Reported / Citable
Background
AVVA, Inc. sued Avamobility, Inc. for trademark infringement, unfair competition, and cybersquatting under federal and Texas law. AVVA alleged that Avamobility, a Hawaii corporation, used allegedly infringing marks to advertise subscription-based autonomous-vehicle services and related software through its website, mobile application, social-media pages, and sponsored events.
After Avamobility failed to respond and the clerk entered default, AVVA moved for default judgment. U.S. District Judge Karen Gren Scholer referred the motion to Magistrate Judge David L. Horan for findings, conclusions, and a recommendation.
The Court’s Holding
The magistrate judge recommended denying AVVA’s motion for default judgment because AVVA had not established a prima facie case of personal jurisdiction over Avamobility. Although the federal claims supported subject-matter jurisdiction, the Lanham Act and Anti-Cybersquatting Consumer Protection Act do not provide nationwide service of process, so AVVA still had to show that exercising jurisdiction over the nonresident defendant comported with due process.
AVVA did not allege facts showing that Avamobility was at home in Texas or that it purposefully targeted Texas through its online or offline conduct. Allegations that Avamobility advertised nationwide and offered services through a subscription-based application did not provide enough detail to assess the website’s interactivity or establish suit-related contacts with Texas. Because a court must assure itself of personal jurisdiction before entering default judgment, the magistrate judge concluded that default judgment could not be entered on the existing record.
Key Takeaways
- A defendant’s default does not relieve a federal court of its independent duty to confirm personal jurisdiction before entering judgment.
- A website’s nationwide accessibility and general advertising, without facts showing purposeful targeting of the forum, do not establish specific jurisdiction.
- A plaintiff seeking default judgment must support personal jurisdiction with concrete factual allegations, even when those allegations are unopposed.
Why It Matters
The recommendation underscores that procedural default does not cure jurisdictional deficiencies. Trademark and cybersquatting plaintiffs pursuing nonresident defendants must connect the defendant’s allegedly unlawful conduct to the forum with specific facts, particularly when relying on websites, applications, or other online activity.
The ruling is a magistrate judge’s recommendation rather than a final disposition by the district judge. The parties may file specific written objections within 14 days after service.