This section contains the nature of the case and procedural background.

P owns the RIO All Suite Casino Resort, and the Rio Race & Sports Book. P registered numerous trademarks with the United States Patent and Trademark Office. P registered the domain name, www.playrio.com on the internet. P operates a website that informs prospective customers about its hotel and allows them to make reservations. D is a Costa Rican entity that participates in an Internet sports gambling operation, doing business as Rio International Sportsbook, Rio Online Sportsbook, or Rio International Sports. D enables customers to wager on sporting events online or via a 1-800 telephone number. D grosses an estimated $ 3 million annually. P discovered D from an advertisement in the Football Betting Guide' 98 Preview. P also found ads for D in the Nevada edition of the Daily Racing Form inviting customers to visit www.riosports.com. D also ran radio spots in Las Vegas as part of its comprehensive marketing strategy. P demanded that D cease and desist from operating the www.riosports.com website. D promptly disabled the objectionable website. D soon activated http://www.betrio.com to host an identical sports gambling operation. P sued D alleging various trademark infringement claims and seeking to enjoin D from the continued use of the name' RIO.' During efforts at service of process. P discovered that D claimed an address in Miami, Florida for the domain names. That address was not authorized to accept service on D's behalf. IEC, the courier company, located there, agreed to forward the summons and complaint to D's Costa Rican courier. After sending a copy, P received a telephone call from Los Angeles attorney John Carpenter ('Carpenter') inquiring about the lawsuit. D received the summons and complaint from IEC and consulted Carpenter about how to respond. Carpenter had a partially illegible copy of the complaint and asked P to send him a complete copy. P asked Carpenter to accept service for D; Carpenter declined. Carpenter did request that P notify him upon successful completion of service of process on D. P's investigator in an attempt to effect process service in Costa Rica, learned that D preferred communication through its email address, email@betrio.com, and received snail mail, including payment for its services, at the IEC address in Florida. P filed an emergency motion for alternate service of process. The district court granted the motion, and pursuant to Federal Rules of Civil Procedure 4(h)(2) and 4(f)(3), ordered service of process on P through the mail to Carpenter and IEC and via D's email address, email@betrio.com . D filed a motion to dismiss for insufficient service of process and lack of personal jurisdiction. The court denied D's motion without a hearing. P propounded discovery requests and interrogatories, and for all intents and purposes, D did not respond. D brought a motion to compel discovery. In granting, the district court warned that in the event D failed to comply, monetary sanctions would be an insufficient remedy and that 'preclusive sanctions' would be awarded. When D failed, P moved for terminating sanctions. The court entered default judgment against P. The court directed D to pay reasonable attorneys' fees and costs in the amount of $88,761.50 and $7,859.52 respectively. D appealed.

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