Schmalbach v. United States of America
Filing
19
ORDER ADOPTING IN PART AND REJECTING IN PART REPORT AND RECOMMENDATION 16 ; Defendant's Motion to Set Aside Default and Dismiss Plaintiff's Complaint 12 is granted; signed by Chief Judge Robert J. Jonker (Chief Judge Robert J. Jonker, ymc)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ANGELA G. SCHMALBACH,
Plaintiff,
CASE NO. 1:16-cv-182
v.
HON. ROBERT J. JONKER
UNITED STATES OF AMERICA,
Defendant.
__________________________________/
ORDER ON REPORT AND RECOMMENDATION
The Court has reviewed Magistrate Judge Kent’s Report and Recommendation in this matter
(ECF No. 16) and Defendant’s Objections to the Report and Recommendation (ECF No. 17). Under
the Federal Rules of Civil Procedure, where, as here, a party has objected to portions of a Report and
Recommendation, “[t]he district judge . . . has a duty to reject the magistrate judge’s
recommendation unless, on de novo reconsideration, he or she finds it justified.” 12 WRIGHT,
MILLER, & MARCUS, FEDERAL PRACTICE AND PROCEDURE § 3070.2, at 381 (2d ed. 1997).
Specifically, the Rules provide that:
[t]he district judge must determine de novo any part of the magistrate
judge’s disposition that has been properly objected to. The district
judge may accept, reject, or modify the recommended disposition;
receive further evidence; or return the matter to the magistrate judge
with instructions.
FED R. CIV. P. 72(b)(3). De novo review in these circumstances requires at least a review of the
evidence before the Magistrate Judge. Hill v. Duriron Co., 656 F.2d 1208, 1215 (6th Cir. 1981).
The Court has reviewed de novo the claims and evidence presented to the Magistrate Judge; the
Report and Recommendation itself; and Defendant’s objections.
Plaintiff originally filed this case, which arises out of alleged damage to a package in the
mail, in the Small Claims Court of Eaton County, Michigan. (ECF No. 1.) The government
properly removed the case. (Id.) The removal took place within thirty days after the government
received a copy of the complaint, but a “nonappearance default judgment” had already entered in
the state court.1 (ECF No. 1, ECF No. 13.) The government moves the Court to set aside the
default judgment and dismiss Plaintiff’s claims under FED. R. CIV. P. 12(b)(1) and 12(b)(6). The
government seeks dismissal because the Federal Tort Claims Act (“FTCA”) does not waive the
United States’ sovereign immunity for claims arising out of the Postal Service’s alleged negligent
transmission of mail.2 (ECF No. 12.) The Magistrate Judge agreed with the government that the
Court lacks jurisdiction over the claim based on sovereign immunity. But the Magistrate Judge
found the government’s position internally inconsistent with respect to jurisdiction, reasoning that
if the Court lacks jurisdiction over the claim based on sovereign immunity, it lacks authority to set
aside the default. Citing 28 U.S.C. § 1447(c), the Magistrate Judge recommends a remand of the
case to the state court. (ECF No. 16.)
The government objects, pointing out that once a case is properly removed, “the federal
court takes it as though everything done in the state court had in fact been done in the federal court.”
1
The default judgment entered in the state court before the government received a copy of
the complaint. (ECF No. 1, PageID.1, ECF No. 13, PageID.23.)
2
Plaintiff’s claim names the United States Postal Service as the defendant. (ECF No. 1-1,
PageID.4.) The Court entered an order amending the case caption to reflect the United States as the
proper defendant under the FTCA, 28 U.S.C. § 2679(b)(1). (ECF No. 9, PageID.17.)
2
Munsey v. Testworth Labs., Inc., 227 F.2d 902, 903 (6th Cir. 1955) (quotation omitted). The
government is correct. A state court judgment subject to being set aside in state court before
removal remains “subject to the same hazard in federal court after removal.” Id. The government
has established the propriety of setting aside the default judgment under FED. R. CIV. P. 60(b)(1),
which permits relief from judgment due to “mistake, inadvertence, surprise, or excusable neglect.”
Courts “have applied Rule 60(b)(1) liberally to set aside default judgments, where the defendant
moves for relief promptly, showing that the default was not willful, that the defendant has a
meritorious defense, and that the opposing party will not be prejudiced.” Zolman v. United States,
170 F. Supp. 2d 746, 751-52 (W.D. Mich. 2001). Plaintiff did not properly serve her complaint,
and the government promptly removed the action upon learning of the default judgment. The
record reflects that the government did not willfully allow the default judgment to enter against it.
The government has a meritorious defense: sovereign immunity bars Plaintiff’s claim under the
FTCA, which provides that its waiver of sovereign immunity does not apply to “[a]ny claim arising
out of the loss, miscarriage, or negligent transmission of letters or postal matter.” 28 U.S.C. §
2680(b). Setting aside the default will not prejudice the plaintiff, who cannot show that a delay
“will result in the loss of evidence, increased difficulties in discovery, or greater opportunities for
fraud and collusion.” Berthelsen v. Kane, 907 F.2d 617, 621 (6th Cir. 2000). The Court also notes
that despite ample time to do so, Plaintiff has responded neither to the government’s motion to set
aside the default and dismiss the complaint nor to the government’s objection to the Report and
Recommendation.
For these reasons, the Court finds it appropriate to set aside the default judgment and
dismiss the case for lack of jurisdiction.
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ACCORDINGLY, IT IS ORDERED:
1.
The Report and Recommendation (ECF No. 16) is APPROVED AND ADOPTED
to the extent consistent with this Order and is REJECTED in all other respects.
2.
Defendant’s Motion to Set Aside Default and Dismiss Plaintiff’s Complaint (ECF
No. 12) is GRANTED.
Dated:
March 27, 2017
/s/ Robert J. Jonker
ROBERT J. JONKER
CHIEF UNITED STATES DISTRICT JUDGE
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