United States District Court, W.D. Louisiana, Lafayette Division
PATRICK J. HANNA, UNITED STATES MAGISTRATE JUDGE.
the Court is the Motion to Set Aside Default filed by
Defendants, Superior Staffing, LLC, Superior Disaster Relief,
LLC, and Scott Butaud (Rec. Doc. 24). Plaintiffs opposed.
(Rec. Doc. 28). The Court conducted an evidentiary on
November 14, 2019. Plaintiffs filed a Post-Hearing Brief,
(Rec. Doc. 41), to which Defendants responded (Rec. Doc. 42).
For the following reasons, the Motion is GRANTED, and the
default entered against Defendants is hereby set aside.
Facts and Procedural History
filed this lawsuit on October 30, 2018 against their employer
for alleged Fair Labor Standard Act violations. (Rec. Doc.
1). Plaintiffs served Defendants on December 1, 2018. (Rec.
Doc. 4, 5, 6). Plaintiffs' counsel was in contact with
Mr. Butaud (CEO of Superior Staffing and Superior Disaster,
referred to collectively as “Superior”) via email
between December 2018 and June 2019 regarding production of
Plaintiff's payroll records and employee files. (Rec.
Doc. 28-1). Plaintiffs' counsel's email
correspondence to Mr. Butaud includes a request to answer the
pending lawsuit on March 12, and June 21, 2019. (Rec. Doc.
28-1, p. 4). Plaintiff's counsel's emails to Mr.
Butaud do not specifically indicate that a default will be
entered against Defendants. (Rec. Doc. 28-1, p. 4). Mr.
Butaud is not a lawyer. (Rec. Doc. 40, p. 15).
Defendants did not timely file an answer, Plaintiffs moved
for default on August 17, 2019, and the Clerk entered same on
August 19, 2019. (Rec. Doc. 20 and 21). Although the Clerk
sent notice of the entry of default to Defendants, the mail
was twice returned as undelivered. (Rec. Doc. 22 and 23). Mr.
Butaud testified at the November 14, 2019 evidentiary hearing
that he did not receive notice of the entry of default. (Rec.
Doc. 40, p. 34). Defendants filed the instant Motion to Set
Aside Default on September 27, 2019. (Rec. Doc. 24).
Butaud testified that he and the Superior CFO worked with the
Puerto Rico Department of Labor (“DOL”) over
several months to resolve Plaintiffs' FLSA complaints.
(Rec. Doc. 40, p. 10-11. See also Rec. Doc. 24-1, p. 3).
According to the Motion to Set Aside Default, on January 30,
2019, the Superior CFO provided documents to the DOL in
response to Plaintiffs' complaints. (Rec. Doc. 24-1,
referencing 24-2). Mr. Butaud testified that they received no
further response from the DOL and thus believed the matter to
have been resolved. (Rec. Doc. 40, p. 11-13).
contended in the Motion to Set Aside Default that they
received no further response from Plaintiffs' counsel
after having apparently satisfied the DOL's inquiry.
(Rec. Doc. 24-1, p.3). Nevertheless, Mr. Butaud admitted at
the hearing to having corresponded with Plaintiff's
counsel by email and telephone. (Rec. Doc. 40, p. 14; 16-18).
He testified that his understanding was that once the DOL
issue was apparently resolved, per his correspondence with a
DOL representative in Puerto Rico, he assumed that the
lawsuit was likewise resolved. (Rec. Doc. 40, p. 14-19). The
Motion to Set Aside Default, filed on behalf of Mr. Butaud,
states that he had no knowledge of this suit or default until
their counsel discovered the suit while preparing to defend
Defendants in an unrelated matter, and that they immediately
filed the instant Motion to Set Aside. (Rec. Doc. 28-1, p.
4-5). Mr. Butaud admitted at the hearing to having reviewed
and approved the Motion to Set Aside for filing. (Rec. Doc.
40, p. 27-28). He did not recall his previous interactions
with Plaintiffs' counsel until seeing the emails attached
to Plaintiffs' Opposition. (Rec. Doc. 40, p. 18; 29).
Nonetheless, he admitted that he was aware of the lawsuit at
the time the Motion to Set Aside was filed, but that he
assumed it was resolved, based on his interactions with the
DOL. He was not aware of the default. (Rec. Doc. 40, p.
Law and Analysis
Rule 55 governs default judgments and states that the court
may set aside an entry of default for good cause. Rule 55(c).
The Fifth Circuit set forth the general standard applicable
to setting aside the entry of default as follows:
[F]ederal courts should not be agnostic with respect to the
entry of default judgments, which are “generally
disfavored in the law” and thus “should not be
granted on the claim, without more, that the defendant had
failed to meet a procedural time requirement.” Thus,
“where there are no intervening equities any doubt
should, as a general proposition, be resolved in favor of the
movant to the end of securing a trial upon the merits.”
To determine whether good cause to set aside a default
exists-a “decision necessarily ... informed by
equitable principles”-“we have found it useful to
consider three factors ... [:] whether the default was
willful, whether setting it aside would prejudice the
adversary, and whether a meritorious defense is
presented.” Other factors may also be considered,
including whether “the defendant acted expeditiously to
correct the default.”
Lacy v. Sitel Corp., 227 F.3d 290, 292 (5th Cir.
2000) (Citations omitted.)
a motion to set aside a default decree under Fed.R.Civ.P.
55(c) is somewhat analogous to a motion to set aside a
judgment under Fed.R.Civ.P. 60(b), the standard for setting
aside a default decree is less rigorous than setting aside a
judgment for excusable ...