Source: http://cisgw3.law.pace.edu/cases/080519u1.html
Timestamp: 2019-04-22 10:14:31+00:00

Document:
This matter came before the undersigned on the court's regularly scheduled law and motion calendar on November 30, 2007, for hearing of plaintiff's motion for default judgment against defendants Grain Board of Iraq and Iraqi Ministry of Trade. Adam C. Brown, Esq. appeared at the hearing on behalf of plaintiff. No appearance was made by or on behalf of defendants.
At the conclusion of the hearing, plaintiff's counsel was granted leave to file a supplemental letter brief concerning the terms of the default judgment sought by plaintiff. Plaintiff filed such a brief on December 4, 2007, together with a revised proposed judgment.
Having heard oral argument and having now considered all written materials submitted in connection with plaintiff's motion, for the reasons stated on the record and set forth below, the undersigned recommends that plaintiff's motion be granted and that default judgment be entered in accordance with plaintiff's revised request.
Plaintiff is a Delaware corporation authorized to do business in the State of California, where its principal place of business is located in Roseville. Plaintiff is a global exporter of agricultural commodities, primarily of products of U.S. origin, including rice, feed grains, and oilseeds.
Defendant Grain Board of Iraq is a state company, and defendant Iraqi Ministry of Trade is a state agency. The Grain Board operates under the Ministry of Trade as part of the food distribution system for the Republic of Iraq. As part of its duties, the Grain Board imports wheat, barley, and rice, and distributes these products to silos and warehouses within Iraq. In connection with these activities, defendants solicited business in the United States.
In 2005 plaintiff and defendants entered into a contract for the purchase and sale of rice to be delivered from Louisiana to Iraq. On July 7, 2006, plaintiff commenced this action with a complaint for damages and declaratory relief against defendants for their alleged wrongful rejection of the first shipment of rice delivered to Iraq pursuant to the parties' contract.
On November 10, 2006, plaintiff requested an order authorizing substitute service of process upon defendants by mail to post office boxes and by email. The district judge granted plaintiff's request on December 29, 2006. On May 23, 2007, plaintiff filed evidence that substitute service of process was effected on defendants on May 11, 2007.
Although service of process was effected on defendants in accordance with the court's December 29, 2006 order, defendants failed to appear in this action. On August 27, 2007, the Clerk of the Court entered the default of both defendants pursuant to the request filed by plaintiff on August 15, 2007. On September 12, 2007, plaintiff filed a certificate of service reflecting that copies of plaintiff's request for entry of default and the Clerk's entry of default, in English and in Arabic translation, were served on defendants in the manner approved by the court for service of process. Subsequently, an amended certificate of service was filed with exhibits that include the Arabic translations.
On October 5, 2007, plaintiff filed its motion for default judgment, noticing it for hearing before the undersigned pursuant to Local Rule 72-302(c)(19). On November 1, 2007, plaintiff filed a certificate of service reflecting that the motion for default judgment and supporting documents, in English and in Arabic translation, were served on defendants in the manner approved for service of process.
Federal Rule of Civil Procedure 55(b)(2) governs applications to the court for entry of default judgment. Upon entry of default, the complaint's factual allegations regarding liability are taken as true, while allegations regarding the amount of damages must be proven. Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) (citing Pope v. United States, 323 U.S. 1, 65 S. Ct. 16, 89 L. Ed. 3, 102 Ct. Cl. 846 (1944), and Geddes v. United Fin. Group, 559 F.2d 557 (9th Cir. 1977)); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987).
Where damages are liquidated, i.e., capable of ascertainment from definite figures contained in documentary evidence or in detailed affidavits, judgment by default may be entered without a damages hearing. Dundee, 722 F.2d at 1323. Unliquidated and punitive damages, however, require "proving up" at an evidentiary hearing or through other means. Dundee, 722 F.2d at 1323-24; see also James v. Frame, 6 F.3d 307, 310-11 (5th Cir. 1993).
(7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.
Eitel, 782 F.2d at 1471-72 (citing 6 Moore's Federal Practice P 55-05, at 55-24 to 55-26).
Plaintiff has also alleged that the forum selection clause contained in the parties' contract is not enforceable. (Id. PP 16-19.) The undersigned finds that defendants have waived any defense based on improper venue or enforcement of the contractual choice of forum clause. See Hoffman v. Blaski, 363 U.S. 335, 343, 80 S. Ct. 1084, 4 L. Ed. 2d 1254 (1960) ("Of course, venue, like jurisdiction over the person, may be waived. A defendant, properly served with process by a court having subject matter jurisdiction, waives venue by failing seasonably to assert it, or even simply by making default."); King v. Russell, 963 F.2d 1301, 1305 (9th Cir. 1992) (holding that City defendants' failure to raise the defense of improper venue constituted a waiver of the defense); Teyseer Cement Co. v. Halla Maritime Corp., 794 F.2d 472, 477 (9th Cir. 1986) (observing that a defendant may waive objections to personal jurisdiction or venue by consent or by conduct). See also Fed. R. Civ. P. 12(b)(3) (listing improper venue as a defense that must be asserted in the responsive pleading or by motion) & 12(h)(1) (providing that a party waives the defense of improper venue by failing to make a motion or include the defense in a responsive pleading).
Defendants were properly served with process by substitute service, as authorized by the assigned district judge on December 29, 2006, when copies of the summons, complaint, and other documents were served by mail and by email on multiple addresses on May 11, 2007. Defendants' defaults were properly entered by the Clerk of the Court on August 27, 2007, more than 90 days after service. Defendants were also served with copies, in English and in Arabic translation, of plaintiff's request for entry of default, the clerk's entry of default, and plaintiff's motion for default judgment. Despite being served with all papers filed in connection with plaintiff's request for entry of default, entry of default by the Clerk, and plaintiff's motion for default judgment, neither defendant filed any written response to the complaint, the request for entry of default, or the motion for default judgment. Neither defendant appeared at the hearing on plaintiff's motion. Defendants have failed to participate in this action in any way.
After weighing the Eitel factors, the undersigned finds that the material allegations of the complaint support plaintiff's claims. Although the amount of money at stake is large, plaintiff will be prejudiced if default judgment is denied because plaintiff will be without other recourse for recovery of the damages suffered due to defendants' breach of the contract. In light of the entry of default against both defendants, there is no apparent possibility of a dispute concerning the material facts underlying the action. Nor is there any indication that either defendant's default resulted from excusable neglect, where plaintiff served defendants with the complaint and summons, the request for entry of default, the Clerk's entry of default, and the motion for default judgment. Defendants had ample notice of plaintiff's intent to pursue judgment against them. Although public policy generally favors the resolution of a case on its merits, defendants' failure to appear and defend against plaintiff's claims has made a decision on the merits impossible in this case. Because most of the Eitel factors weigh in plaintiff's favor, the undersigned, while recognizing the public policy favoring decisions on the merits, will recommend that default judgment be entered against both defendants.
The undersigned finds that plaintiff is entitled to the relief sought in the proposed order filed with the court on December 4, 2007.
The court order that defendants shall pay plaintiff's costs of suit in the amount of $10,491.06.
These findings and recommendations will be submitted to the United States District Judge assigned to the case, pursuant to the provisions of 28 U.S.C. � 636(b)(1). Within thirty (30) days after being served with these findings and recommendations, any party may file written objections with the court. A document containing objections should be titled "Objections to Magistrate Judge's Findings and Recommendations." Any reply to objections shall be served within fifteen (15) days after service of the objections. The parties are advised that failure to file objections within the specified time may waive the right to appeal the District Court's order. See Martinez v. Ylst, 951 F.2d 1153 (9th Cir. 1991).
1. Defendants DOES 1 through 50, inclusive, were dismissed by the Honorable Garland E. Burrell, Jr. on September 14, 2007. See Status (Pretrial Scheduling) Order filed Sept, 14, 2007, at 2. Defendant Republic of Iraq was dismissed without prejudice by the Clerk of the Court on September 26, 2007, pursuant to plaintiff's notice of dismissal filed September 25, 2007.
2. Plaintiff's proposed orders request total damages of $7,005,737.75. The sum of $2,258,499.69 and $4,747,238.16 is $7,005,737.85.

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