Pola v. Rao ( 2021 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 SAI POLA, No. 2:19–cv–1154–MCE–KJN 12 Plaintiff, ORDER 13 v. (ECF No. 17) 14 MAHENDER RAO, et al., 15 Defendants. 16 17 On April 29, 2020, the court held a hearing on plaintiff’s motion for default judgment 18 against defendant Srinivas Rao. (ECF No. 17.) The night before the hearing, Attorney Vani 19 Moodley filed a motion to dismiss for lack of jurisdiction on behalf of defendants Mahender Rao 20 and Srinivas Rao, setting the motion for a hearing the next morning. (ECF No. 22.) At the 21 hearing, attorney Brian R. Katz appeared on behalf of plaintiff, and Moodley entered a special 22 appeared on behalf of defendants. The court and counsel discussed the status of the case. 23 Plaintiff’s motion for default judgment is denied for multiple reasons. First, as this is an 24 action on a breach of partnership, where one partner has appeared and default is sought against 25 another, the Ninth Circuit has indicated it would be inappropriate to enter default against the 26 absent defendant until after liability is established against the appearing defendant. See In re First 27 T.D. & Inv., Inc., 253 F.3d 520, 532 (9th Cir. 2001) (“[W]here a complaint alleges that 28 defendants are jointly liable and one of them defaults, judgment should not be entered against the 1 | defaulting defendant until the matter has been adjudicated with regard to all defendants.”). 2 | Second, plaintiff's motion for default judgment against Srinivas Rao is deficient, as plaintiff 3 | provides little basis for his damages calculations beyond a short declaration. Geddes v. United 4 | Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (“The general rule of law is that upon default the 5 | factual allegations of the complaint, except those relating to the amount of damages, will be taken 6 || as true.”); see also, e.g., Rubicon Glob. Ventures, Inc. v. Chongquing Zongshen Grp. Imp./Exp. 7 | Corp., 630 F. App'x 655, 658 (9th Cir. 2015) (“The district court abused its discretion by failing 8 | to hold a hearing on damages prior to entering the default judgments in Rubicon I, H, and III, 9 | where the judgments were based on Plaintiffs’ own conclusory declarations of their future lost 10 | profits over the course of five years.”). 11 In addition, it would be inappropriate to enter default judgment at this time, given the 12 || recent developments in the case. Defendants obtained counsel before the hearing, who entered a 13 || special appearance to challenge jurisdiction. The district court will need to resolve that motion, 14 | as well as (should the case move beyond the jurisdictional issue) defendants’ request to lift the 15 | entry of default. See Local Rule 302(c)(21) (“Actions initially assigned to a Magistrate Judge 16 || under this paragraph shall be referred back to the assigned Judge if a party appearing in propria 17 | persona is later represented by an attorney appearing in accordance with L.R. 180.”). 18 ORDER 19 It is HEREBY ORDERED that: 20 1. Plaintiff's motion for default judgment is DENIED WITHOUT PREJUDICE; 21 2. Pursuant to Local Rule 302(c)(21), the case is referred back to assigned District Judge, 22 Judge England, and the Pro Se designation is removed; and 23 3. Defendants shall renotice their motion to dismiss for lack of jurisdiction before Judge 24 England, as per the requirements of Local Rule 230. 25 | Dated: April 29, 2021 Foci) Aharon 7 KENDALL J. NE pola.1154 UNITED STATES MAGISTRATE JUDGE 28