Ideavillage Products Corp. v. Media Brands Co. Ltd.

Filing 22

OPINION & ORDER re: 12 MOTION for Default Judgment as to Defendant Saonjay Mirpur aka Sanjay Mirpur and Sanjay Mirpuri, filed by Ideavillage Products Corp. The Court VACATES the entry of default against pro se Defendant Mirpur. Mi rpur's conduct was not willful, Plaintiff will not be prejudiced, and Mirpur has raised a potentially meritorious defense. The Court directs Mirpur to answer or otherwise respond to Plaintiff's complaint by November 2, 2015. An initial sta tus conference will be scheduled after Mirpur's response is electronically filed. If Mirpur's response is not received by November 2, 2015, the Court will direct the Clerk of the Court to enter a default against Mirpur and Plaintiff may refile its motion for default judgment. (As further set forth in this Order.) Saonjay Mirpur answer due 11/2/2015. (Signed by Judge Kimba M. Wood on 9/24/2015) (kko)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------X
IDEAVILLAGE PRODUCTS CORP.,
Plaintiff,

14-CV-6008 (KMW) (DCF)
OPINION & ORDER

-againstMEDIA BRANDS CO. LTD., et. al.,
Defendants.
----------------------------------------------------X
KIMBA M. WOOD, U.S.D.J.:
Plaintiff, Ideavillage Products Corp. (“Plaintiff”), is suing pro se Defendant, Saonjay
Mirpur (“Mirpur”), for copyright infringement, trademark infringement, counterfeiting of
federally registered trademarks, false designation of origin, and unfair competition. On
November 20, 2014, the Clerk of the Court entered a default against Mirpur. On January 30,
2015, Plaintiff moved for default judgement against Mirpur. Although Mirpur’s reply to
Plaintiff’s motion is dated February 5, 2015, it was not filed with the Court until September 2,
2015. For the reasons set forth below, the Court construes Mirpur’s reply as a motion to set
aside the default and VACATES entry of default against Mirpur. 1
I.

BACKGROUND
On August 1, 2014, Plaintiff filed a complaint against pro se Defendant Saonjay Mirpur

(aka Sanjay Mirpur and Sanjay Mirpuri) and his employer, corporate Defendant Media Brands
Co., Ltd. (Complaint, [ECF No. 1]). Plaintiff is a New Jersey corporation that markets, sells,

Mirpur’s reply to Plaintiff’s motion for default judgment is construed as a motion to set aside the entry of
default. See Meehan v. Snow, 652 F.2d 274, 276 (2d Cir. 1981) (“Even if a default had been entered, opposition to a
motion for a default judgment can be treated as a motion to set aside the entry of a default despite the absence of a
formal Rule 55(c) motion.”).
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and produces consumer products. Id. ¶¶ 5, 12-13. Mirpur is CEO of the Hong Kong-based
Media Brands. Id. ¶¶ 6-7; (Saonjay Mirpur Waiver of Service, [ECF No. 5]).
Plaintiff sues Defendants for copyright infringement arising under the Copyright Laws of
the United States, 17 U.S.C. § 101 et seq.; for trademark infringement of federally registered
trademarks in violation of § 32 of the Lanham Act, 15 U.S.C. § 1114; for counterfeiting of
federally registered trademarks in violation of U.S.C. §§ 1114, 1116(d), and 1117(b)-(c); for
false designation of origin and unfair competition in violation of Section 43(a) of the Trademark
Act of 1946, as amended (15 U.S.C. §1125(a)); and for related common law claims. Id. ¶¶ 1,
40-84.
On September 4, 2014, both Mirpur and corporate Defendant Media Brands waived
service of the summons, (Saonjay Mirpur Waiver of Service, [ECF No. 5]); (Media Brands
Waiver of Service, [ECF No. 4]), and agreed to answer or otherwise respond to the complaint by
November 19, 2014, (Plaintiff’s Request for Entry of Default Against Defendant Saonjay Mirpur
at 2, [ECF No. 8]). Defendant Media Brands, represented by Manager of Media Brands Charlie
Lee, has settled and agreed to entry of a consent judgment. (Final Judgment Upon Consent
Ideavillage and Media Brands, [ECF No. 16]).
Mirpur failed to respond to Plaintiff’s complaint, resulting in entry of default against him.
(Clerk’s Certificate of Default, [ECF No. 9]). On January 30, 2015, Plaintiff moved for default
judgement against Mirpur, (Plaintiff’s Memorandum of Law in Support of Default Judgment,
[ECF No. 14]), which the Court referred to Magistrate Judge Freeman for a Report and
Recommendation, see (Order of Reference to a Magistrate Judge, [ECF No. 17]). Plaintiff is
asking for a money judgment of $600,000. (Plaintiff’s Memorandum of Law in Support of
Default Judgment at 20-25, [ECF No. 14]).

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In his reply to Plaintiff’s motion for default judgment, Mirpur challenges the Court’s
jurisdiction and denies all allegations against him. See generally (Defendant’s Reply “Def.
Reply,” [ECF No. 20]). Mirpur specifically denies Plaintiff’s contention that he has failed to
respond to any correspondences, repeatedly claiming that he has been traveling and has promptly
responded to Plaintiff by electronic communication. Id. at 1, 2, 7, 8, 23. Mirpur also claims that
Media Brands’ Manager, Charlie Lee, responded on Mirpur’s behalf. Id. at 2, 10, 11. Although
Mirpur’s reply is dated February 5, 2015, it was not stamped as “received” by Judge Freeman
until June 16, 2015 and was not placed on the case’s electronic docket until September 2, 2015.
Id. at 1.
II.

LEGAL STANDARD
The decision to vacate an entry of default is left “to the sound discretion of a district

court.” Enron Oil Corp. v. Diakuhara, 10 F. 3d 90, 95 (2d Cir. 1993). Federal Rule of Civil
Procedure 55(c) states that “[t]he court may set aside an entry of default for good cause.” Fed.
R. Civ. P. 55(c). The Second Circuit evaluates “good cause” using three well-established
factors: “(1) whether the default was willful; (2) whether setting aside the default would
prejudice the adversary; and (3) whether a meritorious defense is presented.” Enron Oil Corp.,
10 F. 3d at 96; see also Am. Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 62 (2d Cir. 1996)
(treating the factors like a balancing test). Upholding a default is particularly disfavored when it
would lead “to the entry of a large money judgment.” Sony Corp. v. Elm State Elecs., Inc., 800
F.2d 317, 320 (2d Cir. 1986) (listing cases holding that default is disfavored when large sums of
money will be awarded).
When the party against whom the default is entered is a pro se defendant, the Court must
be particularly sensitive to the defendant’s ability to protect her or his rights. See Traguth v.

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Zuck, 710 F.2d 90, 95 (2d Cir. 1983). Therefore, district courts should “grant leave to set aside
the entry of default freely when the defaulting party is appearing pro se.” Enron Oil Corp., 10
F.3d at 96.
III.

DISCUSSION
Liberally construing Mirpur’s submission “‘to raise the strongest arguments that they

suggest,’” Green v. United States, 260 F.3d 78, 83 (2d Cir. 2001) (quoting Graham v.
Henderson, 89 F .3d 75, 79 (2d Cir. 1996)), the Court finds that Mirpur satisfies the three “good
cause” factors and vacates the entry of default to grant Mirpur a final opportunity to respond to
the complaint.
1. Willfulness
The first factor, willfulness, is found when “the conduct of counsel or the litigant was
egregious and was not satisfactorily explained.” S.E.C. v. McNulty, 137 F.3d 732, 738 (2d Cir.
1998). The Second Circuit has repeatedly held that willfulness does not include conduct that is
“merely negligent or careless.” Id. (citing Am. Alliance Ins. Co., 92 F.3d at 61; Davis v. Musler,
713 F.2d 907, 915-16 (2d Cir. 1983)). A finding of willfulness weighs against vacating an entry
of default. See Am. Alliance Ins. Co., 92 F.3d at 62.
Mirpur claims that his default was not willful, because he was under the false impression
that Charlie Lee, representative for corporate Defendant Media Brands, bore responsibility for
communicating with Plaintiff about the case, and was responding to the allegations. Def. Reply
at 2, 10, 11. Mirpur’s 25-page reply to the motion for default judgment supports this
interpretation of Mirpur’s behavior. After corporate Defendant Media Brands settled with
Plaintiff, Mirpur finally realized that he needed to respond, and filed a reply. Because Mirpur
relied on his employer’s representative to respond on his behalf, the Court finds that Mirpur’s

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default was not willful. Mirpur is now required to respond to the complaint by November 2,
2015.
2. Prejudice
The second factor, prejudice, refers to delay that will “‘result in the loss of evidence,
create increased difficulties of discovery, or provide greater opportunity for fraud and
collusion.’” Davis, 713 F.2d at 916 (quoting 10 C. Wright, A. Miller and M. Kane, Federal
Practice and Procedure: Civil, § 2693 at 477-93 (1983)). Although some delay is inevitable
when granting a motion to vacate a default, “‘delay alone is not a sufficient basis for establishing
prejudice.’” New York v. Green, 420 F.3d 99, 110 (2d Cir. 2005) (quoting Davis, 713 F.2d at
916). A finding of prejudice weighs against vacating an entry of default. See Am. Alliance Ins.
Co., 92 F.3d at 62.
Granting Mirpur a final opportunity to respond to the complaint will not prejudice
Plaintiff in any meaningful way. The Court’s strong preference for resolution of cases on the
merits is not outweighed by the limited delay Plaintiff will face if the Court vacates the default.
See Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 174 (2d Cir. 2001) (“A clear preference
exists for cases to be adjudicated on the merits.”); Enron Oil Corp., 10 F.3d at 96 (“an
understandable zeal for a tidy, reduced calendar of cases should not overcome a court’s duty to
do justice in the particular case.”). Mirpur’s 25-page reply evinces a desire to meaningfully
contest the allegations against him on the merits, and the Court will grant him that opportunity.
Additionally, the fact that Plaintiff waited over two months to file its motion for default
judgment suggests that some further delay will not significantly impact Plaintiff. Therefore, the
Court finds that Plaintiff will not suffer prejudice if the default is vacated.

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3. Meritorious Defense
The third factor, meritorious defense, requires only that a defendant “present some
evidence beyond conclusory denials to support his defense.” Enron Oil Corp., 10 F.3d at 98. A
defense will be considered meritorious “‘if it is good at law so as to give the factfinder some
determination to make.’” Am. Alliance Ins. Co., 92 F.3d at 61 (quoting Anilina Fabrique de
Colorants v. Aakash Chemicals and Dyestuffs, Inc., 856 F.2d 873, 879 (7th Cir. 1988)). A
finding of meritorious defense weighs in favor of vacating the default. See id. at 62.
Liberally construed, Mirpur’s reply contains sufficient facts to constitute a meritorious
defense. Mirpur’s reply is a point-by-point rebuttal of Plaintiff’s brief in support of default
judgment. See generally Def. Reply. Mirpur claims that his company’s ideas were
misappropriated, arguing that his company should be compensated for the damage caused by
Plaintiff’s actions. Id. at 2-3, 8, 15-17. Mirpur claims that he has documents, witnesses,
telephone recordings, and voice recordings to prove that he never infringed on any copyright or
trademark-protected products, never intentionally infringed on Plaintiff’s intellectual property
rights, and never profited from products connected to Plaintiff’s intellectual property rights. Id.
at 2, 3, 5, 8, 15, 17, 20. Because district courts have a broad duty to protect pro se defendants
who find themselves in court against their will “with little time to learn the intricacies of civil
procedure,” Traguth, 710 F.2d at 95, the Court holds, for the purpose of vacating the entry of
default, that Mirpur has raised the prospect of a meritorious defense.
IV.

CONCLUSION
The Court VACATES the entry of default against pro se Defendant Mirpur. Mirpur’s

conduct was not willful, Plaintiff will not be prejudiced, and Mirpur has raised a potentially
meritorious defense. The Court directs Mirpur to answer or otherwise respond to Plaintiff’s

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complaint by November 2, 2015. An initial status conference will be scheduled after Mirpur’s
response is electronically filed. If Mirpur’s response is not received by November 2, 2015, the
Court will direct the Clerk of the Court to enter a default against Mirpur and Plaintiff may refile
its motion for default judgment.

SO ORDERED.
DATED:

New York, New York
September 24, 2015
/s/
KIMBA M. WOOD
United States District Judge

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