Opinion
NO. CIV. S-01-227 LKK/JFM.
January 3, 2008
ORDER
The court is in receipt of the Embassy of the Arab Republic of Egypt, the Arab Republic of Egypt, and the Embassy of Egypt Cultural and Educational Bureau's (collectively, "Egyptian defendants") response to the order to show cause, as well as plaintiff Mohamed Lasheen and defendant Loomis Company's replies to that response. Previously, Lasheen and Loomis filed a joint "special motion" regarding the inapplicability of the Foreign Sovereign Immunities Act. The Egyptian defendants, who have been in default since March 2, 2006, filed a request to continue the hearing on the special motion so that they could submit an opposition. The court continued the hearing but ordered the Egyptian defendants to show cause why sanctions should not be imposed for delay and inconvenience, and noted that they would need to move to set aside the entry of default.
Under Rule 55, "[t]he court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b)." Fed.R.Civ.P. 55. Here, although judgment has not yet been entered, the Egyptian defendants argue that the grounds set forth in Rule 60(b)(1)-(3), (4) and (6) support setting aside default. Fed.R.Civ.P. 60(b). Many of these grounds are clearly frivolous, but one is not. Under Rule 60(b)(4), the court may relieve a party from a judgment or order if "the judgment is void." Fed.R.Civ.P. 60(b)(4). Furthermore, under this rule, "a litigant may attack a judgment as void due to lack of subject matter jurisdiction." Wages v. I.R.S., 915 F.2d 1230, 1234 (9th Cir. 1990); see also Export Group v. Reef Indus. Inc., 54 F.3d 1466, 1469 (9th Cir. 1995). Here, if judgment is entered against the Egyptian defendants, they will have standing to argue that the judgment was void because the Foreign Sovereign Immunities Act deprived the court of subject matter jurisdiction.
For example, the Egyptian defendants argue that service was improper but any argument as to the propriety of service was waived long ago. See Fed.R.Civ.P. 12(h)(1).
Given that the joint motion brought by Lasheen and Loomis deals with precisely this same Foreign Sovereign Immunities Act issue, it would be efficient to hear the Egyptian defendants' arguments in the form of an opposition to the motion, rather than in the form of a separate post-judgment motion. In addition, doubt should generally "be resolved in favor of the motion to set aside the [default] so that cases may be decided on their merits." Mendoza v. Wright Vineyard Mgmt., 783 F.2d 941, 945 (9th Cir. 1986) (internal quotes omitted). Accordingly, the court finds that the Egyptian defendants have standing to contest the joint motion. Nevertheless, the court sets aside default only with respect to the Foreign Sovereign Immunities Act issue; the Egyptian defendants have not demonstrated good cause to set aside default as to any other aspect of the case.
In light of the above, the court orders as follows:
1. The Egyptian defendants shall file an opposition to the joint motion by January 14, 2008.
2. Lasheen and Loomis may file a single reply by January 22, 2008 at 9:00 a.m.
IT IS SO ORDERED.