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Mcfadden v. L & J Waste Recycling, LLC

United States District Court, D. Maryland

July 14, 2017

L&J WASTE RECYCLING, LLC, et al. Defendants.


          Ellen Lipton Hollander United States District Judge.

         Alphonso McFadden, plaintiff, filed suit against defendants L&J Waste Recycling, LLC ("L&J"); Lenzie M. Johnson, III ("Johnson III"); and Lenzie M. Johnson, Jr. ("Johnson Jr."), alleging violations of the Fair Labor Standards Act ("FLSA"), as amended, 29 U.S.C. §§ 201, et seq.; the Maryland Wage and Hour Law ("MWHL"), as amended, Md. Code (2016 Repl. Vol.), §§ 3-401 et seq. of the Labor and Employment Article ("L.E."); and the Maryland Wage Payment and Collection Law ("MWPCL"), as amended, L.E. §§ 3-501 et seq. ECF 1. In particular, plaintiff claims that he was not paid time and a half for hours worked in excess of 40 hours a week during the period of his employment, from October 28, 2014, to January 14, 2016. Id. ¶¶ 21-23; ECF 32-2 (McFadden Affidavit), ¶ 4.

         Through counsel, Johnson III and L&J moved to dismiss, or in the alternative, for summary judgment. ECF 5. And, through counsel, Johnson Jr. also filed a motion to dismiss, or in the alternative, for summary judgment. ECF 7. By Memorandum (ECF 19) and Order (ECF 20) of January 10, 2017, I denied both motions. In my Order, I directed the defendants to answer the Complaint on or before January 31, 2017. ECF 20.

         In the interim, on January 27, 2017, counsel for defendants moved to withdraw from the case. ECF 21. The motion reflected compliance with Local Rule 101.2(a) and 1012(b). Therefore, I granted the motion to withdraw by Order of the same date. ECF 22.

         In a letter dated January 27, 2017, the Clerk notified defendants of the implications of counsel‘s withdrawal. ECF 24. Then, by Order of February 7, 2017, I advised the defendants of the requirement that corporate entities, including limited liability companies, appear in court only through counsel. See ECF 25; see also Local Rule 101.1(a); 101.2(b). And, I granted L&J until March 13, 2017, to obtain counsel. ECF 25. Further, I directed all defendants to answer the Complaint by March 13, 2017. Id. at 2.

         By March 27, 2017, no lawyer had entered an appearance for L&J, nor had defendants answered the Complaint. Therefore, on that date, I directed plaintiff to file a motion for clerk‘s entry of default as to each defendant, pursuant to Fed.R.Civ.P. 55(a), or show cause why such action is not appropriate. ECF 26. Plaintiff filed a Motion for Entry of Default as to all defendants on April 10, 2017. ECF 27. And, on April 20, 2017, the Clerk entered an order of default as to all defendants. ECF 29.

         Thereafter, plaintiff filed a motion for default judgment (ECF 32, "Motion"), supported by several exhibits. ECF 32-1 through ECF 32-6. The exhibits include the Affidavit of George E. Swegman, Esq. (ECF 32-1); the Affidavit of Alphonso McFadden (ECF 32-2); "Plaintiff‘s Attorneys‘ Fees and Costs Affidavit" (ECF 32-3); and two "Non-Military" Affidavits signed by Mr. Swegman, concerning Johnson III (ECF 32-5) and Johnson Jr. (ECF 32-6). Defendants have not responded, and the time for them to do so has expired. See Local Rule 105.2.

         No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion for Default Judgment as to liability and statutory damages. But, I shall defer entry of an order awarding attorney‘s fees, pending the submission of a proper motion for such fees.

         I. Standard of Review

         Rule 55(b) of the Federal Rules of Civil procedure governs default judgments.[1] In particular, Rule 55(b)(1) provides that the clerk may enter a default judgment if the plaintiff‘s claim is "for a sum certain or a sum that can be made certain by computation."[2] But, "[a] plaintiff‘s assertion of a sum in a complaint does not make the sum ‗certain‘ unless the plaintiff claims liquidated damages; otherwise the complaint must be supported by affidavit or documentary evidence. Monge v. Portofino Ristorante, 751 F.Supp.2d 789, 794 (D. Md. 2010) (Grimm, M.J).[3]

         The United States Court of Appeals for the Fourth Circuit has a "strong policy that cases be decided on the merits." United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993); see Tazco, Inc. v. Director, Office of Workers' Compensation Program, 895 F.2d 949, 950 (4th Cir. 1990); Disney Enters. v. Delane, 446 F.Supp.2d 402, 405 (D. Md. 2006). That policy is not absolute, however. Default judgment "is appropriate when the "adversary process has been halted because of an essentially unresponsive party.‘" Entrepreneur Media, Inc. v. JMD Entertainment Group, LLC, 958 F.Supp.2d 588, 593 (D. Md. 2013) (quoting SEC v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).

         As noted, defendants did not answer the suit after the Court denied their motions to dismiss. See Fed. R. Civ. P. 12(a)(4)(A); ECF 20. Therefore, plaintiff‘s factual allegations, other than those pertaining to damages, are deemed admitted. See Fed. R. Civ. P. 8(b)(6); see also Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (stating that the court accepts as true the well pleaded factual allegations in the Complaint as to liability). But, the court must determine whether the undisputed factual allegations constitute a legitimate cause of action. Id. at 780-81; see also 10A Wright, Miller & Kane, Federal Practice and Procedure, § 2688 (3d ed. 2010 Supp.) ("[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 is satisfied that liability has been established, it must then determine the appropriate amount of damages. Ryan, 253 F.3d at 780-81. Allegations "relating to the amount of damages" are not deemed admitted based on a defendant‘s failure to respond to a suit. Fed R. Civ. P. 8(b)(6); see Ryan, 253 F.3d at 780 ("‗[D]efault is not treated as an absolute confession by the defendant of his liability and of the plaintiff‘s right to recover‘") (citation omitted); see also Monge, 751 Supp. 2d at 794 (same); Trs. of the Elec. Welfare Trust Fund v. MH Passa Elec. Contracting, Inc., No. DKC-08-2805, 2009 WL 2982951, at *1 (D. Md. Sept. 14, 2009) ("Upon default, the well-pled allegations in a complaint as to liability are taken as true, although the allegations as to damages are not."); Pentech Fin. Servs., Inc. v. Old Dominion Saw Works, Inc., No. 6:09cv00004, 2009 WL 1872535, at *1 (W.D. Va. June 30, 2009) ("Upon default judgment, Plaintiff‘s factual allegations are accepted as true for all purposes excluding determination of damages.").

         Rather, a court must make an independent determination regarding allegations as to damages. See Credit Lyonnais Sec. (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). However, the court may also make a determination of damages without a hearing, so long as there is an adequate evidentiary basis in the record to support an award of the requested damages. See Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) ("[T]he court may rely on detailed affidavits or documentary evidence to determine the appropriate sum."); Monge, 751 F.Supp.2d at 795 (same); Pentech Fin. Servs., Inc., Civ. No. 6:09cv00004, 2009 WL 1872535, at *2 (concluding that there was "no need to convene a formal evidentiary hearing on the issue of damages" because plaintiff submitted affidavits and records establishing the amount of damages); JTH Tax, Inc. v. Smith, Civil No. 2:06CV76, 2006 WL 1982762, at *3 (E.D. Va. June 23, 2006) ("If the defendant does not contest the amount pleaded in the complaint and the claim is for a sum that is certain or easily computable, the judgment can be entered for that amount without further hearing.").

         Notably, under Fed.R.Civ.P. 54(c), "[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." See In re Genesys Data Techs, Inc., 204 F.3d 124, 132 (4th Cir. 2000) ("When a Complaint demands a specific amount of damages, courts have generally held that a default judgment cannot award additional damages."). This is meant to enable the defendant to decide whether to expend the resources to defend the action. Monge, 751 F.Supp.2d at 796.

         II. Discussion

         A. Liability

         Plaintiff claims that defendants violated the provisions of the FLSA, MWHL, and MWPCL because he was not paid required overtime wages during his employment as a "Plant Foreman" for defendants. ECF 1, ¶¶ 19, 21-24; see 29 U.S.C. § 207; L.E. 3-415; L.E. 3-508. In particular, McFadden states that he was paid "straight time" for all hours worked, including weekly hours in excess of forty hours. ECF 1, ¶ 23.

         Congress enacted the FLSA in 1938 "to protect all covered workers from substandard wages and oppressive working hours, ‗labor conditions [that are] detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.‘" Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 739 (1981) (quoting 29 U.S.C. § 202(a)) (alterations in Barrentine). Thus, the FLSA is now "best understood as the ‗minimum wage/maximum hour law.‘" Trejo v. Ryman Hospitality Properties, Inc., 795 F.3d 442, 446 (4th Cir. 2015) (citation omitted); see also Monahan v. County of Chesterfield, Va., 95 F.3d 1263, 1266-67 (4th Cir. 1996) ("The two central themes of the FLSA are its minimum wage and overtime requirements . . . . The FLSA is clearly structured to provide workers with specific minimum protections against excessive work hours and substandard wages.") (internal quotations omitted).

         Of relevance here, the FLSA "'establishe[s] a minimum wage and overtime compensation for each hour worked in excess of 40 hours in each workweek‘ . . . ." Perez v.

         Mortgage Bankers Ass'n, ___ U.S.___ , 135 S.Ct. 1199, 1204 (2015) (quoting Integrity Staffing Solutions, Inc. v. Busk, 574 U.S.___ , 135 S.Ct. 513, 516 (2014)) (alterations in Perez). In particular, it established the "general rule that employers must compensate each employee ‗at a rate not less than one and one-half times the regular rate‘ for all overtime hours that an employee works." Darveau v. Detecon, Inc., 515 F.3d 334, 337 (4th Cir. 2008) (quoting 29 U.S.C. § 207(a)(1)). Further, 29 U.S.C. § 216(b) states:

Any employer who violates the provisions of . . . section 207 of this title shall be liable to the employee . . . affected in the amount of . . . their unpaid overtime compensation, . . . and in an additional equal amount as liquidated damages....The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.

         The MWHL is the State‘s equivalent of the FLSA. See Newell v. Runnels, 407 Md. 578, 650, 967 A.2d 729, 771 (2009). Generally, the MWHL governs minimum wages and overtime under Maryland law. See L.E. §§ 3-413, 3-415, 3-420. Under L.E. § 3-415(a), "each employer shall pay an overtime wage of at least 1.5 times the usual hourly wage." And, L.E. § 3-420(a) provides that overtime wages shall be computed "on the basis of each hour over 40 hours that an employee works during 1 workweek."

         The MWHL also authorizes an employee to bring an action against an employer to recover unpaid wages due under the statute. L.E. § 3-437. See generally Friolo v. Frankel, 373 Md. 501, 819 A.2d 354 (2003). It provides that, "[i]f an employer pays an employee less than the wage required under this subtitle, the employee may bring an action against the employer to recover the difference between the wage paid to the employee and the wage required under this subtitle, " as well as for costs and attorney‘s fees. L.E. §§ 3-427(a) & (d).

         The MWPCL "protects employees from wrongful withholding of wages upon termination." Stevenson v. Branch Banking and Trust Corporation, t/a BB & T,159 Md.App. 620, 635, 861 A.2d 735, 743 (2004) (citing L.E. § 3-505). "The principal purpose of the Act ‗was to provide a vehicle for employees to collect, and an incentive for employers to pay, back wages.‘" Medex v. McCabe,372 Md. 28, 39, 811 A.2d 297, 304 (2002) (citation omitted). The MWPCL does not focus on "the amount of wages payable but rather the duty to pay whatever wages are due on a ...

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