Rubicon Global Ventures v. Chongquing Zongshen Group , 630 F. App'x 655 ( 2015 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
NOV 05 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
RUBICON GLOBAL VENTURES, INC., No. 13-35879
an Oregon corporation; Z MOTORS, INC.,
an Oregon corporation, D.C. No. 3:09-cv-00818-HA
Plaintiffs - Appellees,
MEMORANDUM*
v.
CHONGQUING ZONGSHEN GROUP
IMPORT/EXPORT CORP., a foreign
corporation; CHONGQING ZONGSHEN
GROUP, a foreign corporation;
ZONGSHEN INDUSTRIAL GROUP, a
foreign corporation; YING ZOU; DEXIU
YUAN,
Defendants - Appellants.
RUBICON GLOBAL VENTURES, INC., No. 14-35836
an Oregon corporation; Z MOTORS, INC.,
an Oregon corporation, D.C. Nos. 3:09-cv-00818-HA
3:05-cv-01809-HA
Plaintiffs - Appellees, 3:09-cv-01397-HA
3:10-cv-00833-HA
v.
CHONGQUING ZONGSHEN GROUP
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
IMPORT/EXPORT CORP., a foreign
corporation; CHONGQING ZONGSHEN
GROUP, a foreign corporation;
ZONGSHEN INDUSTRIAL GROUP, a
foreign corporation; DEXIU YUAN,
Defendants - Appellants.
Appeals from the United States District Court
for the District of Oregon
Ancer L. Haggerty, Senior District Judge, Presiding
Argued and Submitted October 15, 2015
Portland, Oregon
Before: FERNANDEZ, TASHIMA, and BEA, Circuit Judges.
Defendants appeal from the district court’s orders reinstating the default
judgments entered in District Court Docket Nos. 3:05–cv–01809 (“Rubicon I ”),
3:09–cv–00818 (“Rubicon II ”), and 3:09–cv–01397 (“Rubicon III ”) following
remand from this court in Rubicon Global Ventures, Inc. v. Chongquing Zongshen
Grp. Imp./Exp. Corp., 494 F. App’x 736 (9th Cir. 2012), disposition recalled and
superseded, 575 F. App’x 710 (9th Cir. 2014).
(1) We affirm the district court’s finding that Chongquing Zongshen Group
Import/Export Corp. (“ZSIE”) and Zongshen Industrial Group, Co. Ltd.
(“ZIGCL”) are subject to specific personal jurisdiction in Oregon. Personal
jurisdiction over a non-resident defendant is tested under a two-prong analysis: the
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exercise of jurisdiction must (1) satisfy the requirements of the long-arm statute of
the state in which the district court sits, and (2) comport with the principles of
federal due process. See Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015).
Oregon Rule of Civil Procedure 4(L) extends jurisdiction to the limits of due
process under the United States Constitution. See Or. R. Civ. P. 4(L). In
determining whether ZIGCL and ZSIE are subject to personal jurisdiction in
Oregon, uncontroverted allegations in the operative complaints must be taken as
true, and conflicts over statements contained in affidavits must be resolved in the
Plaintiffs’ favor. See Love v. Associated Newspapers, Ltd., 611 F.3d 601, 608 (9th
Cir. 2010). Here, the Due Process Clause of the U.S. Constitution is satisfied
because each defendant has sufficient minimum contacts with Oregon “such that
the exercise of personal jurisdiction does not offend traditional notions of fair play
and substantial justice.” Int’l Shoe Co. v. Wash., Office of Unemployment Comp. &
Placement, 326 U.S. 310, 316 (1945); see also Schwarzenegger v. Fred Martin
Motor Co., 374 F.3d 797, 802 (9th Cir. 2004); cf. Walden v. Fiore, 134 S. Ct. 1115,
1124–25 (2014).
(2) The district court did not abuse its discretion in reinstating the default
judgment in Rubicon II against Dexiu Yuan. Although the district court had found
in a previous ruling that the amount of the default judgment in Rubicon II was
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excessive as against defendant Dexiu Yuan, that decision was made in the context
of a ruling that eliminated every other defendant. The district court explained,
“while the large judgment, meant to remedy the actions of corporations, [was]
excessive when [borne] by one individual, the same judgment is not excessive when
[borne] jointly and severally with all defendants.” A district court may reconsider
an issue it previously decided when “changed circumstances exist.” United States
v. Cuddy, 147 F.3d 1111, 1114 (9th Cir. 1998). On remand from the Ninth Circuit,
Dexiu Yuan was no longer the only defendant in Rubicon II, but was joined by the
corporate defendants ZSIE and ZIGCL because they were properly served.
(3) We reject Defendants’ res judicata argument that the final judgment in
Rubicon IV bars the district court from reinstating the default judgments in Rubicon
I–III on remand from the Ninth Circuit. The Ninth Circuit concluded that the
defaults were erroneously set aside for insufficient service of process. Res judiciata
prohibits “the parties or their privies from relitigating issues that were or could have
been raised” in an action resulting in “[a] final judgment on the merits.” Herb Reed
Enters., LLC v. Florida Entm’t Mgmt., Inc., 736 F.3d 1239, 1245 (9th Cir. 2013)
(internal quotation marks omitted). The Plaintiffs could not have raised the issue in
Rubicon IV that the default judgments in Rubicon I–III should be reinstated because
the Ninth Circuit had not yet ruled that the Defendants were properly served in
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those cases. Additionally, res judicata is an affirmative defense, and Defendants
cannot now raise res judicata as an affirmative defense in Rubicon I–III when they
had defaulted in those cases. See Fed. R. Civ. P. 8(c).
(4) The district court abused its discretion by failing to hold a hearing on
damages prior to entering the default judgments in Rubicon I, II, and III, where the
judgments were based on Plaintiffs’ own conclusory declarations of their future lost
profits over the course of five years. “The general rule of law is that upon default
the factual allegations of the complaint, except those relating to the amount of
damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557, 560
(9th Cir. 1977) (emphasis added). “It is well settled that a default judgment for
money may not be entered without a hearing unless the amount claimed is a
liquidated sum or capable of mathematical calculation.” Davis v. Fendler, 650 F.2d
1154, 1161 (9th Cir. 1981). The district court did not hold a hearing to determine
Plaintiffs’ damages before entering default judgments in Rubicon I–III, despite
Plaintiffs’ concession that their money damages for their lost future profits were not
a certain sum or capable of mathematical calculation. The declarations on which the
judgments were entered are wholly conclusory. Accordingly, we vacate the default
judgments entered in Rubicon I, II, and III, and remand to the district court for a
factual determination of damages in those cases.
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Each party shall bear its own costs.
AFFIRMED IN PART. The default judgments entered in Rubicon I, II,
and III are VACATED and REMANDED for a factual determination of damages
in those cases.
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