Initial Decision Served 6/28/99
Notice Not to Review Served 8/2/99
FEDERAL MARITIME COMMISSION
DOCKET NO. 98-07
CTM INTERNATIONAL, INC.
v.
MEDTECH ENTERPRISES, INC.,
MR. XIN LIU, AND MRS. YANHONG LIU
Complainant, an NVOCC (non-vessel operating common carrier) carried two shipments to China but allegedly was not paid for its services and was given a check by respondents Medtech Enterprises, Inc. and its president, Mr. Xin Liu, who stopped payment after receiving delivery in China. Complainant, alleging violation of section 10(a)(1) of the Shipping Act of 1984, filed a complaint seeking full payment for its services. Respondents filed a counterclaim, alleging damages on an unrelated shipment handled by complainant. The parties appeared to have settled but respondents made one payment under their agreement and stopped further payments. Complainant refiled its complaint, amending it to add as a respondent the corporation's alleged Secretary and Treasurer, seeking the balance of the unpaid freight charges. The corporate respondent and its president have ignored the refiled complaint, failing to answer it, but the new respondent did answer it, denying liability or involvement in the transaction. It is held:
(1) By defaulting, respondent corporation and its president are deemed to have admitted that they violated section 10(a)(1), as alleged, by inducing complainant to surrender the cargo by giving a check that was promptly canceled, thereby causing complainant to lose its cargo lien; respondents' counterclaim is also dismissed with prejudice.
(2) Respondent corporation and its president have compounded their violation by breaching their settlement agreement.
(3) Reparations are awarded to complainant amounting to the original freight and charges due plus interest less the money that complainant received under the dishonored settlement agreement.
(4) Disposition of the claim against the non-defaulting respondent is deferred pending advice of counsel regarding complainant's intentions.
Andrew M. Danas for complainant.
No appearance for respondents Medtech Enterprises, Inc. and Mr. Xin Liu as to amended complaint.
Respondent Mrs. Yanhong Liu for herself.
INITIAL DECISION(1) OF NORMAN D. KLINE, ADMINISTRATIVE LAW JUDGE AS REGARDS RESPONDENTS MEDTECH ENTERPRISES, INC. AND MR. XIN LIU
For the reasons explained below, this Initial Decision is in the nature of a default judgment against two of the three respondents named in the amended complaint in this proceeding. Disposition of the complaint as regards the third named respondent, Mrs. Yanhong Liu, will be deferred pending advice of complainant's counsel.
This case represents an ongoing attempt to collect freight by complainant CTM International, Inc., an NVOCC (non-vessel operating common carrier) that carried two shipments of used medical equipment from New York to Xingang, China, under bills of lading dated September 17 and 23, 1996, but has still not been fully paid for its services.
In its original complaint, served May 28, 1998, CTM alleged that it carried the two shipments pursuant to an agreement between CTM and respondents Medtech Enterprises and Mr. Xin Liu and, in addition, advanced payment of various shipping rates and charges, including insurance, inland hauling, stripping, carting and re-loading. Moreover, it was alleged, these two respondents issued a check to CTM on October 25, 1996, in order to secure release of the cargo in China but upon securing such release, on October 30, 1996, respondents stopped payment on the check, causing CTM to be out of pocket in the amount of $10,791.46. CTM alleged that respondents had fraudulently caused CTM to lose its lien on the cargo, in violation of section 10(a)(1) of the Shipping Act of 1984, and sought an award of reparations in the foregoing amount plus interest, costs, and reasonable attorney's fees. CTM alleged that it had made repeated demands for payment without success and concluded that "[b]y reason of the facts alleged . . . in particular, issuing a bad check or issuing a check upon which payment was subsequently stopped in order to induce release of the cargo and cause Complainant to lose its lien on the cargo, Respondents Medtech and Xin Liu have violated, and continue to violate, Section 10(a)(1) of the Shipping Act of 1984, by knowingly and willfully, by means of false representation and unfair device or means, obtaining or attempting to obtain ocean transportation for property at less than the rates and charges that would otherwise be applicable."
Respondents failed to file their answers to the complaint timely and were ordered to show cause why judgment should not be entered against them. See Notice of Default and Order to Show Cause, June 22, 1998. However, the default was vacated upon respondents' showing that at the time of service of the original complaint respondent Mr. Liu was in China and his wife, Mrs. Liu, who was not fluent in English, had to secure the services of counsel. With the assistance of counsel (who has since withdrawn from the case), the two respondents denied the allegations of their unlawful behavior and filed a counterclaim against CTM, alleging that CTM damaged an unrelated shipment in the amount of $100,000 and that respondents' claims against CTM had not been resolved. I noted that such damage claims on other shipments have not been held to be valid defenses to a section 10(a)(1) complaint, citing Waterman Steamship Corporation v. General Foundries, Inc., 26 S.R.R. 1173 (I.D.), adopted in relevant part, 26 S.R.R. 1424 (1994). See Notice of Default Vacated, July 22, 1998. After CTM answered the counterclaim, the parties agreed to a discovery schedule leading to a possible motion for summary judgment. However, before CTM filed its evidentiary case, counsel advised that the parties had reached settlement and on March 16, 1999, their settlement agreement was approved by the undersigned and made administratively final by the Commission on April 22, 1999. See Motion to Approve Settlement Agreement and to Dismiss Complaint Granted, March 16, 1999.
By the terms of their settlement agreement, respondents Medtech and Mr. Liu agreed to pay CTM $10,000 in return for CTM's release of its claim against these respondents. Moreover, CTM agreed to assign to these respondents CTM's rights against a third party that might have damaged respondents' cargoes. Respondents agreed to transfer the moneys to CTM in China. However, the ruling approving the settlement and dismissing the complaint was conditioned on the parties carrying out their obligations, failing which the ruling of approval would be vacated and the complaint would be re-activated. See Motion to Approve Settlement, etc., cited above. Unfortunately, according to CTM, respondent Xin Liu caused only the amount of $2,409.63 to be transferred to a designated bank account in China for CTM, leaving a balance of $8,381.83 still due and owing. Accordingly, on March 12, 1999, CTM filed an amended complaint containing the above allegations and added Mrs. Yanhong Liu, who allegedly is the Secretary and Treasurer of Medtech enterprises, as a respondent. See amended complaint, para. 4. Moreover, CTM alleges that respondent Yanhong Liu "had co-responsibility for the day-to-day operations of Respondent Medtech Enterprises, Inc., and the handling of the shipments involved in this complaint." (Id.) Furthermore, CTM alleges that in addition to being an officer of the corporation Medtech Enterprises, respondent Yanhong Liu is a director, shareholder and co-owner of the corporate respondent. (Id. at para. 5.) She also allegedly participated in the issuance of a check and in the decision to stop payment on the check, thereby fraudulently causing CTM to lose its lien on the cargo, and together with the other two respondents, failed to remit the balance due on freight owed to CTM despite repeated demands for payment by CTM. (Id. at paras. 9, 10, 11, 12.)
Respondents Medtech Enterprises, Inc. and Mr. Xin Liu filed answers to the original complaint, which was served on the same corporate address in Houston as was the amended complaint, and indeed, they even filed a counterclaim. However, these two respondents did not file answers to the amended complaint, although the new respondent, Mrs. Liu, served at the same corporate address, did file her answer to the amended complaint. The first two respondents, however, declined to claim the amended complaint after being notified by the postal service of its arrival but subsequent rulings served at the corporate address have not been declined. Accordingly, the first two respondents were notified that they were in default and were ordered to show cause why judgment should not be issued against them. See Notice of Default and Order to Show Cause, June 11, 1999. They have not replied to the Order to Show Cause and have therefore defaulted.(2) Consequently, the law deems them to have admitted the well-pleaded allegations in the amended complaint as to the violations as well as to the liquidated or easily determined damages that CTM is seeking. See Bermuda Container Line Ltd. v. SHG International Sales, Inc., et al., 28 S.R.R. 312, 314 (1998), and cases cited therein; Docket No. 98-24 - Go/Dan Industries, Inc. and Atlantic Customs Brokers, Inc. v. Eastern Mediterranean Shipping Corp. et al. (I.D., December 10, 1998), at 4-5, F.M.C. notice of administrative finality, January 27, 1999, 28 S.R.R._____; 10 Wright, Miller and Kane, Federal Practice and Procedure, sec. 2688 at 447-448; 46 Am Jur 2d, Judgments, secs. 307, 311, 321.
I conclude therefore that respondents Mr. Xin Liu and Medtech Enterprises, Inc. have violated section 10(a)(1) of the Shipping Act of 1984, as alleged in the original and amended complaint, by inducing complainant CTM to carry a shipment and to surrender the cargo without being paid the freight due, thereby causing CTM to lose its cargo lien by the unjust and unfair device of giving CTM a check on which respondents promptly stopped payment once they had received the cargo on the invalid grounds that CTM had damaged another shipment. Such conduct has been held to violate section 10(a)(1). See Waterman Steamship Corporation v. General Foundries, Inc., 26 S.R.R. 1173 (I.D.), adopted in relevant part, 26 S.R.R. 1424 (1994).(3) In this case such conduct has been aggravated by the fact that respondents Xin Liu and Medtech Enterprises even breached a settlement agreement by failing to pay CTM what they had promised under that agreement.
It is hereby ordered that respondents Mr. Xin Liu and Medtech Enterprises are jointly and severally liable and shall pay to CTM reparations in the following amount: the original unpaid amount claimed ($10,791.46) plus interest running from October 25, 1996, the date of respondents' check on which they later stopped payment, less the $2,409.63 that respondents have already paid to CTM. See 46 C.F.R. 502.253.(4) Complainant is also entitled to petition for reasonable attorney's fees at the appropriate time. See 46 C.F.R. 502.254.
Dismissal of Respondents' Counterclaim
As I noted above, respondents Medtech Enterprises, Inc. and Mr. Xin Liu, together with their answers to the original complaint, filed a counterclaim against CTM International. These respondents sought an award of $100,000, alleging that CTM had violated section 10(d)(1) of the Shipping Act of 1984 by improperly packaging and handling cargoes carried on an earlier unrelated shipment that had occurred in July 1996. A loss and damage claim on an unrelated shipment could possibly fall under admiralty law but, in any event, it has been held that such a claim is not a defense to a carrier's claim that a respondent has failed to pay lawful freight by an unjust or unfair device or means. See Waterman Steamship Corp. v. General Foundries, Inc., cited above, 26 S.R.R. at 1182-1183, and the cases cited therein.
Whatever merit there might have been to these respondents' counterclaim, by breaching their settlement agreement and walking away from the case by declining to receive the amended complaint, they have, in effect, abandoned the counterclaim and become subject to its dismissal with prejudice. See In re Mack, cited above, 330 F. Supp. at 738, in which the U.S. District Court in Houston issued summary judgment for the government against a seaman who had failed to litigate his defenses and to advise the court of his current address. See also Rule 41(b) and (c), F.R.C.P. (dismissal of a complaint or counterclaim with prejudice for failure to prosecute).
Absent a specific Commission rule, the Commission follows the federal rules of civil procedure to the extent that they are consistent with sound administrative practice. See 46 C.F.R. 502.12. Under the federal rules judges can dismiss complaints sua sponte for want of prosecution in the interest of controlling their dockets and achieving the orderly and expeditious disposition of cases. See Link v. Wabash R. Co., 370 U.S. 626, 630-631 (1962). Failure to prosecute has been recognized as grounds for dismissal of complaints in Commission proceedings and sometimes the dismissals are with prejudice. See Consolidated Express Co. v. Sea-Land Service, Inc., et al., 19 F.M.C. 722, 723, 724 (1977), and cases cited in footnote 3 on page 724; The Tagit Co. v. Luckenbach Steamship Co., Inc., et al., 1 U.S.S.B.B. 519 (1935); Isbrandtsen Co., Inc., 3 F.M.B. 543 (1951). Dismissals with prejudice are recognized as being rather drastic and are scrutinized carefully by appellate courts. However, they are allowed in cases of willful default, contumacious conduct, and the like. Consolidated Express Co. v. Sea-Land Service, Inc., cited above, 19 F.M.C. at 724, and authorities cited therein.(5)
In the instant case, respondents Medtech Enterprises, Inc. and Mr. Xin Liu have been served properly with the original complaint, have even filed a counterclaim, thereby invoking the Commission's jurisdiction, but have dishonored their settlement agreement with complainant and have declined to accept further service of the amended complaint but have received service of other recent rulings. Moreover, Mr. Liu, who is the registered agent for service on the corporate respondent under Texas law, has not accepted service at his address as such agent.(6) These two respondents have been served with notice of a possible default judgment on account of their failure to answer the amended complaint and, by their conduct, have shown an apparent lack of interest in pursuing their counterclaim. I therefore find sufficient basis not only to issue a default judgment against them but also to dismiss their counterclaim with prejudice.(7) It is so ordered.(8)
The Status of Respondent Mrs. Yanhong Liu and the Claim Against Her
Mrs. Yanhong Liu, allegedly an officer of respondent Medtech Enterprises, Inc. (Secretary, Treasurer) and allegedly a director, shareholder, and co-owner of Medtech Enterprises, was not named as a respondent in the original complaint. In the amended complaint, she is now alleged to have been a participant in the unjust and unfair practices described above and to have been equally responsible with the other named respondents for the events described above. However, unlike the other two respondents, Mrs. Liu has not defaulted but has, on the contrary, filed her answer to the complaint, albeit several days late (by fax on June 16, 1999, nine days overdue). In her answer, which, contrary to the Commission's rules (46 C.F.R. 502.112(b)), is not verified, i.e., is not sworn to under oath and was not served on complainant's counsel, Mrs. Liu admits that she was an employee of Medtech Enterprises, Inc., processed paperwork and some part of the paperwork involved in the subject shipments but denies handling the subject shipments, denies issuing a check or stop-payment order, and denies violation of section 10(a)(1). Mrs. Liu appears to have followed the form of answer that was prepared by and filed on behalf of the two other respondents in the earlier phase of this proceeding. She is acting "pro se." Courts have traditionally been more lenient toward "pro se" litigants in the interest of justice while trying to prevent such litigants from taking undue advantage over other litigants who have counsel and follow the rules diligently.(9) In this vein I will accept Mrs. Liu's denials and answer notwithstanding the technical deficiencies subject to future rulings that will ensure fairness and due process.(10)
Because Mrs. Liu has filed an answer to the amended complaint, albeit unverified, she is not now subject to a default judgment, unlike the other two respondents. Moreover, the record is at present inadequate for me to determine whether she can be found personally to have violated section 10(a)(1) of the Act. As noted above, complainant alleges that Mrs. Liu is an officer of Medtech Enterprises (Secretary, Treasurer) who participated in the alleged unjust and unfair practices that violated section 10(a)(1) of the Act. However, in her unverified answers she claims to have been only an "employee" who processed some paperwork but she denies involvement in the subject unlawful practices and in issuing or stopping payment of the subject check. Perhaps because she is acting "pro se" and may not be proficient in English, she has forgotten that at one time she swore that she was Medtech's "Secretary" as well as being the wife of respondent Xin Liu, having some personal knowledge on the subject matter of the dispute. In her own sworn words, she stated:
I am the Secretary of Respondent Medtech Enterprises, Inc. and the wife of Respondent Xin Liu. I have read the foregoing pleading and know the contents thereof and the facts recited therein are true and correct to the best of my knowledge, except as to the matters stated to be on information and belief, as to those matters, I believe it to be true and correct.
The source of my information and the grounds of my belief are my personal knowledge, and statements and records furnished to me by Respondents, including Mr. Xin Liu, involved in investigating the foregoing claim. The reason I am verifying this pleading is that the individual respondent, Mr. Xin Liu, who is the principal of respondent Medtech Enterprises, is now and has been located in China. See Respondents Medtech Enterprises, Inc.'s and Mr. Xin Liu's FRCP 12(B) Motions; Answer; and Counterclaim, July 13, 1998, Verification, page 6.
The above sworn statements are more reliable and credible evidence than Mrs. Liu's "pro se" unsworn claim to be a relatively low-level "employee" of Medtech having limited knowledge or participation in the events in question. However, complainant has the burden of proof of showing by a preponderance of reliable and probative evidence that even if Mrs. Liu is an officer of Medtech, she actively participated in the alleged wrongdoing. It is not enough merely to show that a person is a corporate officer if a complainant wishes to impose personal liability on such officer.
It is not the law that merely showing that a defendant occupied such a position in a defendant corporation suffices to show that the person was also liable for the corporation's wrongdoing or for the wrongdoing of another corporate officer. The cases are legion holding that a corporate officer may become personally liable for the wrongdoing of the corporation only if such officer has become personally involved in the conduct and to an extent that exceeds mere marginal participation. For some of the many cases so holding see Sit-Set A.G. v. Universal Jet Exchange, Inc., 747 F.2d 921, 929 (4th Cir. 1984) (". . . [officer's] participation was too marginal and too subject to the directions and advice of others to support a finding against him individually of intentional misrepresentation with intent to defraud."); Hoover Group, Inc. v. Custom Metalcraft, Inc., 84 F.3d 1408, 1412 (Fed. Cir. 1996) (corporate president not personally liable without showing of culpability, active and knowing assistance, etc.); L.C.L. Theatres, Inc. v. Columbia Pictures Industries, Inc., 619 F.2d 455, 457 (5th Cir. 1980) (officer not liable personally for corporation's tortious acts unless he participated in the wrongdoing); F.D.I.C. v. Henderson, 849 F. Supp. 495 (E.D. Tex. 1944) (corporate officer not liable unless he was grossly negligent and actively participated in the wrongdoing); American Airlines v. Christensen, 967 F.2d 410 (10th Cir. 1992) (individual officers must have directed and participated actively in the tortious conduct). A case of particular relevance is United States v. Appendagez, Inc., 560 F. Supp. 50, 54-55 (C.I.T. 1983), in which the Court of International Trade declined to dismiss a corporate president in a case involving violations of the Tariff Act because the Court could not determine the extent of the president's participation in the wrongdoing and the Court was furnished with only "conclusory allegations"); Resolution Trust Corporation v. Seale, 13 F.3d 850, 854-855 (5th Cir. 1994) ("conclusory allegations" of gross negligence and "naked assertions" as to corporate officer's participation are not enough to prove regulatory violations).(11)
The instant situation resembles somewhat the same situation as happened in Bermuda Container Line Ltd. v. SHG International Sales, Inc., et al., cited above, 28 S.R.R. 312. In the case cited, the complaining carrier had originally named three respondents, a manufacturer, a shipper, and a licensed ocean freight forwarder, alleging that they had violated section 10(a)(1) by failing to pay lawful ocean freight on a shipment by means of an unfair or unjust device or means. After discovery was conducted, however,(12) the complainant agreed to dismissal of the manufacturer but obtained a default judgment against the shipper for some $4100 in freight money owed. However, complainant apparently chose not to enforce its judgment against the defaulting shipper and proceeded to litigate against the third respondent, the licensed freight forwarder, who, incidentally was bonded. Later it was found that this forwarder had not incurred liability nor violated the law. See case cited, 28 S.R.R. 492 (I.D.), August 6, 1998, pending decision of the Commission on exceptions.
The point to this discussion is that complainant's counsel in the instant case must decide if or how to proceed against Mrs. Liu. Obviously if there is to be a decision on the merits as regards Mrs. Liu, it will be necessary for complainant, who has the burden of proof, to develop the evidence or complainant has the option of terminating its complaint against Mrs. Liu either before or after conducting discovery. I can do nothing on the merits of complainant's allegations against Mrs. Liu on the basis of the naked allegations made against Mrs. Liu in the face of her denials even though her denials were not submitted under oath. Even had she defaulted by filing no answer at all, I am authorized by the Commission's rules to "require such proof as . . . [I] . . . may deem proper. . . ." 46 C.F.R. 502.64(b).
Accordingly, counsel for complainant is instructed to advise me by July 20, 1999, as to complainant's intentions with regard to Mrs. Liu and, if possible, to propose a suitable schedule to adduce the necessary evidence in support of complainant's allegations relating to Mrs. Liu.(13)
Norman D. Kline
Administrative Law Judge
ENDNOTES
1. This decision will become the decision of the Commission in the absence of review thereof by the Commission (Rule 227, Rules of Practice and Procedure, 46 C.F.R. 502.227).
2. Because these two respondents were served successfully with the original complaint and even filed their own counterclaim with the Commission, in which they gave the same corporate address as that used for service of the amended complaint, it is too late for these two respondents to claim lack of personal service merely because they declined to pick up the amended complaint which had arrived in Houston, according to the postal service. Litigating parties are under a duty to keep courts advised of their current addresses and to remain active in their own cases, and if they fail to do so, they may suffer adverse judgments. See In re Mack, 330 F. Supp. 737, 738 (S.D. Tex. 1970) (disappearing party must notify court of change of address or suffer adverse judgment on its claim). See also Freed v. Plastic Packaging Materials, Inc., 66 F.R.D. 550, 552 (E.D. Pa. 1975); cf. Double "S" Truck Line, Inc. v. Frozen Food Express, 171 F.R.D. 251, 253 (D. Minn. 1997) (defendant must make sure that its registered agent for service of process is kept informed as to defendant's current address).
3. Section 10(a)(1) of the Shipping Act of 1984 provides in relevant part:
(a) IN GENERAL.-No person may-
(1) knowingly and willfully, directly or indirectly, by means of false billing, false classification, false weighing, false report of weight, false measurement, or by any other unjust or unfair device or means obtain or attempt to obtain ocean transportation for property at less than the rates or charges that would otherwise be applicable.
4. Complainant has asked for either the unpaid amount ($8,381.83) plus interest "or such other sum as the Commission may determine to be proper as an award of reparations." (Amended Cmplaint, para. 5.) CTM has been deprived of its lawfully earned freight money plus incidental charges, totaling $10,791.46, which it has never received from respondents and respondents, by reneging on their settlement agreement, have in effect nullified that agreement. Accordingly, to give CTM full compensation, I find that CTM is entitled to the full original amount claimed plus interest from the date respondents issued a bad-faith check less the $2,409.63 that respondents paid to CTM. The difference between this calculation and a calculation of $8,381.83, plus interest, is not substantial but the former calculation, in my opinion, more accurately compensates CTM for its injury.
5. See also discussion and cases cited in 9 Wright and Miller, Federal Practice and Procedure, sec. 2369 at 340 (dismissal with prejudice in cases of "willful default").
6. But Mrs. Liu, who earlier admitted that she is an officer (Secretary) of the corporate respondent, Medtech Enterprises, did accept service of the amended complaint and even answered it in her own name. Under Federal Rule 4(d)(3), service on a corporate officer constitutes service on the corporation. See also 4A Wright and Miller, Federal Practice and Procedure, sec. 1102; Chan v. Society Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir. 1994), cert. denied, 514 U.S. 1004 (1995).
7. Dismissals with prejudice are considered to be decisions on the merits. In the instant case, respondents' loss and damage counterclaim, alleging violations of section 10(d)(1) of the Shipping Act of 1984, as to an unrelated shipment, is not a valid defense to a section 10(a)(1) claim. Waterman v. General Foundries, Inc., cited above, 26 S.R.R. at 1182-1183. The instant dismissal of the counterclaim applies only to section 10(d)(1) of the Shipping Act of 1984 and does not constitute findings under admiralty law. Respondents are therefore free to pursue their loss and damage claims against CTM or unknown third persons in admiralty courts but not before the Commission and they are still liable to CTM for the unpaid freight and other charges notwithstanding any loss and damage claims on an unrelated shipment.
8. It is held under the federal rules that by asserting their counterclaim against CTM on an unrelated shipment, which would be a permissive counterclaim under the federal rules, respondents Medtech Enterprises and Mr. Liu have waived any arguments they might have had regarding personal jurisdiction, inadequate service, and the like under Federal Rules 12(b)(2) through (12(b)(5), assuming, contrary to the fact, that there was no valid service of the original complaint. See 5A Wright and Miller, Federal Practice and Procedure, sec. 1397 at 788, and cases cited in footnotes 8 and 10. Cf. Kincade v. Jeffrey-De Witt Insulator Corporation, 242 F.2d 328, 332 (5th Cir. 1957) (person became bound by judgment in earlier court suit merely by participating in the earlier case, although not named as a defendant in that case). In the instant case these two respondents not only have participated but had earlier even obtained rights as assignees of CTM's claims for damage against third persons under their agreement which was approved by the Commission.
9. The pleadings of "pro se" litigants are held to less stringent standards. See Hughes v. Rowe,449 U.S. 5, 9-10 (1980); Estelle v. Gamble, 429 U.S. 97, 106 (1976). However, courts do not hold that "pro se" litigants have licenses to engage in sloppy litigation or to ignore rules of substantive or procedural law. See, e.g., Denlinger v. Brennan, 87 F3d 214, 217 (7th Cir. 1996) ("pro se" party has no right to engage in sloppy litigation); Andrews v. Bechtel Power Corp., 780 F.2d 124, 140 (1st Cir. 1985) ("pro se" party does not have license to fail to comply with relevant procedural and substantive rules); King v. Atiyeh, 814 F.2d 565, 567 (9th Cir. 1987) ("pro se" litigant must follow same rules that govern other litigants); Michelson v. Merrill Lynch Pierce, Fenner & Smith, 619 F. Supp. 727, 741-742 (S.D.N.Y. 1985). But courts are also careful to protect "pro se" litigants from the consequences of their technical errors so as to avoid injustice. See U.S. v. Sanchez, 88 F.3d 1243, 1247-1248 (D.C. Cir. 1996).
10. I have made a copy of Mrs. Liu's "pro se" answer to the amended complaint and mailed it to complainant's counsel and have instructed Mrs. Liu to follow the rules requiring her to serve complainant's counsel, among others. See Notice of Filing of Answer by Respondent Mrs. Yanhong Liu and Status of Case, June 16, 1999.
11. For still more case law on this subject, see 19 C.J.S., Corporations, secs. 537 - 540, and West's Federal Practice Digest, key number 336.
12. Because of the relatively small amount of money in controversy and distant locations, the parties decided to curtail costs of litigation by serving interrogatories, requests for production of documents, and requests for admissions.
13. This decision against the two defaulting respondents applies only to those two respondents and is not intended to prejudice either complainant or Mrs. Liu as regards complainant's allegations against Mrs. Liu. Whether those allegations can be found to be true depends, of course, on whether complainant presents evidence to support the allegations. See Bermuda Container Line Ltd. v. SHG International Sales, Inc. et al., cited above, 28 S.R.R. at 315. Incidentally, if complainant decides to enforce this judgment against Medtech Enterprises and Mr. Liu in the U.S. District Court in Houston, complainant will be entitled to attorney's fees. See section 14(d), Shipping Act of 1984, 46 U.S.C. app. sec. 1713(d).