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Panda Restaurant Group, Inc. v. Panda Chinese & Japanese Restaurant, LLC

United States District Court, D. New Jersey

October 25, 2018

PANDA RESTAURANT GROUP, INC., Plaintiff,
v.
PANDA CHINESE & JAPANESE RESTAURANT, LLC, SAM YANG, individually, and ABC Corps. 1-100, related entities whose names are unknown, Defendants.

          OPINION

          WILLIAM H. WALLS SENIOR UNITED STATES DISTRICT COURT JUDGE.

         This matter arises out of an alleged trademark infringement by Defendants, a New Jersey Limited Liability Corporation ("PAC") and one of its principals, Mr. Sam Yang ("Yang"). Cmpl. (ECF No. 1) ¶¶ 1;5-15. Plaintiff Panda Restaurant Group ("Panda") brought suit in this Court on November 16, 2017. Id. Nearly a year later, Defendants have failed to make an appearance in this action. See ECF No. 9-4 at Ex. K. On January 3, 2018, the Clerk of the Court entered default against Defendants for failure to plead or otherwise defend this action. Plaintiff now moves for default judgment against Defendants. ECF No. 9. Decided without oral argument pursuant to Fed.R.Civ.P. 78, Plaintiffs motion is granted.

         STANDARD OF REVIEW

         Because the entry of default prevents a plaintiffs claims from being decided on the merits, "this court does not favor entry of defaults or default judgments." United States v. $55, 518.05 in U.S. Currency, 728 F.2d 192, 194 (3d Cir. 1984). The Third Circuit has clarified that, while "the entry of a default judgment is left primarily to the discretion of the district court," this "discretion is not without limits," and cases should be "disposed of on the merits whenever practicable." Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984) (citations omitted); see also $55, 518.05 in U.S. Currency, 728 F.2d at 194-95.

         Before granting a default judgment under Fed.R.Civ.P. 55, the Court must determine (1) whether there is sufficient proof of service, Gold Kist, Inc. v. Laurinburg Oil Co., Inc., 756 F.2d 14, 19 (3d Cir. 1985); (2) whether a sufficient cause of action was stated, DIRECTV v. DeCroce, 332 F.Supp.2d 715 (D.N.J. 2004), rev'don other grounds, 431 F.3d 162 (3d Cir. 2005).; and (3) whether the factors described in Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) are met. As set forth in Chamberlain, courts in the Third Circuit consider (1) whether there is prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct. 210 F.3d at 164. A court must treat "the factual allegations in a complaint, other than those as to damages ... as conceded by the defendant." DIRECTV, Inc. v. Pepe, 431 F.3d 162, 165 (3d Cir. 2005).

         Default judgment is inappropriate, even where defendants have failed to appear, unless the plaintiff has provided well-pleaded facts sufficient to establish a claim. DeCroce, 332 F.Supp.2d at 715. Because a defaulting party does not admit conclusions of law, a court must make an independent inquiry into "whether the unchallenged facts constitute a legitimate cause of action." Id. (denying default judgment for failure to state a claim) (quoting Charles A. Wright, Arthur R. Miller & Mary Kay Kane, 10A Federal Practice and Procedure § 2688, at 63 (3d ed. 1998)).

         JURISDICTION

         This Court has original jurisdiction over Plaintiffs claims arising under federal law pursuant to 28 U.S.C. § 1331, and supplemental jurisdiction over Plaintiffs state law claims pursuant to 28 U.S.C. § 1367.

         DISCUSSION

         1. Proof of Service

         There is sufficient proof of service. See ECF No. 9-4 at Exs. H-J. Plaintiff has even demonstrated a good faith effort to contact Defendants after it was statutorily required to do so in order to move the litigation along. Id. at Ex. K.

         2. Sufficient Cause of Action

         A sufficient cause of action has been stated. Plaintiff Panda is a well-known restaurant chain that specializes in Asian cuisine. See Del Pizzo Declaration ¶ 5; Cherng Aff. ¶ 2. Panda has a distinctive logo/brand about which it owns numerous federal trademarks and registrations. See Mot. Br. (ECF 9-1) at 4-5. Defendants allegedly violated those trademarks by operating restaurants that used both the Panda name and Panda's exact logo. Cmplt. ¶¶ 6; 16-22. Panda adequately alleges violations of The Lanham Act, 15 U.S.C. § 1125, N.J.S.A. § 56:4-1, and common law unfair competition based on Defendants' conduct. Cmplt. ¶¶ 23-66.

         i. ...


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