Rubicon Global Ventures, Inc. v. Chongqing Zongshen Grp. ( 2018 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
NOV 14 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
RUBICON GLOBAL VENTURES, INC. No. 17-35601
et al.,
D.C. Nos.
Plaintiffs-Appellants, 05-cv-01809-MO
09-cv-00818-MO
v. 09-cv-01397-MO
CHONGQING ZONGSHEN GROUP
IMPORT/EXPORT CORP. et al., MEMORANDUM*
Defendants-Appellees.
Appeal from the United States District Court
for the District of Oregon
Michael W. Mosman, Chief District Judge, Presiding
Argued and Submitted October 9, 2018
Portland, Oregon
Before: FISHER and CALLAHAN, Circuit Judges, and BENCIVENGO,** District
Judge.
Plaintiffs Rubicon Global Ventures, Inc., and Z Motors, Inc., appeal the
district court’s entry of final judgments in favor of Defendants Zongshen Industrial
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Cathy Ann Bencivengo, United States District Judge
for the Southern District of California, sitting by designation.
Group, Co., Ltd., Chongqing Zongshen Group Import/Export Corp., and Deixu
Yuan after granting Defendants’ motion to preclude entry of default judgment
against Defendants. We affirm in part and reverse in part with instructions to the
district court to enter default judgments in these three related cases against
Defendants jointly and severally in the total amount of $1,316,650.
This is the third time this collection of related cases, the first of which was
filed in 2005, has been before the Ninth Circuit. On the second appeal, Defendants
appealed the district court’s entry of default judgments against them on numerous
grounds, but Defendants did not contend that the default judgments were improper
because the complaints failed to state a claim. The Ninth Circuit rejected most of
Defendants’ arguments but held that the district court abused its discretion by
failing to hold a hearing on damages prior to entering the default judgments
because the judgments included damages for future lost profits that were not a
certain sum or capable of mathematical calculation. The Ninth Circuit therefore
remanded the cases “for a factual determination of damages.” On remand from the
second appeal, Defendants filed a motion to preclude entry of default judgment on
the ground that the operative complaints failed to state a claim. The district court
granted this motion and declined to enter default judgments against Defendants
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while also finding that, if default judgments had been appropriate, Plaintiffs would
have been entitled to a damage award of $916,650 after trebling.
Plaintiffs argue that the district court exceeded the scope of the mandate by
granting Defendants’ motion to preclude entry of default judgment. “As a question
of law, we review de novo a district court’s compliance with the mandate of an
appellate court.” United States v. Kellington, 217 F.3d 1084, 1092 (9th Cir. 2000).
“Upon return of its mandate, the district court cannot give relief beyond the scope
of that mandate, but it may act on ‘matters left open by the mandate.’” Caldwell v.
Puget Sound Elec. Apprenticeship & Training Trust, 824 F.2d 765, 767 (9th Cir.
1987) (quoting In re Sanford Fork & Tool Co., 160 U.S. 247, 256 (1895)). “[I]n
construing a mandate, the lower court may consider the opinion the mandate
purports to enforce as well as the procedural posture and substantive law from
which it arises. . . . [T]he ultimate task is to distinguish matters that have been
decided on appeal, and are therefore beyond the jurisdiction of the lower court,
from matters that have not.” Kellington, 217 F.3d at 1093.
Considering the mandate remanding these cases to the district court “for a
factual determination of damages” in the context of the memorandum that
otherwise rejected Defendants’ arguments of error in the district court’s entry of
default judgments, as well as the unique procedural posture of these cases at that
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time, the issue of whether the complaints adequately stated claims was not left
open by the mandate. Accordingly, the district court exceeded the scope of the
mandate when it granted Defendants’ motion to preclude entry of default
judgment.
Plaintiffs also argue that the district court erred in the manner in which it
trebled their damages. The district court found that Plaintiffs had suffered
$505,550 in damages, and that they were entitled to trebling of those damages
based on the federal and Oregon RICO claims in the complaints. Before trebling,
however, the district court reduced the $505,550 by $200,000 to account for
Plaintiffs’ prior settlement with Zongshen, Inc., which is not party to this appeal.
Thus, the district court calculated the trebled award to be $916,650. Because
settlement payments should be deducted from an award against non-settling
defendants after the actual damages are trebled, the district court erred. See
William Inglis & Sons Baking Co. v. Cont’l Baking Co., Inc., 981 F.2d 1023, 1024
(9th Cir. 1992) (“[U]nder our existing law settlement payments should be deducted
from the damages after they have been trebled.”); In re Nat’l Mortg. Equity Corp.
Mortg. Pool Certificates Sec. Litig., 636 F. Supp. 1138, 1151 (C.D. Cal. 1986)
(Tashima, J.) (“Without exception, courts hold that the full award to which such
plaintiffs are entitled is an amount three times the proven actual damages and that,
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to ensure that plaintiffs receive complete satisfaction of their claims, settlement
payments should be deducted from the award against the non-settling defendant(s)
after actual damages are trebled.”). The trebled damage award, accounting for the
deduction of the $200,000 settlement payment, should be $1,316,650.
The plaintiffs also contend that the district court erred in refusing to award
damages for lost profits and refusing to award punitive damages. We find no error
and affirm these aspects of the district court’s damages determination.
Consistent with the foregoing, the district court’s entry of judgment for
Defendants is VACATED. The district court’s grant of Defendants’ motion to
preclude entry of default judgment is REVERSED. The district court’s
determination of Plaintiffs’ damage award on default judgment is AFFIRMED IN
PART and REVERSED IN PART. These cases are REMANDED to the district
court for entry of default judgments in favor of Plaintiffs and against Defendants
jointly and severally in the total amount of $1,316,650. Costs to Plaintiffs.
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