United States District Court, E.D. California
ORDER DENYING PLAINTIFFS' MOTION FOR DEFAULT
JUDGMENT AS PREMATURE (ECF NO. 14)
1, 2019, Wang Ting Long and Xuejun Makhsous
(“Plaintiffs”) filed this action alleging
violations of the Federal Securities Act and California law.
(ECF No. 1.) Currently before the Court is Plaintiffs'
motion for default judgment filed on November 12, 2019. (ECF
No. 14.) Plaintiffs' motion shall be denied as premature
as no defendant has had default entered against them, a
necessary condition prior to the entering of default
judgment. The Court also sets out the legal standards below
to inform the pro se Plaintiffs of the factors the
Court considers on a motion for default judgment so
Plaintiffs are aware of the applicable legal standards if
they choose to seek default judgment again after obtaining an
entry of default.
Legal Standard for Default Judgment
starting point is the general rule that default judgments are
ordinarily disfavored, ” as “[c]ases should be
decided upon their merits whenever reasonably
possible.” NewGen, LLC v. Safe Cig, LLC, 840
F.3d 606, 616 (9th Cir. 2016) (quoting Eitel v.
McCool, 782 F.2d 1470, 1472 (9th Cir. 1986)). Pursuant
to Federal Rules of Civil Procedure 55, obtaining a default
judgment is a two-step process. Entry of default must be
obtained prior to entry of default judgment, and entry of
default is appropriate as to any party against whom a
judgment for affirmative relief is sought that has failed to
plead or otherwise defend as provided by the Federal Rules of
Civil Procedure and where that fact is made to appear by
affidavit or otherwise. Fed.R.Civ.P. 55(a). After entry of
default, a plaintiff can seek entry of default judgment.
Fed.R.Civ.P. 55(b). Federal Rule of Civil Procedure 55(b)(2)
provides the framework for the Court to enter a default
(b) Entering a Default Judgment.
(2) By the Court. In all other cases, the party must apply to
the court for a default judgment. A default judgment may be
entered against a minor or incompetent person only if
represented by a general guardian, conservator, or other like
fiduciary who has appeared. If the party against whom a
default judgment is sought has appeared personally or by a
representative, that party or its representative must be
served with written notice of the application at least 7 days
before the hearing. The court may conduct hearings or make
referrals--preserving any federal statutory right to a jury
trial--when, to enter or effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
Fed. R. Civ. P. 55.
decision to grant a motion for entry of default judgment is
within the discretion of the court. PepsiCo, Inc. v.
California Security Cans, 238 F.Supp. 1172, 1174 (C.D.
Cal. 2002). The Ninth Circuit has set forth the following
seven factors (the “Eitel factors”) that
the Court may consider in exercising its discretion:
(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 Federal
Rules of Civil Procedure favoring decisions on the merits.
Eitel, 782 F.2d at 1471-72.
Plaintiffs' Motion Shall ...