Anbang Group Holdings Co. Limited v. Zhou

Background

The plaintiffs moved for default judgment against Haibin Zhou, World Award Foundation Inc., Amer Group LLC, An Bang Group LLC, AB Stable Group LLC, Andy Bang LLC, SHC Group LLC, and SHR Group LLC. The order describes the case as a federal civil action under the Racketeer Influenced and Corrupt Organizations Act, commonly called RICO. This order does not provide a detailed description of the alleged conduct beyond referring to the plaintiffs’ RICO claims and the damages they sought.

Jurisdiction

The court held that it had subject-matter jurisdiction because the case was a federal RICO action. It also held that it had personal jurisdiction over the defendants. The court stated that Zhou resides in California, the entities are based in California, many of the targeted properties are in California, and one of the alleged sham lawsuits was filed in California. The court further stated that the RICO statute independently provided a basis for jurisdiction over the alleged nationwide enterprise.

Default judgment

Default judgment is a judgment entered when a defendant does not respond to a lawsuit. The court applied the factors from Eitel v. McCool and found that each factor favored entering default judgment. It found that the complaint stated credible RICO claims and that the plaintiffs had submitted reliable supporting evidence. The defendants were properly served, were aware of the lawsuit, and never appeared. The court stated that their failure to respond meant that no material facts appeared to be disputed, but also that their failure to appear made a decision on the merits impossible.

Award and disposition

The court granted the motion for default judgment against all eight named defendants. It awarded the plaintiffs $14,656,205.91 in treble damages—three times the underlying damages—plus postjudgment interest under 28 U.S.C. § 1961(a). Because the judgment followed the defendants’ failure to appear rather than an adversarial merits determination, this opinion is classified as a procedural order.