United States of America v. Stratics Networks Inc., et al.
- Proceeding
- district
- Area
- civil
- Panel
- Cynthia Ann Bashant (author)
Analysis
The court considered the status of the Atlas Corporate Defendants, who had failed to retain new counsel by the court-ordered deadline following the withdrawal of their previous attorneys. The court entered default against the defendants without prejudice and struck their pending motions for summary judgment without prejudice.
| What the court decided | The model |
|---|---|
Entry of default against Atlas Corporate Defendants without prejudice“As such, Court ENTERS DEFAULT against Atlas Corporate Defendants WITHOUT PREJUDICE.” | agree with court The court correctly applied the well-established rule that corporations must be represented by licensed counsel in federal court. Because the defendants failed to comply with the court's specific order to retain counsel by a set date, entering default is a standard and appropriate sanction to enforce the rule and protect the integrity of the proceedings. |
Striking of Atlas Corporate Defendants' motions for summary judgment without prejudice“the Court also STRIKES WITHOUT PREJUDICE Atlas Corporate Defendants’ motions for summary judgment (ECF Nos. 199, 200, 201).” | agree with court Once default is entered against a party, that party is no longer an active litigant in the case. Consequently, any pending motions filed by that party must be stricken. Striking them without prejudice is consistent with the entry of default without prejudice, allowing the motions to potentially be refiled if the defendants later obtain counsel and the default is lifted. |
The order itself: sound — The order is procedurally sound. It correctly identifies the legal requirement for corporate representation, cites binding Supreme Court and Ninth Circuit authority, and applies a logical and standard sanction (default without prejudice) for the defendants' failure to comply with a court order. The reasoning directly addresses the procedural posture and the specific actions taken.
Opinion
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 UNITED STATES OF AMERICA, Case No. 23-cv-00313-BAS-KSC 12 Plaintiff, 13 ORDER:
v. 14 (1) ENTERING DEFAULT STRATICS NETWORKS INC., et. al., AGAINST DEFENDANTS 15 WITHOUT PREJUDICE; AND Defendants. 16 (2) STRIKING WITHOUT 17 PREJUDICE DEFENDANTS’ MOTIONS FOR SUMMARY 18 JUDGMENT (ECF Nos. 199, 19 200, 201)
20 Pending before the Court are Defendants’ Atlas Marketing Partners, Inc., Tek 21 Ventures, LLC, and Atlas Investment Ventures, LLC (“Atlas Corporate Defendants”) 22 motions for summary judgment. (ECF Nos. 199, 200, 201.) 23 For the reasons below, the Court ENTERS DEFAULT against Atlas Corporate 24 Defendants WITHOUT PREJUDICE. In addition, the Court also STRIKES 25 WITHOUT PREJUDICE Atlas Corporate Defendants’ motions for summary judgment. 26 (ECF Nos. 199, 200, 201.) 27 I. BACKGROUND 28 1 On February 16, 2023, Plaintiff United States of America Department of Justice filed 2 a complaint against Defendants ACE Business Solutions LLC, Atlas Investment Ventures 3 LLC, Atlas Marketing Partners, Inc. (“Atlas Marketing”), Kenan Azzeh, Sandra Barnes, 4 Todd DiRoberto, Kurt Hannigan, Kasm, Netlatitude, Inc. (“Netlatitude”), Eric Petersen, 5 Stratics Networks Inc., and Tek Ventures, LLC (“Provident Solutions”). (ECF No. 1.) 6 Plaintiff brings this action under its authority to enforce Section 5(a) of the Federal Trade 7 Commission Act (“Section 5 of the FTC Act”), 15 U.S.C. § 45(a), which prohibits “unfair 8 or deceptive acts or practices in or affecting commerce.” (Id. ¶ 125.) 9 Relevant to this Order, Atlas Corporate Defendants moved for summary judgment. 10 (ECF Nos. 199, 200, 201.) Several months later, the Court granted withdrawal of Atlas 11 Corporate Defendants’ counsel. (ECF Nos. 264, 265.) The Court ordered Atlas Corporate 12 Defendants to find new counsel by March 27, 2026. (ECF No. 265.) Over a month later, 13 Atlas Corporate Defendants have still not obtained counsel. 14 II. DISCUSSION 15 “Only natural persons representing their individual interests in propria persona may 16 appear in court without representation by an attorney.” CivLR 83.3(j). “All other parties, 17 including corporations, partnerships and other legal entities, may appear in court only 18 through an attorney permitted to practice pursuant to Civil Local Rule 83.3.” Id.; see also 19 Rowland v. Cal. Men's Colony, 506 U.S. 194, 201–02 (1993) (“It has been the law for the 20 better part of two centuries ... that a corporation may appear in the federal courts only 21 through licensed counsel.... [T]hat rule applies equally to all artificial entities.”); United 22 States v. High Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (affirming 23 district court's entry of default judgment against the corporation when the corporation 24 failed to retain counsel for the duration of the litigation and attempted to proceed through 25 its unlicensed president and sole shareholder); Greenspan v. Admin. Office of the U.S. 26 Courts, No. 14cv2396 JTM, 2014 WL 6847460, at *6 (N.D. Cal. Dec. 4, 2014) (dismissing 27 corporate plaintiffs for failure to obtain legal representation). 28 I Here, Atlas Corporate Defendants have failed to obtain counsel by the date that the 2 ||Court ordered Atlas Corporate Defendants to secure counsel. (ECF No. 265.) As such, 3 Court ENTERS DEFAULT against Atlas Corporate Defendants WITHOUT 4 ||PREJUDICE. If Plaintiff chooses to move for default judgment, Plaintiff must do so in 5 |} accordance with Civil Local Rule 55.1 and Federal Rule of Civil Procedure 55. 6 Since the Court directs the Clerk of Court to enter default against Atlas Corporate 7 Defendants, the Court also STRIKES WITHOUT PREJUDICE Atlas Corporate 8 || Defendants’ motions for summary judgment (ECF Nos. 199, 200, 201). See Lexar Media, 9 || Inc. v. Pretec Elecs. Corp., No. CO0-04770 MJJ, 2007 WL 1449749, at *1 (N.D. Cal. May 10 || 14, 2007) (“Because C-One and Pretec cannot continue to litigate this action in federal 11 |} court without counsel, the Court STRIKES WITHOUT PREJUDICE their pending Motion 12 || For Summary Judgment of Invalidity.”). 13 CONCLUSION 14 For the reasons above, the Court ENTERS DEFAULT against Atlas Corporate 15 ||Defendantt WITHOUT PREJUDICE. In addition, the Court also STRIKES 16 || WITHOUT PREJUDICE Atlas Corporate Defendants’ motions for summary judgment. 17 (ECF Nos. 199, 200, 201.) 18 IT IS SO ORDERED. 19 20 || DATED: May 1, 2026 (yatta Bahar >] H n. Cynthia Bashant, Chief Judge United States District Court 22 23 24 25 26 27 28 48