Hemlock Semiconductor Corporation v. Jinglong Industry and Commerce Group Co., LTD
ORDER Granting 20 Motion for Default Judgment. Signed by District Judge Thomas L. Ludington. (KWin)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case Number 15-cv-12499
Honorable Thomas L. Ludington
JINGLONG INDUSTRY AND
COMMERCE GROUP CO., LTD,
OPINION AND ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
Plaintiff Hemlock Semiconductor Corporation filed this suit on July 14, 2015, alleging that
Defendant Jinglong Industry and Commerce Group Co., LTD, breached a contract for the purchase
of solar panel components. ECF No. 1. Traditional methods of service were ineffectual, and, on
June 26, 2017, the Court granted leave for Hemlock to use alternative means of service. ECF No.
15. Accordingly, Hemlock served Jinglong’s domestic counsel. No answer has been filed. On July
28, 2017, Hemlock asked for and received the Clerk of Court’s entry of default. ECF Nos. 17, 18.
Now, Hemlock has filed a motion for default judgment. ECF No. 20.
The well-pleaded factual allegations in the complaint will be summarized. Compl., ECF
No. 1. The Hemlock Semiconductor Corporation is “a leading manufacturer of polycrystalline
silicon that is used, inter alia, in the manufacturing of photovoltaic wafers, ingots, solar cells, and
solar modules.” Id. at 2 (emphasis in original). Jinglong Industry and Commerce Group Co., LTD,
is “principally engaged in the manufacturing and distribution of solar grade solar cell and
semiconductor device grade silicon products.” Id. The two companies entered into two “Long
Term Supply Agreements” on July 3, 2006, and June 18, 2007. Id. at 1. Pursuant to the Supply
Agreements, “Hemlock was obligated to manufacture solar grade polycrystalline silicon that
Jinglong was obligated to purchase.” Id.
The Supply Agreements obligated Jinglong “to purchase specified quantities of Product
for a period of years, pursuant to an annual schedule, at specific prices.” Id. at 3. “Jinglong also
agreed in Supply Agreements II and III that it would ‘take or pay’ for the Product, such that
Jinglong was ‘absolutely and irrevocably required’ to pay the full purchase price of the Product
scheduled for each year (the ‘Contract Quantity of Product,’) regardless of whether Jinglong opted
to order or take delivery of the Product.” Id.
Hemlock alleges that it has “fully performed and complied with all of its obligations under”
the Supply Agreements. Id. Despite that, Jinglong “did not order or take delivery of the full
Contract Quantity of Product” for calendar years 2012, 2013, or 2014. Id. at 3–4. Throughout 2013,
2014, and 2015, Hemlock sent Jinglong notices of default and invoices requesting payment for the
product that Jinglong did not take. Jinglong never made any of the requested payments.
The Supply Agreements include a provision permitting Hemlock to terminate the Supply
Agreements if Jinglong failed to pay or otherwise committed a material breach of the agreement
and the breach was not cured within 180 days. Id. at 5. On March 31, 2015, Hemlock terminated
the Supply Agreements pursuant to that provision.
Now, Hemlock brings claims against Jinglong for breach of contract and account stated. In
the complaint, Hemlock asserts that Jinglong has failed to pay $448,075,008. Id. at 6. Hemlock
thus requests damages in that amount, plus $134,024,064 in interest that has accrued. Mot. Default
at 8, ECF No. 20.
A judgment by default may be entered against a defendant who has not pleaded or
otherwise defended against an action. Fed. R. Civ. P. 55(b). Before a default judgment may be
enterd, a party first must obtain a default. Fed. R. Civ. P. 55(a). Once a default is entered, the
defendants are considered to have admitted the well pleaded allegations in the complaint, including
jurisdiction. Ford Motor Company v. Cross, 441 F.Supp.2d 837, 845 (E. D. Mich. 2006) (citing
Visioneering Construction v. U.S. Fidelity and Guaranty, 661 F.2d 119, 124 (6th Cir. 1981)).
Here, Plaintiff properly obtained a default against Defendant, and the clerk certified that a notice
of default was served on Defendants. ECF Nos. 17, 18, 19.
After a party secures the entry of default, the party may apply for a default judgment. Fed.
R. Civ. P. 55(b). In reviewing an application for a default judgment, “[t]he court may conduct
hearings or make referrals … 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 (D) investigate any other matter.” Fed. R. Civ. P. 55(b)(2). While the well-pleaded
factual allegations in the complaint are taken as true when a defendant is in default, damages are
not. Ford Motor Company, 441 F.Supp.2d at 848 (citing Thomson v. Wooster, 114 U.S. 104
(1885)). The Court must determine the propriety and amount of the default judgment where the
damages sought are not for a sum certain. See Fed. R. Civ. P. 55(b). “Ordinarily, the District
Court must hold an evidentiary proceeding in which the defendant has the opportunity to contest
the amount [of damages].” Antoine v. Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995) (internal
quotation and citation omitted). However, Rule 55 gives the court the discretion to determine
whether an evidentiary hearing is necessary, or whether to rely on detailed affidavits or
documentary evidence to determine damages. Stephenson v. El Batrawi, 524 F.3d 907, 916 (8th
The Court has previously found that materially identical Supply Agreements were valid
and enforceable. See, e.g, Hemlock Semiconductor Corp. v. Glob. Sun Ltd., No. 13-11881, 2014
WL 3440119, at *1 (E.D. Mich. July 15, 2014) (entering default judgment); Hemlock
Semiconductor Corp. v. Deutsche Solar GmbH, No. 13-CV-11037, 2016 WL 3743130, at *1 (E.D.
Mich. July 13, 2016), aff’d sub nom. Hemlock Semiconductor Operations, LLC v. SolarWorld
Indus. Sachsen GmbH, 867 F.3d 692 (6th Cir. 2017) (granting summary judgment). The Supply
Agreements provide for 12% annual interest on “payment past due from the payment due date to
the date payment is received.” See, e.g., 2006 Supp. Agr. at 2, Sec. 6, ECF No. 23, Ex. 1. Michigan
Compiled Law 600.6013(7), specifies that
if a judgment is rendered on a written instrument evidencing indebtedness with a
specified interest rate, interest is calculated from the date of the filing of the
complaint to the date of satisfaction of the judgment at the rate specified in the
instrument if the rate was legal at the time the instrument was executed. . . . The
rate under this subsection shall not exceed 13% per year compounded annually.
Because the Supply Agreement specifies a 12% annual interest rate, that provision is enforceable
under Michigan law up to the point that the judgment is satisfied. Accordingly, Hemlock is entitled
to interest on the unpaid principal amounts from the date of the payment due dates until this
judgment is satisfied.
Here, Hemlock has provided the Supply Agreements, an affidavit detailing the breaches
and totaling the payments due, and a document listing the payments and interest due and providing
a total calculation of damage. Because the damages requested by Hemlock are governed by the
Supply Agreements and thus are completely quantifiable by reference only to those documents
and the previously mentioned affidavits, no evidentiary hearing is necessary. The Court has
independently reviewed the complaint, the Supply Agreements, and the affidavits. Hemlock’s
requested damages are consistent with the allegations made in the complaint and the payments
anticipated in the Supply Agreements. The requested damages are for a sum certain, and default
judgment in the amount requested will be granted.
Accordingly, it is ORDERED that Plaintiff Hemlock’s motion for default judgment, ECF
No. 20, is GRANTED.
It is further ORDERED that in accordance with Federal Rules of Civil Procedure 55 and
58, on Plaintiff Hemlock’s Complaint against Defendant Jinglong, final judgment is ENTERED
in favor of Plaintiff Hemlock and against Defendant Jinglong in the amount of $569,913,312.00,
plus continuing 12 percent interest per annum on the principal amount of $435,744,000.00
through satisfaction of the judgment. Each party shall bears its own costs and fees.
Dated: October 23, 2017
s/Thomas L. Ludington
THOMAS L. LUDINGTON
United States District Judge
PROOF OF SERVICE
The undersigned certifies that a copy of the foregoing order was served
upon each attorney or party of record herein by electronic means or first
class U.S. mail on October 23, 2017.
KELLY WINSLOW, Case Manager
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