GS Holistic, LLC v. Masoud

Background

GS Holistic, LLC moved for default judgment on May 31, 2024. Its first amended complaint named Basel Masoud doing business as Hotbox Smoke Shop, Nadim Maida doing business as Hotbox Smoke Shop, Basel Masoud, and Nadim Maida as defendants. GS Holistic later voluntarily dismissed Nadim Maida, leaving Masoud as the only defendant. The court treated Masoud and “Basel Masoud d/b/a Hotbox Smoke Shop” as one individual because a fictitious business name does not create a separate legal entity.

GS Holistic alleged that a glass infuser was purchased from “HOTBOX SMOKE.” Its default-judgment materials included photographs of the product, an “Illusion Smoke Shop” storefront, and the interior of a store. The court noted that Illusion Smoke Shop, Inc. had originally been a defendant but was later voluntarily dismissed, and that Illusion was not mentioned in the amended complaint.

Service of process

The court explained that a federal court generally does not have authority over a defendant unless the defendant was properly served under Federal Rule of Civil Procedure 4. GS Holistic first attempted to serve Masoud at an address on Main Street in Watsonville on September 14, 2023, but the attempt was unsuccessful. After obtaining a report, GS Holistic made another unsuccessful attempt at an address in Freedom on October 15, 2023. On March 21, 2024, it used substitute service by serving Masoud’s wife, Flower Masoud, at an address on Green Valley Road in Watsonville.

The court asked GS Holistic to explain why the substitute service was proper. Under the federal service rule discussed by the court, service at a person’s home requires that the address be the person’s “dwelling or usual place of abode.” The court said it was unclear whether the Green Valley Road address met that requirement. If GS Holistic relied on California law instead, the court directed it to explain how service complied with that law.

Connection between the product, stores, and defendant

The court also ordered GS Holistic to clarify whether the pictured Illusion Smoke Shop storefront was connected to Masoud, Hotbox Smoke Shop, and the purchase of the glass infuser. The court sought a clear connection between the allegedly infringing product, the storefront, and Masoud.

Ruling and next steps

The court did not grant or deny the motion for default judgment. Instead, Judge Alex G. Tse ordered GS Holistic to submit a supplemental brief by August 20, 2024, addressing proper service and the connection among the product purchase, storefront, and defendant. GS Holistic was also required to serve Masoud with the order by a method reasonably calculated to provide actual notice and file proof of service by that date. The order allowed GS Holistic to request additional time to complete service or to seek leave to amend its complaint or default-judgment motion.