Google, Inc. et al v. Jackman et al, No. 5:2010cv04264 - Document 59 (N.D. Cal. 2011)
Court Description: ORDER granting 44 , 53 Motion for Default Judgment. Since this Order and ensuing Judgment effectively resolve this case against all remaining defendants, the Clerk shall close this file upon entry of Judgment. Signed by Judge Edward J. Davila on 7/28/2011. (ejdlc1, COURT STAFF) (Filed on 7/28/2011)
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Google, Inc. et al v. Jackman et al Doc. 59 1 2 3 4 5 6 7 IN THE UNITED STATES DISTRICT COURT 8 FOR THE NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION NO. 5:10-cv-04264 EJD (HRL) GOOGLE, INC., 11 ORDER GRANTING PLAINTIFF’S MOTION FOR DEFAULT JUDGMENT Plaintiff(s), v. For the Northern District of California United States District Court 10 12 OMAR JACKMAN, et. al., 13 [Docket Item Nos. 44, 53] Defendant(s). 14 15 / Presently before the Court is Plaintiff Google Inc.’s (“Google”) Motion for Default Judgment 16 (“Motion”) against Defendants Gina Wyant, Gregory Gavin and Amanda Odell (collectively, 17 “Defendants”). To date, Defendants have not filed an opposition or otherwise appeared in this 18 proceeding. Pursuant to Local Rule 7-1(b), the court determined this motion was suitable for 19 decision without oral argument and therefore vacated the previously-scheduled hearing. Having 20 reviewed Google’s pleadings and the applicable legal authorities, the Motion will be granted.1 I. 21 22 FACTUAL AND PROCEDURAL BACKGROUND On September 21, 2010, Google initiated this action by filing a Complaint against defendants 23 Omar Jackman and “John Doe” Simon. See Docket Item No. 1. Thereafter, Google filed a First 24 Amended Complaint (“FAC”) adding Wyant, Gavin, Odell and Joey Patron as defendants. See 25 Docket Item No. 16. The following facts are taken largely from the FAC, as noted. 26 Google is a Delaware corporation with its principal place of business in Mountain View, 27 28 1 This disposition is not intended for publication in the official reports. 1 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) Dockets.Justia.com 1 California. FAC at ¶ 1. Google operates a program called AdWords, an online advertising service, 2 which places ads on pages containing Google search results. Id. at ¶ 12. Potential advertisers bid on 3 search keywords to have their advertisement presented on a search page. Id. Due to its size, 4 AdWords is mostly automated and self-service. Id. 5 In order to participate in the AdWords program, a potential advertiser must open an 6 AdWords account. Id. at ¶ 13. An account is created online and requires the advertiser to agree to 7 the terms and conditions that govern an account with AdWords, which are contained in the 8 Advertising Program Terms (“Ad Terms”). Id. at ¶ 13; Decl. of Heather Cain in Support of Motion 9 for Default Judgment (“Cain Decl.”), at Ex. A. The Ad Terms prohibit advertisers from using AdWords to advertise illegal products or to engage in illegal business practices using AdWords. Id. 11 For the Northern District of California United States District Court 10 More specifically, Google prohibits the promotion of anabolic steroid products, and only allows 12 online pharmacies to advertise using AdWords if they have been verified by the National 13 Association of Boards of Pharmacy’s Verified Internet Pharmacy Practice Sites (“VIPPS”) program. 14 FAC at ¶ 14. 15 Defendants have used AdWords to advertise on behalf of online pharmacies that are not 16 registered with VIPPS. Id. at ¶ 19. Specific Defendants, Gavin registered the domain name 17 www.swesspharma.com. Id. Defendants then opened a series of AdWords accounts to advertise 18 www.swesspharma.com and promote Dianabol, an anabolic steroid. Id. at ¶¶ 19, 24. In order to 19 evade detection by Google’s automatic monitoring system, Defendants misspelled Dianabol on the 20 advertisement that ran over the AdWords network. Id. at ¶ 24. Also, Defendants continued to open 21 accounts, possibly using different names and false contact information, even after their original 22 accounts were suspended. Id. at ¶ 26. These practices are in violation of the Ad Terms. Id. 23 Defendants ads ran for a short time on the AdWords network, but they were eventually 24 removed through Google’s “sweeps,” a process used to identify and inspect ads that originally 25 passed automated review but may actually violate Google’s policies. Id. at ¶ 25. 26 The FAC contains one cause of action for breach of contract against all defendants. See 27 Docket Item No. 16. Jackman waived service of the FAC (see Docket Item No. 22), and eventually 28 agreed to the entry of a permanent injunction against him. See Docket Item No. 46. Google then 2 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 dismissed defendants “John Doe” Simon and Joey Patron. See Docket Item No. 45. Defendants 2 Wyant, Gavin, and Odell failed to respond after being served with the action. The clerk entered 3 their defaults on February 2nd and February 9, 2011. See Docket Item Nos. 35, 40, 41. The instant 4 Motion followed on March 31, 2011, (see Docket Item No. 44) and was re-noticed on May 6, 2011. 5 See Docket Item No. 53. 6 II. DISCUSSION Pursuant to Federal Rule of Civil Procedure 55(b), the court may enter default judgment 9 against a defendant who has failed to plead or otherwise defend an action. “The district court’s 10 decision whether to enter default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 11 For the Northern District of California A. 8 United States District Court 7 1089, 1092 (9th Cir. 1980). The Ninth Circuit has provided seven factors for consideration by the 12 district court in exercising its discretion to enter default judgment: (1) the possibility of prejudice to 13 the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the sufficiency of the complaint; (4) 14 the sum of money at stake in the action; (5) the possibility of dispute concerning material facts; (6) 15 whether default was due to excusable neglect and; (7) the strong policy underlying the Federal Rules 16 of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th 17 Cir. 1986). When assessing these factors, all factual allegations in the complaint are taken as true, 18 except those with regard to damages. Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th 19 Cir. 1987). 20 21 Legal Standard B. Jurisdiction Courts have an affirmative duty to examine their own jurisdiction - both subject matter 22 jurisdiction and personal jurisdiction - when entry of judgment is sought against a party in default. 23 In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The court does so below. 24 25 1. Subject Matter Jurisdiction District courts have original jurisdiction to hear civil actions where the matter involves 26 citizens of different states, and the amount in controversy exceeds the sum or value of $ 75,000, 27 exclusive of interest and costs. 28 U.S.C. § 1332(a). Here, there is complete diversity between 28 Google and each of the Defendants. FAC at ¶¶ 1-7. Also, the amount in controversy exceeds 3 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 2 3 $75,000. FAC at ¶ 9. This court may therefore exercise subject matter jurisdiction over this action. 2. Personal Jurisdiction As the party seeking to invoke the court ’s jurisdiction, Google must bear the burden of 4 establishing personal jurisdiction over Defendants. See Scott v. Breeland, 792 F.2d 925, 927 (9th 5 Cir. 1986). In the Motion, Google contends Defendants consented to personal jurisdiction in this 6 forum when they agreed to the Ad Terms. FAC at ¶ 10; Cain Decl. at Ex. A. Paragraph 9 of the Ad 7 Terms includes the following forum selection clause: “All claims arising out of or relating to this 8 Agreement or the Google program(s) shall be litigated exclusively in the federal or state courts of 9 Santa Clara County, California, USA, and Google and customer consent to personal jurisdiction in 11 For the Northern District of California United States District Court 10 those courts.” Cain Decl. at Ex. A. Forum selection clauses, like the one cited above, are presumptively valid. M/S Bremen v. 12 Zapata Off-Shore Co., 407 U.S. 1, 10 (1972). “[T]he party seeking to avoid a forum selection clause 13 bears a ‘heavy burden’ to establish a ground upon which” the court may find the clause 14 unenforceable. Doe 1 v. AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009). The Ninth Circuit has 15 recognized that the acceptance of a forum selection clause constitutes consent to personal 16 jurisdiction in the identified forum. SEC v. Ross, 504 F.3d 1130, 1149 (9th Cir. 2007) (citing Nat'l 17 Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1964); Dow Chem. Co. v. Calderon, 422 18 F.3d 827, 831 (9th Cir. 2005)). Here, Plaintiff has established that in order to participate in the 19 AdWords program, Defendants were required to agree to the Ad Terms and to the forum selection 20 clause contained in Paragraph 9. The Ad Terms appear on the computer screen during the account 21 activation process, and an AdWords account does not become functional until the advertiser 22 specifically acknowledges consent to the Ad Terms. Cain Decl. at ¶ 4. Due to their non-appearance, 23 Defendants have not raised a challenge to the clause, and the court does not independently consider 24 the clause unreasonable or unfair. Thus, the presumption validity prevails here. See M/S Bremen, 25 407 U.S. at 10. Accordingly, the court finds it may properly exercise personal jurisdiction over 26 Defendants due to their consent to the Ad Terms. 27 28 3. Service of Process The court must assess whether the Defendants were properly served with notice of this 4 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 action. Plaintiff served the Summons and FAC on Defendant Wyant by delivering the documents to 2 her husband at their place of residence in Ohio. See Docket Item No. 24. The Summons and FAC 3 were served on Defendants Gavin and Odell through personal delivery to Gavin at their residence in 4 Tennessee. See Docket Item Nos. 33, 34. The court finds Plaintiffs effected service of process in 5 conformance with subsections (e)(2)(A) and (e)(2)(B) of Federal Rule of Civil Procedure 4. 6 C. 7 Having found the existence of jurisdiction and proper notice, the court now turns to the Eitel 8 9 factors. 1. Prejudice to Google Under the first factor, the court must examine whether Google will be prejudiced should the 11 For the Northern District of California United States District Court 10 The Eitel Factors court deny the request for default judgment. Having done so, the court agrees with Google that 12 denial of the injunctive relief requested will leave Google with no means of preventing Defendants 13 from infringing Google’s rights in the future, especially since these particular individuals have 14 serially opened multiple accounts in order to circumvent Google’s security measures. Cain Decl. at 15 ¶ 6. Because failure to grant the Motion would cause substantial harm to Google, this factor weighs 16 in favor of entering default judgment. 17 18 19 20 2. Sufficiency of Google’s FAC and Likelihood of Success For the second and third factors, the court must determine whether Google’s FAC contains sufficient facts to establish and succeed on its claim. The FAC contains only one cause of action for breach of contract. In order to plead and 21 prove a successful claim for breach of contract in California, a plaintiff must show: (1) the existence 22 of a contract; (2) plaintiff’s performance of excuse for non-performance; (3) defendant’s breach; and 23 (4) damage to plaintiff resulting therefrom. Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. 24 App. 3d 1371, 1388 (1990). Here, Google has met its burden to sufficiently plead each of these 25 elements. Taking each in turn, Google alleges that a valid contract existed between it and the 26 Defendants in the form of the Ad Terms, which Defendants accepted by activating an AdWords 27 account. FAC at ¶¶ 13, 28. The Ad Terms require each advertiser to comply with its provisions, 28 and prohibit the promotion of on-line pharmacies and prescription drugs except under certain 5 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 circumstances. Id. at ¶¶ 13, 14. Only pharmacies verified by VIPPS may target the United States 2 using the AdWords program, and the promotion of anabolic steroids is prohibited altogether. Id. at ¶ 3 14. Google performed by offering and allowing the posting of Defendant’s ads through the 4 AdWords program. Id. at ¶¶ 19, 21, 24. Defendants breached the Ad Terms by using the AdWords 5 program to advertise prescription drugs and illicit pharmaceuticals, including anabolic steroids, to 6 customers in the United States despite the fact Defendants have not been verified by the VIPPS, and 7 despite the unequivocal prohibition of anabolic steroids. Id. at ¶¶ 21, 24. Google has been damaged 8 as a direct result of Defendants’ activities such that it has been forced to implement systems 9 designed to prevent, detect, and take action against Defendants. Id. at ¶ 31. Taking these allegations as true, the court finds Google has established a claim for breach of contract. This factor therefore 11 For the Northern District of California United States District Court 10 weighs in favor of default judgment. 12 13 3. Sum of Money at Stake and Possibility of Factual Dispute The fourth and fifth Eitel factors require the court to examine the amount of money at stake 14 and the possibility of dispute concerning material facts, respectively. According to the Motion, 15 Google is seeking only injunctive relief by way of default judgment. Because money is not at stake, 16 the fourth factor favors entry of judgment. Moreover, Google has set forth sufficient and specific 17 allegations to support its claim for breach of contract. It is unlikely Defendants could dispute these 18 facts, even if they appeared in this matter. The fifth factor, therefore, also weighs in favor of 19 Google’s requested default judgment. 20 4. Possibility of Excusable Neglect 21 The court must examine the possibility that Defendants’ default is due to excusable neglect 22 under the sixth Eitel factor. Here, Defendants were each served with notice of this proceeding and, 23 as already noted, did not respond or otherwise appear. There is no evidence, or even suggestion, that 24 their failure to participate is due to anything other than informed inaction. As such, this factor 25 favors entry of default judgment. 26 5. 27 28 Policy Favoring Decisions on the Merits The seventh and final Eitel factor requires observation of the policy favoring the determination of cases on their merits rather than through default judgment. Eitel, 782 F.2d at 1472. 6 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 The court recognizes that default judgments are generally disfavored. See Pena v. Seguros La 2 Comercial, S.A., 770 F.2d 811, 814 (9th Cir. 1985). However, the Federal Rules of Civil Procedure 3 provide for entry of default in situations such as this: where a decision on the merits is either 4 impracticable or impossible. See Philip Morris USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 5 501 (C.D. Cal. 2003). Defendants’ complete failure to respond in any way renders a decision on the 6 merits both impracticable and impossible. Thus, this factor weighs in favor of default judgment. 7 8 9 judgment against Defendants. D. Remedies Having determined that default judgment may be entered, the court must now determine the 11 For the Northern District of California United States District Court 10 In sum, all of the factors designated for review under Eitel weigh in favor of entry of default appropriate remedy. See 3A Entm’t Ltd. v. Constant Entm’t, Inc., No. C 08-1274 JW, 2009 WL 12 248261, 2009 U.S. Dist. LEXIS 11042, at *9-10 (N.D. Cal. Jan 30, 2009). Although they requested 13 monetary damages in their FAC, Google only seeks entry of a permanent injunction in the Motion. 14 Thus, the court examines only injunctive relief here. 15 In general, a plaintiff that establishes breach of contract is entitled to recover the “amount 16 which will compensate the party aggrieved for all the detriment proximately caused thereby, or 17 which, in the ordinary course of things, would be likely to result therefrom.” Cal. Civ. Code § 3300. 18 However, injunctive relief may be also appropriate in a claim for breach of contract. Smith v. 19 Mendonsa, 108 Cal. App. 2d 540, 544, 238 P.2d 1039 (1952). “The basis for injunctive relief in the 20 federal courts has always been irreparable injury and the inadequacy of legal remedies.” Lucasfilm 21 Ltd. v. Media Market Gp., Ltd., 182 F. Supp. 2d 897, 899 (N.D. Cal. 2002) (internal quotations 22 omitted). 23 Here, the court finds that failure to issue an permanent injunction will expose Google to 24 continuing irreparable injury. Without such an injunction, Google will need to expend further 25 resources to discover and eliminate Defendants’ improper advertising. Defendants have shown an 26 ability to evade Google’s automatic monitoring system in the past by opening accounts under 27 different names and using creative mis-spellings in their advertisements. FAC at ¶¶ 15, 19, 24, 26. 28 Defendants’ violations of the Ad Terms will persist unless they are prohibited from doing so. 7 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 Moreover, other legal remedies, such as monetary damages, are inadequate to eliminate the problem 2 described above. Thus, Google has shown it is entitled to injunctive relief. 3 The remaining question is the scope of the injunction. In the FAC, Google prayed for an 4 injunction “barring defendants and their agents from advertising or attempting to advertise through 5 Google’s AdWords advertising network, without regard to contact name, address, or email address 6 and without regard to what URL or website is advertised.” FAC at § VI(A). They now request a 7 more expansive version in the Motion: 8 9 Defendants Wyant, Gavin, and Odell, and their agents, representatives, successors, assigns, and any persons acting in active concert or participation with them (the “Enjoined Parties”) are immediately and permanently enjoined from: 11 For the Northern District of California United States District Court 10 (a) Opening an account with Google (whether in the Enjoined Parties’ name or using different names or aliases); 12 (b) Using any Google web-based application or service provided for a fee, whether existing now or created in the future; and 13 14 15 (c) Using any Google web-based application or service - whether or not provided for a fee, and whether existing now or created in the future - that requires a log-in or account, including but not limited to AdWords, AdSense, Analytics, and Gmail. 16 Generally, “an injunction must be narrowly tailored to remedy only the specific harms shown 17 by the plaintiffs rather than to enjoin all possible breaches of the law.” Iconix, Inc. v. Tokuda, 457 18 F. Supp. 2d 969, 998-1002 (N.D. Cal. 2006) (citing Price v. City of Stockton, 390 F.3d 1105, 1117 19 (9th Cir. 2004)). Moreover, “[a] default judgment must not differ in kind from, or exceed in amount, 20 what is demanded in the pleadings.” Fed. R. Civ. Proc. 54(c). As explained above, Google has only 21 shown irreparable injury arising out of Defendants’ improper use of the AdWords program - not 22 from their use of any Google-based program. The corresponding injunction issued must therefore be 23 narrowly tailored to that demonstrated injury. The injunction proposed by Google is not so narrowly 24 tailored since it appears Google is attempting to prevent Defendants from violating the terms and 25 conditions of all Google programs. Additionally, the language proposed by Google is much more 26 expansive than the injunction described in the FAC. It would be unfair to Defendants to issue such 27 28 8 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 2 an overbroad injunction based only on the notice they received through the FAC.2 Google offers little argument in the Motion to support their proposed injunction despite these 3 fairly obvious issues. That being the case, the court finds no compelling reason to adopt such an 4 overbroad order. The court will issue an injunction as requested by Google, but with terms which 5 comport with the scope of the harm as well as the notice provided to Defendants. The specific 6 injunction follows below. 7 III. ORDER 8 Based on the foregoing: 9 1. Google’s Motion for Default Judgment is GRANTED against Defendants Gina Wyant, 11 For the Northern District of California United States District Court 10 12 Gregory Gavin and Amanda Odell; 2. Google’s request for a permanent injunction is also GRANTED consistent with the following language: 13 Defendants Gina Wyant, Gregory Gavin and Amanda Odell, and their agents, representatives, successors, assigns, and any persons in active concert or participation with them are immediately and permanently enjoined from advertising or attempting to advertise through Google’s AdWords advertising network, without regard to contact name, address, or email address and without regard to what URL or website is advertised. 14 15 16 17 3. Since this Order and ensuing Judgment effectively resolve this case against all remaining 18 defendants, the Clerk shall close this file upon entry of Judgment. 19 IT IS SO ORDERED. 20 21 Dated: July 28, 2011 EDWARD J. DAVILA United States District Judge 22 23 24 25 26 27 28 2 The fact that Google served Defendants with the Motion and proposed injunction on July 14, 2011 - only 8 days before the scheduled hearing - does not cure the issue of deficient notice. Indeed, this case is distinguishable from those which have awarded more in the default judgment than the amount requested in the complaint. See, e.g., Stafford v. Jankowski, 338 F. Supp. 2d 1225, 1228-29 (awarding more in default judgment than the amount demanded in the complaint when the defendant was served with motion for default judgment after he appeared in the action but was uncooperative with subsequent proceedings). In any event, the court would still find that Google’s proposed injunction is not narrowly tailored to the harm, even if Defendants had received timely notice of the Motion. 9 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1) 1 THIS IS TO CERTIFY THAT COPIES OF THIS ORDER HAVE BEEN DELIVERED TO: 2 Rebecca S. Engrav rengrav@perkinscoie.com Albert Gidari, Jr AGidari@perkinscoie.com Joshua A. Reiten jreiten@perkinscoie.com Bobbie Jean Wilson BWilson@perkinscoie.com 3 4 5 Dated: July 28, 2011 Richard W. Wieking, Clerk 6 By: 7 /s/ EJD Chambers Elizabeth Garcia Courtroom Deputy 8 9 11 For the Northern District of California United States District Court 10 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 Case No. 5:10-cv-04264 EJD (HRL) ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT (EJDLC1)
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