On April 5, 2022, Judge Kevin Castel (S.D.N.Y.) set aside entries of default against the defendants in a patent and trademark infringement action between two competing manufacturers of pelvic floor strengthening products. See Flect LLC v. Lumia Prods. Co., No. 21-CV-10376 (S.D.N.Y. Apr. 5, 2022).

Flect sued Lumia, alleging infringement of a patent and trademarks relating to its Pelvic Clock®, product, an exercise device designed to relieve hip and lower back pain.  Lumia manufactures and sells a competing product called Pelvic Bowl. 

Lumia failed to respond to Flect’s complaint by the answer deadline of January 3, 2022, resulting in a Clerk’s Certificate of Default being entered on January 7.  On January 10, counsel for Defendants appeared and filed a letter motion requesting an extension of time to answer.  Judge Castel advised the parties to meet and confer, the result of which was Flect’s motion for default judgment against Defendants under Fed. R. Civ. P. Rule 55.  Defendants opposed, arguing that they had good cause for the missed deadline.

Judge Castel agreed with Defendants that a default judgment against them was not warranted.  In a six-page opinion, he noted that default judgment is a “severe sanction,” and that a district court’s discretion in choosing to grant one is “circumscribed.”  Op. at 3.  Judge Castel applied the Second Circuit’s three factor test to determine whether to relieve a party from default judgment: “‘(1) the willfulness of default, (2) the existence of any meritorious defenses, and (3) prejudice to the non-defaulting party.’” Id.

Judge Castel found that all three factors weighed in favor of setting aside the entries of default against Defendants.  He found that the missed deadline was not willful, but was rather due to Lumia’s designated service agent’s failure to timely send the complaint to Lumia.  Op. 4-5.  He also found that Defendants had raised potentially meritorious defenses to Flect’s claims.  Notably, Judge Castel found that improper venue constituted a meritorious defense.  Op. 5.  Lastly, Judge Castel found that vacating the default “will not thwart plaintiff’s recovery or remedy after litigation on the merits, nor will it result in the loss of evidence, create increased difficulties of discovery or provide greater opportunity for fraud and collusion.” Id. (citing New York v. Green, 420 F.3d 99, 110 (2d Cir. 2005)). 

In general, Judge Castel found that “the defendants’ failure to timely respond was a mistake in good faith,” and that default judgment was too harsh a result, “especially when it appears likely that it was precipitated in significant part by the defendants’ agent’s failure to follow protocol for service of process.” Op. 6.  He ordered that the entries of default be set aside.