Bendure v. Star Targets, Justin Hardy, TLD Indus. LLC

• Decision Date: 01 March 2016
• Docket Number: CV 14-89-BLG-SPW-CSO
• Parties: CASEY BENDURE, Plaintiff, v. STAR TARGETS, JUSTIN HARDY, TLD INDUSTRIES LLC, and CABELA'S WHOLESALE, INC., Defendants. TLD INDUSTRIES LLC, Third-Party Plaintiff, v. ROLLING THUNDER PYROTECHNIC, CORP. and MACRAFT USA, Third-Party Defendants.
• Court: U.S. District Court — District of Montana

CASEY BENDURE, Plaintiff, v. STAR TARGETS, JUSTIN HARDY, TLD INDUSTRIES LLC,and CABELA'S WHOLESALE, INC., Defendants.

TLD INDUSTRIES LLC, Third-Party Plaintiff, v. ROLLING THUNDER PYROTECHNIC, CORP. and MACRAFT USA, Third-Party Defendants.

CV 14-89-BLG-SPW-CSO

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA BILLINGS DIVISION

March 1, 2016

FINDINGS AND RECOMMENDATION OF U.S. MAGISTRATE JUDGE

Before the Court is Third-Party Plaintiff TLD Industries, LLC's ("TLD") renewed motion for default judgment against Third-Party Defendants Rolling Thunder Pyrotechnic Corp. ("Rolling Thunder") and Macraft USA ("Macraft") under Fed. R. Civ. P. 55(b)(2). Renewed Mtn. for Default Judgment (ECF No. 87).¹ For the reasons that follow, the Court recommends that TLD's motion be granted.

I. RELEVANT BACKGROUND

In Findings and Recommendation ("F&R") issued September 3, 2015, the Court addressed TLD's initial motion for default judgment against Rolling Thunder and Macraft. Findings and Recommendation of U.S. Magistrate Judge (ECF No. 67). The Court set out the relevant background, including background concerning TLD's service upon Rolling Thunder and Macraft, and the Clerk of Court's entry of default. Id. at 2-5. The Court will not repeat that background here.

After applying the legal standard for default judgment, the Court: (1) concluded that it has subject matter jurisdiction over this action under 28 U.S.C. § 1332, id. at 7; (2) determined that it was unclear from the record as it then existed whether it has personal jurisdiction over TLD's Third-Party Complaint against Rolling Thunder and Macraft, id. at 8-10; and (3) recommended that the motion for default judgment "bedenied with leave to renew after an appropriate record is made[,]" id. at 10-11. No party filed objections to the F&R.

On September 24, 2015, Judge Watters issued an Opinion and Order adopting the F&R, in full, and denying TLD's motion for default judgment with leave to renew. ECF No. 68 at 1-3.

On November 13, 2015, TLD, with the Court's leave, filed its amended third-party complaint against Rolling Thunder and Macraft. See Order Granting Mtn. for Leave to File (ECF No. 80); Am. Third-Party Cmplt. (ECF No. 81). TLD alleges, inter alia, that Rolling Thunder and Macraft "are responsible for the condition of the targets when the targets were used by Plaintiff [Casey Bendure,]" who "alleges that the condition of the targets caused him injury." ECF No. 81 at ¶¶ 7-8. TLD further alleges that under "[MCA] § 27-1-703 and other statutory and common law of Montana, if TLD has liability to [Bendure], then Macraft [ ] and Rolling Thunder [ ] are responsible for some or all of that liability." Id. at ¶ 15.

On January 4, 2016, TLD filed its renewed motion for default judgment against Rolling Thunder and Macraft now before the Court. ECF No. 87 at 1.

II. LEGAL STANDARD FOR DEFAULT JUDGMENT

As detailed in the F&R discussed above, the appropriate legal standard for entry of a default judgment is as follows:

Rule 55(b) permits a court to enter default judgment following a defendant's default. Boards of Trustees v. Energy Management, 2012 WL 1657523, *1 (N.D. Cal. 2012) (citing Shanghai Automation Instrument Co. v. Kuei, 194 F.Supp.2d 995, 999 (N.D. Cal. 2001)). Whether to enter a default judgment lies within the court's discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986); Pepsico, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1175 (C.D. Cal. 2002) ("A defendant's default does not automatically entitle the plaintiff to a court-ordered judgment."); Shanghai Automation Instrument Co., 194 F.Supp.2d at 999.

A district court has an affirmative duty to look into jurisdiction over both the subject matter and the parties. "Before assessing the merits of a default judgment, a court must confirm that it has subject matter jurisdiction over the case and personal jurisdiction over the parties, as well as ensure the adequacy of service on the defendant." Board of Trustees, 2012 WL 1657523, *2. When a court is consideringwhether to enter a default judgment, it may dismiss an action sua sponte for lack of personal jurisdiction. A judgment entered without subject matter and personal jurisdiction over the parties is void. In re Tuli, 172 F.3d 707, 712 (9^th Cir. 1999)).

If a court is satisfied that it has jurisdiction and that service on defendants was adequate, the court next applies the following factors, sometimes known as the Eitel factors, to determine whether it should grant a default judgment:

(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 decision on the merits.

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9^th Cir. 1986) (citation omitted).

As part of this analysis, "the well-pleaded allegations of the complaint relating to a defendant's liability are taken as true." Board of Trustees, 2012 WL 1657523, *2 (quoting Pepsico, Inc., 238 F.Supp.2d at 1175 (citing Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9^th Cir. 1987))). "Nevertheless, default does not compensate foressential facts not within the pleadings and those legally insufficient to prove a claim." Id. (citing Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9^th Cir. 1992)).

III. DISCUSSION

Applying the foregoing legal standards, the Court concludes that TLD's motion for entry of default judgment should be granted.

A. Subject Matter Jurisdiction

The Court already has concluded that it has subject matter jurisdiction over this action under 28 U.S.C. § 1332. ECF No. 67 at 7; ECF No. 68 at 2.

B. Personal Jurisdiction

The Court concludes that TLD's amended third-party complaint includes allegations sufficient to invoke this Court's personal jurisdiction over Rolling Thunder and Macraft. On a motion seeking default judgment, "a plaintiff must make a prima facie showing of the existence of personal jurisdiction." Heidorn v. BDD Marketing & Management Co., LLC, 2013 WL 6571629, *7 (N.D. Cal. 2013) (citing DFSB Kollective Co. Ltd. v. Bourn, 897 F.Supp.2d 871, 885 (N.D. Cal. 2012)). "[T]o establish a prima facie case, plaintiffs are not limited toevidence that meets the standards of admissibility ... [but] [r]ather, they may rest their argument on their pleadings, bolstered by such affidavits and other written materials as they can otherwise obtain." Id. (quoting Mwani, et al. v. Bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005) and citing Harris Rutsky & Co. Ins. Services, Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9^th Cir. 2003) (holding on a motion to dismiss that in order to make a prima facie showing, the plaintiff must produce "facts that if true would support jurisdiction over the defendant"). "In evaluating whether a prima facie case is pled, only well pled facts of plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.'" Id. (quoting High Tech Pet Products, Inc. v. Juxin Pet Product Co., Ltd., 2013 WL 1281619, at * (E.D. Cal., March 27, 2013) (quoting Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10^th Cir. 1995))).

"Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Picot v. Weston, 780 F.3d 1206, 1211 (9^th Cir. 2015) (quoting Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 753, 187 L.Ed.2d 624 (2014)). Under Montana law,

[courts] first determine whether personal jurisdiction exists under M. R. Civ. P. 4(b)(1). Personal jurisdiction may exist under Rule 4(b)(1) in one of two ways: a party may be found within the state of Montana and subject to general jurisdiction, or the claim forrelief may arise from any of the acts listed in Rule 4(b)(l)(A-G) and create specific jurisdiction for the purpose of litigating that particular claim. If personal jurisdiction exists under the first step of the test, [a court] then determine[s] whether the exercise of personal jurisdiction conforms with the traditional notions of fair play and substantial justice embodied in the due process clause. If personal jurisdiction does not exist under the first part of the test, further analysis under the second part of the test is unnecessary.

Milky Whey, Inc. v. Dairy Partners, LLC, 342 P.3d 13, 17 (Mont.2015) (internal quotations and citation marks omitted).

Here, TLD alleges in its amended third-party complaint that the actions of Rolling Thunder and Macraft, directed at Montana, resulted in the accrual of a tort action in Montana. TLD's Supporting Br. (ECF No. 88) at 9. Specifically, TLD alleges that: (1) TLD was approached by Cabela's Wholesale Inc. ("Cabela's") to provide Cabela's with rim-fire targets for sale in Cabela's retail stores throughout the United States, including Montana, ECF 81 at ¶ 4; (2) TLD entered into a business relationship and supply chain with Rolling Thunder and Macraft whereby Rolling Thunder would create the targets and ship them to Macraft, which would then ship the targets to TLD, id. at ¶ 5; (3) TLD would then sell the targets to Cabela's, which would then sell them to consumers, id. at ¶ 7; (4) Rolling Thunder and Macraft would capitalize from this arrangement because Cabela's retail stores are in variousstates, including Montana, id. at ¶ 6; and (5) because no entity, including TLD, altered the targets before Cabela's sold them to consumers, Rolling Thunder and Macraft were responsible for the targets' condition when they were used by Plaintiff Casey Bendure ("Bendure") in this case, id. at ¶ 8; (6) based on Bendure's allegation that he was injured when a target unexpectedly exploded, Rolling Thunder and Bendure engaged in acts that resulted in the accrual of a tort action in Montana, id. at ¶ 10; and (7) Rolling Thunder and Macraft purposely availed themselves of...