United States District Court, C.D. California
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT
D. WRIGHT, II UNITED STATES DISTRICT JUDGE
INTRODUCTION AND BACKGROUND
December 11, 2018, Plaintiff United States of America
initiated this in rem forfeiture action. (See Verified
Compl., ECF No. 1.) The government subsequently filed a
Verified First Amended Complaint (“FAC”) on March
4, 2019 against the defendant currency and the interests of
all potential claimants. (FAC, ECF No. 10.) Through this
action, the government seeks forfeiture of $201, 900.00 in
U.S. currency. (FAC ¶ 5.) The Drug Enforcement Agency
(“DEA”) and South Gate Police Department seized
the defendant currency during a joint investigation into
money laundering and drug trafficking organizations. (FAC
¶¶ 8, 23, 29.) The government alleges that the
currency “represents or is traceable to proceeds of
illegal narcotic trafficking, was intended to be used in one
or more exchanges for a controlled substance or listed
chemical, or was used or intended to be used to facilitate a
controlled substance or listed chemical violation, in
violation of 21 U.S.C. § 841 et seq.” (FAC ¶
32.) The government alleges that, as such, the defendant
currency is subject to forfeiture pursuant to 21 U.S.C.
§ 881(a)(6). (FAC ¶ 32.)
government attempted to directly serve the known potential
claimants and published notice of the seizure and forfeiture
action for thirty days pursuant to the Supplemental Rules for
Admiralty or Maritime Claims and Asset Forfeiture Actions.
(Decl. of Brent A. Whittlesey (“Whittlesey
Decl.”) ¶¶ 4-12, Ex. B, ECF No. 24-1.)
Process was executed on the defendant currency by the United
States Marshals Service. (Whittlesey Decl. ¶ 3, Ex. A.)
The time for filing a claim or answer has expired.
(Whittlesey Decl. ¶ 13.)
potential claimant, Zhonghuang Li, asserted a claim to the
defendant currency and filed an answer. (Whittlesey Decl.
¶ 14; see also Claim of Right, ECF No. 15; Answer, ECF
No. 17.) However, Li withdrew his claim and subsequently
entered into a Stipulation for Entry of Judgment of
Forfeiture. (Withdrawal, ECF No. 19; Stipulation, ECF No.
21.) Li consented to the entry of a Consent Judgment of
Forfeiture in favor of the government. (Stipulation 2.)
Accordingly, there are no pending claims to the defendant
currency or pending answers to the FAC. (Whittlesey Decl.
4, 2019, the Clerk entered default as to the interests of
Suiyan Tang, Ren Tong You Chang, Xin Zong, and all other
potential claimants regarding the defendant currency.
(Default, ECF No. 23.) On June 7, 2019, the government filed
its Motion for Default Judgment (“Motion”)
against the interests of Tang, Chang, Zong, and all other
potential claimants. (Mot. 6, ECF No. 24.) Pursuant to Local
Rule 7-9, any opposition to the government's Motion was
due no later than twenty-one days before the July 15, 2019
hearing date. The Court received no opposition to the
Rule of Civil Procedure (“FRCP”) 55(b) authorizes
a district court to grant a default judgment after the Clerk
enters default under Rule 55(a). Fed.R.Civ.P. 55(b). Before a
court can enter a default judgment against a defendant, the
plaintiff must satisfy the procedural requirements set forth
in FRCP 54(c) and 55, as well as Local Rules 55-1 and 55-2.
Fed.R.Civ.P. 54(c), 55; C.D. Cal. L.R. 55-1, 55-2. Local Rule
55-1 requires that the movant submit a declaration
establishing: (1) when and against which party default was
entered; (2) identification of the pleading to which default
was entered; (3) whether the defaulting party is a minor or
incompetent person; (4) the Servicemembers Civil Relief Act,
50 U.S.C. § 3931, does not apply; and (5) the defaulting
party was properly served with notice, if required under Rule
55(b)(2). C.D. Cal. L.R. 55-1.
these procedural requirements are satisfied, a district court
has discretion to enter default judgment. Aldabe v.
Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). “[A]
defendant's default does not automatically entitle the
plaintiff to a court-ordered judgment.” PepsiCo,
Inc., v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1174 (C.D.
Cal 2002). In exercising discretion, a court considers
several factors (the “Eitel Factors”):
(1) the possibility of prejudice to the plaintiff, (2) the
merits of plaintiff's substantive claim, (3) the
sufficiency of the complaint, (4) the sum of money at stake
in the action; (5) the possibility of a dispute concerning
material facts; (6) whether the default was due to excusable
neglect, and (7) the strong policy underlying the [FRCP]
favoring decisions on the merits.
Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir.
1986). The Court need not make detailed findings of fact in
the event of a default judgment. See Adriana Int'l
Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990).
Generally, after the Clerk enters default, the
defendant's liability is conclusively established, and
the well-pleaded factual allegations in the complaint are
accepted as true, except those pertaining to damages.
TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915,
917-18 (9th Cir. 1987) (per curiam) (quoting Geddes v.
United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)).
reviewed the filings in this action, the Court is satisfied
that the government has met all procedural requirements for
obtaining a default judgment against the interests of all
potential claimants. Notice was adequately given and the time
for filing a claim or answer has expired. Only one potential
claimant, Li, filed a claim, which he later withdrew and Li
subsequently stipulated to entry of a Consent Judgment of
Forfeiture in favor of the government. Thus, there are no
pending claims or answers. The government has satisfied the
procedural requirements of FRCP 55 and Local Rule 55-1: (1)
the Clerk entered default against the interests of Tang,
Chang, Zong, and all other potential claimants on June 4,
2019; (2) other than Li, who withdrew his claim and entered
into a Consent Judgment of Forfeiture, no potential claimants
responded to the FAC; (3) no potential claimants are infants
or incompetent persons; and (4) no potential claimants are in
the military, so the Service Members Civil Relief Act does
not apply. (See Default; Whittlesey Decl. ¶¶
the Court finds that on balance the Eitel factors weigh in
favor of granting the government's Motion. The
allegations establish that the defendant currency represents
or is traceable to proceeds of illegal narcotic trafficking,
was intended to be used in one or more exchanges for a
controlled substance or listed chemical, or was used or
intended to be used to facilitate a controlled substance or
listed chemical violation, in violation of 21 U.S.C. §
841, et seq., rendering them subject to forfeiture pursuant
to 21 U.S.C. § 881(a)(6). In light of the well-pleaded
allegations in the FAC and all potential claimants other than
Li having failed to file a claim, the government's
interest in an efficient resolution of the case outweighs any
potential claimant's ...