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Armeni v. Transunion, LLC, Inc.

United States District Court, W.D. Virginia, Charlottesville Division

December 2, 2016

TRANSUNION LLC, INC., et al., Defendants.


          Norman K. Moon, United States District Judge

         Default judgment was entered against the remaining Defendant BSI Financial Services, Inc. (“Defendant”) in this Fair Credit Reporting Act (“FCRA”) case. (Dkt. 38). After a briefing order, the Court must decide whether damages in this case should be determined by the Court or by a jury. (Dkt. 53). The parties were unable to reach an agreement on the issue; Plaintiff desires a jury trial, while Defendant believes one is not available. (Dkts. 57, 58).

         Under Federal Rule of Civil Procedure 38(a), the “right to a jury trial as declared by the Seventh Amendment to the Constitution-or as provided by a federal statute-is preserved to the parties inviolate.”[1] On the other hand, Rule 55(b)(2)(B) states that, in finalizing a default judgment, “the court may conduct hearings or make referrals-preserving any federal statutory right to a jury trial-when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.”


         Plaintiff argues that Rule 55(b)(2) must be read not in isolation, but in conjunction with Rule 38's declaration that the right to a jury trial is “inviolate” and withdrawn only on the parties' consent. He contends that “it is the better practice, if not actually compelled, that the issue as to damages be submitted to the jury” after a default. Barber v. Turberville, 218 F.2d 34, 37 & n.1 (D.C. Cir. 1954). Plaintiff also relies on a handful of district court cases. See Mitchell v. Bd. of Cty. Comm'rs of Cty. of Santa Fe, No. CIV 05-1155 JBALM, 2007 WL 2219420, at *13 (D.N.M. May 9, 2007) (holding that Rule 38(d) prevented plaintiff from unilaterally “withdrawing” jury demand after obtaining default against non-appearing defendant); Abernathy v. Church of God, No. 4:11-CV-2761-VEH, 2013 WL 2248286, at *1 (N.D. Ala. May 22, 2013) (“better practice” to empanel jury in light of Rule 38(d)); Zero Down Supply Chain Sols., Inc. v. Glob. Transp. Sols., Inc., 282 F.R.D. 604, 606 (D. Utah 2012); Ault v. Baker, No. 4:12-CV-00228-KGB, 2013 WL 1247647, at *10-11 (E.D. Ark. Mar. 27, 2013).[2]

         As an alternative argument, Plaintiff submits that the Court may permit a jury even if one is not allowed as of right. See Wright & Miller, 10A Fed. Prac. & Proc. Civ. § 2688 (4th ed.) (Westlaw); Gill v. Stolow, 18 F.R.D. 508, 510 (S.D.N.Y. 1955) (stating it is “no doubt within [court's] discretion to order a jury trial” after default), rev'd on other grounds, 240 F.2d 669 (2d Cir. 1957). He argues that valuing emotional harm damages like those he intends to prove is especially proper for a jury determination. (Dkt. 57 at 7-8).

         Finally, Plaintiff argues that punitive damages must go to the jury. Punitive damages under the FCRA are permitted in an amount “as the court may allow.” 15 U.S.C. § 1681n(a)(2). Plaintiff cites cases holding that this language is merely a codification of the Court's duty to review excessive verdicts, not a congressional command for a bench trial in lieu of a jury. See, e.g., Saunders v. Branch Banking And Trust Co. of Va., 526 F.3d 142, 145 (4th Cir. 2008); Northrop v. Hoffman of Simsbury, Inc., 12 F. App'x 44, 50 (2d Cir. 2001); Collins v. Retail Credit Co., 410 F.Supp. 924, 933 (E.D. Mich. 1976).


         Defendant asserts that any Seventh Amendment right to a jury trial does not survive an entry of default. See Graham v. Malone Freight Lines, Inc., 314 F.3d 7, 16 (1st Cir. 1999) (holding that plaintiff was not entitled to jury trial on damages after obtaining default against two defendants); Frankart Distributors, Inc. v. Levitz, 796 F.Supp. 75, 76 (E.D.N.Y. 1992) (compiling cases).

         Moreover, Defendant argues that the statutory right to a jury trial survives default only if the statute expressly preserves it in that situation, and the sole statute to do so is not applicable here. See Shepherd v. Am. Broad. Companies, Inc., 862 F.Supp. 486, 492 (D.D.C.) (observing paucity of such statutes), vacated on other grounds, 62 F.3d 1469 (D.C. Cir. 1995). Defendant cites several district court cases which have thus determined FCRA damages after entry of default. (See dkt. 58 at 6). Defendant also contends that Rule 38(d), which prohibits a unilateral withdraw of a jury demand, does not apply in this situation because there is no withdraw of the demand at all; instead, a jury trial is simply not available by law. (Id. at 7-8). Finally, Defendant urges the Court not to refer damages to a jury.

         III. ANALYSIS

         The parties have not identified a Fourth Circuit case addressing whether a default extinguishes the constitutional right to a jury trial. Nevertheless, the overwhelming weight of authority instructs that the Seventh Amendment does not guarantee a jury trial after default. See Graham, 314 F.3d at 9, 12, 16 (holding plaintiff had not right to jury trial after defendant's default); Goldman, Antonetti, Ferraiuoli, Axtmayer & Hertell v. Medfit Int'l, Inc., 982 F.2d 686, 692 n.15 (1st Cir. 1993) (citing Adriana Int'l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990)); Matter of Dierschke, 975 F.2d 181, 185 (5th Cir. 1992) (“[I]n a default case neither the plaintiff nor the defendant has a constitutional right to a jury trial on the issue of damages”); Henry v. Sneiders, 490 F.2d 315, 318 (9th Cir. 1974); Olcott v. Del. Flood Co., 327 F.3d 1115, 1124 (10th Cir. 2003); Mwani v. Bin Ladin, 244 F.R.D. 20, 23-24 (D.D.C. 2007) (denying plaintiff's motion for jury trial after default); Benz v. Skiba, Skiba & Glomski, 164 F.R.D. 115, 116 (D. Me. 1995) (rejecting plaintiff's request for jury trial because “[c]aselaw dating back to the eighteenth century . . . makes clear that the constitutional right to jury trial does not survive the entry of default”); CountrymAn Nevada, LLC. v. Suarez, No. 6:15-CV-0436-SI, 2016 WL 5329597, at *4-5 (D. Or. Sept. 22, 2016) (overruling plaintiff's request for jury trial after default); Sonoco Prod. Co. v. Guven, No. 4:12-CV-00790-BHH, 2015 WL 127990, at *7 n.5 (D.S.C. Jan. 8, 2015) (holding that “parties do not have the right to a jury trial as to the amount of recovery” after default judgment is entered); Estate of Faull v. McAfee, No. 613CV1746ORL31KRS, 2015 WL 6125309, at *4 (M.D. Fla. Oct. 16, 2015) (ruling plaintiff was not entitled to jury trial after defendant's default).[3] Wright and Miller also agree that, after default, “neither side has a right to a jury trial on damages.” 10A Fed. Prac. & Proc. Civ. § 2688 (4th ed.).

         As for any statutory right that Rule 38(a) might protect, Plaintiff has identified neither a provision of the FCRA that guarantees a jury trial nor a case so holding. True, he points to several cases in which a jury ultimately decided FRCA claims. (Dkt. 57 at 4 n.3, 10 n.4). But those cases involved a full trial on the merits (not default), and thus were premised on a Seventh Amendment (not statutory) right, which as discussed is no longer guaranteed.

         Further, even if the FCRA generally granted the right to a jury trial, that would not guarantee a jury after default. “Despite the reference to a ‘federal statutory right to a jury trial, ' courts have interpreted the language of Rule 55 as preserving a right to a jury trial only in the atypical situation where a statute specifically preserves the jury trial right even after a default.” Manno v. Tennessee Prod. Ctr., Inc., 657 F.Supp.2d 425, 429-30 (S.D.N.Y. 2009). That is, the statute must protect the right in the specific context of default; the only statute to do so-28 U.S.C. § 1874-is not implicated here. See Sells v. Berry, 24 F. App'x 568, 572 (7th Cir. 2001); Meyers v. Lakeland Supply, Inc., 133 F.Supp.2d 1118, 1119 (E.D. Wis. 2001) (holding that, even where statute provided general jury trial right, it failed to provide one in case of default); Benz, 164 F.R.D. at 115-16 (protection in Rule 55(b)(2) only “applies to statutes requiring jury trials specifically after default has occurred”); Shepherd, 862 F.Supp. at 492 n.4; Offei v. Omar, No. 11 CIV. 4283 ...

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