Kyle v. Green Bird, LTD, No. 5:21-cv-00919 (BKS/ML) (W.D.N.Y. Aug. 4, 2023) [click for opinion]
On or about March 12, 2020, Amazon shipped a waffle maker and a sickle to Plaintiff Grant W. Kyle, a New York resident. Defendant Green Bird Ltd. ("Green Bird"), a foreign business corporation with a principal place of business in Shen Zhen City, Guangdongsheng, was the third-party seller of the sickle.
On or about March 14, 2020, Kyle opened the package, but the "packaging on the sickle was insufficient and did not properly protect [Kyle] . . . while removing the items from the box." Kyle alleged that Green Bird "failed to provide any sheathing or other protective equipment or encasing on the sickle," or "any warnings on the sickle or packaging to alert" Kyle about "the dangers of the product, namely its sharp blade." As Kyle attempted to remove the items from the box, "two digits of his left hand were sliced by the unprotected blade of the sickle." As a result, Kyle "suffered severe and permanent injuries to his left hand." Kyle alleged that he "has and will continue to suffer great physical and mental pain; severe and permanent scarring of his body; lost wages and medical expenses."
Kyle brought a diversity action in the U.S. District Court for the Western District of New York, asserting negligence claims against Green Bird and Amazon. The claims against Amazon were dismissed by stipulation. However, Green Bird failed to answer the Amended Complaint or otherwise appear in the action. Kyle thus moved for a default judgment as to liability against Green Bird under Rule 55(b)(2) of the Federal Rules of Civil Procedure, and requested a hearing to determine the amount of damages.
In considering Kyle's motion, the court started by explaining that Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining a default judgment. First, under Rule 55(a), the plaintiff must obtain a clerk's entry of default. Second, the plaintiff must apply to the court for entry of a default judgment.
The court explained that Kyle properly served Green Bird, which is located in China, in accordance with the Judge's order granting Kyle's motion for alternative service. Then Kyle filed a Request for Entry of Default against Green Bird, submitted an affidavit affirming that Green Bird (1) was not an infant, incompetent, or an active-duty member of the United States Armed Forces; (2) was properly served; and (3) had defaulted in the action. Next, Kyle received a clerk's entry of default against Green Bird, and moved for default judgment. Kyle served the motion on Green Bird by mail, and Green Bird filed no response. Therefore, the court held that Kyle had met the procedural requirements and was entitled to an order of default.
Later, the court issued a text order noting that Kyle's motion for default judgment did not address the issue of whether the court had personal jurisdiction over Green Bird. The court directed Kyle, to the extent he sought to proceed on the motion for default judgment, to provide evidence and a memorandum of law addressing whether the court had personal jurisdiction over Green Bird. Kyle submitted a memorandum of law with additional evidence responsive to the court's text order.
The court explained that, although a district court should not raise personal jurisdiction sua sponte when a defendant has appeared and consented, voluntarily or not, to the jurisdiction of the court, when a defendant declines to appear before a court grants a motion for default judgment, it may first assure itself that it has personal jurisdiction over the defendant. The court explained that, while the Second Circuit has left open the question whether a district court must investigate its personal jurisdiction over a defendant before entering a default judgment, a default judgment is void if it is rendered by a court that lacks jurisdiction over the parties.
The court thus went through the personal jurisdiction analysis to assure itself it had personal jurisdiction. The court held that Green Bird had transacted business in New York sufficient to create jurisdiction under New York's long-arm statute, CPLR § 302(a)(1), because Green Bird purposefully used Amazon to sell into the United States and New York.The court also found that the dispute directly arose from Green Bird's transacting of business in New York. The court then determined that there were minimum contacts with the forum sufficient to satisfy the due process requirements of personal jurisdiction because Green Bird purposefully sold products into New York.
The court then turned to the issue of liability and determined that, by failing to appear in the action or respond to Kyle's Amended Complaint, Green Bird was deemed to have admitted the factual allegations in the Amended Complaint with respect to liability. The court noted that, even though Green Bird admitted all the facts as true, the court was not required to find that the Amended Complaint sufficiently showed liability. But the court held that Kyle sufficiently showed liability as to negligence due to a failure to warn and design defect. Thus, the court entered a default judgment against Green Bird.
The court noted, however, that damages are not proven based on a finding of liability. Kyle thus requested, and the court permitted, an evidentiary hearing on the existence and amount of damages.
Jeffrey Butler of the Chicago office contributed to this summary.