Facebook, Inc. v. OnLineNic Inc

Background

The court’s order supplemented Judge van Keulen’s report and recommendation and the court’s earlier order on requests for de novo review. The court had adopted the report and recommendation on October 17, 2022, except that it deferred deciding whether to enter default judgment against OnLineNIC and ID Shield. The parties then submitted additional briefs.

The remaining defendant, Xiamen 35.com Technology Co., Ltd., referred to as “35.CN,” remained involved in the case. The plaintiffs alleged that 35.CN was an alter ego of the other defendants. An alter ego allegation generally asserts that one entity is legally the same as, or responsible for the conduct of, another entity, but this order did not decide that allegation.

Ruling

The court found good cause to defer entry of default judgment against OnLineNIC and ID Shield until the case against 35.CN was resolved. Under Federal Rule of Civil Procedure 54(b), a court may enter a final judgment for fewer than all parties only when it expressly finds no just reason for delay. The court declined to make that determination here.

The court reasoned that entering default judgment against OnLineNIC and ID Shield could result in piecemeal appeals involving the same issues because of the plaintiffs’ alter ego allegation concerning 35.CN. It therefore concluded that judicial administrative interests favored delaying default judgment.

The court clarified that it adopted Judge van Keulen’s report and recommendation except for Section IV, titled “Relief,” which it declined to adopt at that time. The Clerk was directed to enter default—but not default judgment—against OnLineNIC and ID Shield. The order, together with the court’s October 17, 2022 order, resolved the plaintiffs’ motions to strike the defendants’ answer and for default judgment, identified as Docket Nos. 117 and 176. The court also set a case management conference for February 3, 2023, and required the plaintiffs and 35.CN to file a joint case management statement.