The opinion of the court was delivered by: Gladys Kessler United States District Judge
Plaintiffs, who are various family members of Esh Kodesh Gilmore, the deceased victim of an alleged terrorist shooting in Jerusalem, Israel on October 30, 2000, bring this action against Defendants Palestinian Interim Self-Government Authority ("PA") and Palestinian Liberation Organization ("PLO") under the Anti-Terrorism Act of 1991 ("ATA"), 18 U.S.C. § 2331, et seq. On January 29, 2007, after Defendants failed for nearly ten months to file an Answer to Plaintiffs' Complaint, this Court granted Plaintiffs' Motion to Enter Default against Defendants PA and PLO [Dkt. No. 92]. This matter is presently before the Court on Defendants' Motion to Vacate Clerk's Entry of Default [Dkt. No. 107] under Federal Rule of Civil Procedure 55(c). Upon consideration of the Motions, Oppositions, Replies, and the entire record herein, and for the reasons set forth below, the Motion to Vacate is granted.
This action was filed on April 18, 2001 by various family members and the estate of U.S. citizen Esh Kodesh Gilmore. Mr. Gilmore was killed on October 30, 2000 in a shooting at the National Insurance Institute--the equivalent of the United States' Social Security Administration--in East Jerusalem. At the time of his death, Mr. Gilmore was twenty-five years old, married, and the father of an infant daughter. Plaintiffs allege that the shooting was planned and carried out by a terrorist cell consisting of officers in a PA security unit known as "Force 17" and members of the armed PLO faction known as "Tanzim." Plaintiffs also allege that the cell was operated and controlled by Defendants PA and PLO. See Complaint ¶¶ 17-30.
The instant Motion follows years of protracted filings in this case. The first default was entered against Defendants PA and PLO on December 20, 2001 [Dkt. No. 18], after Defendants failed to file a timely Answer. On January 29, 2002, more than five months after service and forty days after entry of the default, Defendants filed a Motion to Vacate Default, which was granted "in light of the strong preference in this jurisdiction for rulings on the merits, and in the absence of any prejudice suffered by Plaintiffs." April 17, 2002 Order [Dkt. No. 28]. Defendants had also filed a Motion to Dismiss with their Motion to Vacate, which--due in part to the many requests made by both parties for leave to file additional briefs and for extensions of time,*fn1 and due in part to the demands of the Court's calendar--was not decided until March of 2006. March 7, 2006 Order [Dkt. No. 73]. The Motion to Dismiss was granted as to certain individual Defendants no longer named in this case, and denied as to Defendants PA and PLO.
On April 24, 2006, after the Motion to Dismiss was denied, Defendants filed an Answer through their attorney, Maher Hanania. At a December 5, 2006 status conference, Defendants' other counsel, Ramsey Clark, then informed the Court that Mr. Hanania had filed the Answer without proper authorization from Defendants, that he had since been fired by Defendants, and that Defendants intended to proceed without responding to the Complaint, but would raise post-judgment challenges on jurisdictional grounds. Defs.' Mot. to Vacate at 8-9 [Dkt. No. 107]. After Mr. Hanania confirmed that he lacked the proper authority to file an Answer, Plaintiffs' Motion to Strike the Answer from the record was granted. Minute Order of January 7, 2007. Thus, by January 2007--ten months after the Motion to Dismiss was denied with respect to Defendants PA and PLO--no Answer had been filed and none was expected.
In light of these facts, a second default was entered against Defendants PA and PLO on January 29, 2007. January 29, 2007 Order [Dkt. No. 92]. The case was then referred to Magistrate Judge Robinson for a hearing on damages. [Dkt. No. 92]. The hearing, which was spread out between June and December 2007, lasted a total of six days, and Defendants fully participated in it.
Defendants represent that, about the same time that the second default was entered, Defendant PA--under the authority of President Mahmoud Abbas and then-Finance Minister Salam Fayyad (who is currently the Prime Minister)--consulted with the U.S. Department of State on whether to appear in U.S. courts to defend against suits such as this one. After being encouraged by U.S. Secretary of State Condoleezza Rice to participate in legal proceedings, Defendants committed to litigating the claims against them and obtained new counsel in May 2007. Mot. to Vacate at 9. Prime Minister Fayyad issued a declaration to that effect, noting that "the importance of [litigating these cases] was not fully appreciated by the PA government, as a whole, until recently." Declaration of Prime Minister Salam Fayyad at 3-4, Ex. C to Defs.' Mot. to Vacate.
Six months later, in November 2007, after five of the six days spent on the damages hearing but before Magistrate Judge Robinson had reached any decision, Defendants filed the present Motion to Vacate Clerk's Entry of Default. The Court then requested the United States file a statement of interest regarding the issues presented in Defendants' Motion. The Government to declined to file such a statement, and cautioned that no inference should be drawn from its decision not to participate. Notice of the United States [Dkt. No. 151].
Under Federal Rule of Civil Procedure 55(c), a court "may set aside an entry of default for good cause." Fed. R. Civ. P. 55(c) ("Rule 55(c)"). The court must balance three factors in evaluating whether a party has demonstrated good cause: (1) whether the default was willful; (2) whether a decision to set aside the default would prejudice the plaintiffs; and (3) whether the defendant has presented a meritorious defense. Keegel v. Key West & Caribbean Trading Co., Inc., 627 F.2d 372, 373 (D.C. Cir. 1980), Capital Yacht Club v. Vessel Aviva, 228 F.R.D. 389, 393 (D.D.C. 2005); see also Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980) (describing approach as requiring balancing of factors). In applying this standard, all doubts shall be resolved in favor of the party moving to set aside the default. Capital Yacht Club, 228 F.R.D. at 393.
While the decision to set aside an entry of default falls within the Court's sound discretion, in this Circuit there are "strong policies favoring the resolution of genuine disputes on their merits." Jackson, 636 F.2d at 835. When the defendant is a foreign sovereign,*fn2 default is especially disfavored because "[i]ntolerant adherence to default judgments against foreign states could adversely affect [the United States'] relations with other nations and undermine the State Department's continuing efforts to encourage foreign sovereigns generally to resolve disputes within the United States' legal framework." Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543, 1551 n. 19 (D.C. Cir. 1987).
First, the Court will consider, pursuant to Rule 55(c), the Defendants' willfulness, any prejudice resulting to Plaintiffs from an order vacating the default, and any meritorious defenses asserted by Defendants. Second, the Court will weigh the significant ...