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7 8 United States District Court 9 Central District of California

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11 UNITED STATES OF AMERICA, Case No. 2:18-cv-10273-ODW (SKx) 12 Plaintiff, 13 ORDER GRANTING MOTION FOR DEFAULT 14 v. JUDGMENT [24]

15 $201,900.00 IN U.S. CURRENCY, 16 Defendant. 17

18 19 I. INTRODUCTION AND BACKGROUND 20 On December 11, 2018, Plaintiff United States of America initiated this in rem 21 forfeiture action. (See Verified Compl., ECF No. 1.) The government subsequently 22 filed a Verified First Amended Complaint (“FAC”) on March 4, 2019 against the 23 defendant currency and the interests of all potential claimants. (FAC, ECF No. 10.) 24 Through this action, the government seeks forfeiture of $201,900.00 in U.S. currency. 25 (FAC ¶ 5.) The Drug Enforcement Agency (“DEA”) and South Gate Police Department 26 seized the defendant currency during a joint investigation into money laundering and 27 drug trafficking organizations. (FAC ¶¶ 8, 23, 29.) The government alleges that the 28 currency “represents or is traceable to proceeds of illegal narcotic trafficking, was 1 intended to be used in one or more exchanges for a controlled substance or listed 2 chemical, or was used or intended to be used to facilitate a controlled substance or listed 3 chemical violation, in violation of

et seq.” (FAC ¶ 32.) The 4 government alleges that, as such, the defendant currency is subject to forfeiture pursuant 5 to

(a)(6). (FAC ¶ 32.) 6 The government attempted to directly serve the known potential claimants and 7 published notice of the seizure and forfeiture action for thirty days pursuant to the 8 Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. 9 (Decl. of Brent A. Whittlesey (“Whittlesey Decl.”) ¶¶ 4–12, Ex. B, ECF No. 24-1.) 10 Process was executed on the defendant currency by the United States Marshals Service. 11 (Whittlesey Decl. ¶ 3, Ex. A.) The time for filing a claim or answer has expired. 12 (Whittlesey Decl. ¶ 13.) 13 One potential claimant, Zhonghuang Li, asserted a claim to the defendant 14 currency and filed an answer. (Whittlesey Decl. ¶ 14; see also Claim of Right, ECF 15 No. 15; Answer, ECF No. 17.) However, Li withdrew his claim and subsequently 16 entered into a Stipulation for Entry of Judgment of Forfeiture. (Withdrawal, ECF 17 No. 19; Stipulation, ECF No. 21.) Li consented to the entry of a Consent Judgment of 18 Forfeiture in favor of the government. (Stipulation 2.) Accordingly, there are no 19 pending claims to the defendant currency or pending answers to the FAC. (Whittlesey 20 Decl. ¶ 14.) 21 On June 4, 2019, the Clerk entered default as to the interests of Suiyan Tang, Ren 22 Tong You Chang, Xin Zong, and all other potential claimants regarding the defendant 23 currency. (Default, ECF No. 23.) On June 7, 2019, the government filed its Motion for 24 Default Judgment (“Motion”) against the interests of Tang, Chang, Zong, and all other 25 potential claimants. (Mot. 6, ECF No. 24.) Pursuant to Local Rule 7-9, any opposition 26 27 28 1 to the government’s Motion was due no later than twenty-one days before the July 15, 2 2019 hearing date. The Court received no opposition to the Motion.1 3 II. LEGAL STANDARD 4 Federal Rule of Civil Procedure (“FRCP”) 55(b) authorizes a district court to 5 grant a default judgment after the Clerk enters default under Rule 55(a). Fed. R. Civ.

(b). Before a court can enter a default judgment against a defendant, the plaintiff 7 must satisfy the procedural requirements set forth in FRCP 54(c) and 55, as well as 8 Local Rules 55-1 and 55-2. Fed. R. Civ. P. 54(c), 55; C.D. Cal. L.R. 55-1, 55-2. Local 9 Rule 55-1 requires that the movant submit a declaration establishing: (1) when and 10 against which party default was entered; (2) identification of the pleading to which 11 default was entered; (3) whether the defaulting party is a minor or incompetent person; 12 (4) the Servicemembers Civil Relief Act,

, does not apply; and (5) the 13 defaulting party was properly served with notice, if required under Rule 55(b)(2). C.D. 14 Cal. L.R. 55-1. 15 If these procedural requirements are satisfied, a district court has discretion to 16 enter default judgment. Aldabe v. Aldabe,

(9th Cir. 1980). “[A] 17 defendant’s default does not automatically entitle the plaintiff to a court-ordered 18 judgment.” PepsiCo, Inc., v. Cal. Sec. Cans,

(C.D. Cal 19 2002). In exercising discretion, a court considers several factors (the “Eitel Factors”): 20 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s 21 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 22 material facts; (6) whether the default was due to excusable neglect, and 23 (7) the strong policy underlying the [FRCP] favoring decisions on the merits. 24 25 Eitel v. McCool,

, 1471–72 (9th Cir. 1986). The Court need not make 26 detailed findings of fact in the event of a default judgment. See Adriana Int’l Corp. v. 27

28 1 After carefully considering the papers filed in support of the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. 1 Thoeren,

(9th Cir. 1990). Generally, after the Clerk enters default, 2 the defendant’s liability is conclusively established, and the well-pleaded factual 3 allegations in the complaint are accepted as true, except those pertaining to damages. 4 TeleVideo Sys., Inc. v. Heidenthal,

, 917–18 (9th Cir. 1987) (per curiam) 5 (quoting Geddes v. United Fin. Grp.,

, 560 (9th Cir. 1977)). 6 III. DISCUSSION 7 Having reviewed the filings in this action, the Court is satisfied that the 8 government has met all procedural requirements for obtaining a default judgment 9 against the interests of all potential claimants. Notice was adequately given and the 10 time for filing a claim or answer has expired. Only one potential claimant, Li, filed a 11 claim, which he later withdrew and Li subsequently stipulated to entry of a Consent 12 Judgment of Forfeiture in favor of the government. Thus, there are no pending claims 13 or answers. The government has satisfied the procedural requirements of FRCP 55 and 14 Local Rule 55-1: (1) the Clerk entered default against the interests of Tang, Chang, 15 Zong, and all other potential claimants on June 4, 2019; (2) other than Li, who withdrew 16 his claim and entered into a Consent Judgment of Forfeiture, no potential claimants 17 responded to the FAC; (3) no potential claimants are infants or incompetent persons; 18 and (4) no potential claimants are in the military, so the Service Members Civil Relief 19 Act does not apply. (See Default; Whittlesey Decl. ¶¶ 13–16.) 20 Further, the Court finds that on balance the Eitel factors weigh in favor of 21 granting the government’s Motion. The allegations establish that the defendant 22 currency represents or is traceable to proceeds of illegal narcotic trafficking, was 23 intended to be used in one or more exchanges for a controlled substance or listed 24 chemical, or was used or intended to be used to facilitate a controlled substance or listed 25 chemical violation, in violation of

, et seq., rendering them subject to 26 forfeiture pursuant to

(a)(6). In light of the well-pleaded allegations in 27 the FAC and all potential claimants other than Li having failed to file a claim, the 28 government’s interest in an efficient resolution of the case outweighs any potential 1 || claimant’s interest in adjudication on the merits. See PepsiCo,

2 || (“Defendant’s failure to answer Plaintiffs’ Complaint makes a decision on the merits 3 || impractical, if not impossible.”). 4 Having determined that entry of default judgment is appropriate, the Court finds 5 | that forfeiture of the defendant currency to the United States for disposition according 6 || to law is proper because it does not “differ in kind from, or exceed in amount, what is 7 || demanded in the pleadings.” Fed. R. Civ. P. 54(c). 8 IV. CONCLUSION 9 For the reasons discussed above, the Court GRANTS Plaintiff's Motion for 10 | Default Judgment. (ECF No. 24.) A separate judgment will issue. 1] 12 IT IS SO ORDERED. 13 14 August 28, 2019 ss 15 “ gf

7 OTIS D. WRIGHT, II ig UNITED STATES, DISTRICT JUDGE

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