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Amato v. Snap Telecommunications, Inc.

United States District Court, Fourth Circuit

August 27, 2013

Alexandra Amato, et al. Plaintiffs,
v.
SNAP Telecommunications, Inc., et al. Defendants

REPORT AND RECOMMENDATION

SUSAN K. GAUVEY, Magistrate Judge.

This matter comes before the Court upon motion by the plaintiffs for an entry of default judgment against SNAP Telecommunications, Inc. ("SNAP") and Tom Kielty pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure, for failure to appear or otherwise defend in this matter. (ECF No. 8). Plaintiffs are Alexandra Amato ("Amato"), Darick Finke ("Finke"), Sherri Fleishell ("Fleishell"), Tanisha James ("James"), Rebecca Boswell ("Boswell"), Donna Matz ("Matz"), Sarah J. McQuaid ("McQuaid"), Megan Moore ("M. Moore"), Shanna Moore ("S. Moore"), Felicia Munford ("Munford"), Carola Hatfield("Hatfield") (together, "the Maryland plaintiffs"), and Brian Reddy ("Reddy" or "the New York plaintiff") (collectively, "plaintiffs"). (ECF No. 3, ¶¶ 17-29).

On September 19, 2012, plaintiffs filed an Amended Complaint seeking to recover unpaid wages and damages under the Maryland Wage Payment and Collection Law; the Maryland Wage and Hour Law; the Federal Fair Labor Standards Act; the New York Wage Payment Statute; the New York Minimum Wage Statute; a negligent misrepresentation theory; and a quantum merit theory.[1] (ECF No. 3).

For the reasons discussed herein, I recommend that plaintiff's motion (ECF No. 8) be GRANTED and that damages be awarded as set forth herein.

I. Default Judgment Standard

Federal Rule of Civil Procedure 55(b)(2) authorizes courts to enter a default judgment against a properly served defendant who fails to file a timely responsive pleading. Fed.R.Civ.P. 55(b)(2).

In deciding whether to grant a motion for default judgment, the Court must first consider the following three factors: (1) whether the plaintiff will be prejudiced if default is not granted, (2) whether the defendant has a meritorious defense, and (3) whether the defendant's delay was the result of culpable misconduct. Emcasco Ins. Co. v. Sambrick , 834 F.2d 71, 73 (3d Cir. 1987), see also Smith v. Bounds , 813 F.2d 1299, 1303 (4th Cir. 1987) (relying on these factors in determining whether a default judgment merited reconsideration).

The Court must also determine whether plaintiffs have alleged legitimate causes of action. In reviewing plaintiffs' Motion for Entry of a Default Judgment, the Court accepts as true the well-pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network , 253 F.3d 778, 780-81 (4th Cir. 2001). It, however, remains for the Court to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id .; see also 10A WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE § 2688 (3rd ed. Supp. 2010) ("[L]iability is not deemed established simply because of the default... and the Court, in its discretion, may require some proof of the facts that must be established in order to determine liability.").

If the Court determines that liability is established, it must then determine the appropriate amount of damages. Ryan , 253 F.3d at 780-81. Unlike allegations of fact establishing liability, the Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. See Credit Lyonnais Secs. (USA), Inc. v. Alcantara , 183 F.3d 151, 154 (2d Cir. 1999). In so doing, the Court may conduct an evidentiary hearing. FED. R. CIV. P. 55(b)(2). The Court may also make a determination of damages without a hearing as long as there is an adequate evidentiary basis in the record for the award. See, e.g., Stephenson v. El-Batrawi , 524 F.3d 907, 917 n.11 (8th Cir. 2008) ("Foregoing an evidentiary hearing may constitute an abuse of discretion when the existing record is insufficient to make the necessary findings in support of a default judgment."); Adkins v. Teseo , 180 F.Supp.2d 15, 17 (D.D.C. 2001) (finding that a court need not make determination of damages following entry of default through hearing, but rather may rely on detailed affidavits or documentary evidence to determine the appropriate sum).

II. Preliminary Factors

The Clerk of court having filed entry of default on October 15, 2012 (ECF No. 7), the undersigned concludes that the procedural requirements for entry of default judgment have been met. Moreover, because defendant has failed to file any responsive pleadings or otherwise show cause as to why default should not be granted, the Court is "not in a position to judge whether any delay was the result of culpable misconduct." Sambrick , 834 F.2d at 73. Further, defendant's failure to appear deprived the plaintiffs of any other means of vindicating their claim, and plaintiff would be prejudiced if default is not granted.

III. Discussion

A. Federal Labor Standards Act

In Count IV of their complaint, plaintiffs assert a claim under the Federal Labor Standards Act ("FLSA"). The FLSA requires that "[e]very employer shall pay to each of his employees... engaged in commerce or in the production of goods for commerce, " an hourly wage at least equal to $7.25, the current Federal Minimum Wage. 29 U.S.C. § 206(a). Plaintiffs allege that defendants violated the FLSA because they did not "pay Plaintiffs any wages at all" for various periods of time. (ECF No. 3, ¶ 57). As such, they allege that defendants "have failed and refused to compensate Plaintiffs properly at a rate at least equal to the Federal Minimum Wage." (Id. at ¶ 59). They state that defendants were "employers" and plaintiffs "employees" for the purposes of FLSA. (Id. at ¶¶ 13-14). They further allege that defendants "were engaged in commerce or in the production of goods for commerce" within the meaning of the FLSA. (Id. at ¶ 11).

Taking these uncontested allegations as true, the Court finds that plaintiffs have properly ...


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