630 F. App'x 655
9th Cir.2015Background
- Plaintiffs obtained default judgments in three related Oregon cases (Rubicon I–III) against corporate defendants Chongquing Zongshen Group Import/Export Corp. (ZSIE), Zongshen Industrial Group Co. Ltd. (ZIGCL), and individual defendant Dexiu Yuan.
- This Court previously remanded after finding defaults had been erroneously set aside for insufficient service; on remand the Ninth Circuit later held service was sufficient and disposition was recalled and superseded.
- On remand the district court reinstated the default judgments and found ZSIE and ZIGCL subject to specific personal jurisdiction in Oregon.
- The district court also reinstated the default judgment against Dexiu Yuan, concluding the previously-identified excessiveness of the award as to him no longer applied because corporate defendants were again parties and judgment would be jointly and severally imposed.
- Defendants argued res judicata and other defenses; the district court rejected res judicata and refused to hold a damages hearing before entering money judgments based on plaintiffs’ declarations of five years of future lost profits.
- The Ninth Circuit affirmed jurisdiction and the reinstatement against Yuan, rejected res judicata, but vacated the money default judgments and remanded for a damages hearing because damages were not a liquidated sum and the declarations were conclusory.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ZSIE and ZIGCL are subject to specific personal jurisdiction in Oregon | Plaintiffs: defendants had sufficient minimum contacts with Oregon to satisfy due process | Defendants: lacked sufficient Oregon contacts for specific jurisdiction | Held: Affirmed — defendants had minimum contacts; jurisdiction comported with due process under Int’l Shoe framework. |
| Whether reinstating default judgment against Dexiu Yuan was proper | Plaintiffs: judgment appropriate when corporate defendants properly served and joined on remand | Yuan: prior finding that judgment amount was excessive as to him required correction | Held: Affirmed — district court did not abuse discretion; changed circumstances (corporate defendants again parties) justified reinstatement. |
| Whether res judicata barred reinstatement of defaults in Rubicon I–III | Plaintiffs: res judicata inapplicable because the issue of proper service in I–III was not yet resolved in prior action | Defendants: final judgment in Rubicon IV precludes relitigation | Held: Rejected defendants’ res judicata defense — plaintiffs could not have raised reinstatement argument earlier; res judicata is an affirmative defense and defendants defaulted. |
| Whether entering money-default judgments without a damages hearing was permissible | Plaintiffs: damages as alleged supported entry of default judgments | Defendants: plaintiffs’ damages allegations were conclusory and required proof at hearing | Held: Vacated judgments — district court abused discretion by not holding a hearing; damages were not liquidated or mathematically certain and declarations were conclusory; remanded for factual damages determination. |
Key Cases Cited
- Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) (two-prong personal jurisdiction analysis in Ninth Circuit)
- Love v. Associated Newspapers, Ltd., 611 F.3d 601 (9th Cir. 2010) (treat uncontroverted allegations as true and resolve affidavit conflicts for plaintiff in jurisdictional inquiry)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts/due process standard for personal jurisdiction)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (9th Cir. 2004) (specific jurisdiction principles)
- Walden v. Fiore, 134 S. Ct. 1115 (U.S. 2014) (limits on personal jurisdiction based on defendant’s contacts with forum)
- Geddes v. United Financial Group, 559 F.2d 557 (9th Cir. 1977) (on default judgments: allegations except damages taken as true)
- Davis v. Fendler, 650 F.2d 1154 (9th Cir. 1981) (default judgment for money requires hearing unless sum is liquidated or calculable)
- Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc., 736 F.3d 1239 (9th Cir. 2013) (res judicata bars relitigation of matters decided in a final judgment)
- United States v. Cuddy, 147 F.3d 1111 (9th Cir. 1998) (district court may reconsider prior rulings when changed circumstances exist)