⚖ Oral Arguments, with Context

The Second Circuit hears a dispute over unpaid goods and a personal guaranty. Phoenix Fashion says businesses associated with Jack Saadia failed to pay for goods they ordered, and that he personally guaranteed their payment obligations. The district court entered a multimillion-dollar default judgment. Saadia wants that judgment undone so he can defend the case. The procedural history matters. The defendants had answered an earlier complaint, but did not answer the amended complaint. Saadia maintains that the missed response resulted from a misunderstanding. The judge found that this default was not willful, but also found that repeated delays had harmed Phoenix Fashion and that there was no meritorious defense to most of the claimed damages. The judge offered to set aside the default if the defendants posted a bond of more than three million dollars. They did not post it, and judgment followed. Two stages must be kept separate. Under Rule fifty-five, an entry of default records a failure to defend. A default judgment is the later decision granting relief. Setting aside the first is not the same request as opposing the second. Default does not relieve the plaintiff of substantiating its damages. An inquest, a term you will hear, means a hearing to determine damages in this setting; it is not a criminal investigation. Saadia will challenge the bond condition and insist that he had defenses involving deliveries, cancelled orders and credits. Phoenix Fashion will defend the judgment, pointing to repeated missed steps and the failure to post the bond. The judges will also ask what objections were actually presented before judgment. This is appellate review of those rulings, not a new trial over each invoice.

Phoenix Fashion, Inc. v. Saadia Group LLC (No. 24-3286) — U.S. Court of Appeals for the Second Circuit, argued October 21, 2026.