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Yazaki North America, Inc. v. Kaneko

United States District Court, E.D. Michigan, Southern Division

April 22, 2019

YAZAKI NORTH AMERICA, INC., Plaintiff,
v.
TAIZO KANEKO and KANEKO CONSULTING COMPANY, Defendants.

          OPINION AND ORDER GRANTING PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT [223]

          STEPHEN J. MURPHY, III UNITED STATES DISTRICT JUDGE.

         On March 29, 2019, Plaintiff Yazaki North America, Inc. ("Yazaki") filed a motion for default judgment and involuntary dismissal against Defendants Taizo Kaneko ("Taizo") and Kaneko Consulting Company ("KCC") (collectively "Kaneko Defendants"). ECF 223. The Kaneko Defendants did not respond. The Court has reviewed the motion and finds that a hearing is unnecessary. E.D. Mich. LR 7.1(f). For the reasons below, the Court will grant Plaintiff's motion for default judgment and involuntary dismissal.

         BACKGROUND

         On August 12, 2016, Yazaki filed its complaint against multiple defendants- including the Kaneko Defendants-for alleged civil violations of the Racketeer Influenced and Corrupt Organizations Act ("Civil RICO"). ECF 1. On February 7, 2017, Kaneko Defendants filed an amended answer and counterclaims against Yazaki. ECF 130. On April 19, 2017, the Court entered a stipulated preliminary injunction freezing certain assets of Kaneko Defendants and requiring an accounting. ECF 135.

         On August 28, 2017, the Court referred the parties to mediation with a private mediator. ECF 139. The parties mediated on December 19 and 20, 2017. See ECF 150, PgID 2753. At the mediation, Yazaki and Kaneko Defendants "made progress towards a resolution," "exchanged settlement offers," and advised that further mediation "would be beneficial." ECF 151, PgID 2759. The Court granted multiple extensions of time for the parties to mediate until May 31, 2018. See ECF 153, 168, 170.

         Then, on August 8, 2018, Kaneko Defendants filed an emergency motion to modify the stipulated preliminary injunction. ECF 175. On October 29, 2018, the Court denied the motion without prejudice. ECF 204.

         The next day, counsel for Kaneko Defendants ("Counsel") filed a motion to withdraw. ECF 205. The Court denied the motion for several reasons: (1) KCC is a corporation and could proceed only through counsel; (2) Taizo "demonstrated an unwillingness to litigate in the case in a timely manner;" and (3) the Court had recently ordered the parties to meet and confer about the stipulated preliminary injunction. ECF 209, PgID 3218. The Court expressed particular concern that, without local counsel, "Taizo may . . . ignore Court orders and thwart the effective and just administration of the case." Id.

         On December 20, 2018, pursuant to the Court's order, Yazaki notified the Court that it had been unable to meet and confer with Kaneko Defendants because they had stopped responding to Counsel. ECF 213, PgID 3245-46.

         In early January 2019, the Court ordered Kaneko Defendants to show cause why default should not be entered against them. ECF 215. The Court noted that Yazaki's belief that "Kaneko Defendants' unresponsiveness justified a default against them" was "likely correct." Id. at 3258. But, out of an abundance of caution, the Court provided Kaneko Defendants another opportunity to litigate the case.

         The Court further required Counsel to certify that they provided a copy of the order via email to Kaneko Defendants. Id. at 3259. Counsel certified that they transmitted the order to Kaneko Defendants, ECF 216, and then responded to the show cause order on Kaneko Defendants behalf, ECF 217. The Court then conducted a status conference with the parties to discuss next steps.

         On February 20, 2019, the Court granted Counsel a withdrawal conditioned on Kaneko Defendants filing a notice of appearance. ECF 219. The Court notified Kaneko Defendants that it would construe "a failure to respond as a concession that Kaneko Defendants do not intend to defend the case." Id. at 3275; see also Id. at 3276. Counsel certified that they served the order on Kaneko Defendants. ECF 220. But Kaneko Defendants did not act or file a notice of appearance. On March 18, 2019, two weeks after the deadline for Kaneko Defendants to file an appearance, the Court permitted Counsel's complete withdrawal, recounted Kaneko Defendants' failure to defend the case, and required Yazaki to show cause why the case should not be dismissed for failure to prosecute. ECF 221. Yazaki's motion for default judgment followed.

         STANDARD OF REVIEW

         The Court may sanction a party that "fails to obey a scheduling or other pretrial order." Fed.R.Civ.P. 16(f)(1)(C). Permissible sanctions include "dismissing the action or proceeding in whole or in part" or "rendering a default judgment against the disobedient party." Fed.R.Civ.P. 37(b)(2)(A)(v)-(vi); see also Fed. R. Civ. P. 16(f)(1) (referencing the permissibility of sanctions authorized by Civil Rule 37). The Civil Rules permit the Court to dismiss claims if "the plaintiff fails to prosecute or comply with [the Civil Rules] or a court order." Fed.R.Civ.P. 41(b). The Court's inherent powers allow it "to protect the due and orderly administration of justice and maintain the authority and dignity of the court" by dismissing a claim as a sanction against a defendant that ignores court orders. Bowles v. City of Cleveland, 129 Fed.Appx. 239, 241 (6th Cir. 2005) (quotation omitted).

         Whether dismissing a claim or rendering default judgment under Rules 16 and 37, Rule 41, or its inherent powers, the Court applies the same analysis. Id. at 241 (quoting Carter v. City of Memphis, 636 F.2d 159, 161 (6th Cir. 1980)). The key of the Court's analysis is "a failure to prosecute." Id. ...


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