The opinion of the court was delivered by: A. Richard Caputo United States District Judge
The United States Olympic Committee (USOC) brought this action to enjoin the defendants, who were doing business as "Camp Olympik," from using the word "Olympic" (or its simulations) or the Olympic symbol in their promotional activities. Camp Olympik failed to appear in the action. Default was entered, and now the USOC applies for a default judgment against the camp. For the reasons discussed below, the USOC's motion for default judgment will be granted in part and denied in part, and the USOC will be directed to submit additional evidence to support its request for attorney's fees and costs.
This action arose out of Camp Olympik's alleged use of words and symbols in violation of the USOC's common law and statutory rights. The USOC's complaint*fn1 alleges that, as early as June 2008, the defendants operated a children's summer camp under the trade name "Camp Olympic." Camp Olympic offered a range of athletic activities, with an emphasis on sports featured in the Olympic Games, such as basketball, tennis, hockey, judo, archery, and soccer. The defendants' website sported the camp's logo, consisting of the word "Olympic" and the five-ring Olympic symbol, placed so that it slightly overlapped the "c" in "Olympic."*fn2 A cartoon drawing of an Olympic torch served as the lowercase "l" in the work "Olympic."
After discovering that the defendants were using the Olympic name and symbol, the USOC, by written and oral demand, insisted that the camp cease using Olympic words and symbols in violation of the Olympic and Amateur Sports Act. To underscore its position, the USOC provided the defendants with a copy of the Act's relevant provisions.
Nearly a year passed, and in May of 2009 the defendants changed their website. The new incarnation branded the sports camp as "Camp Olympik," with a "k" (the "l" in "Olympik" was still drawn as a torch). The five rings, once interlocking, were pushed apart so that they appeared bowling-pin style, with three rings on the top and two on the bottom.
The USOC remained unmollified. It informed the defendants by letter that the new website was no better than the old, because it still "tended to cause confusion or mistake, to deceive, or to falsely suggest a connection" with the Olympic Games and the USOC. After what the USOC characterized as "repeated attempts since July 2009 to obtain Defendant's compliance with the Olympic and Amateur Sports Act," all to no avail, they commenced the present action on January 22, 2010, seeking injunctive relief, damages, fees, and costs.
Within the time specified by Federal Rule of Civil Procedure 4(m), the USOC served the summons and complaint. The defendants have yet to appear or defend this action. Pursuant to Rule 55(a) the clerk entered a default on June 15, 2010. The USOC moved for a default judgment against defendant Tobyhanna Camp Corporation (the camp). This motion is presently before the Court. The USOC seeks a permanent injunction restraining the camp from using the five-ring symbol or word "Olympic" in violation of relevant law. The USOC further requests its fees, to the tune of $9,379.10, incurred in relation to the case, as well as its costs.
Under Federal Rule of Civil Procedure 55, once the clerk has entered a default a party may apply to the court for a default judgment. "The court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to: (a) conduct an accounting; (b) determine the amount of damages; (c) establish the truth of any allegation by evidence; or (d) investigate any other matter." Fed. R. Civ. P. 55(b)(2).
Default is disfavored because it contravenes the strong policy in favor of resolving disputes on the merits. See, e.g., Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 75 (3d Cir. 1987); Hritz v. Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984) ("[W]e have repeatedly stated our preference that cases be disposed of on the merits whenever practicable."). A district court should consider three factors before entering default judgment: prejudice to the plaintiff if default is denied; whether the defendant appears to have a meritorious defense; and whether the defendants's delay is due to culpable conduct. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000).
This calculus, however, is "necessarily one-sided" when a defendant has "failed to appear or respond in any fashion to the complaint." T & C Leasing Inc. v. BBMC, LLC, No. 1:09-cv-873, 2010 WL 231128, at *2 (M.D. Pa. Jan. 14, 2010). "When a defendant fails to appear . . . the district court . . . is authorized to enter a default judgment based solely on the fact that the default has occurred." Anchorage Assocs. v. Virgin Islands Bd. of Tax Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990).
Here, the factors weigh in favor of granting a default judgment. The camp has failed to appear in the action or defend the claims against it. There is no apparent excuse for the camp's default; the USOC has shown that the camp was properly served its copy of the summons and complaint. (See Doc. Nos. 5, 6.) Thus, the Court finds that the camp's delay was due to its own culpable conduct. Based on the allegations in the complaint, no obvious defense appears available to the camp. Thus, the Court finds that default judgment is appropriate.
B. The USOC's Claim Under the Olympic and Amateur Sports Act
When default judgment is to be entered, "the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Comdyne I, Inc. v Corbin, 908 F.2d 1142, ...