Court Opinion

ID: 4341526
Source: CourtListenerOpinion
Date Created: 2018-11-14 21:01:20.092455+00
Date Added: 2024-06-11T14:48:54.735997
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                            NOV 14 2018
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
RUBICON GLOBAL VENTURES, INC.                    No.   17-35601
et al.,
                                                 D.C. Nos.
              Plaintiffs-Appellants,             05-cv-01809-MO
                                                 09-cv-00818-MO
 v.                                              09-cv-01397-MO

CHONGQING ZONGSHEN GROUP
IMPORT/EXPORT CORP. et al.,                      MEMORANDUM*

              Defendants-Appellees.

                  Appeal from the United States District Court
                           for the District of Oregon
               Michael W. Mosman, Chief District Judge, Presiding

                      Argued and Submitted October 9, 2018
                               Portland, Oregon

Before: FISHER and CALLAHAN, Circuit Judges, and BENCIVENGO,** District
Judge.

      Plaintiffs Rubicon Global Ventures, Inc., and Z Motors, Inc., appeal the

district court’s entry of final judgments in favor of Defendants Zongshen Industrial

         *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
         **
             The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
Group, Co., Ltd., Chongqing Zongshen Group Import/Export Corp., and Deixu

Yuan after granting Defendants’ motion to preclude entry of default judgment

against Defendants. We affirm in part and reverse in part with instructions to the

district court to enter default judgments in these three related cases against

Defendants jointly and severally in the total amount of $1,316,650.

      This is the third time this collection of related cases, the first of which was

filed in 2005, has been before the Ninth Circuit. On the second appeal, Defendants

appealed the district court’s entry of default judgments against them on numerous

grounds, but Defendants did not contend that the default judgments were improper

because the complaints failed to state a claim. The Ninth Circuit rejected most of

Defendants’ arguments but held that the district court abused its discretion by

failing to hold a hearing on damages prior to entering the default judgments

because the judgments included damages for future lost profits that were not a

certain sum or capable of mathematical calculation. The Ninth Circuit therefore

remanded the cases “for a factual determination of damages.” On remand from the

second appeal, Defendants filed a motion to preclude entry of default judgment on

the ground that the operative complaints failed to state a claim. The district court

granted this motion and declined to enter default judgments against Defendants

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while also finding that, if default judgments had been appropriate, Plaintiffs would

have been entitled to a damage award of $916,650 after trebling.

      Plaintiffs argue that the district court exceeded the scope of the mandate by

granting Defendants’ motion to preclude entry of default judgment. “As a question

of law, we review de novo a district court’s compliance with the mandate of an

appellate court.” United States v. Kellington, 217 F.3d 1084, 1092 (9th Cir. 2000).

“Upon return of its mandate, the district court cannot give relief beyond the scope

of that mandate, but it may act on ‘matters left open by the mandate.’” Caldwell v.

Puget Sound Elec. Apprenticeship & Training Trust, 824 F.2d 765, 767 (9th Cir.

1987) (quoting In re Sanford Fork & Tool Co., 160 U.S. 247, 256 (1895)). “[I]n

construing a mandate, the lower court may consider the opinion the mandate

purports to enforce as well as the procedural posture and substantive law from

which it arises. . . . [T]he ultimate task is to distinguish matters that have been

decided on appeal, and are therefore beyond the jurisdiction of the lower court,

from matters that have not.” Kellington, 217 F.3d at 1093.

      Considering the mandate remanding these cases to the district court “for a

factual determination of damages” in the context of the memorandum that

otherwise rejected Defendants’ arguments of error in the district court’s entry of

default judgments, as well as the unique procedural posture of these cases at that

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time, the issue of whether the complaints adequately stated claims was not left

open by the mandate. Accordingly, the district court exceeded the scope of the

mandate when it granted Defendants’ motion to preclude entry of default

judgment.

      Plaintiffs also argue that the district court erred in the manner in which it

trebled their damages. The district court found that Plaintiffs had suffered

$505,550 in damages, and that they were entitled to trebling of those damages

based on the federal and Oregon RICO claims in the complaints. Before trebling,

however, the district court reduced the $505,550 by $200,000 to account for

Plaintiffs’ prior settlement with Zongshen, Inc., which is not party to this appeal.

Thus, the district court calculated the trebled award to be $916,650. Because

settlement payments should be deducted from an award against non-settling

defendants after the actual damages are trebled, the district court erred. See

William Inglis & Sons Baking Co. v. Cont’l Baking Co., Inc., 981 F.2d 1023, 1024

(9th Cir. 1992) (“[U]nder our existing law settlement payments should be deducted

from the damages after they have been trebled.”); In re Nat’l Mortg. Equity Corp.

Mortg. Pool Certificates Sec. Litig., 636 F. Supp. 1138, 1151 (C.D. Cal. 1986)

(Tashima, J.) (“Without exception, courts hold that the full award to which such

plaintiffs are entitled is an amount three times the proven actual damages and that,

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to ensure that plaintiffs receive complete satisfaction of their claims, settlement

payments should be deducted from the award against the non-settling defendant(s)

after actual damages are trebled.”). The trebled damage award, accounting for the

deduction of the $200,000 settlement payment, should be $1,316,650.

      The plaintiffs also contend that the district court erred in refusing to award

damages for lost profits and refusing to award punitive damages. We find no error

and affirm these aspects of the district court’s damages determination.

      Consistent with the foregoing, the district court’s entry of judgment for

Defendants is VACATED. The district court’s grant of Defendants’ motion to

preclude entry of default judgment is REVERSED. The district court’s

determination of Plaintiffs’ damage award on default judgment is AFFIRMED IN

PART and REVERSED IN PART. These cases are REMANDED to the district

court for entry of default judgments in favor of Plaintiffs and against Defendants

jointly and severally in the total amount of $1,316,650. Costs to Plaintiffs.

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