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Brooks v. Illusions, Inc.

United States District Court, S.D. Mississippi, Western Division

March 1, 2018

ASHLEY BROOKS, et al. PLAINTIFFS
v.
ILLUSIONS, INC., et al. DEFENDANTS

          MEMORANDUM OPINION AND ORDER

          KEITH STARRETT UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the Motion to Set Aside Default [82] and Motion for Relief From Sanctions (“Motion for Relief”) [85] filed by Defendants Illusions, Inc., and Thomas Walsh. After considering the submissions of the parties, the record, and the applicable law, the Court finds that neither of these motions are well taken and that both should be denied.

         I. BACKGROUND

         Plaintiffs Rachel Leblanc, Ashley Brooks, and Brian Sharp (collectively “Plaintiffs”), on behalf of themselves and all other similarly situated individuals, filed this action under the Fair Labor Standards Act (“FLSA”) against Defendants Illusions, Inc. (“Illusions”), and Thomas Walsh (“Walsh”) (collectively “Defendants”). Illusions is a Mississippi corporation, and Walsh is its director, president, and registered agent.

         On November 16, 2016, the Court issued an Order [23] directing Defendants to “provide to Plaintiff, in usable electronic form, the names, addresses, email addresses, social media handles/identifiers, and phone numbers of all members of the prospective class” within ten (10) days. (Order [23] at p. 5.) After Defendants failed to comply with this Order [23], Plaintiffs filed a Motion for Contempt [31].

         On February 14, 2017, the Court issued its Order [40] granting Plaintiffs' Motion for Contempt [31], holding Defendants in civil contempt for failure to comply with the Court's previous Order [23]. In that Order [40], the Court held that Defendants had failed to provide Plaintiffs with the information required by its previous Order [23] and sanctioned them $100 per day until they came into complete compliance. The Court also ordered Defendants to pay Plaintiffs attorney fees in connection with its Motion for Contempt [31].

         Additionally, on March 16, 2017, the Court further sanctioned Defendants and their counsel for failure to comply with discovery and for failure to respond to pending motions. (See Order [43].)

         On June 5, 2017, Plaintiffs filed a second Motion for Contempt [48], alleging that Defendants never complied with the Court's Orders [23][43]. Defendants never responded to this motion. The Court subsequently granted this motion and found Defendants to be in contempt of court. Defendants were sanctioned, and default was entered against them.

         Defendants have obtained a new attorney to represent them. On August 18, 2017, Defendants filed the current Motion for Relief [60], seeking relief from default and sanctions pursuant to Federal Rule of Civil Procedure 60(b) and blaming their previous misconduct on the deficiencies of their previous attorney. Plaintiffs filed their Response [63] in opposition to this motion on August 22, 2017. Defendants filed no rebuttal. This motion was denied without prejudice on September 6, 2017. (See Order [67].)

         Defendants now file their Motion to Set Aside Default [82] and Motion for Relief [85], once again asking for relief from default and sanctions and blaming previous misconduct on their former attorney.

         II. DISCUSSION

         A. Motion to Set Aside Default [82]

         Under Federal Rule of Civil Procedure 55, “[t]he court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b).”[1] Fed.R.Civ.P. 55(c). “[T]he decision to set aside a default is committed to the sound discretion of the trial court.” Moreno v. LG Elecs., USA Inc., 800 F.3d 692, 698 (5th Cir. 2015) (quoting In re Dierschke, 975 F.2d 181, 183 (5th Cir. 1992)). However, the Fifth Circuit has held that “district courts generally should grant motions to set aside a default unless the default was willful, the plaintiff will be prejudiced, or the defendant has no meritorious defense.” Id. (emphasis added). In this case, Defendants have failed to show that the default was not willful. Defendants have also not shown that Plaintiffs would not be prejudiced.

         Though Defendants contend that all willful conduct leading to the Court's entry of default was done by their previous attorney, they have not cited any authority stating parties cannot be held accountable for their attorney's willful conduct that led to an entry of default. In response, however, Plaintiffs cite Link v. Wabash Railroad Co., which unequivocally held that there was “no merit” in the argument that a party could not be held accountable for the “unexcused conduct” of his attorney. 370 U.S. 626, 633, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962). “Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and is considered to have ‘notice of all ...


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