Does 1-114 v. Shalushi et al

Filing 455

MEMORANDUM OPINION and ORDER DENYING 344 Amended MOTION to Take Deposition from ahmed alabadi Supplement to Motion for relief from order,DENYING 453 MOTION, DENYING 338 MOTION to Vacate, Motions terminated: 344 Amended MOTION to Take Deposition from ahmed alabadi Supplement to Motion for relief from order filed by Ahmed Alabadi, 338 MOTION to Vacate filed by Ahmed Alabadi, 453 MOTION. filed by Ahmed Alabadi. Signed by District Judge David M. Lawson. (DTof)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
FADHILA ABASS, AHMAD A. ABBAS, RAZAQ HUSSIN
ABID, ASAAD AHMAD, MAHMOOD AHMAD, ABRAHIM
AL ABOODY, YOUSIF AL AMEEDI, MEHSIN AL-BUSAID,
MOHAMMED AL-BUSAID-JWAD, EMAD AL-EDANI,
AHMED AL-FADAWI, HATTAB AL-FARTOUSI, FARIS
AL-GERAWY, ALAA AL-HAJAJ, HIAM AL-HAKIM,
MAJED AL-HAMADANI, MUNIM AL-HASSAN, ABDULAMIR AL-HELU, AMADA AL-HILALI, RIYADHA ALHILALI, NAJAH AL-HINDAWY, AHMED AL-HUMADI,
WALAA AL-HUSSEINE, ATEEL AL-HUSSEINY,
SAADOUN AL-HUSSEINY, SALAH AL-HUSSEINY,
ZAYNAB AL-HUSSEINY, HASSAN AL HUSSEINY,
Case No: 10-11837
MUNTADAR AL MOUSAWI, AHMED AL-ABOUDY,
Honorable David M. Lawson
MOHAMMED AL-ALI, AMJED AL-ATWANI, TUAMA
AL-BADERY, ALI AL-BIDERY, HASSAN AL-BIDERY,
MOHAMMED AL-BIDERY, FEAKHRYA AL-BUSAID,
ZEID AL-HUSSEINY, ALAA AL-IDANI, SALAH ALJAFER, HAIDAR AL-JIBORY, IMAD AL-JIBORY, JABER
OPINION AND ORDER
AL-KARAWI, MARVIN AL-KHAFAJI, QASSIM ALDENYING MOTIONS BY
KHAFNAWIZ, RATIP AL-KHALIDI, ALI AL-KUBA, ADIL
DEFENDANT AHMED
AL-KUBBA, THABIT AL-MANSSORI, MOHAMMED ALALABADI FOR RELIEF
MASIH, ALI AL-MUSAWI, MAHMOUD AL-RASHED,
FROM DEFAULT
SATAR AL-RUBAI, RAAD AL-SHAMKHANI, JABBAR
JUDGMENT AND TO
AL-SHIBANI, HAIDAR AL-SHIMARY, MURAD ALSTAY PROCEEDINGS
SHIMERY, MOLUD AL-SORIFY, SADIK AL-TAMIMI,
KARAR AL-THWEJ, IBRAHIM AL-TWAINI, ISMAEL
AL-TWAINI, JIMY AL-UBEIDI, GHAZWAN AL-WISHAH,
FAISAL AL-ZERKAN, NAJEH ALABDULRESOOL,
SAMEER ALADILI, ARKAN ABBAS ALANOON, TAHIR
ALARAGY, ALI ALAWI, MOHAMMED AL-NASIH, KADHIM
ALBAHIESH, SABRI HADI ALDAHAN, SAHAR ALDUJAILI,
MUNAF ALEISAWY, HUSSAIN ALFATLAWY, ALI
ALGHURABI, ABDALAMIR ALHAGAR, ABDULKAREM
ALHAMDAN, HAMED NOOR ALHASHIMI, HEKMAT
ALHASSAN, NABIL ALHILFI, RAHIM ALHISNAWI,
NATHAN ALJABIRY, SAAD AL-JBOURY, ABBAS
ALKHAFAGI, TALIB ALKHEKANI, HUSSAIN ALMAHDI,
AHMED ALMALEKY, JAFER ALMOOSAWI, ABDUL
ALMUSAWI, MOHAMMED ALQASSIR, KARRAR
ALRABIAH, MAJID ALRAYES, AHMED ALRUBAIEE,
HAIDAR ALSAIDI, RAHIM ALSHAMARY, SATTAR
ALSHIBAWI, ALI ALSHIBIL, RAHIM ALZERJAWI, AQEEL

ALZIRGANY, HOUSA ALZIRGHANI, ALI G. AWADI,
ADNAN BALLY, BRIANNA BORING, AHMAD FRADI,
ISSA J. FRADI, JOSEPH FRADI, KHADIJA FRADI,
MOHAMED FRADI, NADA FRADI, RAHEL FRADI, REDA
FRADI, BASHEER FTUNI, HASSAN MUSA HAMZA, FATIMA
HASSAN, HAIDAR HASSON, ANWAR HUSSAIN, HAMEED
HUSSAIN, NAZAR IBRAHIM, HATIF IMGOTER, NAJI
HATEM JASEM, ABDULRIDHQ JASSIAM, SAMIR HARBY
JASSIM, KAZEM JAWAD, JOE JOHNSON, WAEL KAREEM,
MALIK KHALSAN, HUSSEIN MAHDI, MAZIN MALALLEH,
FAYSAL MAZLOUM, IHSAN MIRZA, SHAKIR MOHAMAD,
HUSSEIN A. MOHAMMED, MOHAMMAD MOUSAWI,
RAED MUNAIM, FADHIL NASSIR, YUSRA RIDHA,
BATOOL SHAMIL, SAMAR SHAREIF, JOSEPH ABBOUD
SHORUTI, RIYADH ALI IBRAHIM, AHMED TIMIMI,
WISSAM TIMIMI, MAZIN YOUSIF-DICKOW, SAMY
ALAMEEDI, KHALID ALJABERI, MOHAMMED ALSARRAF,
HAIDER AL-SALAMI, AWS NASER, HASAN HUMADI,
KHALDOON ALAHMEDI, THANNA AZAWI, RAID
ALZIHAIRY, SATTAR AL-MAYALI, NAJI AL-SAIDI, NABIL
AHMAD MUTLAK, AAED MUSA AL-KHAFAJI, SALIH
ALMUHANA, FAHIL ALABUDI, HUSSAIN SHAKER,
HAIDER AL-NASIR, MOHAMAD SOBOH, HABEEB ALMAYAHI, SOUHAIL ABOOD, MOHAMMED ALI AHMAD,
ALI AL SULTANI, HUSSAIN ALAAEDI, AMIR ALMASHKUR, RASIM ALSAAID, BURHAN ABRAHAM, ALI
KAREM, AHMED ALRUBAIEE, MAITHAM AL-JIBORY,
HAIDER ALHASHIMI, NAMEEM ALRABIA, MOSTAFA
BELKHALFIA, SADEEM ABOOD, ZUHAIR THARIS,
MOHAMMED AL-AETIAJ, IHSAN SHIEKH, ADEL BAKER,
STEVE HAKIM, SALEM ALDEJANNI, KADHUM ALABUDI,
AMJAD ABBAS AHMAD, ALAA ALABUDI, JASON
SHAREEF, AMMAR SULTAN, HASSAN HAMADEH,
ABDULLAH HAMDI, BASSIM ALHAJAR, THAYER MALEK,
MOHAMMED AL-ASADI, AHMED ALSHIMARY, KARAR
ALSHIMARY, BASIM ALI, MONTATHER ALMOSWI,
HAIDER ALSALMAN, FERAAS KARKHI, MOHAMMED
MERZA, and GADER MIRZA,
Plaintiffs,
v.
ABDZHRA SHALUSHI, AHMED ALABADI, MOHSIN
ALJEBORY, ABDULKHALIQ ALMAHANNA, HASSAN
-2-

ZWEIN, MOHSEN ALJABIRI, FATIMA INTERNATIONAL,
INC., ADAM TRADE, GROUP, FEDEK GROUP, INC.,
SAAD MISHIT, ALAA AL-YAAQUBI, and FATHEL
MOHAMMED ALJIBORI,
Defendants.
_______________________________________________________/
OPINION AND ORDER DENYING MOTIONS BY DEFENDANT AHMED ALABADI
FOR RELIEF FROM DEFAULT JUDGMENT AND TO STAY PROCEEDINGS
On October 27, 2011, the Court entered a default against defendant Ahmed Alabadi
following multiple failures by the defendant to comply with the discovery orders of the Court. The
defendant has contended that he has refused to appear for his deposition because he fears for his
safety, particularly at the hands of some of the many plaintiffs in this case. However, despite
multiple attempts to address the defendant’s fears and efforts to accommodate his security concerns,
the discovery in the case was thwarted and the action could not proceed. The defendant has now
filed a motion for relief from the judgment entered against him, pledging in his motion that he will
submit to the plaintiffs’ questions at a deposition. However, due to the subsequent developments,
which include the defendant’s arrest on fraud and money laundering charges, a deposition any time
soon appears unlikely. The defendant has altered his request now to include vacatur of the judgment
and a stay of proceedings. The Court does not believe that defendant has demonstrated entitlement
to that relief.
The defendant has brought his motion under the authority of Federal Rule of Civil Procedure
60(b). Generally, when considering a Rule 60(b) motion to set aside the entry of a default judgment,
the Court should consider “the three factors which control the decision of a Rule 55(c) motion to set
aside entry of default.” United Coin Meter Co., Inc. v. Seaboard Coastline RR., 705 F.2d 839, 845
(6th Cir. 1983). However, as the defendant acknowledged at oral argument on March 7, 2012,
-3-

where the default judgment is not based on a prior failure to appear or answer, those three factors
are not directly applicable, and an analysis under the factors for Rule 60(b) relief is more
appropriate. But even then, when relief is sought under Rule 60(b) from a default judgment, the
United Coin factors play a role. See Waifersong, Ltd. Inc. v. Classic Music Vending, 976 F.2d 290,
292 (6th Cir. 1992).
The defendant filed his first motion for relief from judgment on November 8, 2011, two days
before judgment was formally entered on November 10, 2011. On January 15, 2012, the defendant
filed a second motion for relief from judgment that is identical to the November 8, 2011 motion (and
is actually dated November 8, 2011). However, the January 15, 2012 motion also included a “notice
of availability of defendant Ahmed Alabadi for deposition.” In addition, that same day the
defendant filed an amended motion to take his own deposition. Finally, on March 5, 2012, two days
before the hearing scheduled on the defendant’s motions, defendant Alabadi filed a supplemental
brief that informed the Court of his recent arrest and requested the latest version of his preferred
relief.
Under Rule 55(c), the defendant must demonstrate good cause to set aside a default. The
three factors to be considered in determining whether a defendant has demonstrated good cause are
“whether the plaintiff will be prejudiced,” “whether the defendant has a meritorious defense,” and
“whether the culpable conduct of the defendant led to the default.” United Coin Meter Co., Inc. 705
F.2d at 845 (internal quotations omitted). However, “the standard for applying [those factors] to a
motion to set aside a final default judgment under Rule 60(b) is more demanding than their
application in the context of a motion to set aside an entry of default under Rule 55(c).” Dassault
Systemes, SA v. Childress, 663 F.3d 832, 839 (6th Cir. 2011).

-4-

With respect to the first Rule 55(c) factor — prejudice to the plaintiffs — “the relevant
inquiry concerns the future prejudice that will result from reopening the judgment, not prejudice that
has already resulted from the defendant’s conduct.” Id. at 42. In order to demonstrate prejudice
under Rule 55(c), the plaintiff must show that “delay will result in the loss of evidence, create
increased difficulties of discovery, or provide greater opportunity for fraud and collusion.” INVST
Financial Group, Inc. v. Chem-Nuclear Systems, Inc., 815 F.2d 391, 398 (6th Cir. 1987) (internal
quotation omitted). “Mere delay in satisfying a plaintiff’s claim, if it should succeed at trial, is not
sufficient prejudice to require denial of a motion to set aside a default judgment.” United Coin
Meter Co., Inc., 705 F.2d at 845. Delay or increased litigation costs are also insufficient to
demonstrate prejudice. Dassault Systemes, SA, 663 F.3d at 842. Unsurprisingly, given the
defendant’s failure to address Rule 55(c), neither party has offered argument specifically addressing
prejudice to the plaintiffs. The defendant has asserted that setting aside the default judgment would
provide an opportunity for settlement discussions and that no meaningful resolution of the case is
possible without the participation of defendant Alabadi. In response, the plaintiffs observe that
defense counsel has stated in the past that defendant Alabadi would not appear for a deposition
unless the default is set aside and argue that once the default is set aside, defendant Alabadi will
have lost any incentive to appear. Alabadi’s recent indictment also creates significant problems for
discovery.
With respect to the second factor, “[i]n determining whether a defaulted defendant has a
meritorious defense ‘[l]ikelihood of success is not the measure.’” United Coin Meter Co., Inc., 705
F.2d at 845. (quoting Keegel v. Key West & Carribbean Trading Co., 627 F.2d 372, 374 (D.C. Cir.
1980)). “Rather, if any defense relied upon states a defense good at law, then a meritorious defense

-5-

has been advanced.” Ibid. “Thus, even conclusory assertions may be sufficient to establish the ‘hint
of a suggestion’ needed to present a meritorious defense.” Dassault, 663 F.3d at 843.
The only defense that the defendant’s motions raise is a possible objection on the grounds
that the Court does not have personal jurisdiction over him because he does not reside in the United
States. However, the defendant specifically disavowed that defense at oral argument on the motion,
and he agreed that the Court has personal jurisdiction over him.
The third factor requires an assessment of culpability. The Sixth Circuit has held that “[a]
party’s conduct is culpable if it displays either an intent to thwart judicial proceedings or a reckless
disregard for the effect of its conduct on those proceedings.” Williams v. Meyer, 346 F.3d 607, 613
(6th Cir. 2003) (internal quotation omitted). “Where the party in default satisfies the first two
requirements for relief and moves promptly to set aside the default before a judgment is entered, the
district court should grant the motion if the party offers a credible explanation for the delay that does
not exhibit disregard for the judicial proceedings.” Shepard Claims Service, Inc. v. William Darrah
& Associates, 796 F.2d 190, 195 (6th Cir. 1986). When the defendant is seeking to avoid a
judgment rather than to set aside an entry of default judgment, “the specific requirements of Rule
60(b) narrow the scope of the court’s equitable inquiry” with respect to culpability. Waifersong, Ltd.
Inc., 976 F.2d at 292.
The defendant has failed to appear for several noticed depositions and to participate in
discovery. In fact, the failure to participate in discovery was the reason the Court granted the default
judgment for the plaintiffs. The defendant argues that his failure to participate was due to threats
against him and his family, as well as ransacking of corporate offices in Iraq. However, other than
his own statement, he has not offered any evidence of those facts, such as affidavits, photographs,

-6-

or reports from civil authorities. Moreover, the Court already has found that the defendant’s conduct
in this case displayed an intent to frustrate the proceedings before this Court.
As noted above, where the defendant is seeking to avoid a judgment, the culpability
determination is narrowed to a consideration of the requirements of Federal Rule of Civil Procedure
60(b). Federal Rule of Civil Procedure 60(b) provides that the court may relieve a party from a final
judgment for the six following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been
discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or
misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based on an earlier
judgment that has been reversed or vacated; or applying it prospectively is no longer
equitable; or
(6) any other reason that justifies relief.
Fed. R. Civ. Pro. 60(b).
A decision to grant or deny a Rule 60(b) motion “is a matter of discretion for the district
court.” Bank of Montreal v. Olafsson, 648 F.2d 1078, 1079 (6th Cir. 1981). Relief from a judgment
or order under Federal Rule of Civil Procedure 60(b) is an “extraordinary remedy that is granted
only in exceptional circumstances.” McAlpin v. Lexington 76 Auto Truck Stop, Inc., 229 F.3d 491,
502-03 (6th Cir. 2000). Rule 60(b) “does not allow a defeated litigant a second chance to convince
the court to rule in his or her favor by presenting new explanations, legal theories, or proof.” Jinks
v. AlliedSignal, Inc., 250 F.3d 381, 385 (6th Cir. 2001); see also E.D. Mich. LR 7.1(g)(3) (“[T]he
court will not grant motions for rehearing or reconsideration that merely present the same issues
ruled upon by the court, either expressly or by reasonable implication.”). In order to qualify for

-7-

relief under Rule 60(b), “a party seeking relief from judgment must show the applicability of the
rule.” Ibid.
The defendant has not discussed specifically how Rule 60(b) applies to the facts of this case.
The defendant merely has quoted subsections 1, 2, 5, and 6 of Rule 60(b), and presumably he intends
his request to fall under one of those four subsections.
Rule 60(b)(1) provides that a court may grant relief in cases of “mistake, inadvertence,
surprise, or excusable neglect.” Fed. R. Civ. P. 60(b)(1). The Supreme Court has stated that
“‘excusable neglect’ is understood to encompass situations in which the failure to comply with a
filing deadline is attributable to negligence.” Pioneer Inv. Services Co. v. Brunswick Associates Ltd.
Partnership, 507 U.S. 380, 394 (1993). “Where a party seeks relief from a default judgment, Rule
60(b)(1) should be applied ‘equitably and liberally . . . to achieve substantial justice.’” Williams, 346
F.3d at 613 (quoting United Coin, 705 F.2d at 844-45). “In cases that have not been heard on the
merits, the determination of whether neglect is excusable takes into account the length and reasons
for the delay, the impact on the case and judicial proceedings, and whether the movant requesting
relief has acted in good faith.” Burrell v. Henderson, 434 F.3d 826, 832 (6th Cir. 2006). In
determining whether it is appropriate to grant relief from a default judgment under Rule 60(b)(1),
the Sixth Circuit has found relevant whether default judgment resulted from “intransigence” or from
“misunderstanding.” INVST Financial Group, Inc., 815 F.2d at 400.
The defendant’s motion does not set out facts or argument that would justify granting relief
under the factors outlined in Burrell. The defendant’s failure to cooperate in discovery dates from
at least November 2010, when the defendant first failed to appear for a scheduled deposition. The
defendant has failed repeatedly to appear for scheduled depositions since that time; most recently,

-8-

the defendant failed to appear for a deposition scheduled to take place in the two weeks between the
Court’s order granting the plaintiffs’ motion for judgment and the entry of judgment. The Court
granted the defendant’s previous motion to set aside a default on January 13, 2011. By the
defendant’s admission, he has been out of touch with defense counsel for a significant portion of this
litigation. The defendant’s motion contains a thinly-veiled threat that he will refuse to comply with
this Court’s judgment and will conceal the location of his remaining assets. In short, the defendant’s
conduct in this case can hardly be said to be an example of the good faith that could justify a relief
from the default judgment against him.
The defendant argues that his failure to cooperate was due to “the poorly developed
infrastructure in the Middle East,” “the extra-judicial self-help of certain Plaintiffs,” and “perennial
death threats against Defendant and his family.” Def.’s Mot. for Relief from Judgment at 9. The
defendant has also provided an affidavit stating that he was subjected to death threats and that his
property has been “ransacked” in Iraq, explaining that his failure to communicate with his attorney
was due to a fear that “[his] enemies might be able to access [his] email communications.” Id. at
11. But those allegations are entirely uncorroborated and are not given much weight by the Court.
Rule 60(b)(2) provides that a court may grant relief from judgment when presented with
“newly discovered evidence that, with reasonable diligence, could not have been discovered in time
to move for a new trial under Rule 59(b).” Fed. R. Civ. P. 60(b)(2). To prevail on a motion for
relief from judgment on that basis, “the moving party must show that it used due diligence in
obtaining the information and that the evidence is so material that it is outcome determinative.”
Crawford v. TRW Automotive U.S. LLC, 560 F.3d 607, 615 (6th Cir. 2009).

-9-

Granting relief from judgment on this ground is singularly unsuited in the context of a default
judgment, where a decision has not been made on the merits. Nevertheless, the defendant has
neither identified any information that was not available in time to move for a new trial, nor has he
made any showing of due diligence.
Rule 60(b)(5) allows a court to grant relief where “the judgment has been satisfied, released
or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it
prospectively is no longer equitable.” Fed. R. Civ. P. 60(b)(5). There is no argument to be made
that the judgment has been satisfied, released or discharged, or that it is based on an earlier
judgment. Therefore, the defendant must be arguing that applying the judgment prospectively is no
longer equitable. But that section of the rule is inapplicable because the judgment in this case is for
a sum of money. As the Sixth Circuit has explained, “[i]njunctions (permanent or temporary), some
declaratory judgments, and particularly consent decrees are prospective judgments susceptible to
a Rule 60(b)(5) challenge. Money judgments, however, do not generally have prospective
application because they are final in the sense of involving a set monetary outlay. Kalamazoo River
Study Group v. Rockwell Intern. Corp., 355 F.3d 574, 587 (6th Cir. 2004) (citations omitted).
Finally, Federal Rule of Civil Procedure 60(b)(6) permits the court to grant a motion for
relief from judgment for “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6). The Sixth
Circuit has held that a court may grant relief under this rule “‘only in exceptional and extraordinary
circumstances,’ which are defined as those ‘unusual and extreme situations where principles of
equity mandate relief.’” Export-Import Bank of U.S. v. Advanced Polymer Sciences, Inc., 604 F.3d
242, 247 (6th Cir. 2010) (quoting Jinks, 250 F.3d at 387). In addition, “something more than one

-10-

of the grounds in subsections (1) through (5)” must be shown to justify relief under Rule 60(b)(6).
East Brooks Books, Inc. v. City of Memphis, 633 F.3d 459, 465 (6th Cir. 2011).
The defendant has provided nothing beyond his allegations of threats to his personal security
that would constitute “exceptional and extraordinary circumstances” justifying relief from the
default judgment under Rule 60(b)(6). However, those alleged threats are offered as an excuse for
the defendant’s neglect under Rule 60(b)(1) and therefore do not constitute “something more” than
the grounds in that section. Although this case as a whole certainly could be characterized as
“unusual,” the Court is not persuaded that the principles of equity mandate relief for the defendant.
Accordingly, it is ORDERED that the defendant’s motions and amended motion to vacate
the default judgment [dkt. #338, 453] and to take his own deposition [dkt. #344] are DENIED.
It is further ORDERED that the request to stay proceedings is DENIED as moot.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Dated: March 8, 2012

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 March 8, 2012.
s/Deborah R. Tofil
DEBORAH R. TOFIL

-11-