United States District Court, E.D. Michigan, Southern Division
GRANTING DEFENDANT'S AMENDED MOTION TO SET ASIDE DEFAULT
AND DEFAULT JUDGMENT, MOTION TO DISMISS FOR LACK OF SUBJECT
MATTER JURISDICTION [DKT. NO. 12], VACATING THE ENTRY OF
DEFAULT [DKT. NO. 6] AND THE DEFAULT JUDGMENT [DKT. NO. 10]
AND DISMISSING PLAINTIFF'S CAUSE OF ACTION WITHOUT
Page Hood, United States District Court Chief Judge
January 18, 2017, the Court entered Default Judgment against
Defendant. On February 2, 2017, Defendant filed its Amended
Motion to Set Aside Default and Default Judgment, Motion to
Dismiss for Lack of Subject Matter Jurisdiction and Lack of
Personal Jurisdiction (“Amended Motion”). Dkt.
No. 12. The motion has been fully briefed. The Court, having
concluded that the decision process would not be
significantly aided by oral argument, ordered that the
motions be resolved on the motion and briefs submitted by the
parties. E.D. Mich. L.R. 7.1(f)(2). Dkt. No. 13. For the
reasons that follow, the Court sets aside the entry of
default and default judgment against Defendant and dismisses
Plaintiff's cause of action, without prejudice, for lack
of subject matter jurisdiction.
case stems from a shipment of produce (lettuce products) that
Plaintiff contracted with Defendant to have Defendant
deliver. Plaintiff alleges that Defendant failed to properly
refrigerate the load at 35 degrees Farenheit, which caused
the products to spoil and the consignee to reject the entire
load. The spoiled products caused Plaintiff to incur a loss
of $21, 863.32, which amount Defendant refused to reimburse
filed this action on December 13, 2016, asserting that this
Court had subject matter jurisdiction pursuant to 49 U.S.C.
§ 14706 (the “Carmack Amendment”). A
certificate of service and summons was executed on December
19, 2016, and Defendant's answer was due on January 9,
2017. When Defendant did not file an answer, Plaintiff moved
for and was granted a Clerk's Entry of Default on January
10, 2017. Dkt. Nos. 5 and 6. Plaintiff served Defendant with
the Clerk's Entry of Default on January 12, 2017, Dkt.
No. 7, and Plaintiff moved for entry of judgment by default
with affidavit of sum certain on January 17, 2017, Dkt. No.
8, the same day that counsel for Defendant filed an
appearance in this case. Dkt. No. 9. On January 18, 2017, the
Clerk of the Court entered Judgment by Default. Dkt. No. 10.
On February 2, 2017, Defendant filed a Motion to Set Aside
Default and Default Judgment, Motion to Dismiss for Lack of
Subject Matter Jurisdiction and Lack of Personal
Jurisdiction, Dkt. No. 11, and the Amended Motion. The Court
now addresses the Amended Motion.
to Federal Rules of Civil Procedure 55(c) and 60(b), an entry
of default and a default judgment may be set aside only upon
the showing of: (1) mistake, inadvertence, or excusable
neglect; (2) newly discovered evidence; (3) fraud,
misrepresentation or other misconduct of the adverse party;
(4) the judgment is void; (5) the judgment has been
satisfied, released, or discharged; or (6) any other reason
justifying relief from judgment. See also Burrell v.
Henderson, 434 F.3d 826 (6th Cir. 2006); United Coin
Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839 (6th
Cir. 1983). As set forth in United Coin, the Court
also must determine that good cause exists for setting aside
default judgment by assessing whether: (a) the plaintiff will
be prejudiced; (c) the defendant has a meritorious defense;
and (c) culpable conduct of the defendant led to the default.
Id. at 845; Shepard Claims Serv., Inc. v.
William Darrah & Assocs., 796 F.2d 190, 194
(6th Cir. 1986). The foregoing standards are applied more
stringently under Rule 60(b) than Rule 55(c).
Shepard, 796 F.2d at 194. As the entry of default is
a harsh sanction, “[a]ny doubt should be resolved in
favor of the petition to set aside the judgment so that cases
may be decided on their merits. United Coin, 705
F.2d at 846; Shepard, 796 F.2d 193 (there is a
strong preference for deciding cases on the merit rather than
argues that there is good cause to set aside the entry of
default judgment. Defendant maintains that the default
judgment is void because the Carmack Amendment is not
applicable in this case. If the Carmack Amendment does not
apply, the Court would lack subject matter jurisdiction and
would have to dismiss Plaintiff's cause of action. As the
Sixth Circuit stated in Antoine v. Atlas Turner,
Inc., 66 F.3d 105, 108 (6th Cir. 1995) (emphasis added):
If the underlying judgment is void, it is a per se
abuse of discretion for a district court to deny a
movant's motion to vacate the judgment under Rule
60(b)(4). United States v. Indoor Cultivation
Equipment, 55 F.3d 1311, 1317 (7th Cir. 1995). A
judgment is void under 60(b)(4) “if the court that
rendered it lacked jurisdiction of the subject matter,
or of the parties, or if it acted in a manner inconsistent
with due process of law.” In re Edwards, 962
F.2d 641, 544 (7th Cir. 1992) (citation omitted).
contends that this meritorious defense precludes any
prejudice to Plaintiff, particularly as there was no culpable
conduct by Defendant. The Court agrees.
undisputed that the sole basis for subject matter
jurisdiction in this Court is Plaintiff's claim for
damage to perishable food goods, a claim allegedly rooted ...