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Amring Pharmaceuticals Inc. v. UPS-Supply Chain Solutions, Inc.

United States District Court, W.D. Kentucky, Louisville

April 19, 2018

AMRING PHARMACEUTICALS, INC., PLAINTIFF
v.
UPS-SUPPLY CHAIN SOLUTIONS, INC., et al., DEFENDANTS

          MEMORANDUM OPINION & ORDER

          THOMAS B. RUSSELL, SENIOR JUDGE UNITED STATES DISTRICT COURT

         Memorandum Opinion & Order This matter comes before the Court upon Motion by Plaintiff Amring Pharmaceuticals, Inc., (“Amring”), for default judgment against Defendant Edin Transfer, Inc. (“Edin”). [DN 22.] This Motion was filed on January 24, 2018, and Edin has failed to file a Response. For the following reasons, IT IS HEREBY ORDERED that Amring's Motion [DN 22] is GRANTED.

         I. Factual Background

         The following Factual Background section is taken from Amring's Complaint, [DN 1], Amended Complaint, [DN 10], and Amring's instant Motion. [DN 22.] Amring is a pharmaceutical company “which sells, among other…goods, desmopressin acetate, ” which “is a man-made form of a naturally occurring hormone, and is used to treat bed-wetting, central cranial diabetes insipidus and increased thirst and urination caused by head surgery or head trauma.” [DN 1, at 3.] According to Amring, due to “its chemical makeup, desmopressin acetate must be stored between 2-8 degrees Celsius. Deviation from this temperature range for any significant time will result in permanent damages and render the drug unusable.” [Id.] Amring and Defendant UPS-Supply Chain Solutions, (“UPS-SCS”), entered into a logistical services agreement, part of which entrusted UPS-SCS to complete two shipments of desmopressin from Chicago, Illinois to Brooks, Kentucky. [Id.] Amring believes that UPS-SCS subcontracted these shipments to Defendant Mid-American Specialized Transport (“MAST”). [Id. at 4.]

         The first shipment of the drug, in March 2016, according to remote data loggers installed with the shipment by Amring, was allegedly subjected to temperatures below 0 degrees Celsius for at least ten hours during the shipment to Kentucky. [Id.] Amring alleges that “[t]he declared value of damaged product with respect to this claim was $447, 952.49.” [Id.] The second shipment, which occurred in April 2016, had the same result, with the drug allegedly being subjected to temperatures below 0 degrees Celsius for at least ten hours. [Id. at 5.] This time, the alleged loss in value was $357, 870.90. [Id. at 6.] On July 28, 2017, Amring filed an Amended Complaint. [DN 10.] Therein, Amring added two more defendants to the action: Edin and CKR Transport, Ltd. (“CKR”). [Id.] According to the Amended Complaint, “MAST provided transportation services” for the drug “and contracted with Edin for the transport of [it]…from O'Hare International Airport to Brooks, Kentucky.” [Id. at 6.] In other words, Amring alleges that “Edin assumed responsibility for, and was responsible for, the care and custody of the March Shipment [of the drug]….” [Id. at 19.] Amring alleges that the portions of the shipment were damaged while in the custody and control of Edin, and that Edin is liable for the loss. [Id.]

         As a result of these incidents, Amring filed suit in federal court and, in its Amended Complaint, it alleges the following causes of action (1) breach of contract against UPS-SCS; (2) breach of the duty to cooperate against UPS-SCS; (3) breach of the implied covenant of good faith and fair dealing against UPS-SCS; (4) negligence against UPS-SCS; (5) breach of contract and/or duties under the Carmack Amendment against MAST; (6) a bailment claim against MAST; (7) negligence against MAST; (8) breach of a third party beneficiary contract against MAST; (9) breach of the implied covenant of good faith and fair dealing against MAST; (10) breach of contract and/or duties under the Carmack Amendment against Edin; (11) a bailment claim against Edin; (12) breach of contract and/or duties under the Carmack Amendment against CKR; and (13) a bailment claim against CKR. [See generally id.]

         II. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Next, under Rule 55(b), default judgment may be entered either by the Clerk under subsection (b)(1), or by the Court under subsection (b)(2). Rule 55(b)(2) permits the Court to enter a default judgment where the plaintiff's claim is not for a sum certain. See Fed.R.Civ.P. 55(b)(1)-(2). Specifically, “the party must apply to the court for a default judgment, ” which the Court may then set aside at a later date pursuant to Rule 60(b). See Fed.R.Civ.P. 55(b)(2), (c).

         Importantly, in reaching a determination regarding whether to enter a default judgment, courts in the Sixth Circuit usually consider factors such as the following:

[1] the amount of money potentially involved; [2] whether material issues of fact or issues of substantial public importance are at issue; [3] whether the default is largely technical; [4] whether plaintiff has been substantially prejudiced by the delay involved; [5] and whether the grounds for default are clearly established or are in doubt.

Joe Hand Promotions, Inc. v. Dick, No. 5:15-cv-00202, 2017 WL 1313792, at *2 (Apr. 5, 2017) (quoting 10A Charles A. Wright et al., Federal Practice and Procedure § 2685 (4th ed.), Westlaw (database updated January 2017) (footnotes omitted)).

         III. Discussion

         Amring filed its original Complaint in this action on March 30, 2017. [DN 1.] Later, it filed an Amended Complaint, naming Edin as a co-defendant in the action, on July 28, 2017. [DN 10.] In the interim period spanning approximately nine months, Edin has not entered an appearance or otherwise answered the Amended Complaint, [id.], the Motion for Entry of Default, [DN 18], or the Motion for Default Judgment. [DN 22.] In short, Edin has failed to defend this action in any way. Thus, the question becomes whether, after having properly applied for an entry of default with the Clerk of Court, Amring is now entitled to a ...


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