Default judgment in a Schedule A case: what changed and what to do

TL;DRA default judgment in a Schedule A case is a federal court order entered against a seller who was named in a mass trademark or copyright complaint but did not respond in time – and on Etsy, it can arrive after a temporary restraining order has already frozen the seller's payment account. Being named does not mean automatic liability. The judgment can often be challenged, vacated, or settled on better terms, but the window to act narrows with every passing day.

The developments around Schedule A litigation – the strategy plaintiffs use to sue dozens of anonymous marketplace sellers at once under a single complaint – have shifted the risk calculus for Etsy sellers in ways that are easy to miss until the freeze notice lands. Enforcement automation has tightened the gap between complaint filing and asset lockdown. A seller can lose access to their shop funds before they even receive service of process, and by the time a payment-processor hold clears enough to confirm what happened, a default judgment may already be on the court's docket.

This briefing covers what a default judgment in a Schedule A case actually means in the Etsy context, the realistic procedural path once a judgment is entered, and the key decision points a seller faces at each stage.

What a Schedule A default judgment is – and how Etsy sellers reach that point

A Schedule A default judgment is a final federal court ruling entered in favor of a rights-owner plaintiff because the named defendant did not appear or respond within the court's deadline. In the "Schedule A" or "SAD scheme" model of litigation, a single plaintiff files against a list of sellers – often dozens or hundreds – identified only by store name or marketplace ID. Each seller is a "Schedule A defendant." The court typically issues a temporary restraining order (TRO) at the outset, which freezes the seller's Etsy payment account and, in many cases, the accounts of third-party payment processors as well.

The default path works like this. The plaintiff files the complaint, obtains the TRO on an ex parte basis – meaning without notice to the seller – and the seller's Etsy funds are frozen on the same day or shortly after. Service of process follows, but it is often attempted by email or through marketplace messaging, and in practice many sellers do not recognize it as a court summons. The response deadline passes. The plaintiff files a motion for default. The clerk enters a default. Then the plaintiff moves for a default judgment and often asks for statutory damages, a permanent injunction, and an order transferring the frozen funds to the plaintiff.

What has changed in recent years is the speed and scale of this pipeline. Plaintiffs in Schedule A litigation have refined the complaint-and-TRO workflow to the point where a seller's account can be frozen, a default entered, and a judgment sought within a matter of weeks. For an Etsy seller whose shop may represent their primary income, that compressed timeline is the central danger.

How does a default judgment on Etsy differ from a standard civil default?

The procedural mechanics of a federal default judgment are the same regardless of the marketplace, but Etsy's payment infrastructure and seller agreement create a specific fact pattern that matters in how freeze orders are executed and how frozen funds are eventually released. Etsy, like Amazon and other platforms, complies with court-ordered asset freezes by suspending disbursements from a seller's payment account. Unlike Amazon FBA, where frozen inventory adds a second layer of complication, an Etsy freeze typically locks the payment-account balance.

In matters we handle, the practical difference is this: the frozen balance on Etsy tends to be the proceeds of recent sales, not a large FBA reserve. That means the absolute dollar amount frozen may be smaller than on Amazon, but for a seller dependent on week-to-week disbursements to cover supply costs, even a modest freeze is operationally disruptive. When a default judgment is then entered and the plaintiff moves to transfer those funds, the seller loses any leverage that the frozen balance might otherwise have provided in a settlement negotiation.

The other Etsy-specific consideration is how service of process is handled. Courts in Schedule A cases have increasingly permitted service by email or electronic messaging. Etsy's messaging system may be used. A seller who does not monitor shop messages closely – or who dismisses an unfamiliar email as spam – can miss the summons entirely, which is precisely how the default pipeline accelerates.

What is the realistic procedural path once a default judgment is entered?

Once a default judgment is entered, the seller has two primary procedural tools: a motion to vacate the default judgment under Rule 60 of the Federal Rules of Civil Procedure, or a motion to dissolve or modify the underlying TRO and asset freeze. In practice, the two are often pursued in parallel, because the frozen funds represent leverage – and the goal is to preserve that leverage while the court reconsiders the judgment.

A motion to vacate asks the court to set aside the default judgment and allow the seller to contest the case on the merits. The standard requires the seller to show, typically, that there was good cause for the failure to appear, that there is a meritorious defense, and that vacating the judgment would not unfairly prejudice the plaintiff. The merits-of-defense argument is often the strongest element: a seller who was genuinely not selling counterfeit goods, who has authorization evidence, or who was misidentified on the Schedule A list has a substantive defense that courts are generally willing to hear.

What we regularly see is that sellers who move quickly – before the plaintiff executes on the frozen funds – have significantly more options than sellers who wait. Once funds are transferred to the plaintiff under the default judgment's asset-transfer order, recovering them requires an additional step that most courts treat as a separate and harder motion.

For a fuller picture of the motion practice available before a judgment is entered, the guide on our motion to dissolve a TRO and what it means for marketplace sellers explains the threshold questions and realistic timeline. If the freeze is already in place and you need to understand the asset-freeze mechanics specifically, our checklist for a motion to modify an asset freeze maps the seller's options.

Who is actually affected by this – and who gets misidentified?

Schedule A litigation was designed to target counterfeit-goods sellers who hide behind anonymous marketplace storefronts. That is the stated rationale, and in some cases it is accurate. But the mechanics of how Schedule A complaints are assembled – using keyword searches, product images, and price points as proxies for infringement – means that a significant number of sellers named on a Schedule A list are not selling counterfeit goods at all. They may be resellers of genuine product, sellers of non-infringing similar goods, or sellers included on the list because a product image or keyword matched the plaintiff's automated search.

Misidentification is a real and recurring problem in the Schedule A ecosystem, and it is one of the strongest grounds for both a motion to vacate a default judgment and a challenge to the court's jurisdiction over a particular defendant. A court that has jurisdiction over 200 Schedule A defendants does not automatically have personal jurisdiction over each individual seller – and joinder of unrelated sellers in a single complaint has been questioned in multiple federal districts. Challenging jurisdiction and misidentified joinder is one of the first-line defenses we assess when a seller comes to us after a default.

The seller's decision here is straightforward, even if the execution is not: if you were not selling infringing goods, that fact is the foundation of your defense. It needs to be documented and presented to the court before the judgment is finalized or funds are transferred.

What changed in how courts handle Schedule A defaults – and what is still uncertain

Federal district courts – particularly in the Northern District of Illinois and the Southern District of Florida, which handle a large share of Schedule A filings – have been grappling with the procedural and constitutional concerns raised by mass Schedule A litigation. Some courts have begun scrutinizing ex parte TRO applications more closely, requiring plaintiffs to show stronger evidence of infringement before freezing accounts. Others have raised questions about whether joinder of dozens of unrelated sellers in a single complaint is proper.

What this means in practice is that the procedural landscape for Schedule A defendants is no longer as one-sided as it was when the scheme first proliferated. Courts are now more receptive to motions that challenge the basis for the TRO, challenge personal jurisdiction, or argue misjoinder. A default judgment entered in that environment is not necessarily final, and it is not necessarily immune to challenge.

What remains uncertain – and what every seller should understand – is that the outcome of any motion to vacate depends heavily on the specific judge, the specific facts of the seller's account, the quality of the moving papers, and the speed with which the seller acts. Durable legal principles are being applied in inconsistent ways across different courts, and what worked in one district may not work in another. This is why the practical advice is always the same: do not treat a default judgment as a closed matter until a lawyer familiar with Schedule A practice has reviewed the specific order and the record.

A seller who came to us after seeing a freeze notification on their Etsy payment account (winter 2025) had already missed the original response deadline. The plaintiff had moved for a default judgment, but the order had not yet been entered. We filed a motion to vacate the default, challenged personal jurisdiction on the grounds that the seller operated exclusively from a jurisdiction not covered by the plaintiff's venue argument, and opened parallel settlement discussions. The default was vacated, and the seller was able to engage on the merits. The outcome in any individual case depends on its own facts – but the lesson here is that "default" is a procedural status, not a final verdict on the merits, and it can often be reversed if the seller acts before funds are transferred.

The seller's real decision points: a practical guide

If a federal order froze your Etsy funds before you even knew about the case, you are already behind the procedural curve – but you are not out of options. The decisions that matter most are the ones in the next days, not the ones that have already passed.

Decision point one: Do you have the actual court order? A freeze notice from Etsy will typically reference a court order. You need the full text of the TRO, the complaint, and the Schedule A attachment that identifies you as a defendant. Without those documents, no assessment of your position is possible. Courts post these documents on their electronic dockets, and a lawyer can retrieve them quickly.

Decision point two: Has a default already been entered, or only a TRO? A TRO and a default judgment are different procedural stages. If only a TRO has been entered, the range of options is wider. If a default has been entered but no judgment yet, there is still time to appear and contest. If a judgment has been entered and an asset-transfer order is pending, the urgency is highest.

Decision point three: What is the nature of the claim against your shop? Trademark infringement, copyright infringement, and design-patent claims each carry different statutory damages ranges, different defenses, and different settlement dynamics. A seller named for trademark infringement who has authorization evidence – a brand distributor relationship, for example – is in a materially different position from a seller named for copyright infringement without such evidence.

Decision point four: What are the trade-offs between fighting and settling? Vacating a default and contesting a Schedule A case on the merits is possible, but it involves motion practice, potential discovery, and time. Settlement – if the plaintiff is willing and the frozen balance provides leverage – can often resolve the matter faster and at a known cost. The right choice depends on the seller's business reality: is the shop ongoing? Is the inventory and the brand worth fighting for? Is the frozen balance material? These are not legal questions in the abstract. They are business questions that inform the legal strategy.

If the notice cites trademark infringement and you have a supply chain or authorization argument, the route is to challenge the TRO on the merits and vacate the default – on a timeline measured in weeks. If the notice cites copyright and the product images are close matches, the route is often an expedited settlement negotiation using the frozen balance as leverage, on a similar timeline. If the complaint includes personal-jurisdiction defects or misidentified joinder, that argument can be raised on a motion to dissolve regardless of the substantive claim type.

Our complete reference on the procedural terrain for Schedule A defendants is available in the Schedule A TRO defense guide for sellers, which covers the full pipeline from complaint filing through post-judgment motion practice.

Common mistakes sellers make when facing a Schedule A default

The most damaging mistake is waiting. The procedural window to vacate a default judgment is not open indefinitely, and courts apply that window strictly. A seller who learns about the freeze but assumes the matter will resolve itself – or who tries to contact the plaintiff directly without counsel – typically loses the window during which a motion to vacate would have had the strongest chance.

The second mistake is assuming that the default means the case is over. It is not. A default is entered because the defendant did not appear. It does not mean the court conducted a merits hearing. Courts are generally willing to vacate defaults when a defendant appears promptly and presents a colorable defense. The emphasis is on "promptly" – because the longer a default stands, the more procedural steps the plaintiff can take to convert it into an executed judgment with transferred funds.

The third mistake – and the one we see most often in matters where sellers handled the early stages alone – is responding to the wrong document or in the wrong way. Contacting the plaintiff's law firm without understanding what you are agreeing to, submitting a response to Etsy's freeze notice rather than to the court, or filing a document that inadvertently waives a jurisdictional defense: these are errors that experienced Schedule A counsel avoid from the start.

The myth that being named in a Schedule A case means an automatic loss is exactly that – a myth. Schedule A defendants who appear, raise defenses, and engage with the court's process have real options. What makes the difference is the quality of the defense and how quickly it begins.

The steps described above outline the main procedural route. Your situation turns on the specific order, the claim type, your account history, and how much time has elapsed – which is what we review first.

To get an assessment of your position, email info@tutamenlaw.com. Tutamen represents Etsy sellers in Schedule A cases with fixed fees quoted up front after a short review.

Related areas

• Schedule A / TRO Defense – federal court defense for marketplace sellers named in mass IP complaints
• IP and Brand Registry Disputes – intellectual-property complaints and counter-notice strategy on major marketplaces

Frequently asked questions

How long does resolving default judgment in a Schedule A case usually take on Etsy?

The timeline depends on which stage the case is at when the seller first appears. A motion to vacate a default – if filed before the plaintiff executes on frozen funds – can be briefed and decided in several weeks to a few months, depending on the court's docket and whether the plaintiff contests the motion. If funds have already been transferred and a separate recovery motion is required, the timeline is longer. Settlement, where leverage exists, can sometimes resolve the matter faster than contested motion practice. Every case turns on its own procedural posture, and the most reliable estimate comes from reviewing the specific court order and docket.

What are the main risks if I handle default judgment in a Schedule A case alone?

The central risk is procedural: doing the right thing in the wrong way, or at the wrong time, can foreclose options that would otherwise be available. Specifically, appearing without understanding how jurisdictional defenses must be raised can waive them permanently. Filing a response to Etsy rather than to the court does not constitute a legal appearance. Contacting the plaintiff's counsel without legal representation can result in inadvertent admissions or unfavorable agreements. Beyond the procedural risks, the substantive analysis – whether the claim is valid, whether the seller was misidentified, whether the damages exposure is real – requires familiarity with Schedule A practice that most general-practice lawyers and all non-lawyers lack.

Do I need a lawyer for default judgment in a Schedule A case?

For a default judgment in a federal court proceeding, yes – and the earlier counsel is engaged, the broader the options remain. Federal court motion practice has strict procedural rules, and errors in how a motion to vacate is framed, supported, or timed can result in the court denying it on procedural grounds before the merits are ever reached. A Schedule A defendant in particular faces a plaintiff with experienced IP litigation counsel who files these cases repeatedly. Matching that experience with a lawyer familiar with the specific courts and the specific procedural arguments that succeed in Schedule A cases is not optional – it is the practical precondition for a realistic defense.

If a first attempt to respond to the court or negotiate with the plaintiff has already come back unsuccessful, a second review can identify what went wrong and whether anything remains open. Email info@tutamenlaw.com to have the order reviewed.

About Tutamen

Tutamen is an independent law firm for online marketplace sellers. We represent Amazon, Walmart, Etsy and eBay sellers in account deactivations, frozen-funds recovery, intellectual-property disputes, arbitration and Notices of Dispute, and US federal Schedule A defense, plus EU marketplace regulation. Our work is attorney-led and confidential, with fees quoted up front. We act for founders, brand owners and in-house teams who need a specialist for a marketplace dispute. In Schedule A matters, we move to dissolve or narrow the restraining order, challenge jurisdiction and joinder, and open settlement on better terms. To discuss your situation, email info@tutamenlaw.com.

By Sofia Marchetti, Partner – Schedule A / Federal Defense, Tutamen

Page authored by Sofia Marchetti, Partner, Schedule A / Federal Defense, Tutamen.

Disclaimer: This article is general information, not legal advice, and does not create an attorney-client relationship. Marketplace policies and the law change, and every account and case is different. For advice on your situation, contact Tutamen at info@tutamenlaw.com.