Worthley v. Global Resourcing LLC

          ORDER

          G. MURRAY SNOW CHIEF UNITED STATES DISTRICT JUDGE

         Pending before the Court is Defendant Christopher Rouen's Motion to Dismiss (Doc. 10), Defendant Global Resourcing LLC's Motion to Set Aside Default Judgment (Doc. 23), and Plaintiff's Motion for Attorneys' Fees (Doc. 19).

         BACKGROUND

         In November 2018, Plaintiff Ronald Worthley filed a complaint in this Court alleging that Defendants Christopher Rouen and Global Resourcing LLC violated the Fair Labor Standards Act (“FLSA”) by failing to pay his overtime wages. (Doc. 1, ¶ 1). Plaintiff also alleges that Defendants failed to pay his wages in a timely manner, in violation of the Arizona Wage Statute. (Id.).

         Defendant Christopher Rouen then filed a pro se Motion to Dismiss. In that motion, he argued that this Court lacks jurisdiction because Plaintiff did not allege an amount in controversy that exceeds $75, 000, the complaint does not differentiate between the allegations against him individually and against the company, and the attorneys who are representing Plaintiff are not licensed to practice law in Arizona. (Doc. 10).

         Because Defendant Rouen apparently only filed this motion to dismiss on his own behalf, Plaintiffs sought a default judgment against the corporate defendant. (Doc. 15). Defendant Rouen did not file a response. A few weeks later, this Court entered a default judgment against corporate defendant Global Resourcing LLC. (Doc. 17). More than a month later, Defendant's attorney, Mr. Powers, entered an appearance with this Court and filed a Motion to Set Aside the Default Judgment. (Doc. 23). For the following reasons, the Court will deny individual Defendant's Motion to Dismiss, and grant the Motion to Set Aside the Default Judgment.

         DISCUSSION

         I. Jurisdiction

         Federal courts have federal question jurisdiction “when a federal question is presented on the face of the plaintiff's properly pleaded complaint.” Caterpillar Inc. v. Williams, 519 U.S. 386, 392 (1987). Plaintiff's Complaint alleges that “Defendants have intentionally failed and/or refused to pay Plaintiff minimum wage according to the provisions of the FLSA” and states that “[t]his Court has jurisdiction over the subject matter and the parties hereto pursuant to 29 U.S.C. § 216(b) and 28 U.S.C. § 1331.” (Doc. 1 at ¶¶ 36, 5). For each claim brought under the Fair Labor Standards Act, the Court has jurisdiction. See 29 U.S.C. § 216(b). And for Plaintiff's remaining state law claims, this Court has supplemental jurisdiction under 28 U.S.C. § 1367(a). Plaintiff also sufficiently differentiated between Mr. Rouen and Global Resourcing LLC. (See e.g. Doc. 1, ¶ 14). Defendant's motion to dismiss therefore lacks merit.^[1]

         II. Relief from Default Judgment

          “[J]udgment by default is a drastic step appropriate only in extreme circumstances; a case should, whenever possible, be decided on the merits.” United States v. Signed Personal Check No. 730, 615 F.3d 1085, 1089 (9th Cir. 2010). The three factors that a district court should consider in deciding whether to vacate entry of default judgment are: (1) whether movant engaged in culpable conduct that lead to its default; (2) whether movant lacks a meritorious defense; and (3) whether reopening the default judgment would prejudice any other party. Franchise Holding II, LLC, v. Huntington Restaurants Group, Inc., 375 F.3d 922, 925, 926 (9th Cir. 2004).

         1. Culpability or Mere Negligence

         A Court may find that a Defendant is culpable “where there is no explanation of the default inconsistent with a devious, deliberate, willful, or bad faith failure to respond.” TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 698 (9th Cir. 2001). Defendant Rouen, who is not an attorney, innocently believed that he was filling a motion to dismiss on behalf of both him and Global Resourcing-or at least believed that by filing the motion to dismiss he would toll the deadlines as to Global Resourcing. Following the judgment of default against Global Resourcing, Defendant Rouen continued to engage in negotiations to settle the case-which may explain the delay in moving for relief from default judgment. Examining this course of events, the Court cannot conclude that the default must have resulted from a “devious, deliberate, or bad faith failure to respond.” TCI Group, 244 F.3d at 698.

         2. ...