Case 1:10-cv-00897-RJL Document 31 Filed 07/28/10 Page 1 of 7

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

)
DANIEL PARISI, et al., )
)
Plaintiffs, )
)
v. ) No. 1:10-cv-00897-RJL
)
LAWRENCE W. SINCLAIR a/k/a “Larry )
Sinclair”, et al., )
)
Defendants. )
)

REPLY MEMORANDUM IN SUPPORT OF

PLAINTIFFS’ MOTION FOR DEFAULT JUDGMENT
AGAINST DEFENDANT SINCLAIR PUBLISHING, INC.

Plaintiffs, Daniel Parisi, Whitehouse.com Inc., Whitehouse Network LLC, and White

House Communications Inc. (collectively referred to as “plaintiffs”), by counsel, files this reply

memorandum in support of its motion for a default judgment against defendant Sinclair

Publishing, Inc. (“SPI”). No opposition to the motion was timely filed by SPI.1 Defendant,

Amazon.com, Inc. (“Amazon”) did file a response, but it presents no valid reason to deny the

requested default judgment.2

ARGUMENT

Amazon argues that a default judgment should not be entered against one defendant when

other defendants that have appeared remain and inconsistent results “will necessarily arise” from

1
Plaintiffs filed their motion for a default judgment on July 8, 2010. (Dkt. No. 24).
Sinclair served a purported opposition on July 21, 2010 by email and mail. However, the
document has not appeared on the Court’s docket and thus it was not timely filed. Local R. 7(b);
Fed. R. Civ. P. 5(d)(1). In addition, Sinclair failed to sign the response, contrary to Fed. R. Civ.
P. 11(a).
2
No party has questioned the relief sought in plaintiffs’ motion – an award of damages of
$5 million, an accounting and imposition of a constructive trust as to SPI’s proceeds from the
defamatory statements and its ownership of any assets, including copyrights.
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the default judgment. (Dkt. No. 30 at 2). However, this Court has discretion to enter a default

judgment against less than all the defendants under Fed. R. Civ. P. 54(b).3 See, e.g., Curtiss-

Wright Corp. v. General Electric Co., 446 U.S. 1, 8 (1980). Amazon’s reliance on Whelan v.

Abell, 953 F.2d 663 (D.C. Cir. 1992), is misplaced. There, the District Court entered a default

judgment against one defendant in a multiple defendant case. The non-defaulting defendants

went on to be successful in the litigation. The District Court then vacated the default judgment

based on the ruling on the merits in favor of the other defendants. The D.C. Circuit reversed the

District Court’s order vacating the default judgment. Id. at 674-75. The Court of Appeals relied

on Carter v. District of Columbia, 795 F.2d 116 (D.C. Cir. 1986), which held that in cases

involving multiple defendants, a default order that is inconsistent with a judgment on the merits

must be set aside only when liability is truly joint – “that is, when the theory of recovery

requires that all defendants be found liable if any one of them is liable – and when the relief

sought can only be effective if judgment is granted against all.” Whelan, 953 F.2d at 674-75

(discussing Carter).

Here, joint liability is not at issue. While reserving all rights, particularly since there has

not been any discovery, it does not appear that there is joint liability, such that if one defendant

tortuously wronged plaintiffs, then all defendants would be liable. Stiffarm v. Burlington

3
Rule 54(b) provides, in relevant part, that: “When an action presents more than one
claim for relief – whether as a claim, counterclaim, crossclaim, or third-party claim – or when
multiple parties are involved, the court may direct entry of a final judgment as to one or more,
but fewer than all, claims or parties only if the court expressly determines that there is no just
reason for delay.”

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Northern R. Co., 1996 U.S. App. LEXIS 8529, *10-11 (9th Cir. Apr. 1, 1996) (unpublished op.).

Consequently, Amazon’s argument as to joint liability is misplaced.4

Plaintiffs’ complaint alleges that some defendants may be jointly and severally liable.

(Dkt. No. 1 ¶ 53). In In re Uranium Antitrust Litig., 617 F.2d 1248 (7th Cir. 1980), the plaintiff

sued 29 foreign and domestic corporations for violating the antitrust laws. Plaintiff sought and

obtained default judgments against nine defendants. The Court of Appeals held that default

judgments against less than all of the defendants was not precluded where the alleged liability

was joint and several. The Court explained the difference between “joint” and “several”

liability:

Joint or common liability arises when a tortious act is committed

by several persons acting in concert. It means that each tortfeasor
is entirely responsible for the damage resulting from that concerted
conduct. A successful plaintiff may look to any one of the
defendants for full satisfaction of a damage award. Several or
independent liability, on the other hand, arises when one defendant
is found to have committed a tort without the aid of other
defendants. A finding of liability as to one defendant is consistent
with a finding of no liability as to the others, so long as there is no
relationship between the parties requiring vicarious liability.

Id. at 1257 (footnotes omitted). The Court went on to find that when the alleged liability is joint

and several, granting a default judgment as to only some of the defendants is proper:

If all twenty-nine of the defendants were found culpable of price-

fixing, Westinghouse could seek to satisfy its judgment and
damages award against all the defendants, or single out one price-
fixer. But at the same time, only a small group of the defendants
might be found to have conspired to fix the price of uranium, and
the remaining defendants would be exonerated. Such a finding of
liability as to nine defendants is not inconsistent with a finding of
no liability as to the other twenty, because liability is potentially
“several” as well as “joint”.

4
Plaintiffs do note, however, that SPI could be liable for the wrongful acts of its officer,
Sinclair. That issue, however, does not prevent the Court from issuing a default judgment
against SPI.

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Id. Accordingly, the law does not preclude the entry of default judgment against a group of nine

defaulting defendants prior to adjudication on the merits as to the remaining defendants, where

liability is joint and several, as is the case here. Id. at 1258; see also Whelan, 953 F.2d at 674;

Carter, 795 F.2d at 137; International Controls Corp. v. Vesco, 535 F.2d 742, 746-47 n.4

(2d Cir. 1976). Here, given SPI’s utter failure to answer the complaint and Sinclair’s purported

“dissolution” of SPI to avoid having to do so,5 there is no just reason for delay, and a default

judgment should be entered under Rules 55(b) and 54(b).

Further, Amazon need not worry about being collaterally estopped from raising any

defense or argument since there is no doubt that “default judgments do not have a preclusive

effect.” Casco Marina Development, LLC v. M/V Forrestall, 384 F. Supp. 2d 154, 159 (D.D.C.

2005) (emphasis added). “When a default judgment is entered where the defendant does not

answer or appear to dispute the issue of liability, this fails the ‘actually litigated’ requirement of

collateral estoppel.” Id.; see also Global NAPS, Inc. v. Verizon New England Inc., 2010 WL

1713240, *18 (1st Cir. Feb. 4, 2010) (“default judgment generally is not a judgment on the

merits of the underlying claim in issue preclusion cases because a default judgment does not

decide the merits of that claim.”); Lee by Lee v. United States, 124 F.3d 1291, 1296 (Fed. Cir.

1997) (“When judgment is issued as the result of a default, however, the underlying issues have

not been actually litigated. For that reason, a default judgment cannot serve to preclude the

litigation of issues under the doctrine of collateral estoppel.”); Weinstein v. Islamic Republic of

Iran, 175 F. Supp. 2d 13, 18 (D.D.C. 2001) (“default judgments . . . are normally not given

preclusive effect under the collateral estoppel doctrine because the issues in the cases have not

5
See, e.g., Dkt. No. 23 at 3 (“Defendant Lawrence W. Sinclair a/k/a “Larry Sinclair” and
Defendant Sinclair Publishing, Inc are effective June 29, 2010 one in the same. Sinclair
Publishing, Inc has been dissolved.”).

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been actually litigated.”); RESTATEMENT (SECOND) OF JUDGMENTS § 27, Comm. (e) (1980)

“A judgment is not conclusive in a subsequent action as to issues which might have been but

were not litigated and determined in the prior action. . . . In the case of a judgment entered by

confession, consent, or default, none of the issues is actually litigated.”).

Thus, a default judgment against SPI would not preclude Amazon – or other defendants

that appear and defend plaintiffs’ claims – from raising any argument or defense. Default would

simply not result in collateral estoppel. As a result, plaintiffs do not oppose Amazon’s request

(Dkt. No. 30 at 2 ¶ 4) that the default judgment specify that the non-defaulting defendants,

including Amazon, will not be held vicariously or jointly liable for any default or damages

attributable to SPI based on this default judgment against SPI, and that the default judgment does

not reflect a determination of any facts or quantification of damages with respect to defendants

other than SPI. A revised proposed order is being filed herewith.

As noted above, there has been no opposition filed as to the specific relief sought in

plaintiffs’ motion – $5 million, an accounting and imposition of a constructive trust as to SPI’s

proceeds from the defamatory statements and its ownership of any assets, including copyrights,

to satisfy the judgment. As also set forth above and in the proposed order submitted herewith,

plaintiffs will not seek to hold the non-defaulting defendants liable for payment of SPI’s

damages. Thus, any default judgment should include the relief sought.

Moreover, absent an immediate default judgment, Sinclair and SPI will be able to hide or

strip assets and avoid compensating plaintiffs for SPI’s defamatory and other wrongful conduct.

Sinclair has publicly disclosed he has “dissolved” SPI in an effort to avoid liability. (Dkt. No. 23

at 3; Exs. A-D). He has also asserted that he personally owns SPI’s copyright in the book in

dispute. (Ex. B). Sinclair has written that the copyright on his book, owned by SPI, is for sale.

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(Ex. C). Moreover, Sinclair seems to be selling or giving away assets. (Exs. C-D). A default

judgment should be entered to preclude SPI and Sinclair from attempting to hide or transfer

assets in a blatant attempt to avoid paying compensation to plaintiffs for SPI’s wrongful acts.

CONCLUSION

For the foregoing reasons, plaintiffs respectfully request that their motion for a default

judgment against SPI be granted.

Dated: July 28, 2010 Respectfully submitted,

/s/ Richard J. Oparil

Richard J. Oparil (D.C. Bar No. 409723)
PATTON BOGGS LLP
2550 M Street, NW
Washington, DC 20037
(202) 457-6000
(202) 457-6315 (fax)

Kevin M. Bell
PATTON BOGGS LLP
8484 Westpark Drive
McLean, VA 22102
(703) 744-8000
(703) 744-8001 (fax)

Attorneys for Plaintiffs

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CERTIFICATE OF SERVICE

I hereby certify that on July 28, 2010, a copy of the foregoing was served on counsel for

the parties that have appeared in the case by the Court’s ECF system and on the following by

first class mail:

Lawrence W. Sinclair
9 Spring Drive
Port Orange, FL 32129

Sinclair Publishing, Inc.

9 Spring Drive
Port Orange, FL 32129

s/ Richard J. Oparil
Richard J. Oparil (DC Bar No. 409723)

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