

immediately and directly.
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Next, in April 2011, Yeo was again contacted by e-mail. Once again, Yeo promptly

responded, spoke directly about the case and, as suggested by Plaintiff’s counsel, took action to
defend himself.

A PROFESSIONAL LAW CORPORATION

11
285 Hamilton Avenue, Suite 300
PALO ALTO, CALIFORNIA 94301
[phone]

THOITS, LOVE, HERSHBERGER & McLEAN

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

Plaintiff does not dispute these facts. Nor does Plaintiff deny that Yeo is a Singapore

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resident who rented a New York mail box only to catch any stray U.S. correspondence (not as

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his regular mailing address). Nonetheless, Plaintiff argues as follows: (1) Plaintiff speculates

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that Yeo is lying as to when he visited the mail box, and (2) if Yeo is lying then Yeo is culpable.

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Plaintiff does not claim to actually know or have any evidence about when Yeo visited

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the New York mail box.

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speculation. Merely positing that another party might be lying, without any evidence at all, is

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obviously insufficient to show culpability (or anything else). Further, Plaintiff’s explanation

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does not make sense. If Yeo wanted to “hide” from Plaintiff, why did he immediately answer

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every communication he received? And what strategic advantage would Yeo gain by letting a

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default judgment be entered against him before defending himself on the merits?

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Rather, the culpability argument rests entirely on Plaintiff’s

Plaintiff’s theory is also inconsistent with Plaintiff’s own conduct.

Plaintiff and his

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counsel knew they could communicate with Yeo by e-mail, and Plaintiff’s opposition shows that

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by July 2, 2010, they also had his telephone number.

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apparently significant in the discussions before the court at that time. Nonetheless, Plaintiff did

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not attempt to contact Yeo after May 2009. It is customary and appropriate to make every effort

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The issue of service on Yeo was

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REPLY IN SUPPORT OF MOTION TO SET ASIDE DEFAULT

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to contact a defendant and warn him that service has been accomplished and if he does nothing a

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default will be entered and judgment obtained. Plaintiff could have easily done this between

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July 2010 and September 2010. He and his counsel knew from experience that when contacted

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directly, Yeo would respond. Yet, after mailing the summons and complaint to the UPS drop in

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New York, Plaintiff did not call or e-mail Yeo. Clearly Plaintiff wanted to be able to argue that

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Yeo had been served, but it is not clear whether he wanted Yeo to know about it.

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It was only after Plaintiff filed his application for a default judgment that he sent Yeo a

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communication he knew Yeo would receive, i.e., an e-mail to the e-mail address he knew Yeo

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checked and used.

The predictable result was immediate action: Yeo communicated with

A PROFESSIONAL LAW CORPORATION

Plaintiff’s counsel, retained his own legal counsel, and attempted to undo the damage caused by

11
285 Hamilton Avenue, Suite 300
PALO ALTO, CALIFORNIA 94301
[phone]

THOITS, LOVE, HERSHBERGER & McLEAN

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the failure to receive Plaintiff’s prior filings. Once again, it is bizarre to suggest that Yeo had

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already received those filings but deliberately chose to wait until that time to act. How would

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Yeo benefit from having a default judgment entered against him?

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Plaintiff’s other attempts to suggest Yeo is lying suffer from the same defects, but even

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more so. The fact that Yeo knew a lawsuit existed obviously does not mean he scrutinized and

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understood every docket entry for that case. And the fact that he called Facebook to find out the

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status of the case while visiting friends in California obviously does not mean he was in New

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York the week before picking up mail.

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In sum, Plaintiff’s theory about Yeo’s motives is not based on evidence, but on the

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simple assertion that Plaintiff thinks Yeo is lying. There is no coherent story to explain such

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alleged manipulation by Yeo, since failing to respond sooner gained him nothing and forced him

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to overcome a default judgment.

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Yeo’s actions are much better explained by the declaration testimony of the one person

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who knows what happened, Yeo himself. He denied the accusations against him immediately

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and directly whenever they were made. He knew he was being sued but did not think he needed

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to hire a lawyer and go to court until he was served with papers. And he did not see those

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REPLY IN SUPPORT OF MOTION TO SET ASIDE DEFAULT

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papers until Plaintiff emailed them to him, at which time he immediately took action.

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III.

CONCLUSION

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Defaults can be set aside, and, in fact, courts prefer to try cases on the merits. Yeo has

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always insisted on his innocence and has produced substantial evidence to that effect. Plaintiff

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does not attempt to deny Yeo has a substantial defense on the merits. Plaintiff will not be

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prejudiced by setting aside the default. Yeo has acted in good faith and he should be permitted

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to defend himself on the merits.

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Dated: May 26, 2011.

THOITS, LOVE,
HERSHBERGER & McLEAN

A PROFESSIONAL LAW CORPORATION

11
285 Hamilton Avenue, Suite 300
PALO ALTO, CALIFORNIA 94301
[phone]

THOITS, LOVE, HERSHBERGER & McLEAN

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By

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s/ Andrew P. Holland
Andrew P. Holland
Attorneys for Defendant
Yao Wei Yeo

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REPLY IN SUPPORT OF MOTION TO SET ASIDE DEFAULT