Court Opinion

ID: 4096197
Source: CourtListenerOpinion
Date Created: 2016-11-07 22:01:14.909695+00
Date Added: 2024-06-11T09:19:36.430634
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                           NOV 07 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ALPHA PHOENIX INDUSTRIES, LLC,                   No.   14-15060
an Arizona limited liability company,
                                                 D.C. No. 2:12-cv-01848-SMM
              Plaintiff-Appellee,

 v.                                              MEMORANDUM*

SCI INTERNATIONAL, INC, a Texas
corporation;

              Defendant,

and

JOANNA BURKE; JOHN BURKE;
MARK BURKE,

              Defendants-Appellants

                   Appeal from the United States District Court
                            for the District of Arizona
              Stephen M. McNamee, Senior District Judge, Presiding

                      Argued and Submitted October 19, 2016
                            San Francisco, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: KLEINFELD and M. SMITH, Circuit Judges, and KRONSTADT,**
District Judge.

      Defendants-Appellants Joanna Burke, John Burke and Mark Burke1 appeal

from a default and default judgment and the denial of their motion to set aside the

default. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

      Defendants argue that both the default and the default judgment were invalid

because the district court lacked personal jurisdiction over them. “The question

whether [a] . . . default judgment [is] void for lack of personal jurisdiction is

reviewed de novo.” Elec. Specialty Co. v. Rd. & Ranch Supply, Inc., 967 F.2d 309,

311 (9th Cir. 1992). “The general rule is that personal jurisdiction over a defendant

is proper if it is permitted by a long-arm statute and if the exercise of that

jurisdiction does not violate federal due process.” Pebble Beach Co. v. Caddy, 453

F.3d 1151, 1154 (9th Cir. 2006). “Arizona’s long-arm rule permits the exercise of

      **
             The Honorable John A. Kronstadt, United States District Judge for the
Central District of California, sitting by designation.
1
 SCI International, Inc. (SCI), a Texas company that is operated by John and
Joanna Burke, was also named as a defendant in this case. However, Defendants
have filed this appeal pro se, and “[i]t is a longstanding rule that ‘[c]orporations
and other unincorporated associations must appear in court through an attorney.’”
D-Beam Ltd. P’ship v. Roller Derby Skates, Inc., 366 F.3d 972, 973–74 (9th Cir.
2004) (quoting Licht v. Am. W. Airlines (In re Am. W. Airlines), 40 F.3d 1058,
1059 (9th Cir. 1994). Therefore, SCI is dismissed from the appeal. Id. at 974.

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personal jurisdiction to the extent allowed by the due process clause of the United

States Constitution.” Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007)

(quoting CE Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1110 (9th Cir.

2004)).

      Due process requires “a defendant, if not present in the forum, [to] have

‘minimum contacts’ with the forum state such that the assertion of jurisdiction

‘does not offend traditional notions of fair play and substantial justice.’” Pebble

Beach, 453 F.3d at 1155. We evaluate minimum contacts by applying a three-part

test. This requirement is satisfied when “(1) the defendant has performed some act

or consummated some transaction within the forum or otherwise purposefully

availed himself of the privileges of conducting activities in the forum, (2) the claim

arises out of or results from the defendant’s forum-related activities, and (3) the

exercise of jurisdiction is reasonable.” Id.

      In this action, Defendants “purposefully ‘reach[ed] out beyond’” Texas and

into Arizona by posting allegedly defamatory statements about API online. Walden

v. Fiore, 134 S.Ct. 1115, 1122 (2014). Moreover, they acted with the stated intent

to affect Plaintiff’s business, which is based and operates in Arizona. Thus,

Defendants’ allegedly harmful acts were “expressly aimed” towards Arizona, and

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the exercise of personal jurisdiction there was proper. See Pebble Beach, 453 F.3d

at 1157.

      Defendants also contend that the district court erred in its decision not to set

aside the default and default judgment. “A district court’s denial of a motion to set

aside either default under Rule 55(c) or default judgment under Rule 60(b)(1), is

reviewed for abuse of discretion.” Brandt v. Am. Bankers Ins. Co. of Florida, 653

F.3d 1108, 1110 (9th Cir. 2011). “[A] ‘court may set aside an entry of default for

good cause.’” United States v. Signed Pers. Check No. 730, 615 F.3d 1085, 1091

(9th Cir. 2010) (quoting Fed. R. Civ. P. 55(c)). “To determine ‘good cause’, a court

must ‘consider[] three factors: (1) whether [the party seeking to set aside the

default] engaged in culpable conduct that led to the default; (2) whether [it] had

[no] meritorious defense; or (3) whether reopening the default judgment would

prejudice’ the other party.” Id. (quoting Franchise Holding II, LLC. v. Huntington

Restaurants Grp., Inc., 375 F.3d 922, 926 (9th Cir. 2004)). The standard for

determining whether to set aside a default judgment under Rule 60(b) “is the same”

as the standard to set aside a default under Rule 55(c). Id.

      Here, the district court concluded that Defendants engaged in bad-faith

conduct that led to both the entry of the default and the default judgment, and that

Defendants’ conduct prejudiced API. This conclusion was reasonable and

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supported by facts in the record. See Brandt, 653 F.3d at 1110. Therefore, there

was no abuse of discretion by the district court in declining to set aside the entry of

default or the default judgment.

       Defendants next argue that the injunction, which was entered as part of the

default judgment process, constitutes a prior restraint on their speech in violation

of the First Amendment. This is different from the First Amendment argument they

made to the district court. There they claimed that “neither equity nor the First

Amendment allows for an Injunction against statements whose truth or falsity has

not been fully litigated and in any event when there are no findings of falsity or

negligence.” They also argue for the first time on appeal that the injunction violates

the common law, and that the award of monetary damages by the district court was

in error.

       “[I]ssues not raised to the district court normally are deemed waived.”

United States v. Flores-Montano, 424 F.3d 1044, 1047 (9th Cir. 2005). There are

“three narrow exceptions to this general rule.” Id. The court may consider an

argument for the first time on appeal when

       (1) there are “exceptional circumstances” why the issue was not raised
       in the trial court, (2) the new issue arises while the appeal is pending
       because of a change in the law, or (3) the issue presented is purely one
       of law and the opposing party will suffer no prejudice as a result of
       the failure to raise the issue in the trial court.

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Id.

      None of these exceptions applies here. The risk of a miscarriage of justice is

low. Any harm to Defendants is the result of their repeated and deliberate disregard

of court orders. Nor have Defendants identified any change of law during the

pendency of their appeal that presents a new issue. Finally, whether the injunction

at issue violates the First Amendment or the common law is a mixed question of

law and fact, and in this case whether the district court’s award of damages was

proper is a question of fact. Therefore, the challenges made on these grounds have

been waived.2

      AFFIRMED.

2
  Defendants also argue in their opening brief that the district court “conspired to
pervert the course of justice” by claiming not to have received their Motion to
Vacate through the mail. As a result, Defendants state that they had to incur the
cost of having the motion delivered in person. As this claim was not presented
before the district court, it is also waived on appeal. See Kimes, 84 F.3d at 1126.
Moreover, Defendants have neither presented a legal argument nor provided any
citations that would show that, even if they could somehow establish the truth of
these unusual allegations, they would provide a basis for relief.

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