United States District Court, E.D. Missouri, Southeastern Division
MEMORANDUM AND ORDER
L. WHITE, UNITED STATES DISTRICT JUDGE
matter is before the Court on SI03, Inc.'s Motion and
Renewed Motion for Default Judgment and Entry of Permanent
Injunction (ECF No. 19, 25). Plaintiff SI03, Inc.
("SI03"), a manufacturer and seller of
SYNTRAX-branded protein powder, brings this action alleging
false advertising under the Lanham Act, 15 U.S.C. §
1125(a) (Count I); unfair competition under Missouri common
law (Count II); and unjust enrichment under Missouri common
law (Count III). SI03 contends that Defendant, MuscleGen
Research, Inc. ("MuscleGen") falsely represents
that its GenePro protein powder product contains 30 grams of
protein per tablespoon serving, when a tablespoon serving
only contains 10 or less grams of protein. (Compl.
¶¶ 18-19, ECF No. 1) Plaintiff seeks an injunction
permanently enjoining MuscleGen from falsely advertising its
products, damages in the amount of $145, 000, and costs
"to prevent ongoing consumer confusion and harm to SI03
as a result of Defendant's ongoing and continuous false
advertising of its GenePro products." (ECF No. 25-1 p.
9) Upon consideration of the record and the applicable law,
the court will enter default judgment against MuscleGen.
filed suit in federal court on November 22, 2016, and
MuscleGen, a North Carolina corporation, was served through
the North Carolina Secretary of State on January 4, 2017.
(ECF No. 8) Under Rule 12 of the Federal Rules of Civil
Procedure, MuscleGen was required to file an answer or other
responsive pleading within twenty-one (21) days of being
served with the Complaint. Fed.R.Civ.P. 12(a)(1)(A)(i).
Because MuscleGen failed to timely file a responsive
pleading, the Clerk of the Court entered default against
MuscleGen on April 19, 2017. (ECF No. 14) Thereafter,
Plaintiff filed a Motion for Default Judgment and Entry of
Permanent Injunction. (ECF No. 19) On May 19, 2017, the
Court, on review of the record, ordered the Clerk of the
Court to mail a copy of the Clerk's Entry of Default to
Defendant MuscleGen at the North Carolina Secretary of State
and a P.O. Box address found on MuscleGen's website. (ECF
No. 20) The Order was received by the North Carolina
Secretary of State but returned unclaimed from the second
address. (ECF Nos. 22, 24) Plaintiff then renewed its motion
on October 6, 2017. (ECF No. 25)
default judgments are generally disfavored, the Court once
again order the Clerk of the Court to mail copies of certain
documents to Defendant at a new mailing address posted on
Defendant's website. In the Order dated October 18, 2017,
the Court stated, "[o]ut of an abundance of caution, the
Court will make one last attempt to notify Defendant
MuscleGen of the Complaint and pending motions for default
judgment seeking injunctive and monetary relief." (ECF
No. 26) The record reflects that on November 8, 2017,
Defendant's representative received copies of the
Complaint; Clerk's Entry of Default; Plaintiff SI03,
Inc.'s Motion and Renewed Motion for Default Judgment and
Entry of Permanent Injunction; and the October 18, 2017 Order
via certified mail. (ECF No. 27) Over one month has passed
and Defendant MuscleGen has failed to respond to the pending
motions for default judgment.
Rule 55 of the Federal Rules of Civil Procedure, a court may
enter default judgment for failure "to plead or
otherwise defend." Fed.R.Civ.P. 55(a). "Default
judgment for failure to defend is appropriate when the
party's conduct includes 'willful violation of court
rules, contumacious conduct, or intentional
delays.'" Ackra Direct Marketing Corp. v.
Fingerhut Corp., 86 F.3d 852, 856 (8th Cir. 1996)
(quoting United States v. Harre, 983 F.2d 128, 130
(8th Cir. 1993)). "In considering a motion for default
judgment, the Court is mindful that, by defaulting, defendant
is deemed to have admitted for purposes of this action all
well-pleaded factual allegations in the complaint."
Terry v. Legal Asset Fin. Grp., LLC, No.
4:13-CV-1674-JAR, 2014 WL 502173, at *3 (E.D. Mo. Feb. 7,
2014) (citation omitted). "[W]hen a default judgment is
entered, facts alleged in the complaint may not be later
contested." Marshall v. Baggett, 616 F.3d 849,
852 (8th Cir. 2010). However, '"it remains for the
[district] court to consider whether the unchallenged facts
constitute a legitimate cause of action, since a party in
default does not admit mere conclusions of law.'"
Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010)
(quoting 10A C. Wright, A. Miller & M. Kane, Federal
Practice and Procedure § 2688 at 63 (3d ed. 1998)).
Further, "[a] party seeking damages under a default
judgment must.. . prove its rights to such damages with
affidavits or other supporting documentation." Joe
Hand Promotions, Inc. v. Kickers Corner of the Americas,
Inc., No. 4:12CV02387 AGF, 2014 WL 805731, at *2 (E.D.
Mo. Feb. 28, 2014) (citations omitted).
Complaint, Plaintiff claims that Defendant MuscleGen markets
its GenePro product by falsely claiming it contains 30 grams
of protein in a roughly 11.15 gram (1 tablespoon) serving
when GenePro has 10 or fewer grams of protein per 11.15 gram
(1 tablespoon) serving. (Compl. ¶¶ 17-22, ECF No.
1) Further, Plaintiff maintains that GenePro's marketing
and packaging statement that it contains "medical
grade" protein is incorrect, false, and misleading, as
no industry or FDA standard for "medical grade"
protein exists. (Id. at ¶¶ 23-24)
Plaintiff SI03 asserts that purchasers of MuscleGen's
products are likely to be misled and deceived by
MuscleGen's product labeling, marketing, and advertising.
(Id. at¶25) Further, Plaintiff contends that
the false and misleading advertising is damaging to Plaintiff
SI03's reputation and goodwill, as MuscleGen's false
and misleading representations are designed to deceive and
entice consumers to purchase MuscleGen's products over
SI03's products based upon the false belief that GenePro
is superior to other protein powders. (Id. at
¶¶ 26-27) According to Plaintiff, MuscleGen's
wrongful conduct has caused confusion in the protein market,
deprived Plaintiff of business, injured Plaintiffs
relationships with current and prospective customers, and
resulted in increased sales of MuscleGen's protein powder
product. (Id. at ¶¶ 28-29)
The Lanham Act and Unfair Competition
Count I, Plaintiff alleges false advertising under §
43(a) of the Lanham Act for false designations of origin and
false deceptions. 15 U.S.C. § 1125(a). In Count II,
Plaintiff S103 raises a claim of unfair competition under
Missouri common law. To establish a claim of false advertising
under the Lanham Act, SI03 must demonstrate: (1) a false
statement of fact by MuscleGen in a commercial advertisement
about its product; (2) the statement actually deceived or has
a tendency to deceive a significant portion of its audience;
(3) such deception is material in that it is likely to
influence the decision to purchase the product; (4) MuscleGen
caused the false statement of fact to enter interstate
commerce; and (5) SI03 has been injured, or is likely to be
injured, as a result of the false statement, either by direct
diversion of sales from SI03 to MuscleGen or by a loss of
goodwill associated with SI03's products. United
Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1180 (8th
Cir. 1998). "A statement may be literally false,
conveying an explicit factual message and in fact be false
..., or may be implicitly false, conveying the implied
message and thereby deceiving] a significant portion of its
recipients ...." Fair Isaac Corp. v. Experian Info.
Sols., Inc., 650 F.3d 1139, 1151 (8th Cir. 2011)
(internal quotations and citations omitted).
SI03 alleges that MuscleGen's claim that its GenePro
product has 30 grams of protein in a 1 tablespoon serving
size and its use of the term "medical grade" in
labeling, marketing, and advertising are false statements of
fact that deceive, or have a tendency to deceive, a
substantial segment of SI03's customers and potential
customers and likely influences the purchasing decisions of
SI03's customers. (Compl. ¶¶ 32) Defendant
MuscleGen has failed to appear in this case and thus concedes
Plaintiff S103's allegations. Neal Techs., Inc. v.
Craven Performance & Off Road, LLC, No.
4:15-cv-800-AGF, 2015 WL 9583395, at *3 (E.D. Mo. Dec. 31,
2015). Therefore, based on the uncontested factual
allegations, the Court finds that Plaintiff SI03 has stated a
violation of § 43(a) of the Lanham Act, 15 U.S.C. §
1125(a), and is entitled to default judgment on Counts I and
II of the Complaint. Id.
Permanent Injunctive Relief
Lanham Act permits courts to enter permanent injunctive
relief to prevent future trademark infringement."
Id. at *3 (citing 15 U.S.C. § 1116). To obtain
a permanent injunction, Plaintiff SI03 must demonstrate:
"(1) its actual success on the merits; (2) that it faces
irreparable harm; (3) that the harm to it outweighs any
possible harm to others; and (4) that an injunction serves
the public interest." Cmty. of Christ Copyright
Corp. v. Devon Park Restoration Branch of Jesus Christ's
Church,634 F.3d 1005, 1012 (8th Cir. 2011) ...