KHN SOLUTIONS LLC v. SHENZHEN CITY XUEWU FEIPING TRADING CO.

Background

KHN Solutions LLC brought federal and state false-advertising claims concerning breathalyzers sold through www.amazon.com. The court described the identified product as the “Defective Rofeer Breathalyzer,” sold under Amazon Standard Identification Number (ASIN) B07ZH6PVD4. KHN alleged that the product did not accurately measure blood-alcohol concentration and was promoted with false quality assurances, fake positive reviews, and false Federal Communications Commission and Food and Drug Administration certifications.

The defendants did not appear. After approved alternative service, including email, the court entered defaults. An earlier interim injunction disabled certain Amazon seller accounts and impounded revenues connected to the identified product. After Amazon raised concerns about the proposed permanent injunction, KHN narrowed its request. It limited the proposed injunction to one product and Amazon, removed provisions disabling seller accounts or seizing products, and abandoned its request for damages.

The court separately discussed Jinhua Kalu Wigs. Co., Ltd. and Zhou Chan, who said they sold only wigs and had been voluntarily dismissed in 2023. KHN agreed to remove their seller account from the interim injunction. The court also identified an anonymous seller connected to another Rofeer breathalyzer but noted that this person was not specifically named as a defendant.

Jurisdiction and Service

The court held that it had subject-matter jurisdiction over the false-advertising claims under federal-question and supplemental jurisdiction. It also found that service by email and other approved methods was reasonably calculated to inform the defendants about the case and give them an opportunity to respond. The court concluded that the defendants were subject to personal jurisdiction in California because the alleged conduct involved selling through an interactive website for delivery to California, and the claims were related to those activities.

Default Judgment

The court applied the factors from Eitel v. McCool, which require balancing the strength of the plaintiff’s claims and the harm from denying relief against the reasons for the defendants’ failure to appear and the risk of mistaken relief.

The court found strong claims against two groups:

1. Direct Sellers. These defendants were identified as owners of Amazon seller accounts that sold the Defective Rofeer Breathalyzer. The court found evidence that the product pages claimed the breathalyzer could accurately measure blood-alcohol concentration, displayed purported FCC and FDA certifications, and included fake reviews. Testing showed that the product could not perform its core function. The court concluded that the sellers at least learned of the product’s defects through consumer complaints and continued selling it through the product pages.

2. Manufacturers. These defendants were identified as Rofeer-US, Shenzhen Yuanyuhaohan Technology Co., Ltd., and Shenzhen Aimasi Electronic Co., Ltd. The court found a strong basis for contributory false-advertising liability. It reasoned that the manufacturers allegedly continued supplying the product to sellers while knowing, or having reason to know, that the product was being falsely advertised. The court did not rely on a direct-liability theory because the pleadings and evidence did not specifically establish which defendants created or adopted the Amazon product pages.

The court rejected the claims against the “Possibly Related Sellers,” Harbans Singh Palda and Richard Gawel. The evidence showed that they sold a different Rofeer breathalyzer, ASIN B08CZBL7YS, and shared some contact or location information with direct sellers. The court held that these facts did not sufficiently connect them to the false advertising of ASIN B07ZH6PVD4. It stated that the claims did not satisfy the particularity requirement of Federal Rule of Civil Procedure 9(b), which requires fraud-based allegations to be stated with detail. The motion for default judgment against Palda and Gawel was denied, and the claims against them were dismissed.

The court found that the related California false-advertising and unlawful-competition claims were also established against the Manufacturers and Direct Sellers. It did not decide whether alleged violations of the Federal Food, Drug, and Cosmetic Act or the Federal Fair Packaging and Labeling Act independently supported the unlawful-competition claim.

Permanent Injunction

The court held that a permanent injunction was warranted under the standards governing injunctions in false-advertising cases. It found that KHN faced ongoing harm, monetary damages would not adequately address that harm, the balance of hardships favored KHN, and the public interest favored preventing sales of a defective safety-related product promoted with false statements.

The injunction was narrowly tailored. It barred the Manufacturer Defendants, Direct Seller Defendants, and those actively working with them from falsely advertising or selling the Defective Rofeer Breathalyzer using claims that it could test blood-alcohol concentration, claims or depictions of FDA or FCC certification or endorsement, and misleading material laundered into consumer reviews or press clippings. The injunction applied only to the identified product and did not generally disable seller accounts or authorize seizure of products.

The court ordered that any funds impounded under the interim relief be released, although the parties had represented that the amount impounded was zero. The permanent injunction superseded the interim relief, and the separate motion to dissolve or amend the interim injunction was denied as moot. The permanent injunction was to take effect upon service under the approved alternative methods, where applicable.

Disposition

The motion for entry of default judgment and a permanent injunction was GRANTED IN PART AND DENIED IN PART. KHN Solutions was entitled to final judgment and a permanent injunction against Rofeer-US; Shenzhen Yuanyuhaohan Technology Co., Ltd.; Shenzhen Aimasi Electronic Co., Ltd.; Shenzhen City Meng Qian Hua Kai Trading Co., Ltd.; Mengqian Jiang; Chengdu City Xiang Jin Xin Commercial & Trading Co., Ltd.; Liandi Chen; Guangzhou City Jian Sheng Trading Co., Ltd.; Jinmei Gong; Shenzhen City Xuewu Feiping Trading Co., Ltd.; Zonghui Li; Dongqing Chen; and Debiao Pang. The court awarded no damages, attorney’s fees, or costs.