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Fathers & Daughters Nevada, LLC v. Beckmann

United States District Court, D. Oregon

November 7, 2017

FATHERS & DAUGHTERS NEVADA, LLC, et. al, Plaintiffs,
v.
JAMES EDWARD BECKMANN, Defendant.

          ORDER

          Michael H. Simon United States District Judge.

         On September 18, 2017, the Court entered an order of default against Defendant James Edward Beckmann for failure to answer or otherwise plead to the complaint. ECF 49. Although Mr. Beckmann had filed several notices and other filings with the Court, none, even liberally construed, had answered or otherwise responded to the Amended Complaint. On October 5, 2017, Plaintiffs filed a motion for default judgment. ECF 52. On October 11, 2017, Defendant Beckmann filed a “Notice of Void Judgment, ” which the Court construed as a response in opposition to the motion for default judgment. ECF 54. On October 17, 2017, Defendant Beckmann filed a motion to dismiss this case, along with several additional notices. ECF 55-58.

         A court must liberally construe the filings of a pro se litigant. See Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010); Rand v. Rowland, 154 F.3d 952, 957 (9th Cir. 1998). Until Defendant filed his Motion to Dismiss, his filings contained arguments irrelevant to the claims in this case-e.g., arguments that the Carl D. Crowell is using a pseudonym, arguments that the undersigned Judge is using a pseudonym, arguments that Defendant refuses to accept the jurisdiction of the Court, threats that use of Defendant's name or any orders against him will result in millions of dollars in judgments in his favor and against Mr. Crowell and the undersigned Judge. Although Defendant's Motion to Dismiss contains several of these same arguments, construing it liberally, it also asserts that that Plaintiffs do not have sufficient evidence that Mr. Beckmann is the person who infringed on Plaintiffs' rights, that their evidence is hearsay, that they fail to state a claim on which relief can be granted, that there is no witness with firsthand knowledge regarding the alleged infringement, that there is no evidence that can fairly trace the conduct of Mr. Beckmann to the alleged injury of Plaintiffs, and that there is no evidence that it was not a third party who infringed on Plaintiffs' rights, particularly because this case involves an “open internet site.” The Court construes Defendant's “motion to dismiss” (ECF 55) as a motion to set aside the Court's entry of default.

         The Court may set aside an entry of default “for good cause.” Fed.R.Civ.P. 55(c). Whether to set aside the entry of default is within the Court's discretion, and “a district court's discretion is especially broad when, as in this case, it is entry of default that is being set aside, rather than a default judgment.” Brady v. United States, 211 F.3d 499, 504 (9th Cir. 2000) (quotation marks omitted). In the Ninth Circuit, the “rules for determining when a default should be set aside are solicitous towards movants, especially those whose actions leading to the default were taken without the benefit of legal representation.” United States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1089 (9th Cir. 2010). To determine “good cause, ” a court must consider the following factors: (1) whether the moving party engaged in culpable conduct that led to the default; (2) whether the moving party has a meritorious defense; and (3) whether setting aside the entry of default would prejudice the plaintiff. Id. at 1091; see also Franchise Holding II, LLC v. Huntington Rests. Grp., Inc., 375 F.3d 922, 926 (9th Cir. 2004). “This standard, which is the same as is used to determine whether a default judgment should be set aside under Rule 60(b), is disjunctive, such that a finding that any one of these factors is true is sufficient reason for the district court to refuse to set aside the default.” Mesle, 615 F.3d at 1091. Courts must also, however, keep in mind that “judgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.” Id. (quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir.1984)).

         Accordingly, the Court informed Plaintiffs that the Court will interpret Defendant's motion to dismiss as a motion to set aside the default for good cause and asked Plaintiffs to file a response addressing the factors identified in Mesle. Plaintiffs filed their response (ECF 59). The Court analyzes the factors below.

         1. Culpable Conduct

         “[A] defendant's conduct is culpable if he has received actual or constructive notice of the filing of the action and intentionally failed to answer.” Mesle, 615 F.3d at 1092 (emphasis and alteration in original) (quotation marks omitted). The Court finds that Defendant engaged in culpable conduct that led to the default being entered against him. Defendant has clearly received notice-he has filed numerous filings with the Court. But in each of his filings, including the motion to dismiss the Court is liberally construing here, Defendant refuses to accept the Court's jurisdiction, refuses to specifically answer the complaint, and refuses to engage in the litigation process. Defendant repeatedly threatens Court personnel, including the undersigned Judge and the U.S. Marshals, and opposing counsel with lawsuits and liens. Defendant has intentionally failed to answer.

         2. Meritorious Defense

         The burden on this element is of a “minimal nature.” Id. at 1094. As the Ninth Circuit in Mesle explained:

A defendant seeking to vacate a default judgment must present specific facts that would constitute a defense. But the burden on a party seeking to vacate a default judgment is not extraordinarily heavy. All that is necessary to satisfy the “meritorious defense” requirement is to allege sufficient facts that, if true, would constitute a defense: the question whether the factual allegation [i]s true is not to be determined by the court when it decides the motion to set aside the default. Rather, that question “would be the subject of the later litigation.”

Id. (quotation marks and citations omitted) (alteration in original).

         The Court was expecting that Plaintiffs would provide a response to the relevant facts and arguments raised in Defendant's filing relating to this prong of the test. Instead, Plaintiffs focused only on the irrelevant and sometimes incomprehensible arguments and assertions made by Defendant in his filing. Plaintiffs ignore the facts and assertions raised by Defendant that Plaintiffs do not have sufficient evidence that Defendant is the person who infringed on Plaintiffs' rights, that their evidence is hearsay, that Plaintiffs fail to establish a claim upon which relief may be granted, that there is no witness with firsthand knowledge regarding the alleged infringement, that there is no evidence that can fairly trace the conduct of Defendant to the alleged injury of Plaintiffs, and that there is no evidence that it was not a third party who infringed on Plaintiffs' rights, particularly because this case involves an “open internet site.” Defendant made all of these assertions under oath.

         This factor is a close call. Many of Defendant's assertions are generalized arguments or conclusions and not specific facts that would constitute a defense. Defendant does not expressly deny downloading or otherwise infringing on Plaintiffs' motion pictures.[1] But Defendant does assert that his internet site was “open” and that Plaintiffs have no evidence that it was not a third party, rather than Defendant, who infringed on their copyrighted material. If true, this would constitute a defense to Plaintiffs' claims. Defendant also asserts that there is no evidence that can fairly trace his conduct to Plaintiffs alleged injury. If true, this also might constitute a defense to Plaintiffs' claims. Although these allegations are not very extensive, the Ninth Circuit's focus on the “minimal nature” of this prong tips the scale in favor of Defendant. Accordingly, this prong supports setting aside the default.

         3. ...


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