United States of America v. Approximately $19,126 in United States Currency et al

Filing 28

ORDER by Judge Lucy H. Koh Denying Without Prejudice 27 Motion for Default Judgment. (lhklc1, COURT STAFF) (Filed on 5/19/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

United States District Court
Northern District of California

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UNITED STATES OF AMERICA,
Plaintiff,

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Case No. 16-CV-06645-LHK
ORDER DENYING WITHOUT
PREJUDICE PLAINTIFF’S MOTION
FOR ENTRY OF DEFAULT
JUDGMENT AS TO THE VEHICLE

v.
APPROXIMATELY $19,126 IN UNITED
STATES CURRENCY,
APPROXIMATELY $17,000 IN UNITED
STATES CURRENCY,
APPROXIMATELY $2,900 IN UNITED
STATES CURRENCY, and
SILVER 2014 DODGE CHARGER , VIN
2C3CDXCT2EH117330,

Re: Dkt. No. 27

Defendants.
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Plaintiff United States of America (“Plaintiff”) filed a complaint for forfeiture against

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Defendants Approximately $19,126 in United States Currency (the “$19,126”), Approximately

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$17,000 in United States Currency (the “$17,000”), Approximately $2,900 in United States

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Currency (the “$2,900”), and a Silver 2014 Dodge Charger, VIN 2C3CDXCT2EH117330 (the

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“Vehicle”) (collectively, “Defendant Properties”). Before the Court is Plaintiff’s Motion for Entry

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of Default Judgment as to the Vehicle. ECF No. 27 (“Mot.”). Pursuant to Civil Local Rule 7-

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Case No. 16-CV-06645-LHK
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR ENTRY OF DEFAULT JUDGMENT
AS TO THE VEHICLE

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1(b), the Court finds this matter appropriate for resolution without oral argument and vacates the

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hearing scheduled for May 25, 2017. Having considered Plaintiff’s briefing, the relevant law, and

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the record in this case, the Court DENIES without prejudice Plaintiff’s Motion for Entry of

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Default Judgment as to the Vehicle.

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Federal Rule of Civil Procedure 55(b)(2) permits a court to enter a final judgment in a case
following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d

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995, 999 (N.D. Cal. 2001). The decision to enter a default judgment lies within the court’s

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discretion. Id. at 999 (citing Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir. 1986)). Plaintiff

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has the burden of establishing that default judgment is warranted. See United States v. A Real

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Prop. Located in Los Angeles (Babicheva), 2013 WL 12075981, at *6 (C.D. Cal. Oct. 7, 2013)

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United States District Court
Northern District of California

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(placing burden of establishing the availability of default judgment on Plaintiff); Lucasfilm, Ltd. v.

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Canal Toys, 2012 WL 685415, at *2 (N.D. Cal. Mar. 2, 2012) (same).

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Before assessing the merits of a default judgment, a court must confirm that it has subject

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matter jurisdiction over the case and personal jurisdiction over the parties, as well as ensure the

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adequacy of service on the defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“[A]

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district court has an affirmative duty to look into its jurisdiction over both the subject matter and

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the parties.”). If the court finds these elements satisfied, it turns to the following factors (“the Eitel

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factors”) to determine whether it should grant a default judgment:

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(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive
claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action[,]
(5) the possibility of a dispute concerning material facts[,] (6) whether the default was due
to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil
Procedure favoring decision on the merits.

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Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986) (citation omitted). In this analysis, “the

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well-pleaded allegations of the complaint relating to a defendant’s liability are taken as true.”

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Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002) (citing Televideo

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Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987)). Nevertheless, default does not

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compensate for essential facts not within the pleadings and those legally insufficient to prove a

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Case No. 16-CV-06645-LHK
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR ENTRY OF DEFAULT JUDGMENT
AS TO THE VEHICLE

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claim. Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (“[C]laims which are

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legally insufficient[] are not established by default.”).

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In addition, forfeiture proceedings are governed by the procedural rules found in Section C

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and G of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions.

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See Fed. R. Supp. C, G. The Northern District of California’s Admiralty and Maritime Local

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Rules 6-1, 6-2, and 6-3 provide additional procedural requirements regarding forfeiture actions.

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Strict adherence to these procedural rules is “paramount in forfeiture proceedings.” United States

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v. Marlof, 173 F.3d 1213, 1217 (9th Cir.1999) (citation omitted).
In the instant case, default against the Vehicle was entered on February 1, 2017. ECF No.

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26. However, Plaintiff has failed to satisfy its burden of demonstrating that a default judgment is

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United States District Court
Northern District of California

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warranted. Plaintiff’s motion addresses solely the notice requirements in forfeiture proceedings

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under the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions and

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the Admiralty and Maritime Local Rules, but fails to address any other issue that is relevant to

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granting default judgment. Plaintiff should explicitly address jurisdiction and the Eitel factors,

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including whether or not Plaintiff has alleged sufficient facts to establish that the Vehicle is

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subject to forfeiture.

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Accordingly, the Court DENIES without prejudice Plaintiff’s Motion for Entry of Default

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Judgment as to the Vehicle. Any subsequent motion must address the above-identified

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deficiencies in the instant motion. If Plaintiff still seeks forfeiture of the Vehicle, Plaintiff shall

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file a renewed motion for default judgment within fourteen (14) days of this order.

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IT IS SO ORDERED.

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Dated: May 19, 2017
______________________________________
LUCY H. KOH
United States District Judge

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Case No. 16-CV-06645-LHK
ORDER DENYING WITHOUT PREJUDICE PLAINTIFF’S MOTION FOR ENTRY OF DEFAULT JUDGMENT
AS TO THE VEHICLE