FILED

U.S. COURT OF APPEALS

ELEVENTH CIRCUIT

January 9, 2003

THOMAS K. KAHN

CLERK

 [PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

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No. 02-10892

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D. C. Docket No. 00-08800-CV-DMM

ANHEUSER-BUSCH, INC.,

Plaintiff-Appellant,

versus

IRVIN P. PHILPOT, III,

Defendant-Appellee.

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Appeal from the United States District Court 

for the Southern District of Florida

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(January 9, 2003)

Before ANDERSON, BIRCH and BARKETT, Circuit Judges.

BARKETT, Circuit Judge:

In this diversity action for defamation, Anheuser-Busch, Inc. (“Busch”)

appeals from the district court’s final judgment in favor of Irvin P. Philpot, III
1

 Under the federal rules, “[a] party may serve upon any other party a written request for the

admission . . . of the truth of any matters,” Fed.R.Civ.P. 36(a), that are “relevant to the claim,” id.

26(b)(1). A request that is not responded to within 30 days of service is deemed admitted. See id.

36(a). “Any matter admitted under this rule is conclusively established unless the court on motion

permits withdrawal or amendment of the admission.” Id. 36(b); see United States v. 2204 Barbara

Lane, 960 F.2d 126, 129-30 (11th Cir. 1992). Withdrawal or amendment of admissions may be

allowed “when the presentation of the merits of the action will be subserved thereby and the party

who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice

that party in maintaining the action . . . .” Fed.R.Civ.P. 36(b). 

2

(“Philpot”). Busch, a Missouri corporation, filed the action against Philpot, a

Florida citizen, alleging that Philpot had defamed Busch by maliciously telling

hundreds of people, including influential business leaders, that Busch’s dealings

with its distributors amounted to criminal conduct. The complaint further alleged

that this defamation had caused Busch at least $75,000 in damages. 

Although an attorney initially appeared on Philpot’s behalf, he withdrew on

January 25, 2001, after moving to dismiss the case and responding to Busch’s

interrogatories and request for production of documents. Philpot thereafter

remained without the assistance of counsel and failed to answer the complaint. 

The clerk of court, upon Busch’s motion, accordingly entered a default against him

on April 10, 2001. Thereafter, on May 1, 2001, Busch served Philpot with a

request for admissions pursuant to Federal Rule of Civil Procedure 36;1

 the

pertinent Request for Admission stated that Busch had “suffered general damages

in an amount not less than $2,000,000.00 as a result of the facts and circumstances
3

set forth in the Complaint.” After Philpot failed to respond to the Request for

Admission, Busch moved for an entry of final default judgment and damages in the

amount of $2,000,000. On September 7, 2001 the court entered a default judgment

against Philpot and scheduled an evidentiary hearing to determine damages.

Busch took the position that Philpot’s failure to respond to its Request for

Admission conclusively established its entitlement to $2,000,000 in damages, but

stated that if required, its expert witness would establish that Busch had suffered

more than $2,000,000 in damages as a result of the defamation. The court ruled

that under the circumstances presented, Busch would have to prove actual damages

in order to prevail on its defamation claim. Accordingly, it proceeded with the

evidentiary hearing pursuant to Federal Rule of Civil Procedure 55(b)(2).

At the hearing, Busch’s expert offered his opinion that because of Philpot’s

defamatory statements, Busch did not receive full value for the approximately 266

million dollars it had spent to strengthen its relationship with its wholesalers during

the relevant period. Based on the notion of “corrective advertising,” which

proposes that injury from defamatory statements can be as high as twenty-five

percent of a company’s relevant advertising costs, the expert testified that he

thought that Busch was entitled to at least one to five percent of its $266 million

expenditure, or $2.6 to 13.3 million. According to the expert, the need for
4

corrective advertising could be inferred from Busch’s increased advertising

expenditures between 1997 and 2000, which reversed the trend between 1990 and

1996. Philpot testified only briefly, regarding his alleged calls to influential

people, explaining that he either had not spoken with them or had not said anything

negative to them about Busch. 

The court concluded that Busch had not presented any evidence of harm to

its reputation at a consumer or distributor level, of loss of value, or of a need to

engage in corrective advertising. As to Busch’s expert testimony regarding the

inferred need for corrective advertising, the court found that Busch had failed to

establish a connection between any such need and the statements allegedly made

by Philpot. Accordingly, because Busch had not proved any actual damages from

any defamation by Philpot, the court vacated the default judgment for Busch and

entered final judgment for Philpot.

DISCUSSION

The issue before us is the narrow question of whether the trial court abused

its discretion in requiring an evidentiary hearing to prove actual damages under the

circumstances presented. See Johnson v. DeSoto County Board of Commissioners,

204 F.3d 1335, 1340 (11th Cir. 2000) (holding that “[t]he scope and effect of
2

 We apply Florida substantive law to the defamation claim. See Media Services Group,

Inc. v. Bay Cities Communications, Inc., 237 F.3d 1326, 1329 (11th Cir. 2001). 

5

admissions . . . is a matter for determination by the trial court, in the exercise of its

broad discretion”). We conclude that there was no abuse of discretion here. 

Under Florida law,2

 proof of “actual damage” is an essential element of a

defamation action. See Miami Herald Publ’g Co. v. Ane, 423 So.2d 376, 388 (Fla.

Dist. Ct. App. 1982); see also Rubin v. U.S. News & World Report, Inc., 271 F.3d

1305, 1306 (11th Cir. 2001). Regarding the amount of damages, Florida law

makes clear as well that an amount of uncertain damages cannot be established

conclusively based on an unanswered Request for Admission. See Bradford Motor

Cars Inc. v. Frem, 511 So.2d 1120, 1121 (Fla. Dist. Ct. App. 1987). Federal law

similarly requires a judicial determination of damages absent a factual basis in the

record. See Adolph Coors Co. v. Movement Against Racism and the Klan, 777

F.2d 1538, 1543-44 (11th Cir. 1985) (holding that “a judgment of default awarding

cash damages could not properly be entered without a hearing, unless the amount

claimed is a liquidated sum or one capable of mathematical calculation”)

(quotation and citation omitted). To that end, Rule 55(b)(2) of the Federal Rules of

Civil Procedure provides that following entry of a default judgment, a district court
6

may conduct an evidentiary hearing “to determine the amount of damages or to

establish the truth of any averment by evidence . . . .” Fed.R.Civ.P. 55(b)(2).

In this case, the Request for Admission asserted an amount that was not

based on any specified fact; there was nothing in the Request for Admission or

Complaint that established, or even suggested, facts that supported a concrete,

actual damage amount. Damages resulting from defamation, unlike liquidated

damages, may range from nominal to significant amounts. We cannot say it is an

abuse of discretion for a trial judge to conduct an evidentiary hearing when the

amount of damages is uncertain and speculative. A court has an obligation to

assure that there is a legitimate basis for any damage award it enters, and to assure

that damages are not awarded solely as the result of an unrepresented defendant’s

failure to respond to a Request for Admission that may allege a completely

unreasonable or speculative amount of damages with no factual basis. See id.; cf.

Brook Village North Assoc. v. General Elec. Co., 686 F.2d 66, 73-75 (1st Cir.

1982) (holding that defendant’s failure to respond to a request for admission that

included letters detailing reparation costs conclusively established damages). 

Under the circumstances in the present case – Philpot’s pro se status, the

requirement of proof of actual damages in a defamation action, and the lack of any

factual basis for the damage amount in the Request for Admission – we find no
3

 We note that Busch never argued below that it would be prejudiced by the evidentiary

hearing nor moved for a continuance of the hearing in order to avoid such prejudice.

7

abuse of discretion in the district court’s decision to hold an evidentiary hearing to

determine damages pursuant to Rule 55(b)(2).3

Finally, we reject Busch’s argument that the district court erred by setting

aside the default judgment absent a motion by Philpot. The default judgement

entered by the court against Philpot was not a final default judgment, as it provided

neither relief nor damages. See Chudasama v. Mazda Motor Corp., 123 F.3d 1353,

1364 n.27 (1997). Accordingly, the court could set it aside sua sponte for “good

cause.” See Fed.R.Civ.P. 55(c). Under the circumstances presented here, Busch’s

failure to prove actual damages was sufficient “good cause” for the court to vacate

the default and enter final judgment for Philpot.

AFFIRMED.