Laffont v. Smarten Media LLC

Background

Jean Pierre Laffont brought a copyright-infringement case against Smarten Media LLC. Laffont alleged that his copyrighted photograph appeared on Smarten Media’s website without proper licensing or consent. After Smarten Media failed to answer or otherwise respond to the complaint, the Clerk entered a certificate of default. The opinion states that no default judgment had been entered.

Smarten Media moved under Federal Rule of Civil Procedure 55(c) to set aside the entry of default based on mistake, inadvertence, or excusable neglect. Smarten Media asserted that it did not receive a copy of the summons and complaint after service on the Office of the Secretary of State of New York. The company’s principal, Michael Martin, later learned about the lawsuit through other means and discussed a possible resolution with Laffont’s counsel. Before obtaining a lawyer, Martin mistakenly believed those discussions meant Laffont would drop the lawsuit.

Court’s Analysis

Rule 55(c) allows a court to set aside an entry of default for “good cause.” The court considered whether the default was willful, whether setting it aside would prejudice Laffont, and whether Smarten Media had presented a potentially meritorious defense.

The court found that the default was not willful. It relied on Smarten Media’s assertion that it never received personal service of the summons and complaint, as well as its explanation that its later failure to act resulted from a misunderstanding about Laffont’s intentions and the litigation process. The court also noted that a prompt motion to set aside default supports finding that the default was not willful.

The court found no sufficient prejudice to Laffont. Although the default delayed the litigation, delay alone did not establish prejudice. The court also stated that Laffont had not responded to Smarten Media’s motion despite having ample time, and the court assumed that Laffont did not oppose setting aside the default.

Smarten Media identified several defenses it intended to assert: the unavailability of statutory damages, fair use, implied license, and the statute of limitations. Considering these factors and the strong preference for resolving disputes on their merits, the court found good cause to set aside the default.

Disposition

Judge Alvin K. Hellerstein granted Smarten Media’s motion. The Clerk’s certificate of default was vacated. Smarten Media was ordered to answer or otherwise respond to the complaint by October 6, 2020, and the parties were ordered to appear for an initial pretrial conference on October 16, 2020, at 10:00 a.m. The order did not decide whether Smarten Media infringed Laffont’s copyright or whether any asserted defense would succeed.