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United States v. Distribuidora Batiz

November 3, 2010

UNITED STATES OF AMERICA, PLAINTIFF,
v.
DISTRIBUIDORA BATIZ CGH, S.A. DE C.V.; ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hayes, Judge

ORDER

The matters before the Court are the Motion for Specially Authorized Service (ECF No. 93), and the Motion for Issuance of an Amended Summons (ECF No. 94).

BACKGROUND

On February 27, 2007, Plaintiff United States of America filed the Complaint against Distribuidora Batiz, S.A. De C.V. (hereinafter "Distribuidora Batiz"), and Silvia Del Carmen Batiz Esquer, Rodolfo Batiz Guillen, Raul Batiz Echavarria, Raul Guillermo Batiz Guillen, Raul Guillermo Batiz Gamboa, Ricardo Batiz Gamboa, Olga Elena Batiz Esquer, Jorge Guillermo Batiz Guillen, Jorge Guillermo Batiz Esquer, Gabriela Maria Batiz Gamboa, Angela Maria Batiz Gamboa, Gerardo Batiz Esquer, Grupo Batiz CGH, S.A. de C.V., Greenver, S.A. de C.V., Invernaderos La Pequena Joya, S.A. De C.V., and Pedro Batiz Guillen (collectively, "Guarantor Defendants"). (ECF No. 1). The Complaint alleges that the United States, through its agency, the Export-Import Bank of the United States, holds a promissory note on which Distribuidora Batiz defaulted. The Complaint alleges that the Guarantor Defendants unconditionally guarantied repayment of the full amount of Distribuidora Batiz's indebtedness on the note, but Defendants failed to pay the amount due. The Complaint seeks payment of principal in the amount of $2,641,574.61, plus accrued interest.

Between approximately April 2008 and July 2008, Plaintiff attempted to serve seven of the Defendants in Mexico pursuant to the Inter-American Convention on Letters Rogatory, but the efforts were unsuccessful. (ECF No. 65-9, 65-10). For five of the Defendants, the Mexican authorities stated that they could not locate the Defendants at the given addresses. (ECF No. 65-9).

On November 7, 2008, the Court issued a Judgment against Defendant Raul Batiz Echavarria pursuant to Federal Rule of Civil Procedure 54(b). (ECF No. 46). On December 5, 2008, the Court issued a Judgment against Defendant Rodolfo Batiz Guillen pursuant to Rule 54(b). (ECF No. 51).

On May 12, 2009, based upon service of process at the San Diego, California offices of Wilson Batiz LLC, "a Batiz family business," the United States moved for default judgment against the following fourteen defendants: Distribuidora Batiz; Grupo Batiz CGH, S.A. de C.V.; Greenver, S.A. de C.V.; Invernaderos la Pequena Jolla, S.A. de C.V.; Pedro Batiz Guillen; Silvia del Carmen Batiz Esquer; Raul Guillermo Batiz Guillen; Raul Guillermo Batiz Gamboa; Olga Elena Batiz Esquer; Jorge Guillermo Batiz Guillen; Jorge Guillermo Batiz Esquer; Gabriela Maria Batiz Gamboa; Angela Maria Batiz Gamboa; and Gerardo Batiz Esquer. (ECF No. 59-2 at 5).

On May 22, 2009, thirteen of the fourteen Defendants who were the subject of the May 12, 2009 Motion for Default Judgment,*fn1 as well as Defendant Ricardo Batiz Gamboa ("Moving Defendants"), through counsel Robert Ted Parker, filed an Opposition to Plaintiff's Motion for Default Judgment (ECF No. 60) and a Motion to Set Aside Clerk's Default and Dismiss Action as to Moving Defendants (ECF No. 61). The Moving Defendants contended that Plaintiff had failed to effectuate service against them, and therefore the action against them should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(5). In support, the Moving Defendants submitted a declaration from Defendant Jorge Guillermo Batiz Guillen stating that "[e]ach of the Moving Defendants is of Mexican citizenship and domicile, and each of them resides in Mexico." (Jorge Guillermo Batiz Guillen Decl., ECF No. 61-3, ¶ 6). He stated that "I first learned of the lawsuit when I received a copy of the letter [dated] February 26, 2009 that was signed by [Plaintiff's counsel] and addressed to me and numerous other members of the Batiz family at addresses which are not the residences or usual places of abode or business of any of the Moving Defendants." Id. ¶ 3.

On June 8, 2009, Plaintiff filed a Motion to Withdraw the Motion for Default Judgment as to the Moving Defendants. (ECF No. 66). On June 9, 2009, Plaintiff filed a Motion for Limited Early Discovery, seeking discovery "to obtain addresses it needs to effect undisputedly proper service upon fourteen defendants and to move this litigation expeditiously towards an adjudication on the merits." (ECF No. 67-1 at 2). Plaintiff attached an email exchange wherein attorney Parker refused to answer the following two questions posed by Plaintiff's counsel: "1) Will you provide me with addresses at which each of your 14 clients may be served with process in this case? 2) Will you accept service of process on behalf of your 14 clients?" (ECF No. 67-2 at 1).

On June 18, 2009, the Moving Defendants filed an opposition to the Motion for Limited Early Discovery. (ECF No. 71). The Moving Defendants contended that any discovery taken on the Moving Defendants prior to service would violate their right to Due Process.

On August 10, 2009, the Court issued an Order (1) granting the Motion to Withdraw the Motion for Default Judgment as to the Moving Defendants; (2) granting the Motion to Set Aside Clerk's Default as to the Moving Defendants; (3) denying the Motion to Dismiss Action as to the Moving Defendants; (4) denying without prejudice the Motion for Limited Early Discovery; and (5) granting the Motion for Default Judgment as to Defendant Pedro Batiz Guillen. (ECF No. 75). The Court stated that "there exists a reasonable prospect that service may be obtained as to the Moving Defendants. Plaintiff may discover the Moving Defendants' Mexican addresses through discovery on the served Defendants or non-parties. Additionally, Plaintiff may move for an order allowing service via Federal Rule of Civil Procedure 4(f)(3)...." Id. at 14 (citation omitted).

On October 14, 2009, the Magistrate Judge issued an Order granting Plaintiff's motion for limited early discovery seeking to take early discovery from non-party First National Bank and Judgment Debtors Raul Batiz Echavarria, Pedro Batiz Guillen and Rodolfo Batiz Guillen "to obtain information reasonably necessary to effect service of process upon the fourteen Defendants who reside in Mexico and have not yet been served." (ECF No. 78 at 1). On December 16, 2009, the Magistrate Judge issued a Protective Order which had been agreed upon by Plaintiff and the Judgment Debtors. (ECF Nos. 80, 81).

On July 22, 2010, the Court issued an Order stating:

The docket reflects that, since the Magistrate Judge authorized limited discovery and issued the Protective Order, no proof of service has been filed as to any of the Unserved Defendants and no proceedings have been taken against any Unserved Defendant. ... It appearing to the Court that dismissal for want of prosecution may be appropriate in this case, Plaintiff is hereby ORDERED TO SHOW CAUSE as to why this case should ...


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