Ashcroft v. Commissioner of Social Security Administration

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Loni Dee Ashcroft, No. CV-21-08115-PCT-GMS

10 Plaintiff, ORDER

11 v.

12 Commissioner of Social Security Administration, 13 Defendant. 14 15 16 Pending before the Court is the Commissioner of Social Security’s (“Defendant”) 17 Motion for Relief from Default Pursuant to Fed. Civ. P. 55(c) (Doc. 20.). For the reasons 18 below, the Motion is granted. 19 BACKGROUND 20 The Court originally dismissed this case on September 3, 2021 because Plaintiff had 21 failed to serve Defendant. (Doc. 8.) Plaintiff then filed a Motion to Reopen Case. (Doc. 9.) 22 The Court allowed Plaintiff to file Affidavits of Service by November 1, 2021. (Doc. 10.) 23 Plaintiff did so, (Doc. 11); the Court granted her Motion to Reopen; and the Court mailed 24 its order to the Office of General Counsel, the United States Attorney General, and the 25 United States Attorney for the District of Arizona. (Doc. 12.) Defendant was ordered to 26 acknowledge receipt of the Court’s order by December 3, 2021, and to file a responsive 27 pleading by December 17, 2021. (Doc. 12.) Defendant did neither. Plaintiff later filed a 28 Motion for Entry of Default on January 26, 2022. (Doc. 14.) After Plaintiff filed her 1 Motion, Defendant finally entered an appearance on February 11, 2022. (Doc. 15.) The 2 Court granted Plaintiff’s Motion, and default was entered on February 17, 2022. (Doc. 17.) 3 Defendant now moves to set aside the default. (Doc. 20.) 4 DISCUSSION 5 “The court may set aside an entry of default for good cause.” Fed. R. Civ. P. 55(c). 6 Courts are given broad discretion when considering whether to set aside entry of default. 7 O’Connor v. Nevada, 27 F.3d 357, 364 (9th Cir. 1994). In making its determination, courts 8 “‘consider[ ] three factors: (1) whether [the party seeking to set aside the default] engaged 9 in culpable conduct that led to the default; (2) whether [it] had [no] meritorious defense; or 10 (3) whether reopening the default judgment would prejudice’ the other party.” United 11 States v. Signed Pers. Check No. 730 of Yubran S. Mesle, 615 F.3d 1085, 1091 (9th Cir. 12 2010) (quoting Franchise Holding II, LLC v. Huntington Rests. Grp., Inc., 375 F.3d 922, 13 925–26 (9th Cir. 2004)). “[A] finding that any one of these factors is true is sufficient 14 reason for the district court to refuse to set aside the default.” Id. 15 Because the administrative record is still being compiled in this case, Defendant 16 cannot address whether Defendant has a meritorious defense. (Doc. 20 at 4–5 n.2). The 17 Court, therefore, will consider only Defendant’s culpable conduct and prejudice to 18 Plaintiff. 19 A. Culpable Conduct 20 “[A] defendant’s conduct is culpable if he has received actual or constructive notice 21 of the filing of the action and intentionally failed to answer.” Mesle, 615 F.3d at 1092. 22 “[T]he term ‘intentionally’ means that a movant cannot be treated as culpable simply for 23 having made a conscious choice not to answer; rather, to treat a failure to answer as 24 culpable, the movant must have acted with bad faith, such as an ‘intention to take advantage 25 of the opposing party, interfere with judicial decisionmaking, or otherwise manipulate the 26 legal process.’” Id. (quoting TCI Grp. Life Ins. Plan v. Knoebber, 244 F.3d 691, 697 (9th 27 Cir. 2001), overruled on other grounds, Egelhoff v. Egelhoff ex. rel. Breiner, 532 U.S. 141 28 (2001)). “[S]imple carelessness is not sufficient to treat a negligent failure to reply as 1 inexcusable, at least without a demonstration that other equitable factors, such as prejudice, 2 weigh heavily in favor of denial of the motion to set aside a default.” Id. 3 According to Defendant, because this case was closed in September, no attorney 4 appearance was entered. (Doc. 20 at 2.) Defendant did not realize that the case had been 5 reopened because she primarily relies on ECF notifications to update her on court 6 proceedings: “[D]ocuments received by U.S. Mail are nearly always redundant to ECF 7 notifications.” (Doc. 20 at 3.) Because no appearance had been made, Defendant did not 8 receive any ECF notifications and thus did not timely file responses in this case. (Doc. 20 9 at 3.) Because Defendant never had any notice of the reopening of the case, her failure to 10 respond is not “culpable.” This factor weighs in Defendant’s favor. 11 B. Prejudice 12 To be prejudicial, the setting aside of default must hinder the plaintiff’s ability to 13 pursue his claim. Lakeview Cheese Co. v. Nelson-Ricks Creamery Co., 296 F.R.D. 649, 14 654 (D. Idaho 2013). “[T]hat plaintiff will be required to establish the merit of [her] claim 15 does not constitute prejudice in this context.” Aristocrat Techs., Inc. v. High Impact Design 16 & Ent., 642 F. Supp. 2d 1228, 1233 (D. Nev. 2009); Yan v. Gen. Pot, Inc., 78 F. Supp. 3d 17 997, 1005 (N.D. Cal. 2015). Mere delay is also insufficient to show prejudice. TCI, 244 18 F.3d at 701. “For a delay to be prejudicial, it must ‘result in tangible harm such as loss of 19 evidence, increased difficulties of discovery, or greater opportunity for fraud or 20 collusions.’” Yan, 78 F. Supp. 3d at 1005 (quoting TCI, 244 F.3d at 701). 21 Plaintiff contends that she is unable to work because of her disability, and she needs 22 the Supplemental Security Income benefits for support. (Doc. 21 at 1.) Although the Court 23 sympathizes that delay in these circumstances is costly, these are the circumstances in 24 nearly all Social Security appeals. Plaintiff has not alleged any loss of evidence or fraud 25 or that her case will be harmed in any way from having to litigate on the merits. Because 26 Plaintiff will not be prejudiced, this factor weighs in Defendant’s favor. 27 CONCLUSION 28 Because all factors weigh in Defendant’s favor, the Court grants the Motion. 1 IT IS HEREBY ORDERED that Defendant’s Motion for Relief from Default Pursuant to Fed. Civ. P. 55(c) (Doc. 20) is GRANTED. 3 IT IS FURTHER ORDERED that Defendant shall file its Answer within fifteen 4|| days of the date of this Order. 5 IT IS FURTHER ORDERED that Defendant shall produce the certified 6 || administrative record within thirty days of the date of this Order. 7 Dated this 14th day of April, 20272. ) 9 A Whacrsay Sooo) 10 Chief United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

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