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I recently found out about a "Schedule A Defendent" Scheme, where an IP Rightholder files a lawsuit, puts hundreds of defendants in a sealed Schedule A form, and then does not service the defendants properly. This is then apparently used to force a settlement from defendants or gain a default judgment without the defendants ever being properly informed.

But... this seems very much abusive litigation, especially with the defendants not informed they even are sued in proper ways. I thought so far, that such egregious litigation misconduct can lead to dismissal with prejudice and costs for the defentents. But for some reason, these schemes still succeed.

How come that a SAD scheme, relying on a sealed and undisclosed defendant list, is not litigation misconduct from the start? Isn't a SAD-Scheme an illegal Ex-Parte filing by never informing the defendants properly?

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    It is worth noting that some SAD Scheme Plaintiffs have been sanctioned for litigation misconduct. blog.ericgoldman.org/archives/2023/09/… “the Court finds that Expeditee, its former counsel, or both have engaged in serious misconduct in pursuing claims against Respect the Look…At key points in this litigation, Expeditee, Jones, or both have committed fraud on the court and acted in bad faith. Further, Jones violated Rule 11 by making false factual representations and frivolous legal arguments.”
    – ohwilleke
    Commented Jul 3 at 21:26

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Maybe it's abusive, maybe it's not.

But it's important to note that although Schedule A may initially be sealed, that doesn't mean that any defendants are going to pay anything without notice.

If a party settles, it has obviously received notice of the lawsuit. And if a party doesn't settle, then the plaintiff is going to proceed with effecting notice. Under Rule 55, the court cannot and will not grant default judgment against any defendant without a showing that that defendant was served. If the defendant was not properly served, it may request relief from judgment under Rule 60.

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  • Courts have made default judgements against unnotified SADs: ineffectual service via e-mail into the spam-inbox of a hospitalized person marks the Luke Combs SAD case
    – Trish
    Commented Jul 3 at 16:46
  • But did they successfully enforce the judgments in the face of a challenge to them under Rule 60? Also, if a defendant receives notice of a lawsuit before judgment is entered, that defendant can move to dismiss under Rule 12 for lack of service (which is a jurisdictional issue).
    – ohwilleke
    Commented Jul 3 at 21:24
  • Certainly it happens that some defendants are unaware that they have been served with notice. That doesn’t have any bearing, though, on the rule as stated above, that the court will not enter default judgment in the absence of a showing that the defendant was served. And had the defendant in that case sought relief under Rule 60, she almost certainly would have been granted it; instead, the plaintiff voluntarily dismissed his claims against her.
    – bdb484
    Commented Jul 3 at 21:26

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