SPIN MASTER LTD. and SPIN MASTER, INC. v. ALVY

Background

The Clerk of Court had entered a certificate of default against the defendants identified in the order as the “Defaulting Defendants.” The order states that Womdee-Direct and Premium Segment were excluded because they had previously been dismissed. A district judge had entered a Final Default Judgment and Permanent Injunction Order against the Defaulting Defendants.

The district judge then referred the case to Magistrate Judge Barbara Moses to conduct an inquest and issue a report and recommendation concerning the plaintiffs’ damages. An inquest is a court process for determining the amount of damages or other relief after default.

Required submissions

The order required the plaintiffs to file proposed findings of fact and conclusions of law by January 31, 2020. For each Defaulting Defendant, the filing had to state the exact dollar amount of damages or other monetary relief sought and the precise terms of any requested non-monetary relief.

If the plaintiffs sought actual damages, rather than statutory or nominal damages, they had to submit declarations or affidavits and any necessary documentary evidence. The evidence had to be admissible, and each proposed factual finding had to cite the supporting declaration paragraph or documentary page. The plaintiffs also had to explain how they calculated the proposed damages for each Defaulting Defendant and connect those damages to the applicable legal claims.

Jurisdiction and liability

Judge Moses stated that the court had to be satisfied that it had personal jurisdiction over each Defaulting Defendant and subject-matter jurisdiction over the action before entering judgment or awarding damages, even after default. The order warned that inadequate proof of service could result in denial of the damages request as to a particular Defaulting Defendant.

The court also had to determine whether the complaint’s well-pleaded allegations, treated as true after default, were legally sufficient to establish each Defaulting Defendant’s liability on each asserted claim. The proposed legal conclusions therefore had to identify the relevant allegations and explain why they established liability.

Attorney’s fees and service

Any request for attorney’s fees had to include authenticated, contemporaneous time records showing each timekeeper’s service date, hours, rate when applicable, and work performed. The plaintiffs also had to provide admissible information about each timekeeper’s background and qualifications and documentation of costs and expenses.

The plaintiffs had to serve each Defaulting Defendant with the proposed findings, supporting materials, and the order before filing. They also had to file proof of service. Each Defaulting Defendant could serve and file a response by February 14, 2020.

Written inquest and disposition

The court notified the parties that it might conduct the damages inquest solely on written submissions. A party seeking an evidentiary hearing had to explain why written submissions were insufficient, identify the witnesses it would call, and describe the evidence it would present.

This was a scheduling order for the damages inquest. It did not determine the amount of damages, award attorney’s fees, or make a final damages ruling. The opinion does not state the ultimate amount of damages or other relief.