EDWARDS, et al. v, EASTMAN, et al.
Filing
68
DECISION AND ORDER ON MOTION TO STRIKE JURY DEMAND - granting 60 Motion to Strike 57 Jury Demand. By JUDGE D. BROCK HORNBY. (mnw)
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
IN RE:
GAME TRACKER, INC.,
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DEBTOR
------------------------------------------------ERNEST EDWARDS, ET AL.,
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PLAINTIFFS
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v.
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EASTMAN OUTDOORS, INC.,
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ET AL.,
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DEFENDANTS
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CIVIL NO. 2:10-CV-189-DBH
DECISION AND ORDER ON MOTION TO STRIKE JURY DEMAND
On August 2, 2011, the Eastman defendants filed a document claiming a
jury trial based upon demands made in 2004.
Those 2004 demands were
made in this District by the Edwards plaintiffs and by a previous defendant in
a lawsuit that named Game Tracker, Inc. as codefendant.1 Thereafter, Game
Tracker defaulted. The Edwards plaintiffs have now objected to the Eastman
defendants’ claim to jury trial and have moved to strike the request. After oral
argument on October 18, 2011, the motion to strike is GRANTED.
After those jury demands were made, Game Tracker defaulted in the lawsuit and then filed
for bankruptcy in the Eastern District of Michigan, automatically staying the lawsuit here. In
the Michigan proceedings, the trustee in bankruptcy added the Eastmans–former owners of
Game Tracker–as Adversary Defendants in the bankruptcy filing. In settling the bankruptcy
trustee’s claim against them, the Eastmans agreed to defend certain pending Game Tracker
product liability claims, including the one filed by the Edwardses. In 2009, the bankruptcy
judge asked sua sponte to have the reference of the adversary proceeding withdrawn. The
District Court granted the motion and transferred venue of the Edwardses’ claims back to this
District.
1
The issue I decide here is whether the right to a jury trial continues after
default.2 I addressed this matter several years ago in Benz v. Skiba, Skiba &
2 At oral argument, the Eastman defendants’ counsel placed a new twist on the controversy.
He argued that the case now pending in this District is only the objection to the Edwardses’
claim in the Bankruptcy Court for the Eastern District of Michigan as transferred here. (The
Eastman defendants entered that objection and a companion jury demand after they agreed to
defend debtor Game Tracker against certain tort claims, including that of the Edwardses.) The
Eastmans’ counsel argued that the pre-bankruptcy default filed in this court in 2004 could
have no effect on the claim objection controversy, because the default applied only to Game
Tracker–not to the Eastman defendants, who assumed liability, if any, through a later
settlement with the bankruptcy trustee. Counsel argued that the jury demand the Eastman
defendants filed in bankruptcy court should apply in this matter and that Game Tracker’s
default is basically irrelevant to the current proceedings.
I did not understand the Eastman defendants to have made this argument when they
previously moved to vacate the default. See Mot. to Set Aside Default with Inc. Mem. of Law
(Docket Item 30). Moreover, in transferring the case here, Judge Rosen of the Eastern District
of Michigan certainly did not have that view. He stated:
[T]his matter comes before this Court against the procedural
backdrop of a clerk’s entry of default against Debtor in the Maine
district court.
As Claimants correctly observe, Debtor (or
Objectors, standing in Debtor’s shoes) will have to show “good
cause” for setting aside this default before Claimants’ claims may
be defended on the merits.
Op. and Order Setting Venue for Claimants’ Pending Pers. Injury Tort Claims at 7 (Docket Item
16), filed in In re Game Tracker, Inc., 09-14589 (E.D. Mich.). I am unaware that the Eastman
defendants objected to Judge Rosen’s characterization. In fact, their earlier filings seem to
have anticipated this approach. For example, the Eastman defendants told the bankruptcy
court that:
FRCP 55(c) allows the Court to set aside a default “for good cause
shown.” . . . It is Eastman’s assumption that when their Objection
to Edwards’ Claim is referred to the District Court in Michigan,
that Court will transfer the case to the District Court in Maine.
The Maine Court will then proceed with the litigation, and the
issue of whether the default should be set aside under FRCP 55,
will be decided by that Court.
Br. in Support of Objection to Claim No. 13 of Ernest and Karla Edwards at 12-13 (Docket Item
182), filed in In re Game Tracker, Inc., 04-34324 (Bankr. E.D. Mich.). In their Reply Brief, the
Eastmans added:
If this Court is to consider the underlying equities, the most
equitable result is to place the parties in the position called for
under the Settlement Agreement. That is, Eastman is in the
same place the debtor [Game Tracker] was as of the date of the
bankruptcy filing, which is there has been a default, but not a
judgment entered in the Maine District Court proceeding. It
should then be up to the District Court to determine whether that
default should be set aside, or whether Eastman can only litigate
damages.
Eastman’s Reply Br. in Support of Objection to Claim No. 13 of Ernest and Karla Edwards at
16 (Docket Item 189), filed in In re Game Tracker, Inc., 04-34324 (Bankr. E.D. Mich.).
Moreover, the Eastmans explicitly based their claim to a jury trial in part upon the demands
filed by the Edwardses and the previous codefendant in the Maine district court case, the same
case in which the Game Tracker default was entered. See Reliance on Jury Demand (Docket
(continued next page)
2
Glomski, 164 F.R.D. 115, 116 (D. Me. 1995), where I noted that caselaw dating
to the eighteenth century confirms that the right to a jury trial does not survive
default.3 Since Benz, no contrary authority has arisen in the First Circuit or
elsewhere.
Instead, the First Circuit has held that “[n]either the Seventh
Amendment nor the Federal Rules of Civil Procedure require a jury trial to
assess damages after entry of default in these circumstances.”
Graham v.
Malone Freight Lines, Inc., 314 F.3d 7, 16 (1st Cir. 1999). Thus, I continue to
regard Benz as the proper approach.
Here, default was entered long ago against Game Tracker, the source of
any liability on the part of the Eastman defendants, and I recently denied a
motion to set the default aside.
Default (Docket Item 42).4
See Dec. and Order on Mot. to Set Aside
Rule 55(b) directs me in post-default procedure:
either the clerk can enter a default judgment for a sum that is or can be made
certain by computation or, if damages are uncertain, I as judge can enter a
default judgment.
Fed. R. Civ. P. 55(b).
In the latter case, I also decide
whether the matter requires an evidentiary hearing:
The court may conduct hearings or make referrals—
preserving any federal statutory right to a jury trial—when,
to enter or effectuate judgment, it needs to:
(A)
conduct an accounting;
(B)
determine the amount of damages;
(C)
establish the truth of any allegation by
evidence; or
Item 57). Because this has been the posture of the case throughout, I agree with Judge Rosen
and accept the case as he transferred it.
3 For further historical discussion of a default’s preempting rights to a jury trial for damages,
see Paul Mogin, Why Judges, Not Juries, Should Set Punitive Damages, 65 U. CHI. L. REV. 179,
200-04 (1998).
4 More detail on the long procedural history of this dispute is available there and in Magistrate
Judge Rich’s Order ruling on a Motion in Limine. See Mem. Dec. and Order on Mot. in Limine
(Docket Item 56).
3
(D)
investigate any other matter.
Fed. R. Civ. P. 55(b)(2). The “federal statutory right to a jury trial” to which the
rule refers is a very narrow category, not applicable here.5
Moreover, this
record does not warrant exercise of the court’s discretion to provide a postdefault jury trial.
Finally, although 14 M.R.S.A. § 156 provides a state law
right to jury trial, federal law governs the right to jury trial in federal court. 9
CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE
AND
PROCEDURE
§ 2302 (3d ed. 2008).
I therefore follow Benz and Graham, and the motion to strike is GRANTED.
SO ORDERED.
DATED THIS 24TH DAY OF OCTOBER, 2011
/S/D. BROCK HORNBY
D. BROCK HORNBY
UNITED STATES DISTRICT JUDGE
As I ruled in Benz, it “applies to statutes requiring jury trials specifically after default has
occurred,” namely 28 U.S.C. § 1874 and similar statutes, which are not applicable here. 164
F.R.D. at 115-16. Contrary to the defendants’ argument, 28 U.S.C. § 1411, dealing with jury
trials in bankruptcy, does not require a jury trial specifically after default has occurred.
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