Federal Trade Commission v. Business Team, LLC ( 2016 )

FILED
NOT FOR PUBLICATION
JUN 09 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
FEDERAL TRADE COMMISSION, No. 14-56582
Plaintiff - Appellee, D.C. No. 8:13-cv-00919-DOC-
RNB
v.
BUSINESS TEAM, LLC, a Nevada MEMORANDUM*
limited liability company; AMIR
MONTAZERAN,
Defendants - Appellants.
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Submitted June 6, 2016**
Pasadena, California
Before: GOULD, MELLOY***, and HURWITZ, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Michael J. Melloy, Senior Circuit Judge for the U.S.
Court of Appeals for the Eighth Circuit, sitting by designation.
Business Team, LLC and Amir Montazeran (“Amir”) appeal the district
court’s denial of their motions to set aside default judgments entered against them
in an action by the Federal Trade Commission (FTC) seeking to enforce Section
5(a) of the FTC Act, which prohibits unfair or deceptive commercial practices. We
affirm.
1. The district court did not err in denying Amir’s motion to set aside entry of
default on the ground that he was never properly served with the FTC’s summons.
Under Fed. R. Civ. P. 4(e), an individual may be served following the law of the
state where the district court is located or where service is made. Under California
law, a person can be served by leaving the summons and a copy of the complaint at
the person’s usual mailing address in the presence of someone apparently in charge
of the mailing address, and thereafter mailing a copy of the summons and
complaint to that address. Cal Civ. Proc. Code § 415.20(b). The FTC employed
this method at Amir’s mailing address in Irvine, after numerous unsuccessful
attempts at personal service that showed reasonable diligence on the part of the
FTC. The FTC thus complied with section 415.20(b) and, therefore, with Fed. R.
Civ. P. 4(e). Amir challenged service on the ground that he had subleased his
Irvine apartment one month before the FTC’s first attempt to deliver the summons
-2-
and complaint. But this allegation does not invalidate service because the Irvine
apartment was still Amir’s usual mailing address.
2. The district court did not err in denying Business Team’s motion to set aside
entry of default. Business team contends that its owner Mohammad Montazeran
(“Mohammad”), Amir’s father, suffered a heart attack in February 2014 that left
him unable to hire counsel until late April 2014. But this allegation is inconsistent
with the district court’s finding that Mohammad was likely not central to Business
Team’s operation, given his status as a dependent on Amir’s tax returns, as well as
Business Team’s eventual defense of the lawsuit, even while Mohammad was
hospitalized in Iran following the heart attack. Also, the FTC served Business
Team on January 15, 2014, several weeks before Mohammad claimed to have been
hospitalized. There was no abuse of discretion in the district court’s decision not
to set aside entry of default against Business Team.
3. The district court also did not err in declining to set aside the default
judgments against Amir and Business Team. It correctly weighed the factors from
Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986), including the likely
prejudice to the FTC, the merits of the FTC’s claims, the material facts at issue,
whether the default was excusable, and the general policy favoring decisions on the
merits.
-3-
AFFIRMED.
-4-