United States District Court, M.D. Louisiana
ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, U.A., AFL-CIO
CCR FIRE PROTECTION, LLC, AGENT OF QUICK RESPONSE FIRE PROTECTION, LLC, ET AL.
RULING AND ORDER
W. deGRAVELLES JUDGE UNITED STATES DISTRICT COURT
matter is before the Court on three motions. The first is a
Motion for Default Judgment against Defendant CCR Fire
Protection, LLC (“CCR”) pursuant to Federal Rule
of Civil Procedure (“Rule”) 55(b)(2) filed by
Plaintiff Road Sprinkler Fitters Local Union No. 669, U.A.,
AFL-CIO (“Plaintiff” or “the Union”).
(Docs. 106, 132). The Court held a hearing on this Motion on
February 1, 2018. (Doc. 133). Following the hearing,
Defendants Quick Response Fire Protection, Rajendra Bhakta,
Nilesh Patel, Rosael Rodriguez, and Theresa Rodriguez filed
Oppositions to the Motion for Default Judgment. (Docs. 142,
143, 144). Plaintiff filed a single Reply to these
Oppositions. (Doc. 147).
second motion before the Court is a Motion to Dismiss
pursuant to Rule 12(b)(2) filed by Bhakta. (Doc. 116). The
third motion is a Motion to Dismiss pursuant to Rules
12(b)(1) and 12(b)(6) filed by Patel. (Doc. 117). Plaintiff
filed a single Opposition to both Motions to Dismiss. (Doc.
126). Bhakta and Patel both replied in further support of
their Motions to Dismiss. (Docs. 134, 135).
reasons discussed below, these Motions are denied.
brings this suit pursuant to the Labor Relations Management
Act (the “Act”), 29 U.S.C. section 185(a), to
enforce the terms of a settlement agreement and collective
bargaining agreement. (Doc. 98 at 1). Named as Defendants are
CCR; Quick Response; Rosael Rodriguez; Theresa Rodriguez;
Patel; and Bhakta. (Id. at 2-3). All Defendants are
alleged to be “employers” within the meaning of
the Act. (Id.). Plaintiff alleges that Defendants
who are natural persons are “employers” because
this term includes a “person acting as an agent of an
employer directly or indirectly[.]” (Id.).
Quick Response install, maintain, and repair fire sprinkler
systems in Louisiana, Arkansas, and Mississippi.
(Id. at 5). At all relevant times, Rosael Rodriguez
was “an owner and agent” of CCR, and Theresa
Rodriguez was its office manager. (Id.). Bhakta and
Patel provided “the original capital investment”
when CCR was initially founded, as well as “several
additional financial investments thereafter.”
(Id. at 4). Bhakta and Patel signed CCR's
original Articles of Incorporation and jointly held a
“majority in interest, ” as defined in CCR's
Operating Agreement. (Id; see also Doc. 98-2 at 1-2, 5).
“At all material times, [Patel and Bhakta] collectively
held a majority interest in [CCR] with vested authority to
affirm and consent to the business decisions of CCR including
entering into labor agreements.” (Doc. 98 at 5).
CCR's March 2017 annual report identifies Bhakta and
Patel as “the only two corporate members” of CCR,
and the report was signed electronically by Patel.
(Id.; see also Doc. 98-3 at 1).
and the National Fire Sprinkler Association, Inc., a
“national trade association employer representing
contractors in the fire protection industry, ” have
been parties to a series of national collective bargaining
agreements, one of which was effective between 2013 and 2016.
(Doc. 98 at 4). In May 2013, Plaintiff and CCR entered into a
collective bargaining agreement whereby CCR agreed to be
bound by the terms of the national agreement with certain
exceptions. (Id. at 4-5).
August 2014, Plaintiff filed an unfair labor practice charge
with the National Labor Relations Board (“NLRB”),
claiming that CCR had violated the collective bargaining
agreement. (Id. at 6). At the outset of the trial
before the NLRB in February 2016, Plaintiff and CCR,
“through [Rosael and Theresa Rodriguez], ”
engaged in settlement negotiations. (Id.). According
to Plaintiff, Plaintiff and CCR entered into a settlement
agreement “with the approval of majority owners Patel
and Bhakta pursuant to the Operating Agreement.”
(Id.; see also Doc. 98-2 at 1-2). Also according to
Plaintiff, the terms of the agreement included that
“CCR would pay $450, 000.00 over eight (8) years to
[Plaintiff] and the National Automatic Sprinkler Industry
fringe benefit funds (“NASI”) along with a down
payment to be agreed upon, payment of back-pay for the
wrongfully terminated employee, confirmation of
[Plaintiff's] status as the bargaining representative of
the employees, an agreement to remain bound by the current
and future CBAs and a notice to be mailed out to employees
regarding the terms of settlement.” (Doc. 98 at 6). In
exchange, Plaintiff withdrew its charge. (Id.). CCR,
“through” Theresa Rodriguez, “affirmed on
the record” that it agreed to the terms of the
settlement agreement, and the parties agreed to reduce its
terms to writing. (Id. at 7). Thereafter, Plaintiff
contends that CCR, “through” Rosael and Theresa
Rodriguez, refused to sign the written agreement and
“reneged” on their agreement to make payments.
(Id.). Plaintiff's representatives attempted to
contact CCR on several occasions, but their attempts were
contends that, within a month of the settlement conference,
CCR “reopen[ed]” as Quick Response, which
performs the same work as CCR and generally retains CCR's
employees, managers, and customers. (Id. at 7-8).
According to Plaintiff, Quick Response is an alter ego of and
successor to CCR and is bound by the terms of the collective
bargaining and settlement agreements described supra.
(Id. at 8). Plaintiff further maintains that Rosael
and Theresa Rodriguez, Patel, and Bhakta intended to evade
their obligations to Plaintiff by purporting to enter into
the settlement agreement with no intention of honoring it.
case was initially filed in July 2016. (See generally Doc.
1). Several Motions to Dismiss were filed. (Docs. 20, 21,
24). Among these Motions was a Rule 12(b)(2) Motion to
Dismiss by Bhakta, which (like Bhakta's present Motion,
discussed infra) argued that Bhakta's contacts with
Louisiana were insufficient to give rise to personal
jurisdiction. (Doc. 24-1 at 2-8). The Court granted this
Motion, agreeing that Plaintiff had failed to establish that
the Court had personal jurisdiction over Bhakta. (Doc. 78 at
2-3). The Court granted leave to amend to permit Plaintiff to
provide factual allegations supporting jurisdiction over
Bhakta. (Id. at 3). The Second Amended Complaint
contains additional allegations concerning Bhakta's
contacts with Louisiana, including that: (1) in addition to
CCR, Bhakta and Patel own and operate eight businesses in and
around Baton Rouge; (2) Bhakta has an office in Denham
Springs, Louisiana, located in a hotel that he owns; (3)
Bhakta's office address is the domicile address for CCR;
(4) Bhakta engaged a Hammond, Louisiana accountant on
CCR's behalf; and (5) for his Louisiana businesses,
including CCR, Bhakta “files annual state income tax
reporting business and personal income.” (Doc. 98 at
August 2017, Plaintiff moved for the entry of default against
CCR, contending that Plaintiff had effected service and CCR
had not appeared. (Doc. 90-1 at 1-2). The Clerk of Court
entered default the same day. (Doc. 91).
Motions before the Court are brought pursuant to Rules
55(b)(2), 12(b)(1), 12(b)(2), and 12(b)(6). The Court
addresses each standard in turn.
section of this Court has recently discussed the standards
applicable to default judgments:
The service of a summons triggers a duty to respond to a
complaint and a failure to respond may result in the entry of
default or default judgment under Federal Rule of Civil
Procedure 55. Rogers v. Hartford Life & Accident Ins.
Co., 167 F.3d 933, 937-39 (5th Cir. 1999). When a party
establishes by affidavit or some other method that there has
been a default, the Clerk of Court will enter the default.
N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 141 (5th
Cir. 1996). Once there has been an entry of default, the
plaintiff may apply to the Court for a default judgment.
Default judgments are usually disfavored under the
Federal Rules of Civil Procedure. Sun Bank of Ocala v.
Pelican Homestead & Sav. Ass'n, 874 F.2d 274,
276 (5th Cir. 1989). A default judgment is considered to be a
drastic remedy that should only be available “when the
adversary process has been halted because of an essentially
unresponsive party.” Id. (quoting H.F.
Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe,
432 F.2d 689, 691 (D.C. Cir. 1970)). Therefore, a party is
not entitled to a default judgment, even where the defendant
is technically in default. Ganther v. Ingle, 75 F.3d
207, 212 (5th Cir. 1996).
In determining whether a default judgment should be entered,
the Fifth Circuit has developed a two-part test. Taylor
v. City of Baton Rouge, 39 F.Supp.3d 807, 813 (M.D. La.
2014). First, the Court must determine whether the entry of
default judgment is appropriate under the circumstances.
Lindsey v. Prive Corp., 161 F.3d 886, 893 (5th Cir.
1998). Factors relevant to this determination include: (1)
whether there are material issues of fact at issue; (2)
whether there has been substantial prejudice; (3) whether the
grounds for default have been clearly established; (4)
whether the default was caused by excusable neglect or good
faith mistake;(5) the harshness of default judgment; and (6)
whether the court would think itself obliged to set aside the
default on a motion by Defendant. Id. Second, the
Court must assess the merits of Plaintiff's claims and
find a viable claim for relief. Nishimatsu Constr. Co. v.
Hous. Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir.
J&J Sports Prods., Inc. v. Boil & Roux Kitchen,
LLC, 2018 WL 1089267, at *1 (M.D. La. Feb. 27, 2018);
see also Mason v. Lister, 562 F.2d 343, 345 (5th
Cir. 1977) (entry of default judgment is “generally
committed to the discretion of the district court”).
the standard for Rule 12(b)(1) motions, the Fifth Circuit has
Motions filed under Rule 12(b)(1) . . . allow a party to
challenge the subject matter jurisdiction of the district
court to hear a case. Fed.R.Civ.P. 12(b)(1). Lack of subject
matter jurisdiction may be found in any one of three
instances: (1) the complaint alone; (2) the complaint
supplemented by undisputed facts evidenced in the record; or
(3) the complaint supplemented by undisputed facts plus the