United States District Court, E.D. Missouri, Southern Division
MEMORANDUM AND ORDER
L. WHITE, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendant Musclegen Research,
Inc.'s Motion for Relief. (ECF No. 53) Defendant argues
the Court should vacate the Default Judgment and permanent
injunction entered December 12, 2017 pursuant to Federal Rule
of Civil Procedure 60(b) because it was not properly served
before the judgment and injunction were entered and it did
not receive notice of the case until October 22, 2018.
Plaintiff SIO3, Inc. opposes the motion. After careful
consideration, the Court grants the motion and vacates the
Default Judgment and permanent injunction (ECF No. 29)
previously entered in this case.
November 22, 2016, Plaintiff SIO3, Inc. filed suit against
Defendant MusclegenResearch, Inc., a North Carolina
corporation, 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). (ECF No. 1) On November 26,
2016, Plaintiffs first attempt to serve Defendant via process
server at the address listed on the North Carolina Secretary
of State's website was unsuccessful. (ECF No. 5) The
address listed on the North Carolina Secretary of State's
website, 2044 Muirfield Village Way, Raleigh, NC 27604, was
the personal residence of Defendant's registered agent,
Dr. Brian Parks. According to Dr. Parks, however, he had
paid a service called "MyCorporation" to change the
address for Defendant and all of its corporate officers on
the North Carolina Secretary of State's website to P.O.
Box 607, Willow Springs, NC 27592. (Decl. of Dr. Brian M.
Parks ¶ 16, ECF No. 50-1) Evidently, MyCorporation had
failed to make Dr. Parks's requested change of address.
Plaintiffs first attempt at service failed, it attempted
substituted service on Defendant via the North Carolina
Department of the Secretary of State, which sent the service
documents via certified mail with return receipt requested to
2044 Muirfield Village Way. On December 24, 2016, the service
documents were signed for by an individual at the 2044
Muirfield Village Way address. (ECF Nos. 8 & 7) According
to Dr. Parks, that individual is the current homeowner of
2044 Muirfield Village Way who has no association with
Defendant and did not know Dr. Parks. (Decl. of Dr. Brian M.
Parks ¶ 16, ECF No. 50-1) Because the documents had been
delivered to the address on record for Defendant and were
ostensibly received by a representative of Defendant as
evidenced by a signature, the North Carolina Department of
the Secretary of State confirmed to Plaintiff on January 4,
2017 that service upon Defendant was successful. (ECF No. 8,
April 18, 2017, Plaintiff filed for the Clerk of Court to
enter default pursuant to Federal Rule of Civil Procedure
55(a) (ECF No. 13), which was entered on April 19, 2017 (ECF
No. 14). The Clerk of Court noted, "The record reflects
service of summons and the complaint upon said Defendant on
January 4, 2017, by service upon the North Carolina Secretary
of State in accordance with North Carolina law."
18, 2017, Plaintiff filed a Motion for Default Judgment and
Entry of Permanent Injunction. (ECF No. 19) Because Defendant
had not been notified of the Clerk of Court's entry of
default, the Court ordered copies of the Clerk's Entry of
Default be mailed through regular mail and certified mail to
Defendant via the North Carolina Secretary of State and to
Dr. Parks at P.O. Box 607, Willow Springs, NC 27592. (ECF No.
20) The Court notes that it discovered this address, which
was the address Dr. Parks says he paid MyCorporation to
change on the Secretary of State's website, after
conducting its own Internet search. The North Carolina
Secretary of State received the copies on May 23, 2017. (ECF
No. 22) The copies sent to Dr. Parks, however, were returned
as unclaimed on June 15, 2017, and the envelope notes two
attempts at delivery were made on May 23 and 29, 2017 before
the documents were returned on June 7, 2017. (ECF No. 24)
October 6, 2017, Plaintiff filed a Renewed Motion for Default
Judgment and Entry of Permanent Injunction. (ECF No. 25) On
October 18, 2017, the Court ordered copies of the renewed
motion, as well as copies of other filings, to be mailed to
Defendant and noted:
While MuscleGen was served through the North Carolina
Secretary of State, a recent Internet search by the Court
revealed a new mailing address on MuscleGen's
website. Out 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) (emphasis added) Accordingly, copies were mailed
via regular and certified mail to MuscleGen Research, Inc.,
2425 Kildaire Farm Road, Suite 407, Cary, NC 28518.
(Id.) On November 8, 2017, the documents were
received and signed for by "Sam Steger." (ECF No.
27) According to Dr. Parks, an employee named Samantha Steger
worked for Defendant from June 2017 until February 2018,
"when she was terminated for cause." (Decl. of Dr.
Brian M. Parks ¶ 18, ECF No. 50-1) Dr. Parks further
asserts that "[i]f Ms. Steger did sign for those
documents, she never passed them along to any other Musclegen
employee." (Id.) On December 12, 2017, the
Court entered a Default Judgment and permanent injunction in
favor of Plaintiff. (ECF Nos. 28 & 29)
to Dr. Parks, he first learned of this case once some of
Defendant's clients made "passing comments about a
lawsuit against Musclegen" after the Court entered its
Default Judgment and permanent injunction. (Decl. of Dr.
Brian M. Parks ¶ 5, ECF No. 50-1) He then searched
online and "learned that this Court had entered an
injunction against Musclegen, but had not ordered a fine or
made any other demand on Musclegen." (Id.) Dr.
Parks states that, after reviewing the language in the
Court's Default Judgment and permanent injunction, he
"believed that Musclegen was not in violation of
it" as Defendant had changed its business practice at
issue. (Id.) Conceding his lack of legal knowledge,
Dr. Parks avers Defendant did not think they needed to take
any action in this matter because they believed they were not
in violation of the injunction. (Id.)
to Plaintiff, its counsel attempted to contact Defendant on
January 11, 2018. (ECF No. 55-2) Once the permanent
injunction's deadline passed for Defendant to recall
certain products, Plaintiffs counsel sent a letter via email
to Defendant at the email address
MuscleGen@outlook.com. (ECF Nos. 55-2, -3) That same
date, Plaintiffs counsel received a response email from
someone named "Gina Travino," who identified
herself as "Customer Service Representative" for
"Musclegen Research, MedFit RX, Skin Fit and Muscle Mud
Coffee." (ECF No. 55-3) "Gina Travino" stated:
"Our legal counsel will respond. We have just received
noticed [sic] before Christmas as all correspondences were
sent to the wrong address. Countersuit to follow."
(Id.) According to Dr. Parks, "Gina
Travino" is a pseudonym used by a third-party company in
India, Habliss, that Defendant hired to handle customer
service responses. (Decl. of Dr. Brian M. Parks ¶¶
20-21, ECF No. 50-1) Dr. Parks further attests that Habliss
did not inform Defendant about the communication with
Plaintiffs counsel and, after Habliss repeatedly failed to
forward certain documents to Defendant's employees,
Defendant ceased doing business with it. (Id.)
filed a Motion for Contempt on April 5, 2018 (ECF No. 35),
and Renewed Motion for Contempt on August 13, 2018 (ECF No.
36), claiming Defendant was violating the permanent
injunction and moving for sanctions. On September 5, 2018,
the Court issued an Order for Defendant to respond to
Plaintiffs Motion for Contempt no later than October 3, 2018.
(ECF No. 37) The Court ordered the Clerk of Court to serve a
copy of the September 5, 2018 Order via regular mail and UPS
to MuscleGen Research, Inc., 2425 Kildaire Farm Road, Suite
407, Cary, NC 28518. (Id.) On October 18, 2018,
after nothing had been filed to indicate service was
successful, the Court issued an Amended Order on October 18,
2018 and ordered Plaintiff to effect service by special
process server. (ECF No. 39) Plaintiff submitted an affidavit
of service indicating service was successful on October 22,
2018. (ECF No. 40)
Parks attests that when Defendant's president was served
on October 22, 2018, "that was the first time that
Musclegen understood that there might be further action with
respect to the injunction." (Decl. of Dr. Brian M. Parks
¶ 24, ECF No. 50-1) The Amended Order of October 18,
2018 ordered Defendant to respond to Plaintiffs Motion for
Contempt no later than fourteen days after service was
completed. (ECF No. 39) Accordingly, Defendant's response
was due no later than November 5, 2018. Defendant's first
activity in the case was the entry of appearance of its
initial counsel on November 20, 2018. (ECF No. 41)
Defendant's initial counsel filed a motion to withdraw as
counsel on January 3, 2019 (ECF No. 42) and Defendant's
current counsel entered their appearance on February 5, 2019.
(ECF Nos. 43 & 44) Defendant's current counsel
requested an additional fourteen days to respond to
Plaintiffs Motions for Contempt, which the Court granted.
(ECF No. 46, 47) Defendant timely filed its Response in
Opposition to Plaintiffs Motions for Contempt in which it
argues all attempts at service prior to October 22, 2018 were
unsuccessful and it only learned of the case on October 22.
(ECF No. 50, at 9) Upon consideration of the ...