Procedural Missteps Lead to Default Judgment

In United Construction Products, Inc. v. Tile Tech, Inc., No. 2016-1392 (Fed. Cir. December 15, 2016), the Federal Circuit affirmed the district court’s entry of default judgment against Tile Tech. The panel noted that, throughout the course of the litigation, Tile Tech repeatedly failed to comply with discovery requests—including an order to compel. Applying Ninth Circuit precedent on default judgments, the Court found that four of the five Malone factors favored dismissal: (1) the public’s interest in expeditious resolution of litigation; (2) the lower court’s need to manage its docket without routine noncompliance; (3) Tile Tech’s failure to comply with discovery requests prejudicing the plaintiff’s ability to adjudicate the matter fairly; and (4) the lack of availability of less drastic sanctions. The Court held that the last factor—public policy favoring disposition of cases on their merits rather than dismissal by default judgment—always weighed against default judgment.

Observing the lower court’s thorough consideration of the Malone factors, the Federal Circuit held that there was no abuse of discretion in issuing the default judgment. Further, it emphasized that a finding of willful, disobedient conduct of a litigant is sufficient to warrant such a dismissal.