Potomac Electric Power Company v. China Construction America, Inc.

• Court: District Court, District of Columbia
• Decided: September 30, 2009
• Docket: Civil Action No. 2009-0111
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

POTOMAC ELECTRIC POWER ) COMPANY, ) ) Plaintiff, ) ) v. ) Civil Case No. 09-111 (RJL) ) CHINA CONSTRUCTION AMERICA ) INC., et aI., ) ) Defendants. )

MEMORANDUM ORDER

Before the Court is a motion by defendant Cherry Hill Construction, Inc. to vacate

an Order of Default entered against it by the Superior Court for the District of Columbia.

The default was entered on February 17,2009, [Dkt. #11-2], after a notice of removal had

been filed in this Court on January 16,2009, [Dkt. #1]. Because, however, a notice of

removal was not filed in the Superior Court until as late as March 13,2009, [Dkt. #19],

the Superior Court retained jurisdiction to enter the default. See Anthony v. Runyon, 76

F.3d 210, 213-14 (8th Cir. 1996) (adopting the prevailing rule that "removal is effected

when the notice of removal is filed with the state court and at no other time"); Resolution

Trust Corp. v. Nernberg, 3 F.3d 62, 69 (3d Cir. 1993) ("The requirement of notice to the

state court is an important part of the removal process and has been held necessary to

terminate the state court's jurisdiction."), Even though removal is now complete, the Superior Court's Order of Default remains in effect. See Murray v. Ford Motor Co., 770

F .2d 461, 463 (5th Cir. 1985) (stating that a state court default judgment, which went into

effect before the state court had notice of removal, "continued in effect when the case was

removed to the federal court").

To set aside the removed entry of default, the Court applies the same test used for

defaults in federal courts. Butner v. Neustadter, 324 F.2d 783,785-86 (9th Cir. 1963). A

default can be vacated under Rule 55(c) for "good cause shown," which is more lenient

than the standard for vacating a default judgment under Rule 60(b). Jackson v. Beech,

636 F.2d 831, 835 (D.C. Cir. 1980). Although the decision whether to set aside a default

lies within this Court's discretion, the following considerations are relevant: (l) whether

the default was willful, (2) whether a set-aside would prejudice the plaintiff, and (3)

whether the alleged defense is meritorious. Keegel v. Key West & Caribbean Trading

Co., Inc., 627 F.2d 372, 373 (D.C. Cir. 1980). Plaintiff Potomac Electric Power

Company does not contend that it would be prejudiced by setting aside the default or that

the defendant's alleged defense is not meritorious. Rather, the plaintiff challenges the

defendant's asserted reasons for its untimely delay in answering the complaint. Even if

the defendant could have exercised more vigor in responding to the plaintiff's lawsuit, the

Court cannot conclude based on the information before it that the default was willful or

that defendant counsel's staffing difficulties are not an acceptable reason for the delay.

Accordingly, based on all the factors to be considered, as well as the general rule that

2 "modem federal procedure favor[s] trials on the merits," id. at 374, the Court GRANTS

defendant's Motion to Vacate the Superior Court's Order of Default. ,q1l - For the reasons set forth above, it is thi0 day:f September, 2009, hereby

ORDERED that defendant's Motion to Vacate Default Judgment Entered by

Superior Court [Dkt. #11] is GRANTED; and it is further

ORDERED that the Superior Court's Order of Default dated February 17,2009, is

VACATED.

SO ORDERED. ,