Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 1 of 19 Page ID #:213

1

2

3 JS-6, O

4

5

6

7

8 UNITED STATES DISTRICT COURT

9 CENTRAL DISTRICT OF CALIFORNIA

10 Case No.: 2:21-cv-08623-MEMF(ASx) 11 SHANE WATERS,

12 Plaintiff, ORDER AND JUDGMENT GRANTING

PLAINTIFF SHANE WATERS’S MOTION

13 v. FOR DEFAULT JUDGMENT [ECF NO. 33]

14 NOTORIOUS MEDIA, LLC, et al., 15 Defendants. 16

17

18

19 Before the Court is Plaintiff Shane Waters’s Motion for Default Judgment. ECF No. 33. On 20 June 30, 2022, the Court held a hearing on the Motion. EC F Nos. 52, 53. 21 For the reasons stated herein, the Court GRANTS the Motion for Default Judgment. 22

23

24

25

26 / / / 27 / / / 28 1 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 2 of 19 Page ID #:214

1 BACKGROUND

2 I. Factual Background1

3 Plaintiff Shane Waters (“Waters”) is a podcast host located in Wabash, Indiana. Compl. ¶ 8.

4 He is best known for his podcasts2 “Foul Play” and “Hometown History.” Id.

5 Defendants Notorious Media, LLC (“Notorious Media“) and Notorious Holdings, LLC

6 (“Notorious Holdings”) are companies headquartered in Los Angeles, California. Id. ¶ 9. Defendant

7 Peter Vincer (“Vincer”) is the primary principal and CEO of Notorious Media and Notorious

8 Holdings (collectively, the “Notorious Defendants”). Id. ¶ 10.

9 On March 26, 2020, Waters and Notorious Media entered into a contract (the “Agreement”)

10 in which Notorious Media agreed “to manage and sell advertising” for Waters’s podcasts. Id. ¶ 22;

11 ECF No. 1, Ex. A (the “Agreement”). As a part of the Agreement, Notorious Media was to act as

12 Waters’s administrator for all advertising revenue, meaning that Notorious Media would collect

13 advertising revenue from Waters’s podcast sponsors. Compl. ¶ 22. Waters was to receive 80 percent

14 of all advertising revenue and Notorious Media retained 20 percent of the revenue as a commission.

15 Id. ¶ 23. The Agreement also allowed Notorious Media to display the logos for Waters’s podcasts

16 “Foul Play” and “Hometown History” (“Waters’s Podcast Logos”) under the “networks shows”

17 section of its website, https://notorious.llc/shows. Id. ¶¶ 31–32.

18 In or about February 2021, Waters learned that Notorious Media, in violation of the

19 Agreement, was improperly withholding advertising revenue. Id. ¶ 25. In or about June 2021, after

20 multiple requests that Notorious Media remit the appropriate amounts of revenue, Waters, in

21 accordance with the Agreement’s terms, gave the Notorious Defendants written notice, informing 22 them that failure to cure their breach within ten days would result in termination of the Agreement. 23 Id. ¶ 27. The Notorious Defendants failed to cure within the allotted period and the Agreement was 24 subsequently terminated. Id. ¶ 28. The Agreement specified that upon termination, Notorious Media 25 26 27 1 Unless otherwise indicated, the following facts are derived from the Complaint. ECF No. 1 (“Compl.”). 2 A “podcast” is “a program (as of music or talk) made available in digital format for automatic download 28 over the Internet.” Podcast, Merriam-Webster, https://www.merriam-webster.com/dictionary/podcast (last visited June 22, 2022). 2 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 3 of 19 Page ID #:215

1 was to “remit payment to [Waters] of any Compensation that is due and payable as of the date of

2 such expiration or termination” which, at the time of the termination, was calculated to be at least

3 $750,000. Id. ¶¶ 29–30. Waters has yet to receive a payment in this amount. Id. ¶¶ 26, 30. Further,

4 despite the termination of the Agreement, Notorious Media continues to display Waters’s Podcast

5 Logos on its website. Id. ¶ 32.

6 II. Procedural History

7 On November 1, 2021, Waters filed a complaint asserting three causes of action: (1) Breach

8 of Contract; (2) Trademark Infringement under the Lanham Act, 15 U.S.C. § 1114; and (3)

9 Trademark Infringement under the Lanham Act, 15 U.S.C. § 1125. See generally id. Waters

10 appropriately filed proofs of service on each of the defendants. See ECF Nos. 8, 13, 22. After each

11 defendant failed to respond, Waters filed Requests for the Clerk to enter default judgment on each

12 defendant. See ECF Nos. 15, 23, 29. Each request was granted pursuant to Federal Rule of Civil

13 Procedure 55(a). ECF Nos. 16, 24, 30.

14 On April 25, 2022, Waters filed the instant Motion requesting default judgment. ECF No. 33

15 (“Mot.”). On April 26, 2022, the Court ordered Waters to provide the defendants with notice of the

16 June 30, 2022 hearing on this Motion and to file a proof of service indicating the date, time, and

17 manner of service no later than June 23, 2022. ECF No. 35. On May 11, 2022, Waters filed the

18 Court’s requested proofs of service. ECF Nos. 43, 44, 45. On June 30, 2022, the Court heard oral

19 argument on the Motion. ECF Nos. 52, 53.

20 III. Applicable Law

21 Federal Rule of Civil Procedure 55(b) authorizes a district court to grant default judgment 22 after the Clerk of the Court enters default under Rule 55(a). FED. R. CIV. P. 55(b). Local Rule 55-1 23 requires the party seeking default judgment to file a declaration establishing: (1) when and against 24 what party the default was entered; (2) the pleading on which default was entered; (3) whether the 25 defaulting party is an infant or incompetent person, and if so, whether that person is represented by a 26 general guardian, committee, conservator, or other like fiduciary who has appeared; (4) that the 27 Servicemembers Civil Relief Act does not apply; and (5) that the defaulting party was properly 28 served with notice. C.D. Cal. L.R. 55-1. 3 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 4 of 19 Page ID #:216

1 Once default has been entered, the well-pleaded factual allegations in the complaint, except

2 those concerning damages, are deemed admitted by the non-responding party. See FED. R. CIV. P.

3 8(b)(6); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). However, default

4 judgment is not automatic upon the Clerk’s entry of default; rather, it is left to the sound discretion

5 of the court. Aldabe v. Aldabe, 616 F.2d 1089, 1092–93 (9th Cir. 1980). When deciding whether to

6 enter default judgment, courts consider seven factors, commonly known as the Eitel factors:

7 (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff’s substantive claim; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; 8 (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of 9 Civil Procedure favoring decisions on the merits.

10 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). 11 “Well-pleaded allegations” require “sufficient factual matter . . . to ‘state a claim for relief 12 that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. 13 Twombly, 550 U.S. 544, 570 (2007)). It requires “more than a sheer poss ibility that a defendant has 14 acted unlawfully” but does not require “detailed factual allegations.” Id. Instead, the plaintiff need 15 only show more than “threadbare recitals of the elements of a cause of action.” Id. “Determining 16 whether a complaint states a plausible claim for relief is ‘a context-specific task that requires the 17 reviewing court to draw on its judicial experience and common sense.’” Ebner v. Fresh, Inc., 838 18 F.3d 958, 963 (9th Cir. 2016) (quoting Iqbal, 556 U.S. at 679). 19

IV. Discussion

20 A. Waters has satisfied the procedural requ irements of Local Rule 55-1. 21 The Clerk of the Court entered default against the Notorious Defendants on December 27, 22 2021, January 25, 2022, and February 23, 2022. ECF Nos. 16, 24, 30. The Notorious Defendants 23 have not responded to the Complaint or otherwise defended the action. Pursuant to Local Rule 55-1, 24 Waters submitted a declaration from counsel establishing that Defendants are corporate entities and 25 not minors, infants, or otherwise incompetent persons, and that the Servicemembers Civil Relief Act 26 does not apply. ECF No. 33-2 ¶ 3. Finally, Waters served the Notorious Defendants with a copy of 27 28 4 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 5 of 19 Page ID #:217

1 this Motion. Id. ¶ 4. As such, the Court finds Waters has complied with the procedural requirements

2 of Local Rule 55-1.

3 B. The Eitel factors weigh in favor of granting default judgment.

4 i. Waters would suffer prejudice without a default judgment.

5 The first Eitel factor requires the Court to consider the harm to a plaintiff in the absence of

6 default judgment. See Eitel, 782 F.2d at 1471. Waters argues that the Notorious Defendants have

7 breached the Agreement both by failing to remit the required amount to Waters and by continuing to

8 display Waters’s Podcast Logos on Notorious Media’s website. Mot. at 19. As such, Waters asserts

9 that “absent injunctive relief through a default judgment, Waters would be without a remedy to stop

10 this continuing infringement.” Id. Defendants failed to appear to contest this allegation.

11 Taking the well-pleaded factual allegations as true—as this Court must, given that the Clerk

12 has entered default—Waters will be prejudiced if the Court does not grant default judgment.

13 Accordingly, the Court finds that this factor weighs in favor of default judgment.

14 ii. The Court finds that Waters’s complaint is sufficient and that the claims alleged therein are meritorious. 15 The second and third Eitel factors consider the substantive merits and sufficiency of the 16 complaint. See Eitel, 782 F.2d at 1471. Notwithstanding the entry of default, the Court must still 17 determine whether the facts alleged give rise to a legitimate cause of action because “claims [that] 18 are legally insufficient . . . are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 19 F.2d 1261, 1267 (9th Cir. 1992). Waters maintains that he has sufficiently pleaded each of the claims 20 set forth in his Complaint. Mot. at 9. 21 Under California law, “common principles apply regardless of whether the alleged alter ego 22 is based on piercing the corporate veil to attach liability to a shareholder or to hold a corporation 23 liable as part of a single enterprise.” Id. at 1108. Accordingly, common principles apply to the 24 question of whether to pierce the corporate veil to attach liability to Vincer as well as to the question 25 of whether to pierce the corporate veil to hold Notorious Holdings liable as part of a single enterprise 26 with Notorious Media. 27 / / / 28 5 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 6 of 19 Page ID #:218

1. Waters has sufficiently pleaded a breach of contract claim as to 1 Notorious Media. 2 To prevail on a breach of contract claim under California law, a plaintiff must establish: “(1)

3 the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) 6 capable of contracting, both parties consent to the contract’s terms, a lawful object is present, and 8 Cir. 1999).

9 Waters pleads breach of contract against Notorious Media. Mot. at 19–22. The Court finds

10 that Waters has made a sufficient showing of each factor in relation to Notorious Media. First, the

11 Complaint sufficiently alleges the presence of a contract in the form of the Agreement. See Compl.

12 ¶¶ 1, 7, 22–29. Next, Waters alleges that he performed his obligations under the Agreement, id. ¶ 35,

13 but that the Notorious Defendants failed to perform their obligations by failing to remit the

14 appropriate percentage of revenue to Waters. Id. ¶¶ 22–29. Finally, Waters has alleged that the

15 Notorious Defendants’ breach resulted in damages of at least $376,178.42. Mot. at 20. Accordingly,

16 the Court finds that Waters has sufficiently pleaded his breach of contract claim.

17 2. Waters has sufficiently alleged alter ego liability as to Vincer, but not 18 as to Notorious Holdings.

19 Waters also argues that Vincer and Notorious Holdings are both liable for breach of contract 20 due to alter ego liability. See Mot. at 21 (citing Compl. ¶¶ 1–2, 4–5, 14). Although the well-pleaded 21 factual allegations in the Complaint are deemed to be true, conclusory allegations are not. Iqbal, 556 22 U.S. at 678. A description of the law governing alter ego liability is in order at this juncture to 23 determine which of these allegations can fairly be considered well-pleaded factual allegations and 24 which are not. 25 With respect to attaching liability to a shareholder, “[t]he alter ego doctrine arises when a 26 plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in 27 derogation of the plaintiff’s interests. In certain circumstances the court will disregard the corporate 28 entity and will hold the individual shareholders liable for the actions of the corporation.” Mesler v. 6 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 7 of 19 Page ID #:219

1 Bragg Mgmt. Co., 702 P.2d 601, 606 (Cal. 1985). A plaintiff must allege two elements for the

2 doctrine to be invoked: (1) “there must be such a unity of interest and ownership between the

3 corporation and its equitable owner that the separate personalities of the corporation and the

4 shareholder do not in reality exist”; and (2) “there must be an inequitable result if the acts in question

5 are treated as those of the corporation alone.” Sonora Diamond Corp. v. Super. Ct., 99 Cal. Rptr. 2d

6 824, 836 (Ct. App. 2000). Put another way, courts consider whether the “corporation is . . .

7 controlled by the individual sought to be held [liable] and [whether] recognition of the separate

8 existence of the controlled corporation would work a fraud or injustice.” O’Donnell v. Weintraub, 67

9 Cal. Rptr. 274, 278 (Ct. App. 1968).

10 Similarly, with respect to holding a corporation liable as part of a single enterprise, “[a] court

11 may . . . disregard the corporate form in order to hold one corporation liable for the debts of another

12 affiliated corporation when the latter is so organized and controlled, and its affairs are so conducted,

13 as to make it merely an instrumentality, agency, conduit, or adjunct of another corporation.” Toho-

14 Towa Co. v. Morgan Creek Prods., Inc., 159 Cal. Rptr. 3d 469, 479 (Ct. App. 2013) (internal

15 quotation marks omitted). “[W]here there is such domination of finances, policies and practices that

16 the controlled corporation has . . . no separate mind, will or existence of its own and is but a business

17 conduit for its principal, the affiliated corporations may be deemed to be a single business enterprise,

18 and the corporate veil pierced.” Id. at 480 (internal citations and quotation marks omitted).

19 With this in mind, the Court turns to the allegations in the Complaint. A number of the

20 allegations are clearly conclusory and merely a recitation of the elements or factors of alter ego

21 liability. For example, the allegation in the Complaint that “Notorious [Media] and Vincer are alter 22 egos of one another and of [Notorious Holdings],” Compl. ¶ 2, is a legal conclusion which this Court 23 need not accept as true on a motion for default judgment. Similarly, the allegation that “there is a 24 substantial unity of interest among all Defendants,” id. ¶ 14, is also a legal conclusion that the Court 25 need not accept as true. 26 However, the following are well-pleaded factual allegations which the Court accepts as true:

27 Id. ¶ 2: “Notorious [Media] and its Chief Executive Officer [Vincer] absconded with 28 Waters’ monies in order to fuel Vincer’s reportedly luxurious and debaucherous lifestyle . . . .” 7 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 8 of 19 Page ID #:220

1 Id. ¶ 4: “Vincer signed a lease for a mansion—referred to as the “Notorious Estate”— 2 which Defendants paid for my converting monies collected by Defendants on Waters’ behalf from Waters’ advertisers.” 3 Id. ¶ 14: “Vincer is the primary principal and CEO of Notorious [Media] and Notorious 4 Holdings.”

5 Id.: “Vincer exercises complete control over and dominates Notorious [Media] and

Notorious Holdings in all substantive matters, including, but not limited to, the 6 hiring of their officers, the ultimate authority to enter into contracts (including, inter

alia, the contract with [Waters] with respect to the conduct complaint of herein), 7 the ultimate authority concerning the direction and strategy of litigation, and the

control over the distribution and disbursement of assets (for example, upon 8 information and belief, Vincer’s treating of Notorious [Media]’s and Notorious

Holdings’ bank accounts as his own personal “piggy bank” and commingling of his 9 personal assets with [Notorious Media’s] and Notorious Holdings’ assets).”

10 Id.: “Vincer holds himself out as the equivalent of Notorious [Media] and Notorious

Holdings.” 11

12 The Court finds that these well-pleaded factual allegations, taken as true, establish both a unity of

13 interest between Vincer and Notorious Media. They also establish that to allow Notorious Media to

14 rely on the corporate form would yield an “inequitable result” and “work a fraud or injustice.”

15 Sonora Diamond Corp., 99 Cal. Rptr.2d at 836; O’Donnell, 67 Cal. Rptr. at 278. Accordingly, the

16 Court finds that Waters has sufficiently alleged an alter ego relationship between Vincer and

17 Notorious Media.

18 Although Waters has sufficiently alleged an alter ego relationship between Vincer and 19 Notorious Holdings, the Court finds that he has not sufficiently alleged an alter ego relationship 20 between Notorious Media and Notorious Holdings. The C omplaint does not allege the nature of the 21 relationship between the two companies or permit this Court to find that they were treated as one 22 enterprise.3 See Toho-Towa Co. v. Morgan Creek Prods., Inc., 159 Cal. Rptr. 3d 469, 479 (Ct. App. 23 2013). 24 / / / 25

26 3 At the hearing, counsel for Waters disclaimed the notion that simply finding that Vincer was the alter ego of 27 both companies would be enough to find that the two companies were alter egos of each other. The Court therefore does not consider whether this theory might support a finding that Waters had properly alleged an 28 alter ego relationship between Notorious Holdings and Notorious Media. 8 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 9 of 19 Page ID #:221

1 3. Waters has sufficiently alleged a breach of Lanham Act claim.

2 To assert a claim for trademark infringement, a plaintiff must show that: (1) it has a valid,

3 protectable mark, and (2) the defendant’s use of the mark is likely to cause consumer confusion.

4 OTR Wheel Eng’g, Inc. v. W. Worldwide Servs., Inc., 897 F.3d 1008, 1022 (9th Cir. 2018); 15 U.S.C.

5 § 1114(1)(a). Although there are some differences between a claim under § 1114 (trademark

6 infringement) and § 1125(a) (false designation of origin), “the analysis under the two provisions is

7 oftentimes identical.” Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1047

8 n.8 (9th Cir. 1999). Furthermore, the Ninth Circuit “has consistently held that state common law

9 claims of unfair competition and actions pursuant to California Business and Professions Code §

10 17200 are ‘substantially congruent’ to claims under the Lanham Act.” Cleary v. News Corp., 30 F.3d

11 1255, 1262–63 (9th Cir. 1994); see, e.g., Rearden LLC v. Rearden Com., Inc., 683 F.3d 1190, 1221

12 (9th Cir. 2012) (“It is undisputed that Appellants’ state law trademark infringement claim (as well as

13 their claim under the UCL to the extent it is based on infringement grounds) is subject to the same

14 legal standards as their Lanham Act trademark claim.”). Therefore, the Court jointly analyzes

15 Waters’s claims for trademark infringement and false design of origin.

16 a. Waters has sufficiently alleged that he holds a valid,

17 protectable mark.

18 Federal registration provides “prima facie evidence” of a trademark’s validity and entitles the 21 uncontested, the ownership interest element of a trademark infringement claim is met. Pom 22 Wonderful LLC v. Hubbard, 775 F.3d 1118, 1124 (9th Cir. 2014). 23 Here, Waters contends that he is the owner of the federally registered trademark “Foul Play” 24 and that he has continuously used the unregistered mark “Hometown History.” Compl. ¶¶ 6, 39. The 25 Notorious Defendants have not contested Waters’s ownership of “Foul Play” and Waters has 26 claimed ownership by providing the U.S. Trademark Registration number. Id. ¶ 6. Therefore, Waters 27 is the presumed owner of the Foul Play mark. 28 9 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 10 of 19 Page ID #:222

1 In regard to the “Hometown History” mark, Waters contends that since or about June 2018,

2 he has continuously used the mark “in connection with the production and interstate marketing and

3 Internet dissemination of [his] ‘Hometown History’ podcasts.” Id. ¶ 49. This continuous use, he

4 argues, has rendered the mark as “either inherently distinctive” or has granted it “secondary meaning

5 as it has come to indicate to relevant consumers the ‘Hometown History’ podcast, with [Waters] . . .

6 as the source thereof.” Id.

7 Secondary meaning is “the mental association by a substantial segment of consumers and

8 potential consumers between the alleged mark and a single source of the product.” Levi Strauss &

9 Co. v. Blue Bell, Inc., 778 F.2d 1352, 1354 (9th Cir. 1985) (citations omitted); Grupo Gigante SA De

10 CV v. Dallo & Co., 391 F.3d 1088, 1095 (9th Cir. 2004) (“Secondary meaning refers to a mark’s

11 actual ability to trigger in consumers’ minds a link between a product or service and the source of

12 that product or service.”). Secondary meaning may be thought of as a “learned association” or “an

13 acquired distinctiveness.” Int’l Jensen, Inc. v. Metrosound U.S.A., Inc., 4 F.3d 819, 824 (9th Cir.

14 1993). “If buyers take the word to refer only to a particular producer’s goods or services, it is not

15 generic. But if the word is identified with all such goods or services, regardless of their suppliers, it

16 is generic and so not a valid mark.” Surgicenters of Am., Inc. v. Med. Dental Surgeries, Co., 601

17 F.2d 1011, 1016 (9th Cir. 1979).

18 “Factors considered in determining whether a secondary meaning has been achieved include:

19 (1) whether actual purchases of the product bearing the claimed trademark associate the trademark

20 with the producer, (2) the degree and manner of advertising under the claimed trademark, (3) the

21 length and manner of use of the claimed trademark and, (4) whether use of the claimed trademark 22 has been exclusive.” Levi Strauss & Co., 778 F.2d at 1358 (quoting Transgo, Inc. v. Ajac 23 Transmission Parts Corp., 768 F.2d 1001, 1015 (9th Cir. 1985)). “While evidence of a 24 manufacturer’s sales, advertising and promotional activities may be relevant in determining 25 secondary meaning, the true test of secondary meaning is the effectiveness of this effort to create it.” 26 Id. 27 A plaintiff may establish secondary meaning through direct and circumstantial evidence. 2 J. 28 Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 15:30 (5th ed. 2022). While 10 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 11 of 19 Page ID #:223

1 direct evidence, such as consumer surveys, are considered to be the most persuasive evidence, see

2 Levi Strauss & Co., 778 F.2d at 1358, circumstantial evidence such as “exclusivity, manner, and

3 length of use, amount and manner of advertising, amount of sales and the number of customers, and

4 plaintiff’s established place in the market” is also considered persuasive. Filipino Yellow Pages, Inc.

5 v. Asian J. Publ’ns, Inc., 198 F.3d 1143, 1150–51 (9th Cir. 1999).

6 Here, the Court finds that Waters has sufficiently alleged secondary meaning. First, Waters

7 alleges that his Hometown History podcast averages roughly 600,000 downloads per an episode.

8 Compl. ¶ 31. This implies that podcast listeners, or customers, associate the “Hometown History”

9 podcast name with Waters specifically. Next, in regard to the degree and manner of advertising,

10 Waters alleges that he has consistently used the “Hometown History” mark since 2018. See id. ¶ 49.

11 Accordingly, the Court finds that Waters has sufficiently alleged the creation of a secondary

12 meaning in the “Hometown History” mark.

13 b. Waters sufficiently shows a likeliho od of confusion. 14 Next, the Court must consider “whether an alleged trademark infringer’s use of a mark 15 creates a likelihood that the consuming public will be confused as to who makes what product.” 16 Jada Toys, Inc. v. Mattel, Inc., 518 F.3d 628, 632 (9th Cir. 2008) (citation and internal quotation 17 marks omitted). When determining the likelihood of confusion, the Ninth Circuit considers eight 18 factors, commonly known as the Sleekcraft factors: (1) the strength of the marks; (2) proximity of 19 the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; 20 6) type of goods and the degree of care likely to be exercis ed by the purchaser; (7) defendant’s intent 21 in selecting the mark; and (8) likelihood of expansion of the product lines. AMF Inc. v. Sleekcraft 22 Boats, 599 F.2d 341, 348–49 (9th Cir. 1979), abrogated by Mattel, Inc. v. Walking Mountain Prods., 23 353 F.3d 792 (9th Cir. 2003). 24 In the context of the Internet, the Ninth Circuit has held that “the three most important 25 Sleekcraft factors are (1) the similarity of the marks, (2) the relatedness of the goods or services, and 26 (3) the simultaneous use of the Web as a marketing channel” (“Web Factors”). GoTo.com, Inc. v. 27 Walt Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000) (citation omitted). 28 11 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 12 of 19 Page ID #:224

1 Waters has set forth allegations that speak to all three Web factors. First, with respect to the

2 similarity of the marks, Waters has alleged that the marks are identical as the Notorious Defendants

3 display Waters’s Podcast Logos on their website which are identical to the Waters’s Podcast Marks.

4 Compl. ¶¶ 6, 32, 38–57. Next, regarding the relatedness of goods and services, both Waters and the

5 Notorious Defendants are engaged in podcasts; Waters’s Podcast Marks are affiliated with Waters’s

6 podcasts; and the Notorious Defendants’ website advertises Waters’s podcasts and other similar

7 podcast shows. See id. ¶ 32. Finally, in regard to use of the Web as a marketing channel, as podcasts

8 are solely hosted on the Internet, both Waters and the Notorious Defendants use the Web as their

9 primary marketing channel. See supra n.2; Compl. ¶¶ 31–32. As Waters has met the three Web

10 Factors, the Court finds that Waters has sufficiently established the merits of its claims for trademark

11 infringement and false designation of origin.

c. As a license is an affirmative defense, the Court does not 12 consider the potential presence of a license in its analysis. 13 Here, however, Waters has granted the Notorious Defendants license to display the Podcast

14 Marks on the Notorious Media website. See the Agreement. At the June 30, 2022 hearing, the Court

15 ordered Waters to submit supplemental briefing regarding the “issue of whether the existence of a

16 license is an affirmative defense for which the defense bears the burden.” Minute Order, ECF No.

17 53. In his resultant briefing, Waters makes the following three arguments: (1) a “license” is an

18 affirmative defense under Federal Rule of Civil Procedure 8(c)(1); (2) insofar as the Agreement

19 constituted a license, the Agreement terminated ten days following Waters’s written notice of

20 breach; (3) any implied license would have terminated upon the commencement of this action.

21 Supplemental Brief, ECF No. 51 (“Supp. Br.”) at 2–4. 22 Principles of copyright law and Rule 8(c)(1) of the Federal Rules of Civil Procedure provide 23 that a license is an “affirmative defense,” and thus must be raised by the defendant. FED. R. CIV. P. 24 8(c)(1); Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 1110, 1114–15 (9th Cir. 25 2000) (“The existence of a license creates an affirmative defense to a claim of copyright 26 infringement.”). Thus, as the defendant “bears the burden of proving an affirmative defense,” 27 Affirmative Defense, BLACK’S LAW DICTIONARY (11th ed. 2019), failure to raise such a defense 28 “effects a waiver.” In re Adbox, Inc., 488 F.3d 836, 841 (9th Cir. 2007). As a result, the Court finds 12 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 13 of 19 Page ID #:225

1 that the presence of a copyright license—either implied or express—has no bearing on its analysis at

2 the default judgment stage and does not address the remainder of Waters’s arguments.

3 In sum, the Court finds that these two Eitel factors—merits of the claim and sufficiency of

4 the complaint—therefore point towards granting default judgment.

5 iii. The sum of money at stake is reasonable.

6 In evaluating this factor, the Court must balance the amount of money at stake in relation to

7 the seriousness of Defendants’ conduct. See Eitel, 782 F.2d at 1471–72.

8 1. Waters is entitled to compensatory damages for his breach of contract

9 claim.

10 Waters seeks $376,178.42 in compensatory damages on his breach of contract claim. Mot. at

11 25. This amount is derived from the unpaid 80 percent share of the ad revenue collected by the

12 Notorious Defendants under the Agreement. Id. at 22.

13 While the requested sum is large, the Court finds that the amount is reasonable as it will put

14 Waters “in as good a position as [he] would have been had performance been rendered as promised.” 16 allegations in the Complaint reflect that the Agreement’s terms guaranteed Waters an 80 percent

17 remittance on the amount generated by the Notorious Defendants through ad revenue. Compl. ¶ 23.

18 The $376,178.42 amount is supported through data pages and invoices listing the specific ad revenue

19 generated from each specific advertiser during the relevant period. See Declaration of Shane Waters,

20 ECF No. 33-1 (“Waters Decl.”), Exs. A–B; Waters Decl. ¶¶ 6, 8.

21 2. Waters is entitled to pre- and post-judgment interest. 22 Waters also seeks pre- and post-judgment interest on the compensatory award of 23 $376,178.42. Mot. at 26. 24 a. Pre-judgment interest. 25 “In diversity cases, state law governs the award of prejudgment interest.” Lund v. Albrecht, 26 936 F.2d 459, 464 (9th Cir. 1991) (citations omitted). California Civil Code Section 3289(b) 27 provides “[i]f a contract entered into after January 1, 1986, does not stipulate a legal rate of interest, 28 13 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 14 of 19 Page ID #:226

1 the obligation shall bear interest at a rate of 10 percent per annum after a breach.” CAL. CIV. CODE §

2 3289(b).

3 The Court finds that Waters is entitled to pre-judgment interest. First, Waters and the

4 Notorious Defendants entered into the Agreement on March 26, 2020. See the Agreement. Next, the

5 Agreement does not provide for an interest rate in the event of either party’s breach. Accordingly,

6 Section 3289(b) applies, and Waters is entitled to prejudgment interest in the amount of 10 percent

7 per annum, totaling $41,739.30.4

8 b. Post-judgment interest

9 “[P]ost-judgment interest is determined by federal law.” Northrop Corp. v. Triad Int’l Mktg.,

10 S.A., 842 F.2d 1154, 1155 (9th Cir. 1988). 28 U.S.C. § 1961 provides that “[i]nterest shall be

11 allowed on any money judgment in a civil case recovered in a district court.” 28 U.S.C. § 1961(a).

12 Post-judgment interest is calculated “from the date of the entry of the judgment, at a rate equal to the

13 weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of

14 the Federal Reserve System, for the calendar week preceding the date of the judgment.” Id.

15 Here, Waters seeks post-judgment interest at the rate set forth by federal law. The record

16 provides no countervailing evidence setting post judgment interest at a different amount.

17 Accordingly, the Court finds that Waters is entitled to the amount permitted by Section

18 1961(c).

19 iv. There is little possibility of dispute.

20 The fifth Eitel factor requires the Court to consider the possibility of dispute about material

21 facts in the case. See Eitel, 782 F.2d at 1471–72. Generally, where a complaint is well-pleaded and 22 the defendants make no effort to respond, this factor weighs in favor of default judgment. 23 Though the Notorious Defendants have not responded to this action, there is no indication 24 from the Complaint nor Waters’s motion that there are any facts in dispute. Upon entry of default, all 25 well-pleaded facts in the complaint are taken as true, except those relating to damages. TeleVideo 26 Sys., Inc., 826 F.2d at 917–18. There is also no indication that the Notorious Defendants might have 27 28 4 This amount is calculated starting from the end of the ten-day cure period on July 8, 2021, to the date of entry of Judgment. 14 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 15 of 19 Page ID #:227

1 a strong affirmative defense of license, keeping in mind the well-pleaded allegations about how that

2 license was breached. Having considered the low likelihood of disputed facts, the Court finds this

3 factor to weigh in favor of default judgment.

4 v. The Court is unable to conclude whether there is excusable neglect.

5 The sixth Eitel factor considers the possibility that the default resulted from excusable

6 neglect. See Eitel, 782 F.2d at 1472.

7 Here, Waters alleges he has made numerous attempts to serve the Notorious Defendants with

8 the Complaint, summons, and this motion for default judgment. See supra Section II. Absent any

9 further information, the Court is unable to conclude whether the Notorious Defendants’ failure to

10 respond is due to excusable neglect.

11 vi. Policy favoring resolution on the merits weighs against granting default

12 judgment.

13 The Ninth Circuit’s “starting point is the general rule that default judgments are ordinarily

14 disfavored. Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782

15 F.2d at 1472. Therefore, the policy favoring resolution on the merits weighs against granting default

16 judgment.

17 Taken as a whole, the Court finds that the Eitel factors weigh towards granting default

18 judgment against the Notorious Defendants.

19

V. Remedies

20 A. The Court grants the request for permanent injunction.

21 Having found in favor of granting default judgment, the Court next considers whether it 22 should award Waters a permanent injunction against the Notorious Defendants. Waters seeks a 23 permanent injunction “requiring [the Notorious Defendants] to remove the Waters’[s] Podcast Logos 24 from Defendants’ website and cease and desist from any advertising of Waters’[s] podcasts or from 25 otherwise suggesting any continued connection, affiliation, and/or association with Waters and/or 26 Waters’[s] podcasts.” Compl. at Prayer ¶ C. 27 The Lanham Act “vests the district court with the power to grant injunctions according to 28 principles of equity and upon such terms as the court may deem reasonable, to prevent the violation 15 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 16 of 19 Page ID #:228

1 of any right of the trademark owner.” Reno Air Racing Ass’n v. McCord, 452 F.3d 1126, 1137 (9th

2 Cir. 2006) (citing 15 U.S.C. § 1116). A party seeking a permanent injunction must show: “(1) that it

3 has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are

4 inadequate to compensate for that injury; (3) that, considering the balance of the hardships between

5 the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would

6 not be disserved by a permanent injunction.” La Quinta Worldwide LLC v. Q.R.T.M., S.A. de C.V.,

7 762 F.3d 867, 879 (9th Cir. 2014) (citations omitted). The decision to grant or deny permanent

8 injunctive relief is an act of equitable discretion by the district court. eBay Inc. v. MercExchange,

9 L.L.C., 547 U.S. 388, 391 (2006).

10 As previously discussed, Waters has shown that he is entitled to judgment on each of his

11 claims, including his claim for federal trademark infringement under the Lanham Act. Here, Waters

12 is entitled to a presumption of irreparable harm because he has demonstrated a likelihood of success

13 on the merits. See 15 U.S.C. § 1116(a) (“A plaintiff seeking any such injunction shall be entitled to a

14 rebuttable presumption of irreparable harm upon a finding of a violation identified in this subsection

15 in the case of a motion for a permanent injunction”). If an injunction were not granted, Waters would

16 suffer irreparable injury from the ongoing damages to its goodwill and diversion of customers to

17 similar products. Furthermore, the balance of hardships favors Waters because without an injunction,

18 Waters will lose profits and goodwill, while the Notorious Defendants will only be inhibited from

19 carrying on its infringing activities. Finally, an injunction is in the public interest because “[t]he

20 public has an interest in avoiding confusion between two companies’ products.” Internet Specialties

21 W., Inc. v. Milon–DiGiorgio Enters., Inc., 559 F.3d 985, 993 n.5 (9th Cir. 2009). Accordingly, the 22 Court concludes that Waters is entitled to a permanent injunction. 23 Thus, the Court GRANTS Waters’s request for permanent injunction, as to the relief actually 24 pleaded in its Complaint. See Compl. at Prayer ¶ C; Mot. at 27–28. 25 B. The Court grants the request for costs. 26 Waters requests that the Court award costs of suit in the amount of $1,324.50, consisting of 27 the $402 filing fee to initiate this action and $922.50 in process server fees. Mot. at 27. Under 28 Federal Rule of Civil Procedure 54(d)(1), a plaintiff prevailing on a motion for default judgment is 16 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 17 of 19 Page ID #:229

1 entitled to costs other than attorneys’ fees. Accordingly, the Court GRANTS Waters’s request for the

2 costs of suit incurred herein, in the amount of $1,324.50. See Mot. at 27.

3 C. The Court denies the request for attorneys’ fees.

4 Waters seeks an award of attorneys’ fees under the Lanham Act given that he has properly

5 stated claims for relief under the Lanham Act. Mot. at 26. And rather than supporting such an award

6 with evidence, Waters relies on Local Rule 55-3 which sets forth a specific schedule for calculating

7 attorneys’ fees awards on default judgment in circumstances when “[an] applicable statute provides

8 for the recovery of reasonable attorneys’ fees.” C.D. Cal. L.R. 55-3. Mot, at 27. Accordingly,

9 Waters requests that the Court award attorneys’ fees in the amount of $11,859.41 which represents

10 the proper calculation under the schedule (assuming pre-judgment interest through the June 30, 2022

11 hearing date). Id.

12 As previously discussed, Waters only requests and has presented evidence in support of

13 compensatory damages stemming from his breach of contract claim (in an amount totaling

14 $376,178.42) plus interest on that damages award. Although he alleges violations of the Lanham

15 Act, and this Court is entering default judgment on his behalf with respect to the alleged violations

16 of the Lanham Act, Waters has not presented evidence of damages under the Lanham Act, and the

17 Court’s judgment as set forth in this Order does not include a monetary judgment with respect to the

18 Lanham Act. Accordingly, the schedule in the Local Rules is inapplicable, as it would only apply

19 where a plaintiff obtained damages pursuant to the Lanham Act. The plain meaning of the Local

20 Rule supports this:

21 L.R. 55-3 Default Judgment - Schedule of Attorneys’ Fees. When a promissory note, 22 contract or applicable statute provides for the recovery of reasonable attorneys’ fees, those fees shall be calculated according to the following schedule: 23 Amount of Judgment Attorneys’ Fees Awards 24 $0.01 - $1,000 30% with a minimum of $250.00 $1,000.01 - $10,000 $300 plus 10% of the amount over $1,000 25 $10,000.01 - $50,000 $1200 plus 6% of the amount over $10,000 26 $50,000.01 - $100,000 $3600 plus 4% of the amount over $50,000 Over $100,000 $5600 plus 2% of the amount over $100,000 27 This schedule shall be applied to the amount of the judgment exclusive of costs. 28 17 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 18 of 19 Page ID #:230

1 C.D. Cal. L.R. 55-3. The plain meaning is that this schedule is applied to the amount of the

2 judgment pursuant to the promissory note, contract, or applicable statute. It would be anomalous—

3 and this Court suggests, unjust—to calculate attorneys’ fees based upon a judgment that was not

4 rendered pursuant to a promissory note, contract, or applicable statute. In theory, it could result in a

5 party obtaining an attorneys’ fees award on a claim that in no way reflects either the recovery on the

6 claim or the work put into prosecuting the claim. Even if Waters’s reading of the rule was proper,

7 this Court finds that this would not constitute a “reasonable” attorneys’ fees award under the

8 Lanham Act and would deny it on that basis. Accordingly, this Court DENIES the request for

9 attorneys’ fees.

10 VI. Conclusion

11 For the reasons stated above, the Court GRANTS Waters’s Motion for Default Judgment.

12 IT IS HEREBY ORDERED that:

13 (1) Judgment be entered in favor of Waters on his claims for breach of contract and trademark

14 infringement under the Lanham Act, 15 U.S.C. § 1117(a);

15 (2) The Notorious Defendants must remove the logos for Waters’s podcasts “Foul Play” and

16 “Hometown History” from the https://notorious.llc website within seven (7) days of this

17 Order;

18 (3) The Notorious Defendants and their officers, agents, servants, employees and attorneys, and

19 all persons in active concert or participation with any one or more of them are permanently

20 restrained and enjoined from advertising Waters’s podcasts or from otherwise suggesting any

21 continued connection, affiliation, and/or association with Waters and/or Waters’s podcasts; 22 (4) All defendants shall be jointly and severally liable to Waters in the amount of $419,242.22, 23 which is comprised of: 24 (a) $376,178.42 in compensatory damages; 25 (b) $41,739.30 in pre-judgment interest; and 26 (c) $1,324.50 in costs; 27 28 18 Case 2:21-cv-08623-MEMF-AS Document 54 Filed 08/17/22 Page 19 of 19 Page ID #:231

1 (5) Waters shall also recover post-judgment interest from the Notorious Defendants, jointly and

2 severally, at the rate of 3.28 percent per annum,5 which is the “rate equal to the weekly

3 average 1-year constant maturity Treasury yield, as published by the Board of Governors of

4 the Federal Reserve System, for the calendar week preceding the date of th[is] judgment.” 28

5 U.S.C. § 1961(a).

6

7 IT IS SO ORDERED.

8 Dated: August 17, 2022 ___________________________________

9 MAAME EWUSI-MENSAH FRIMPONG

10 United States District Judge

11

12

13

14

15

16

17

18

19

20

21 22

23 5 See “Current Applicable Rates,” Administrative Office of the U.S. Courts, 24 https://www.uscourts.gov/services-forms/fees/post-judgment-interest-rate (last visited Aug. 17, 2022) (“Under each of the above statutes [including 28 U.S.C. § 1961] the rate of interest used in calculating the 25 amount of post judgment interest is the weekly average 1-year constant maturity (nominal) Treasury yield, as published by the Federal Reserve System. . . . . Additionally, as of October 11, 2016, the Board no longer 26 publishes the H.15 [the Federal Reserve Board Selected Interest Rates statistical release] in PDF format or publish weekly and monthly averages directly on the H.15. Weekly and monthly averages continue to be 27 available through the Board’s Data Download Program.”); “Data Download Program,” Board of Governors of the Federal Reserve System, https://www.federalreserve.gov/datadownload/Choose.aspx?rel=H.15 (last 28 visited Aug. 17, 2022) (applicable data pulled for the week of August 12, 2022). 19