Lopez v. New York City Tourism + Conventions, Inc.

Background

Robert Lopez filed his complaint on September 19, 2024, and served New York City Tourism + Conventions, Inc. (NYCTC) through the New York Secretary of State on October 1, 2024. NYCTC’s response was due October 22. After NYCTC did not respond, Lopez requested a clerk’s certificate of default, and the clerk entered default on October 24. Lopez then moved for default judgment.

NYCTC’s attorney appeared on November 15 and opposed default judgment while asking the court to vacate, or cancel, the entry of default. NYCTC said its offices were being moved and that its chief operating officer and general counsel did not receive notice of service until after Lopez filed his default-judgment motion. NYCTC also said its attorney failed to focus on the response deadline. After learning of the default, the attorney promptly sought an extension from Lopez, but Lopez said he intended to pursue default judgment.

Lopez did not oppose NYCTC’s motion to vacate default after the court gave him an opportunity to do so.

Legal standard

Under the federal civil rules, a clerk may enter default when a party fails to respond to a complaint. But that entry does not automatically require a final default judgment. Before a court enters default judgment, it considers whether the facts establish a valid claim. If the defendant appears before the court enters default judgment, the court may set aside the entry of default for good cause.

The court applied three factors: whether the default was deliberate, whether setting it aside would harm the opposing party, and whether the defendant presented a potentially valid defense. The standard for vacating an entry of default is less demanding than the standard for vacating a final default judgment.

Court’s analysis

The court found that NYCTC’s default was not deliberate. The office move and the attorney’s failure to focus on the deadline may have been negligent or careless, but they were not the kind of extreme or intentional conduct required to show a willful default. The attorney’s filing of the motion to vacate two weeks after learning of the default also showed an effort to defend the case.

The court found no prejudice to Lopez. Delay alone was insufficient, and Lopez had not identified lost evidence, greater difficulty conducting discovery, or a greater opportunity for fraud or collusion. The court also noted that Lopez did not oppose the motion and provided no evidence of those disadvantages.

The court further found that NYCTC had presented evidence of a potentially complete defense. Lopez asserted copyright infringement and a civil-conspiracy claim alleging that the defendants interfered with his business operations. NYCTC argued that the complaint did not allege concrete facts supporting claims against NYCTC, that the copyright claim failed as a matter of law, and that the other claims were not adequately pleaded. NYCTC also argued that a photograph from its website did not contain Lopez’s copyrighted materials and that the complaint confused copyright and trademark protection. The court concluded that the record contained more than enough evidence of a possible complete defense to satisfy the low standard governing motions to vacate default.

Ruling

Judge Dale E. Ho granted NYCTC’s motion to vacate default. The court denied Lopez’s motion for default judgment as moot. The clerk was directed to terminate the two motions, and to mail a copy of the order to Lopez, who was proceeding without a lawyer. The order resolved the default-related motions and did not determine whether Lopez’s underlying claims would succeed.