United States District Court, D. Arizona
DAVID G. CAMPBELL, District Judge.
On February 6, 2015, the Court notified the parties that it would enter a default judgment against Defendant Falcon Air Express Incorporated. Doc. 31. In an order dated February 9, 2015, the Court considered the Ninth Circuit's five-factor test and found that default judgment was appropriate in light of Defendant's failure to communicate with and retain counsel, Defendant's refusal to meet discovery deadlines, and Defendant's disregard of a Court order requiring a representative to appear at a hearing. Doc. 32. New counsel has appeared for Defendant and filed a motion to set aside the default judgment. Doc. 40. The Court will deny the motion.
Plaintiff Lori Eichenberger formerly worked for Defendant Falcon Air. Doc. 1, ¶ 7. After Defendant terminated her employment, she complained of discrimination to the Equal Employment Opportunity Commission and received a notice of right to sue. Id., ¶¶ 49-50. On January 29, 2014, she filed this lawsuit. Id. She alleged that a fellow employee at Falcon Air had sexually harassed her, Falcon Air had fired her for complaining about the harassment, and Falcon Air had not paid her for all the hours she had worked. Id., ¶¶ 51-111. She brought claims under Title VII of the Civil Rights Act, the Family and Medical Leave Act, the Fair Labor Standards Act, and the Arizona Wage Act. Id.
At first, the case proceeded normally. Service was executed, a motion to dismiss was filed, and a scheduling conference was held. On August 26, 2014, the Court entered a case management order setting the deadline for fact discovery as April 24, 2015. Doc. 18. The order cautioned the parties that "the Court intends to enforce the deadlines set forth in this Order, and [the parties] should plan their litigation activities accordingly." Id. The parties served initial disclosures and Plaintiff served her first set of interrogatories and a request for production of documents. Docs. 19-22.
On November 26, 2014, defense counsel moved to withdraw, citing irreconcilable differences and possible conflicts. Doc. 23. The Court set a hearing for the motion on December 19, 2014. As ordered by the Court, defense counsel appeared at the hearing as did Nelson Ramiz, general manager for Falcon Air, who appeared by phone.
The Court advised Mr. Ramiz that Falcon Air could not appear without counsel in the litigation. It has been the law for more than a century that corporations and other business entities cannot appear without counsel in federal court. See Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 201-02 (1993). The Court cautioned Mr. Ramiz as follows: "if Falcon Air is not represented in this case, a default judgment will be entered against Falcon Air." Court's Livenote Transcript, 12/19/14. When Mr. Ramiz stated that Falcon Air intended to retain new counsel, the Court set a deadline of January 23, 2015 for new counsel to appear. The Court then provided this caution: "If there is not new counsel who appears by January 23rd, then I'm going to enter a default judgment. Is that understood?" Id. Mr. Ramiz responded "Yes sir." Id.
Because Falcon Air had not responded to Plaintiff's written discovery requests, and because new counsel would be entering the case, the Court set a deadline of February 6, 2015 for the Falcon Air's discovery responses, and set a case management conference on that date to adjust the litigation schedule in light of new counsel's appearance. Before concluding the hearing, the Court confirmed on the record Mr. Ramiz's role as general manager for Falcon Air. Id.
Attorney Scott Blaney appeared as counsel for Falcon Air on January 20, 2015, but he filed a motion to withdraw only two weeks later. Doc. 29. He stated in the motion that irreconcilable differences and conflicts had arisen between him and Falcon Air and, significantly, that "Falcon Air failed to respond to Blaney Law's repeated attempts to communicate regarding the case and pending deadlines, leaving Blaney Law unable to properly represent Falcon Air." Id. Because this unexpected withdrawal further threatened the efficient resolution of this case, the Court set a hearing for February 6 - the date of the already-existing discovery deadline and case management conference - and specifically directed that "Nelson Ramiz, Jr., General Manager of Falcon Air Express, shall appear by telephone at the hearing. Mr. Ramiz shall call the Court's chambers no later than 1:55 p.m. on February 6, 2015 to be connected to the hearing." Doc. 30.
The order directed defense counsel to provide prompt notice of the hearing to Mr. Ramiz. He did so. Mr. Blaney sent an e-mail to Mr. Ramiz on February 4, 2015, which enclosed the Court's order and which opened with this paragraph:
I have attached for your records a copy of our Motion to Withdraw. I have also attached a copy of the court's order regarding this Friday's hearing. Please read it carefully as it requires you to call into the hearing on Friday.
Doc. 47-1 at 56 (emphasis in original). Defense counsel also sent Mr. Ramiz a copy of the Court's order by overnight mail. Mr. Ramiz did not participate in the hearing.
On February 9, 2015, the Court entered an order granting new defense counsel's motion to withdraw and informing the parties that the Court will enter a default judgment against Defendant. Doc. 32. The Court explained that default judgment was appropriate for the following reasons:
The Court set a case management schedule for this case on August 26, 2014. Doc. 18. The order cautioned the parties that the deadlines established by the Court were real and that the Court would not, absent truly ...