GS Holistic, LLC v. Ashes Plus Nine

Background

GS Holistic, LLC filed an amended motion for default judgment, which asks the court to enter judgment against defendants who have not defended the case. The motion was referred to a magistrate judge for a report and recommendation. The order states that the case had previously been reassigned to Judge Yvonne Gonzalez Rogers.

The court had earlier recommended denying GS Holistic’s original motion because of possible service-of-process defects, insufficient support for the merits and pleadings, and inadequate evidence supporting the requested damages, costs, permanent injunction, and other equitable relief. Judge Rogers’s court adopted that recommendation, denied the original motion without prejudice, and allowed GS Holistic to file an amended motion.

Reasons for the Order

The court identified several continuing concerns:

- Service of process: The service records listed 2317 Stevens Creek Boulevard, Unit 10, while a California Secretary of State record listed 2319 Stevens Creek Boulevard for Ashes Plus Nine and Gaizan N. Alreyashi. GS Holistic submitted Google Maps screenshots supporting the first address, but the screenshots were not authenticated under Federal Rule of Evidence 901. The court also found that the process server’s account involving an unidentified employee did not establish that the first address was correct. The amended proof of service also conflicted with the process server’s declaration about who received the documents and whether that person identified himself.

- Merits and sufficiency of the complaint: The complaint alleged one October 2022 purchase of a single allegedly counterfeit infuser. It did not identify which of GS Holistic’s three registered trademarks appeared on the product, and it did not explain when the defendants began selling allegedly counterfeit products or the scope of their conduct. GS Holistic characterized the reference to one trademark as a drafting error, but had not amended the complaint. The court also found that photographs of the product and an individual at what appeared to be a smoke shop were not authenticated. Finally, the court stated that the allegations about Alreyashi’s ownership and control of Ashes Plus Nine were conclusory and did not describe how he directed, controlled, approved, participated in, or caused the alleged infringement.

- Damages: GS Holistic requested $150,000 in statutory damages based on a complaint alleging one $400 sale. The court found that the amended affidavits continued to focus on counterfeit products generally rather than harm caused by these defendants. Information that GS Holistic’s investigators visited 4,781 stores and bought 973 counterfeit products did not show damages caused by Ashes Plus Nine or Alreyashi. The court also found insufficient support for estimates concerning GS Holistic’s sales and the effect of counterfeit products on its business.

- Costs and destruction of products: GS Holistic renewed its request for $465 in investigation fees without addressing the court’s earlier conclusion that presuit investigation costs were not costs of the action under 15 U.S.C. § 1117(a). It also renewed its request for an order requiring the defendants to deliver allegedly infringing products and related materials for destruction, without supporting evidence or legal authority.

Disposition

The court ordered GS Holistic to show cause—meaning to explain—why its amended motion for default judgment should not be denied as to Ashes Plus Nine and Gaizan N. Alreyashi. It required a supplemental brief and supporting evidence by May 29, 2024. The court stated that, after receiving GS Holistic’s response, the magistrate judge would issue a report and recommendation. This order did not grant or deny the amended motion.