Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_04-cv-00672/USCOURTS-cand-3_04-cv-00672-5/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAMGAMO BIOSCIENCES, INC.,

Plaintiff,

v.

CARGOLUX AIRLINES

INTERNATIONAL, S.A., et al.,

Defendants.

___________________________________/

No. C-04-0672 JSW (EMC)

ORDER RE SUPPLEMENTAL

BRIEFING AND/OR EVIDENCE IN

SUPPORT OF PLAINTIFF’S MOTION

FOR DEFAULT JUDGMENT

(Docket No. 70)

Plaintiff Samgamo Biosciences, Inc. has moved for default judgment with respect to three

defendants in the above-referenced case, namely, Intersped Logistics Group, Inc. (“Intersped”); RPG

International Freights Ltd. (“RPG”), and Mr. Cargo Ltd. (“Mr. Cargo”). Judge White has referred

the motion for default judgment to the undersigned for a report and recommendation.

Having reviewed Samgamo’s brief and accompanying submissions, the Court hereby orders

Samgamo to provide additional briefing and/or evidence in support of its motion for default

judgment to address the concerns detailed below.

1. Entry of Default re RPG

Samgamo has asked for default judgment with respect to Intersped, RPG, and Mr. Cargo. 

While it appears that default has been entered with respect to Intersped and Mr. Cargo, see Docket

Nos. 30, 65 (entries of default with respect to Intersped and Mr. Cargo respectively), the record does

not reflect an entry of default with respect to RPG. Samgamo should explain why its motion for

default judgment should be granted with respect to RPG if no entry of default has been made.

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2. Claims for Relief

In its motion for default judgment, Samgamo does not identify for which causes of action it is

seeking default judgment. (The complaint lists five causes of action against the “carrier

defendants.”) In addition, Samgamo has not provided any explanation as to why it is entitled to

default judgment for any of the causes of action. The Court refers Samgamo to the Ninth Circuit

opinion Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), which states that the following factors are

considered in a motion for default judgment: (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 decisions on the merits. Samgamo should identify for which causes of action it

is seeking default judgment and explain why it is entitled to default judgment based on the above

factors. 

Samgamo should be sure to provide a complete discussion with respect to Eitel factors (2)

and (3) above. See Philip Morris U.S.A. Inc. v. Castworld Prods., 219 F.R.D. 494, 499 (C.D. Cal.

2003) (noting that the second and third Eitel factors “‘require that a plaintiff state a claim on which

the [plaintiff] may recover’”). The Court notes that, upon entry of default, the factual allegations of

the plaintiff’s complaint will be taken as true (except for those relating to the amount of damages). 

See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987). However, some of the

factual allegations in Samgamo’s complaint seem equivocal. For example, Samgamo alleges that

defendant Beckman Coulter United Kingdom Ltd. agreed to sell to Samgamo a robot/thermal cycler

“purported to be in good order and condition,” Compl. ¶ 12 (emphasis added). Moreover, legal

conclusions, as opposed to well-pleaded factual allegations, are not deemed admitted as a result of

default. See Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005); see also 10A

Wright & Miller, Fed. Prac. & Proc. Civ. 3d § 2688 (“Even after default, . . . it remains for the court

to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in

default does not admit mere conclusions of law.”).

///

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3. Damages

The Dhurjon-Singh declaration submitted in support of the motion for default judgment

claims that Samgamo was insured by Federal Insurance Company (“FIC”); that FIC paid Samgamo

$216,574 for the loss of the cargo described in the complaint; and that Samgamo assigned its rights

to recovery to FIC. See Dhurjon-Singh Decl. ¶¶ 10-12; see also id., Ex. 7 (subrogation receipt)

(Samgamo assigning FIC “all of the rights, claims and interest which [Samgamo] may have against

any person or corporation liable for the loss mentioned, and authoriz[ing] [FIC] to sue, compromise

or settle in [Samgamo’s] name”). The declaration goes on to assert that the damages sustained were

therefore $216,574 (minus $29,000 paid by the settling defendants). See id. ¶ 15.

Although FIC may have paid Samgamo $216,574 under the insurance policy, it is not clear

that Samgamo actually suffered $216,574 in damages -- i.e., the Court has doubts about the

sufficiency of the evidence regarding damages. Samgamo should explain why the insurance

payment is adequate evidence of damages sustained (citing any relevant authority), especially for

purposes of a default judgment, and/or provide additional evidence substantiating the damages

claimed.

In addition, Samgamo should explain to the Court how damages liability should be allocated

among the defendants against whom it seeks default judgment. For instance, should the defendants

be held jointly and severally liable? Or should there be a specific allocation of liability among the

defendants?

Samgamo should file all of the briefing and evidence required in items (1) through (3) above

within thirty days of the filing date of this order. Also, Samgamo shall serve a copy of this order on

Intersped, RPG, and Mr. Cargo within three days of the filing date of this order.

IT IS SO ORDERED.

Dated: August 26, 2005

_________________________

 EDWARD M. CHEN

United States Magistrate Judge

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