United States District Court, D. Arizona
Maria Tolano, Francisco Javier Ponce Bernal, Jose Daniel Mendoza, and Raquel Herrera, Plaintiffs,
v.
El Rio Bakery and Carlos Guillermo Vargas Mendoza, Defendants.
ORDER
Honorable Rosemary Marquez United States District Judge.
Pending
before the Court is Plaintiffs' “Motion to Court
for Entry of Default Judgment and Request for Monetary
Relief” as to Defendants El Rio Bakery and Carlos
Guillermo Vargas Mendoza. (Doc 30.)[1] For the reasons explained
below, the Court will order limited further briefing before
resolving this Motion.
I.
Procedural and Factual Background
Plaintiffs
Maria Tolano, Raquel Herrera, Jose Daniel Mendoza, and
Francisco Javier Ponce Bernal are former employees of
Defendant El Rio Bakery. (Doc. 1.) Plaintiffs filed their
operative First Amended Complaint on July 24, 2018. (Doc.
12.) They alleged claims for overtime violations under the
Fair Labor Standards Act (“FLSA”), 29 U.S.C.
§ 207(a); failure to pay the minimum wage in compliance
with Arizona's Minimum Wage Act, A.R.S. § 23-362
et. seq.; failure to make timely wage payments under
A.R.S. § 23-351; retaliation in violation of the FLSA,
29 U.S.C. § 215(a)(3); retaliation in violation of
A.R.S. § 23-364(B); and common-law unjust enrichment.
(Id.) Service was executed upon Defendant El Rio
Bakery and Defendant bakery-owner Carlos Guillermo Vargas
Mendoza on August 28, 2018. (Docs. 15, 16.)
Neither
Defendant filed an Answer to Plaintiff's Amended
Complaint. (Doc. 12.) On September 14, 2018, Defendant Vargas
Mendoza gave Notice of Filing of Chapter 13 Bankruptcy
Petition. (Doc. 17.) The Court ordered briefing as to whether
the automatic stay provision of 11 U.S.C. § 362 applied
to Defendants in light of the pending bankruptcy petition.
(Doc. 18.) Both parties agreed that the stay provision
applied only to Defendant Vargas Mendoza, the debtor in the
bankruptcy petition, and not to Defendant El Rio Bakery.
(Docs 19, 20.) On December 17, 2018, the Court provided
Defendant El Rio Bakery an extension of time to file its
Answer, but no Answer was filed. (Doc. 21.)
On
January 2, 2019, Plaintiffs requested that the Clerk of Court
enter default judgment against Defendant El Rio Bakery
pursuant to Rule 55(a) of the Federal Rules of Civil
Procedure. (Doc. 22.) Default was entered as to Defendant El
Rio Bakery by the Clerk of Court on that same day. (Doc. 23.)
On February 19, 2019, the Bankruptcy Court dismissed
Defendant Vargas Mendoza's Chapter 13 Petition, thus
lifting the automatic stay pursuant to 11 U.S.C. §
362(c)(2)(B). (Doc. 26.) On May 13, 2019, Plaintiffs
requested the Clerk of Court enter default against Defendant
Vargas Mendoza, and default was entered on March 14, 2019.
(Docs. 26, 27.) On April 4, 2019, Plaintiffs moved the Court
for entry of default judgment against both Defendant El Rio
Bakery and Defendant Vargas Mendoza, and requested monetary
relief. (Docs. 29, 30.)
II.
Discussion
Once a
party's default has been entered, the district court has
discretion to grant default judgment against that party.
See Fed. R. Civ. P. 55(b)(2); Aldabe v.
Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). A
defendant's default does not automatically entitle the
plaintiff to a court-ordered judgment. See Draper v.
Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). In
Eitel v. McCool, the Ninth Circuit laid out seven
factors that may be considered by courts exercising
discretion as to the entry of a default judgment: (1) the
possibility of prejudice to the plaintiff; (2) the merits of
the plaintiff's substantive claim; (3) the sufficiency of
the complaint; (4) the sum of money at stake in the action;
(5) the possibility of a dispute concerning material facts;
(6) whether the default was due to excusable neglect; and (7)
the strong policy underlying the Federal Rules of Civil
Procedure favoring decisions on the merits. 783 F.2d 1470,
1471-72 (9th Cir. 1986).
“[U]pon
default, the factual allegations of the complaint, except
those relating to the amount of damages, will be taken as
true.” Geddes v. United Fin. Group, 559 F.2d
557, 560 (9th Cir. 1977). A plaintiff seeking default
judgment and monetary relief “is required to prove all
damages sought in the complaint.” Philip Morris
USA, Inc. v. Castworld Prods., Inc., 219 F.R.D. 494, 498
(C.D. Cal. 2003). “The plaintiff is required to provide
evidence of its damages, and the damages sought must not be
different in kind or amount from those set forth in the
complaint.” Fed.R.Civ.P. 54(c); Amini Innovation
Corp. v. KTY Int'l Mktg., 768 F.Supp.2d 1049, 1054
(C.D. Cal. 2011). “In determining damages, a court can
rely on declarations submitted by the plaintiff[.]”
Philip Morris USA, Inc., 219 F.R.D. at 498.
Plaintiffs
request double damages for overtime violations as provided by
the FLSA, 29 U.S.C. § 216(b). (Doc. 31 ¶ 10.) They
also request treble damages for minimum wage violations under
Arizona's Minimum Wage Act, A.R.S. § 23-364(G).
(Id. ¶ 11.) They further request $150 in
damages for retaliation under A.R.S. § 23-364(G), to be
paid for each day between Plaintiff's alleged termination
or constructive discharge and October 4, 2018, the date El
Rio ceased operations. (Id. ¶ 12.) Plaintiff
Tolano requests damages in the amount of $52, 171, comprised
of $6, 190 in base wages and liquidated damages for overtime
violations under the FLSA, $11, 781 in treble damages under
the Arizona Minimum Wage Act, and $34, 200 as remedy for
retaliation. (Id. at p. 7.) Plaintiff Bernal
requests damages in the amount of $51, 925, comprised of $7,
780 in base wages and liquidated damages for overtime
violations under the FLSA, $23, 295 in treble damages under
the Arizona Minimum Wage Act, and $20, 850 as remedy for
retaliation. (Id. at p. 10.) Plaintiff Mendoza
requests damages in the amount of $30, 106, comprised of $6,
976 in base wages and liquidated damages for overtime
violations under the FLSA, $4, 680 in treble damages under
the Arizona Minimum Wage Act, and $18, 450 as remedy for
retaliation. (Id. at p. 11.) Plaintiff Herrera
requests damages in the amount of $62, 876, comprised of $410
in base wages and liquidated damages for overtime violations
under the FLSA, $5, 916 in treble damages under the Arizona
Minimum Wage Act, and $56, 550 as remedy for retaliation.
(Id. at p. 12-13.)
Plaintiffs
have supported their requests for overtime violation damages
under the FLSA and minimum wage violations under the Arizona
Minimum Wage Act with a lengthy and detailed affidavit by
their counsel, specifying for each relevant week the number
of hours worked, the amount of overtime not paid, the actual
wages paid, and the applicable minimum wage at that time.
(Id. at p. 25-55.)
Plaintiffs,
however, have provided no evidence of actual damages suffered
as a result of their alleged retaliatory termination or
constructive discharge. The enforcement section of
Arizona's Minimum Wage Act provides in relevant part
that, “[A]ny employer who retaliates against an
employee or other person in violation of this article shall
be required to pay the employee an amount set by the
commission or a court sufficient to compensate the employee
and deter future violations, but not less than one hundred
fifty dollars for each day that the violation continued or
until legal judgment is final.” A.R.S. §
23-364(G). Instead of providing evidence of their actual
damages, Plaintiffs each request $150 for each day between
their alleged termination or constructive discharge and the
day Defendant El Rio ceased operations. (Id. ¶
12.)
The
Court has found no decision construing the meaning of
“for each day that the violation continued” as
provided for by Arizona's Minimum Wage Act. A.R.S. §
23-364(G). Plaintiffs request statutory damages of $150 for
each day following their termination or constructive
discharge until Defendant El Rio shut down, and they
therefore implicitly argue that the violation
“continued” until Defendant El Rio ceased
operations. However, the statute's plain language
provides for a monetary remedy “sufficient to
compensate the employee and deter future violations.”
A.R.S. § 23-364(G). To determine what is sufficient to
compensate an employee for retaliatory termination, and
whether such amount would be sufficient to deter future
violations, the Court must know the extent to which the
employee mitigated damages by securing alternative
employment. In a related context, courts have consistently
required such evidence in determining backpay compensation
under federal employment laws. See Ford Motor Co. v.
E.E.O.C., 458 U.S. 219, 232 (1982) (plaintiff
“forfeits his right to backpay if he refuses a job
substantially equivalent to the one he was denied”);
see also Caudle v. Bristow Optical Co., Inc., 224
F.3d 1014, 1020 (9th Cir. 2002) (“plaintiff seeking
back pay [has] a duty to mitigate damages by seeking
alternative employment with reasonable diligence”)
(internal citation and quotation marks omitted).
Plaintiffs
have provided no evidence of damages suffered as a result of
their alleged retaliatory terminations and constructive
discharges. The Court will provide Plaintiffs with an
opportunity to submit evidence as to wages lost as a result
of their alleged retaliatory termination or constructive
discharge. Such evidence, if provided, shall ...