Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 1 of 6 PageID# 1138
`
`IN THE UNITED STATES DISTRICT COURT FOR THE
`EASTERN DISTRICT OF VIRGINIA
`Alexandria Division
`
`VOLKSWAGEN AG, et al.,
`Plaintiffs,
`
`UNINCORPORATED
`ASSOCIATIONS, et al..
`
`Defendants.
`
`Case No. I:17cvl413
`
`ORDER
`
`On July 13, 2018, United States Magistrate Judge John Anderson entered a Report
`
`and Recommendation ("Report"), recommending that plaintiffs' motion for default
`
`judgment be granted. Defendants, 28 unrelated individuals and entities located in the
`
`People's Republic of China, are accused of counterfeiting plaintiffs' federally-registered
`
`trademarks and then selling these unauthorized products on the internet. Plaintiffs seek to
`
`hold defendants liable for these activities under the Section 32 of the Lanham Act, 15
`
`U.S.C. §§ 1114, 1125.
`
`All defendants, as the Magistrate Judge correctly concluded, were properly served
`
`and 28 of these defendants, all of whom are identified in the Magistrate Judge's Report,
`
`failed to file responsive pleadings. Thus, these 28 defendants are in default and have
`
`therefore conceded that the factual allegations in plaintiffs' amended complaint are true.
`
`Given that defendants are in default, this matter was referred to Magistrate Judge
`
`Anderson pursuant to 28 U.S.C. § 636 to make the requisite findings of fact and
`
`1
`
`

`

`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 2 of 6 PageID# 1139
`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 2 of 6 Page|D# 1139
`
`conclusion of law. Because plaintiffs’ factual allegations must be treated as true, Judge
`
`Anderson evaluated whether plaintiffs’ allegations satisfy the elements of the three
`
`federal trademark claims raised in the amended complaint. Following this analysis,
`
`Judge Anderson appropriately determined that judgment should be entered against these
`
`defendants for violating the Lanham Act.
`
`No party objected to Judge Anderson’s thorough Report. Nonetheless,
`
`the
`
`reviewing district court has an independent obligation to review the Report for clear
`
`error.| Although the great majority of Judge Anderson’s Report is clearly correct, there is
`
`one aspect of the Report which merits closer inspection: namely, whether these 28
`
`defendants are properly joined pursuant to Rule 20(a)(2), Fed. R. Civ. P.
`
`Defendants may be joined in a single action if two threshold requirements are
`
`satisfied: (i) their claims arise from the same transaction or occurrence or series of
`
`transactions or occurrences; and (ii) any question of law or fact in the action is common
`
`to all defendants. See Fed. R. Civ. P. 20(a)(2).
`
`In recent years, district courts have split
`
`over the parameters of permissive joinder — an issue which often arises in the context of
`
`intemet commerce cases. See CineTel Films, Inc. v. Does 1-1, 052, 853 F. Supp. 2d 545,
`
`550 (D. Md. 2012) (collecting cases). Many courts have held that joining multiple
`
`defendants (ofientimes hundreds or thousands of defendants) in a single action simply
`
`because their underlying conduct was similar in nature violates Rule 20’s transaction or
`
`' See Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (in the absence of any
`objections to a magistrate’s report, the court “need not conduct a de novo review, but instead must ‘only
`satisfy itself that
`there is no clear error on the face of the record in order
`to accept
`the
`recommendation”).
`
`

`

`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 3 of 6 PageID# 1140
`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 3 of 6 Page|D# 1140
`
`occurrence requirement, especially when there is no evidence that the defendants acted in
`
`concert with one another.2 Other courts have held that joinder of multiple defendants is
`
`appropriate where the defendants’ actions are closely connected in time and space and
`
`those actions also support or enhance collective illegal activity.3
`
`Courts that have
`
`permitted “swarm” joinder have also focused heavily on judicial efficiency and the need
`
`to effectively manage these intemet commerce cases which almost always result in
`
`default judgments.
`
`Regardless of their respective outcomes, the focus of these joinder decisions ofien
`
`turns on the transaction or occurrence portion of the Rule’s two-part test, and this case is
`
`similarly focused.
`
`It is well-settled that the “transaction or occurrence” test should be
`
`construed broadly to promote judicial efficiency;4 however, courts cannot
`
`ignore the
`
`2 See, e.g., Venice, R]. v. Does [-18, No. 2:17-CV-285-JVB-JEM, 2018 WL 1992201, at *3 (ND. Ind.
`Apr. 26, 2018); Pow Nevada. LLC v. Doe 2, No. C17-l649RSM, 20l8 WL 525958, at *1 (W.D. Wash.
`Jan. 24, 2018); Cell Film Holdings LLC v. McCray, No. 216CV02089JADVCF, 2017 WL 5949576, at *4
`(D. Nev. Nov. 29, 2017); UN4 Prods, Inc. v. Does [-15, N0. CV 17-2768, 2017 WL 5885779, at *3
`(ED. Pa. Nov. 29, 2017); MEZ Prods, Inc. v. Does [-11, No. 1:16-CV-04052-ELR, 2017 WL 3449577,
`at l"l (ND. Ga. Feb. 1, 2017); [TI Prods. LLC v. Does, No. CV DKC 16-3999, 2017 WL 167840, at *2
`(D. Md. Jan. 17, 2017).
`
`1 l—cv—02164—CMA—MJW, 2012 WL 415436, at *2—
`3 See, e.g., Patrick Collins. Inc. v. Does 1—15, No.
`*4 (D. Colo. Feb. 8, 2012); Digital Sin, Inc. v. Does 1—176, 279 F.R.D. 239, 243—44, 2012 WL 263491, at
`*5 (S.D.N.Y.2012); Call of the Wild Movie, LLC v. Does [—1.062, 770 F.Supp.2d 332, 342—43
`(D.D.C.201 1); W. Coast Prod, Inc. v. Does [—5829, 275 F.R.D. 9, 15—16 (D.D.C.2011); K—Beech, Inc. v.
`Does [—57, No. 2:] l—cv—358—th—36SPC, 2011 WL 5597303, at *5—*7 (MD. Fla. Nov. 1, 201 1), Hard
`Drive Prods, Inc. v. Does [—55, No. 11 C 2798, 2011 WL 4889094, at *5 (ND. 111. Oct. 12, 2011);
`Donkeyball Movie. LLC v. Does [—17], 810 F.Supp.2d 20, 26—28 (D.D.C. 201 l).
`
`4 See United Mine Workers of Am. v. Gibbs, 383 US. 715, 724 (1966) (“[T]he impulse is toward the
`broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and
`remedies is strongly encouraged”); Aleman v. Chugach Support Servs. Inc., 485 F.3d 206, 218 n. 5 (4th
`Cir.2007) (“Rule 20 grants courts wide discretion concerning the permissive joinder of parties”);
`Advamtel. LLC v. AT& TCorp., 105 F. Supp. 2d 507, 514 (ED. Va. 2000).
`
`

`

`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 4 of 6 PageID# 1141
`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 4 of 6 Page|D# 1141
`
`Rule’s plain limitations simply for efficiency’s sake. Here, it seems abundantly clear that
`
`defendants are not properly joined because their activities are wholly unrelated to one
`
`another and do not arise from the same transaction or occurrence.
`
`Notably, the defendants in this case are distinct Chinese individuals (or entities)
`
`who are independently selling counterfeit goods on E-commerce sites such as Ebay.5
`
`Based on the allegations in the amended complaint, there appears to be no concert of
`
`actin between the foreign individuals (or entities) or any other form of cooperation.
`
`Moreover, the operations of these Chinese counterfeiters in no way relate to or support
`
`one another. The only commonality between the individuals (or entities) is that they use
`
`E-commerce stores like Ebay to perpetuate their counterfeiting activities. The fact that
`
`individuals who have never met one another and live in different places across the globe
`
`use a particular intemet platform to violate the law does not sufficiently bind them
`
`together to permit permissive joinder. See, e.g., Kokinda v. Pa. Dep’t of Corn, 663 F.
`
`App’x 156, 159 (3d Cir. 2016) (“Simply committing the same type of violation in the
`
`same way does not link defendants together for the purposes of joinder.”). To hold
`
`otherwise would lead to ridiculous results.6 Rule 20 does not contemplate unbounded
`
`joinder of parties and permitting joinder in this case would deprive the phrase “same
`
`transaction or occurrence” of any real meaning.
`
`5 This case is not a “swarm” joinder case and therefore it is even clearer that joinder of these defendants is
`inappropriate.
`
`6 For example, following plaintiffs’ logic on joinder, a landlord could join all of its tenants who were
`delinquent in rent payments in a single breach of contract action simply because those tenants reside in
`the same building. Or to offer another illustration, a disabled plaintiff could sue a number of gas stations
`for unrelated ADA violations and join them in a single suit simply because each of these gas stations
`conducts business in a similar way.
`
`4
`
`

`

`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 5 of 6 PageID# 1142
`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 5 of 6 Page|D# 1142
`
`Because the various claims against the defendants in this case do not arise from
`
`the same transaction or occurrence or series of transactions or occurrences, twenty-seven
`
`of the twenty-eight defendants must be severed.
`
`It is worth noting that this decision and
`
`other similar decisions understandably places a hardship on trademark and copyright
`
`owners who seek to enforce their interests against the thousands of individuals who
`
`violate their trademarks and copyrights on a daily basis. But the result reached here is
`
`what the text of Rule 20 requires and courts cannot elevate policy above the law’s plain
`
`meaning.
`
`If public policy demands that trademark and copyright owners be given
`
`additional leeway to join defendants in infringement suits, a remedy exists. However,
`
`this remedy is within exclusive purview of the political branches of government.
`
`In the
`
`meantime, plaintiffs will be required to bring individual cases against
`
`individual
`
`defendant
`
`if and when those defendants’ wrongfiJl actions have no meaningful
`
`connection to one another.
`
`Accordingly,
`
`The Court ADOPTS IN PART the findings of fact and recommendations of the
`
`United States Magistrate Judge, as set forth in the Report (Doc. 70), and as supplemented
`
`and amended by this Order.
`
`Therefore,
`
`It is hereby ORDERED that plaintiff‘s motion for default judgment (Doc. 64) is
`
`GRANTED as to defendant hongyundangtou69.
`
`Final judgment against defendant
`
`hongyundangtou69 shall issue separately.
`
`

`

`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 6 of 6 PageID# 1143
`Case 1:18-cv-01109-TSE-JFA Document 73 Filed 08/30/18 Page 6 of 6 Page|D# 1143
`
`It is further ORDERED that the Clerk of Court shall create new civil cases for
`
`each of the remaining twenty-seven (27) defendants. Because these defendants have
`
`been properly served and have defaulted, plaintiffs will not be required to re-serve these
`
`defendants or to file new motions for default judgment.
`
`Instead, plaintiffs’ current
`
`motion for defaultjudgment will be deemed filed in each new civil case along with Judge
`
`Anderson’s Report.
`
`Final judgment will
`
`then be entered separately against each
`
`defendant in each of these new cases.7
`
`The Clerk is directed to provide a copy of this Order to al counsel of record, and to
`
`place this matter among the ended causes.
`
`Alexandria, Virginia
`
`August 30, 2018
`
`7 Ordinarily plaintiffs would be required to pay individual filing fees for each case it brings against each
`defendant. See 28 U.S.C. § I914. However, given the posture of this particular case and the fact that this
`matter has already proceeded to its near conclusion, no additional filing fees will be assessed at this time.
`In future, however, plaintiffs will be required to file separate cases and pay separate filing fees for each
`unrelated defendant.
`
`