United States District Court, M.D. Pennsylvania
D. Mariani United States District Judge
before the Court are two motions led by Defendant Plastic
World Recycling, Inc. (hereinafter "Plastic
World"): (1) a "Motion to Dismiss Complaint, Motion
for Preliminary Injunction and Request for Entry of Default
for Failure to Comply with Federal Rule of Civil Procedure
§ 7.1" (Doc. 11) and (2) a Motion to Set Aside
Default (Doc. 18). The Court will address each motion in
"Motion to Dismiss Complaint, Motion for Preliminary
Injunction and Request for Entry of Default for Failure to
Comply with Federal Rule of Civil Procedure §
December 4, 2016, Plastic World filed a "Motion to
Dismiss Complaint, Motion for Preliminary Injunction and
Request for Entry of Default for Failure to Comply with
Federal Rule of Civil Procedure § 7.1" (Doc. 11)
arguing that because Plaintiff KMB Agro-Chemicals, LLC
(hereinafter "KMB") failed to file a Disclosure
Statement pursuant to Federal Rule of Civil Procedure
Plaintiffs Complaint should be dismissed as well as
Plaintiffs motion for preliminary injunction and that
Plaintiff "should be deprived of its ability to enter
default in [the] underlying Complaint since the Complaint
itself was improperly filed." Defendant never filed a
brief in support of this motion despite Plaintiffs assertion
in its reply to Defendant's motion that the motion should
be stricken for failure to comply with the Middle District of
Pennsylvania Local Rules requiring the filing of a brief in
support of a motion such as Defendant's (see Doc. 22,
filed a disclosure statement pursuant to Rule 7.1 on
Decembers, 2016. (Doc. 13). On December 12, 2016, Defendant
filed an Answer to Plaintiffs Complaint. (Doc. 20).
to the Middle District of Pennsylvania Local Rules
"[w]ithin fourteen (14) days after the filing of any
motion, the party filing the motion shall file a brief in
support of the motion If a supporting brief is not filed
within the time provided in this rule the motion shall be
deemed to be withdrawn." M.D. Pa. L.R. 7.5. Here, over
one month has passed and Defendant has failed to file any
brief in support of its motion. As a result, the Court deems
Defendant's motion withdrawn.
Motion to Set Aside Default
World's second motion requests that the Court set aside
Plaintiffs Request for Entry of Default against Defendant
because Plaintiff "failed to file its Disclosure
Statement prior to the Request for Entry of Default."
(Doc. 18, ¶ 6). Defendant's brief in support of this
motion argues that "[t]his Court should vacate default
because good cause exists; it was not the result of egregious
behavior, and vacating default will not result in any
prejudice to Plaintiff." (Doc. 19, at 1).
the Court notes that although Plaintiff did file a Request
for Entry of Default (Doc. 9), the docket reflects that the
Clerk of Court never entered default in this action.
Therefore, common sense dictates that a default cannot be set
aside when it has never been entered. In that case,
Defendant's motion would be unnecessary.
alternative, assuming that there is a default which Defendant
must now seek to set aside, the Court will engage in an
analysis of Federal Rule of Civil Procedure 55.
Rule of Civil Procedure 55(a) provides: "When a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, and that failure is
shown by affidavit or otherwise, the clerk must enter the
party's default." However, "[t]he court may set
aside an entry of default for good cause." Fed.R.Civ.P.
55(c). "A decision to set aside the entry of default...
is left primarily to the discretion of the district
court." United States v. $55, 518.05 in US.
Currency, 728 F.2d 192, 194 (3d Cir. 1984). The Third
Circuit "does not favor entry of defaults" but
rather "require[s] doubtful cases to be resolved in
favor of the party moving to set aside the default judgment
'so that cases may be decided on their merits."'
Id. at 194-95 (quoting Tozer v. Charles A.
Krause Milling Co., 189 F, 2d 242, 245 (3d Cir. 1951)).
A district court must consider the following factors in
exercising its discretion over a motion to set aside default;
"(1) whether lifting the default would prejudice the
plaintiff; (2) whether the defendant has a prima
facie meritorious defense; (3) whether the defaulting
defendant's conduct is excusable or culpable; and (4) the
effectiveness of alternative sanctions." Emcasco
Ins. Co. v. Sambrick, 834 F.2d 71, 73 (3d Cir. 1987).
Although the factors for determining whether to set aside a
default judgment are the same as those used when determining
whether to set aside an entry of default, these factors
should be applied even more liberally when deciding whether
to set aside a default. Jackson v. Delaware Cnty,
211 F.R.D. 282 (E.D. Pa. 2002).
the Court balances the above factors in light of our
Circuit's disfavor of judgments by default, it becomes
clear that good cause exists for setting aside the entry of
the delay has caused Plaintiff no legally significant
prejudice. "Under Rule 55, the prejudice requirement
compels plaintiffs to demonstrate that the plaintiffs claim
would be materially impaired because of the loss of evidence,
an increased potential for fraud or collusion, substantial
reliance on the entry of default, or other substantial
factors." Dizzley v. Friends Rehab. Program,
Inc., 202 F.R.D. 146, 147-48 (E.D. Pa. 2001); see
alsoAccu-Weather, Inc. v. Reuters Ltd., 779 F.Supp. 801,
802 (M.D. Pa. 1991) ("Prejudice exists if circumstances
have changed since entry of the default such that plaintiffs
ability to litigate its claim is now impaired in some
material way or if relevant evidence has become lost or
unavailable. Detriment in the sense that plaintiff will be
required to establish the merit of its claims does not
constitute prejudice in this context."). Here, Defendant
entered an appearance two days after Plaintiff filed its
request for the entry of default and filed a motion to
dismiss that same day. Although the Court recognizes the
importance of a defendant quickly responding to a motion for
a preliminary injunction, Defendant entered an appearance
less than one month after this motion was filed and almost
immediately began filing responses to Plaintiffs filings as
well as participating in a conference call with Plaintiffs
counsel and the Court to schedule an evidentiary hearing on
Plaintiffs preliminary injunction motion. Further, in the two
days between the time that Plaintiff requested that default
be entered against Defendant and Defendant entering an
appearance, nothing in the case changed. Nor has Plaintiff
offered the Court anything to show that it suffered from
Defendant's delay aside beyond the harm inherent in the
passage of time itself. Thus, the "prejudice" prong
favors setting aside the entry of default.
the Defendant has shown a prima facie meritorious
defense. "The showing of a meritorious defense is
accomplished when 'allegations of defendant's answer,
if established on trial, would constitute a complete defense
to the action.'" $55, 518.05, 728 F.2d at
195 (quoting Tozer, 189 F.2d at 244). "A court
requires the defendant to raise specific facts beyond a
general denial so that it has some basis for determining
whether the defendant can make out a complete defense."
Momah v. Albert Einstein Med. Ctr.,161 F.R.D. 304,
307 (E.D. Pa. 1995). Although Defendant's Answer provides
minimal responses to Plaintiffs Complaint and is devoid of
any factual assertions, Defendant's Answer also raises
nineteen "Affirmative Defenses" and includes a
Counterclaim against KMB. (See Doc. 20). Plastic
World's Counterclaim appears to arise out of the same
transaction or set of transactions as asserted in Plaintiffs
Complaint and sets forth several factual ...