Proposed FRCP Amendments: Rule 55

December 9, 2014

FCRP updateThe next rule we are going to look at in our series on the proposed amendments to the Federal Rules of Civil Procedure is Rule 55.

The proposed amendment to Rule 55 modifies Rule 55(c) to clarify the relationship between Rule 54(b), Rule 55(c), and Rule 60(b).

Rule 55 (c) currently directs that “the court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b).” Rule 60 (b) provides a list of grounds that may be used to justify relieving a party from a final judgment. ¬†When considering relief from default judgment, some courts have read Rule 55 (c) as requiring the application of the Rule 60(b) grounds even in cases where the default judgment did not dispose of all claims in a lawsuit. These courts have done so despite the fact that Rule 54(b) allows a judgment to “be revised at any time before the entry of a judgment adjudicating all claims and all the parties’ rights and liabilities.”

In order to avoid the incorrect application of Rule 60(b) to non-final default judgments, the proposed amendment to Rule 55(c) adds the word “final” before “default judgment.” Thus, making it clear that relief from a default judgment is only limited by the grounds listed in Rule 60(b) when the default judgment meets the standard for a final judgment under Rule 54(b).

Only three comments on the proposed amendment to Rule 55(c) were received and all were in favor of the change.