Opinion ID: 3047727
Heading Depth: 2
Heading Rank: 1

Heading: Default Against Ethan Enterprises

Text: Ethan concedes that it violated Local Rule GR 2(f)(4)(B), 5 This characterization of the firms’ relationship is in dispute. There is separate litigation in district court in which it is alleged that Ethan is actually the alter ego or successor to Tift & Young, Inc. See Bd. of Tr. of the Masonry Sec. Plan of Wash. v. Ethan Enter., Inc., No. 04-659 (W.D. Wash. filed Mar. 26, 2004). EMPLOYEE PAINTERS’ TRUST v. ETHAN ENTERPRISES 3267 which requires a corporation to be represented by counsel before the court. This failure suffices to support the default judgment against the corporation. [1] Local Rule GR 2(f)(4)(B) is explicit that “failure to obtain a replacement attorney by the date the withdrawal [of counsel] is effective may result in . . . entry of default against the corporation as to any claims of other parties.” Ethan’s attorney provided it with actual notice of the rule before he withdrew, yet Ethan never retained replacement counsel. As Ethan concedes, we have recognized default as a permissible sanction for failure to comply with local rules requiring representation by counsel. See United States v. High Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993) (per curiam). We find no reason to distinguish the present case. Ethan nonetheless argues that the default judgment here was an abuse of discretion because it was based solely on its failure to answer the amended complaint, which, Ethan contends, was not properly served. Neither the record nor the law supports Ethan’s position. The district court made clear that it found Ethan in default not for failure to answer the amended complaint but for failure to retain substitute counsel after Brown withdrew. Although the trusts did file an amended complaint at a time when Ethan was no longer represented by counsel, nothing about that filing itself diverged from the normal course of litigation. [2] Because Ethan’s violation of Local Rule GR 2(f)(4)(B) justified entry of a default judgment against it whether or not service of the amended complaint was effective, the district court did not abuse its discretion by entering a default judgment and, later, refusing to set it aside.