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Isaac v. Daniels

United States District Court, D. Hawaii

March 30, 2018

ISAAM ISAAC, Plaintiff,
v.
ARI DANIELS, JERRY KMIEC, AND DOE DEFENDANTS 3-10, Defendants.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT ARI DANIELS AS TO COUNT I OF THE FIRST AMENDED COMPLAINT [1]

          Richard L. Puglisi United States Magistrate Judge

         Before the Court is Plaintiff's Motion for Default Judgment Against Defendant Ari Daniels as to Count I of the First Amended Complaint, filed on March 16, 2018 (“Motion”). ECF No. 53. The Court found the Motion suitable for disposition without a hearing pursuant to Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawaii. ECF No. 54. After careful consideration of the Motion, the declarations, exhibits, and the record established in this action, the Court FINDS AND RECOMMENDS that the Motion be GRANTED IN PART AND DENIED IN PART.

         BACKGROUND

         In his First Amended Complaint, Plaintiff alleges that in August 2016, Defendant Ari Daniels and others created a website that contained a number of false statements about Plaintiff, Plaintiff's businesses, and the company that Plaintiff's businesses contracted with. ECF No. 15 ¶¶ 7-15. The website stated that Plaintiff committed a number of crimes, that Plaintiff was residing illegally in the United States, and that Plaintiff's businesses were scamming tourists. Id. It included a map pinpointing Plaintiff's residence and an image of Plaintiff's Hawaii driver's license. Id. ¶ 14. Defendant Daniels knew that the statements published in the website were false. Id. ¶ 17. Plaintiff alleges that he has been injured by the false statements. Id. ¶ 18.

         Plaintiff asserted claims against Defendant Daniels and others for defamation, extortion, negligent infliction of emotional distress, and intentional infliction of emotional distress. Id. On July 11, 2017, the court adopted the recommendations of this Court to grant default judgment against Defendant Jerry Kmiec as to Plaintiff's claim for defamation and awarded general damages in the amount of $10, 000. ECF Nos. 31, 33. The court also adopted the recommendation of this Court to deny Plaintiff's request for default judgment against Defendant Daniels because Plaintiff had failed to demonstrate proper service. Id.

         Following the court's order, Plaintiff obtained leave of court to attempt to serve Defendant Daniels by certified mail. ECF No. 38. After Plaintiff's attempt to serve by certified mail failed, Plaintiff then obtained leave of court to serve Defendant Daniels by publication. See ECF No. 40. Plaintiff filed a Affidavit of Publication on November 24, 2017, stating that notice had been published for four consecutive weeks in the Honolulu Star-Advertiser. ECF No. 43. Pursuant to Rule 55(a) of the Federal Rules of Civil Procedure, the Clerk entered default against Defendant Daniels on December 19, 2017. ECF No. 46. Plaintiff then filed the instant Motion, seeking default judgment against Defendant Daniels on Plaintiff's claim for defamation.

         DISCUSSION

         Default judgment may be entered for the plaintiff if the defendant has defaulted by failing to appear and the plaintiff's claim is for a “sum certain or for a sum which can by computation be made certain[.]” Fed.R.Civ.P. 55(b)(1), (2). The granting or denial of a motion for default judgment is within the discretion of the court. Haw. Carpenters' Trust Funds v. Stone, 794 F.2d 508, 511-12 (9th Cir. 1986). Entry of default does not entitle the non-defaulting party to a default judgment as a matter of right. Valley Oak Credit Union v. Villegas, 132 B.R. 742, 746 (9th Cir. 1991). Default judgments are ordinarily disfavored, and cases should be decided on their merits if reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). The court should consider the following factors in deciding whether to grant a motion for 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 decisions on the merits.

Id. at 1471-72.

         On default “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). The allegations in the complaint regarding liability are deemed true, but the plaintiff must establish the relief to which it is entitled. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Also, “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).

         A. Jurisdiction

         The Court has an affirmative obligation to determine whether or not it has subject matter jurisdiction over this action and personal jurisdiction over defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place.”).

         1. Subject Matter Jurisdiction

         Plaintiff is a resident of Honolulu, Hawaii. ECF No. 15 ¶ 1. Defendant Daniels is a resident of Nevada. Id. ¶ 2. Plaintiff sought damages in excess of $75, 000. Id. ¶ 5. Because Plaintiff and Defendant are residents of different states and the amount in controversy exceeds $75, 000, the Court has diversity jurisdiction over this matter. See 28 U.S.C. § 1332(a)(1).

         2. Personal Jurisdiction

         Personal jurisdiction is proper if it is consistent with Hawaii's long-arm statute and it comports with due process of law. Boschetto v. Hansing, 539 F.3d 1011, 1021-22 (9th Cir. 2008). Because Hawaii's long-arm statute reaches to the full extent permitted by the United States Constitution, the Court need only determine whether due process permits the exercise of personal jurisdiction. Television Events & Mktg., Inc. v. Amcon Distrib. Co., 416 F.Supp.2d 948, 958 (D. Haw. 2006) (citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800-01 (9th Cir. 2004)); Haw. Rev. Stat. § 634-35. Under the Federal Rules of Civil Procedure, service of process is sufficient if it complies with state law for serving a summons in the state where the district court is located. Fed.R.Civ.P. 4(e)(1). Hawaii law permits service of summons by publication, when personal service and service by certified mail has failed, when the defendant resides outside of Hawaii, and only when authorized by a court order. See Haw. Rev. Stat. §§ 634-23, 634-24;

         For due process to be satisfied, a defendant must have “minimum contacts” with the forum state such that the assertion of jurisdiction “does not offend traditional notions of fair play and substantial justice.” Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1155 (9th Cir. 2006) (citing Int'l Shoe Co. v. Wash., 326 U.S. 310, 315 (1945)). Here, the Court must determine whether it has specific jurisdiction over Defendant Daniels. Specific jurisdiction exists if (a) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed himself of the privileges of conducting activities in the forum; (b) the claim arises out of or results from the defendant's forum related activities; and (c) the exercise of jurisdiction is reasonable. Boschetto, 539 F.3d at 1021.

         a. ...


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