Paredes Quintero v. RCO Reforesting, INC. ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 CANDELARIO PAREDES QUINTERO, No. 2:23-cv-1127-DJC-SCR et al., 12 Plaintiffs, 13 FINDINGS AND RECOMMENDATIONS v. 14 RCO REFORESTING, INC., and 15 ROBERT C. OCHOA, 16 Defendants. 17 18 This matter is before the court on Plaintiffs’ Motion for Default Judgment. ECF No. 21. 19 The Motion was referred to the undersigned pursuant to E.D. Cal. R. 302(c)(19), and was heard 20 by video on September 12, 2024, at 12:00 p.m. ECF No. 24. Plaintiffs appeared through counsel, 21 and Defendants did not appear. Id. For the reasons set forth below, the Court recommends 22 Plaintiffs’ Motion be GRANTED, and judgment be entered in favor of Plaintiffs. 23 I. Relevant Background 24 Plaintiffs Candelario Paredes Quintero and Pedro Paredes Aguilar brought their 25 Complaint on June 13, 2023 alleging that Defendants had violated both federal and state wage 26 and hour laws—the Fair Labor Standards Act, 29 U.S.C. § 201, et seq. (“FLSA”), and various 27 provisions of the California Labor Code (“Labor Code”). ECF No. 1 at 1-2. Plaintiffs allege that 28 they regularly worked in excess of 40 hours per week without receiving the overtime 1 compensation required by state and federal law. Id. at 3. Plaintiff Quintero alleges that he 2 worked at least 48 hours per week, and Plaintiff Aguilar worked at least 56 hours per week. Id. 3 Both Plaintiffs claim they worked more than 40 hours per week during every week at issue in the 4 Complaint. Id. Plaintiffs further allege that Defendants regular practice was not to allow for paid 5 rest breaks. Id. 6 The Court issued a summons as to both Defendants on June 13, 2023. ECF No. 4. The 7 record reflects that both Defendant RCO and Defendant Mr. Ochoa were served on June 16, 8 2023. ECF No. 6 & 7. Defendants did not appear, and Plaintiffs requested entry of default on 9 August 10, 2023. ECF No. 8. The clerk entered default on August 18, 2023. ECF No. 9. 10 Plaintiffs then sought leave to conduct discovery as to damages and identify potential members 11 for the class and/or collective action claims. ECF No. 10. The motion for discovery was granted. 12 ECF No. 17. Plaintiffs’ counsel represents that after discovery, Plaintiffs decided not to pursue 13 class and/or collective action claims and that he made no contact with other potential class and/or 14 collective action members. 15 Plaintiffs then moved for default judgment on May 31, 2024. ECF No. 21. Defendants 16 did not respond to the motion for default judgment, and still have not appeared in this case. 17 II. Motion 18 Plaintiffs ask the court to enter judgment as follows: 19 1) In favor of Candelario Paredes Quintero and against Defendants RCO Reforesting, 20 Inc. and Roberto C Ochoa, jointly and severally, in the amount of $29,840.00; 21 2) In favor of Pedro Paredes Aguilar and against Defendants RCO Reforesting, Inc., and 22 Roberto C Ochoa, jointly and severally, in the amount of $35,153.501; 23 3) In favor of Candelario Paredes Quintero and Pedro Paredes Aguilar and against 24 Defendants RCO Reforesting, Inc., and Roberto C Ochoa, jointly and severally, in the 25 amount of $5,740.00, representing attorney’s fees and costs; and 26 27 1 The affidavit of Pedro Paredes Aguilar seeks entry of Judgment in the amount of $31,153.50, but that appears to be a scrivener’s error as the total of the itemization provided is $35,153.50. 28 See ECF No. 21 at 14-15. 1 4) For any such other relief as the Court deems just or proper. 2 ECF No. 21 at 5. Defendants have not appeared or filed any response. 3 III. Analysis 4 A. Legal Standard 5 Pursuant to Federal Rule of Civil Procedure 55, default may be entered against a party 6 against whom a judgment for affirmative relief is sought who fails to plead or otherwise defend 7 against the action. See Fed. R. Civ. P. 55(a). However, “[a] defendant’s default does not 8 automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 9 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th 10 Cir. 1986)); see Fed. R. Civ. P. 55(b) (governing the entry of default judgments). Instead, the 11 decision to grant or deny an application for default judgment lies within the district court’s sound 12 discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In making this determination, 13 the court may consider the following factors: 14 (1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's 15 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 16 the default was due to excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 17 18 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Default judgments are ordinarily 19 disfavored. Id. at 1472. 20 As a general rule, once default is entered, well-pleaded factual allegations in the operative 21 complaint are taken as true, except for those allegations relating to damages. TeleVideo Sys., Inc. 22 v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (per curiam) (citing Geddes v. United Fin. 23 Group, 559 F.2d 557, 560 (9th Cir. 1977) (per curiam)); see also Fair Housing of Marin v. 24 Combs, 285 F.3d 899, 906 (9th Cir. 2002). Although well-pleaded allegations in the complaint 25 are admitted by a defendant’s failure to respond, “necessary facts not contained in the pleadings, 26 and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. 27 of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 28 (9th Cir. 1978)); accord DIRECTV, Inc. v. Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (“[A] 1 defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.”) 2 (citation and quotation marks omitted); Abney v. Alameida, 334 F.Supp.2d 1221, 1235 (S.D. Cal. 3 2004) (“[A] default judgment may not be entered on a legally insufficient claim.”). A party’s 4 default conclusively establishes that party’s liability, although it does not establish the amount of 5 damages. Geddes, 559 F.2d at 560; cf. Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th 6 Cir. 1990) (stating in the context of a default entered pursuant to Rule 37 that the default 7 conclusively established the liability of the defaulting party). 8 B. The Eitel Factors 9 Factor One: Possibility of Prejudice to Plaintiff 10 The first Eitel factor considers whether a plaintiff would suffer prejudice if default 11 judgment is not entered, and such potential prejudice to the plaintiff weighs in favor of granting a 12 default judgment. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Here, Plaintiffs would suffer 13 prejudice if the court did not enter a default judgment because they would be without recourse for 14 recovery. Accordingly, the first Eitel factor favors the entry of default judgment. 15 Factors Two and Three: Merits of Claims and Sufficiency of Complaint 16 The merits of Plaintiffs’ substantive claims and the sufficiency of the complaint are 17 considered here together because of the relatedness of the two inquiries. The court must consider 18 whether the allegations in the Complaint are sufficient to state a claim that supports the relief 19 sought. See Danning, 572 F.2d at 1388; PepsiCo, Inc., 238 F.Supp.2d at 1175. Here, the merits 20 of the claims and sufficiency of the complaint favor entry of default judgment. 21 Plaintiffs bring five counts alleging that Defendants: 1) failed to pay overtime as required 22 by FLSA; 2) failed to pay overtime as required by the Labor Code § 1194; 3) failed to authorize 23 or permit paid rest periods as required by the Labor Code §§ 226.2 and 226.7; 4) failed to issue 24 accurate itemized wage statements under Labor Code §§ 226(a) & (e) and 226.2; and 5) willfully 25 failed to pay Plaintiffs their wages due after the termination of Plaintiff’s employment and thus 26 waiting time penalties are owed under Labor Code § 203. ECF No. 1 at 7-14. 27 Plaintiffs allege that they were non-exempt employees who worked overtime during every 28 week of the relevant period and were not paid an additional amount for overtime. ECF No. 1 at 1 ¶¶ 19-20. Plaintiffs allege they were not allowed rest breaks, or paid for rest breaks. Id. at ¶¶ 21- 2 26. Plaintiffs allege that Defendants did not issue accurate wage statements. Id. at ¶ 27. 3 Plaintiffs also allege that Defendants willfully failed to pay Plaintiffs their wages due after 4 Plaintiffs’ employment with Defendants terminated. Id. at ¶ 97. Plaintiffs allege they “repeatedly 5 demanded” such payment “verbally and in writing” but that Defendants “willfully and 6 intentionally” refused to pay. Id. at ¶ 99. 7 The Court finds that the Complaint states a claim for wage and hour violations under 8 FLSA and the Labor Code upon which Plaintiffs may recover. Thus, factors two and three weigh 9 in favor of entry of default. 10 Factor Four: The Sum of Money at Stake in the Action 11 Under the fourth Eitel factor, the court considers the amount of money at stake in relation 12 to the seriousness of Defendants’ conduct. The total amount of damages sought by the two 13 Plaintiffs totals approximately $70,000. The amount is largely to compensate for unpaid wages 14 for overtime and rest periods, and includes statutory damages and penalties. The amount at issue 15 is proportionate to the seriousness of Defendants’ conduct and this factor favors entry of default 16 judgment. 17 Factor Five: Possibility of Dispute Concerning Material Facts 18 The facts of this case are relatively straightforward, and Plaintiffs have provided the court 19 with well-pleaded allegations supporting their claims and affidavits in support of their claim to 20 damages. Here, the court may assume the truth of well-pleaded facts in the complaint (except as 21 to damages) following the clerk’s entry of default and, thus, there is no likelihood that any 22 genuine issue of material fact exists. See, e.g., Elektra Entm't Group Inc. v. Crawford, 226 23 F.R.D. 388, 393 (C.D. Cal. 2005) (“Because all allegations in a well-pleaded complaint are taken 24 as true after the court clerk enters default judgment, there is no likelihood that any genuine issue 25 of material fact exists.”); accord Philip Morris USA, Inc., 219 F.R.D. at 500; PepsiCo, Inc., 238 26 F.Supp.2d at 1177. 27 Factor Six: Whether Default Was Due to Excusable Neglect 28 Upon review of the record before the court, there is no indication that the default was the 1 result of excusable neglect. See PepsiCo, Inc., 238 F.Supp.2d at 1177. Plaintiffs served the 2 Defendants with the summons and complaint. ECF Nos. 6 and 7. Moreover, Plaintiffs served 3 Defendants by mail with notice of its application for default judgment. ECF No. 21-1. Despite 4 ample notice of this lawsuit and Plaintiffs’ intention to seek a default judgment, Defendants failed 5 to defend. Thus, the record supports a conclusion that Defendants have chosen not to defend this 6 action, and that the default was not the result of excusable neglect. Accordingly, this Eitel factor 7 favors the entry of a default judgment. 8 Factor Seven: Policy Favoring Decisions on the Merits 9 “Cases should be decided upon their merits whenever reasonably possible.” Eitel, 782 10 F.2d at 1472. However, district courts have concluded with regularity that this policy, standing 11 alone, is not dispositive, especially where a defendant fails to appear or defend itself in an action. 12 PepsiCo, Inc., 238 F.Supp.2d at 1177; see also Craigslist, Inc. v. Naturemarket, Inc., 694 13 F.Supp.2d 1039, 1061 (N.D. Cal. Mar. 5, 2010). Accordingly, although the Court is cognizant of 14 the policy favoring decisions on the merits – and consistent with existing policy would prefer that 15 this case be resolved on the merits – that policy does not, by itself, preclude the entry of default 16 judgment. 17 C. Propriety of Default Judgment 18 Upon consideration of all the Eitel factors, the Court concludes that Plaintiffs are entitled 19 to the entry of default judgment against Defendants. What remains is the determination of the 20 amount of damages to which Plaintiffs are entitled. Plaintiff Candelario Paredes Quintero 21 submitted an affidavit in support of damages. ECF No. 21 at 6-11. The affidavit avers that 22 Quintero was not paid time and a half for hours in excess of 40 per week, and that he was 23 required to work throughout the day without any rest or break. Id. at 7. Quintero seeks damages 24 for unpaid overtime and rest period violations and statutory liquidated damages and penalties. Id. 25 at 8-9. Plaintiff Aguilar also submitted an affidavit in support of damages and seeks a similar 26 award. ECF No. 21 at 12-18. Both Plaintiffs provided, as exhibits to their affidavits, charts 27 showing the weeks and hours per week for which they were not properly compensated. ECF No. 28 21 at 10, 16-17. 1 The damages sought by Plaintiffs are allowed by statute. Under the FLSA, § 216(b), an 2 employer who violates the relevant provisions of the statute is liable for unpaid overtime 3 compensation and “an additional equal amount as liquidated damages.” FLSA also provides: 4 “The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, 5 allow a reasonable attorney’s fee to be paid by the defendant, and costs of the action.” § 216(b). 6 Additionally, Plaintiffs’ Complaint relies on the Labor Code and cites to §§ 203, 226, 226.2, 7 226.7, and 1194. These provisions provide for the damages Plaintiffs seek. Section 203 provides 8 a penalty for untimely payment; §226(e)(1) provides a penalty for failure to provide itemized 9 statements; § 226. 2 requires compensation for rest periods; and § 1194 allows an employee to 10 recover unpaid overtime compensation and attorney’s fees and costs. 11 Plaintiffs’ Motion for Default Judgment also seeks an award of attorney’s fees and costs. 12 ECF No. 21 at 19-21. An award of attorney’s fees must be reasonable. See Intel Corp. v. 13 Terabyte Intern., Inc., 6 F.3d 614, 622 (9th Cir. 1993) (“the district court must first determine the 14 presumptive lodestar figure by multiplying the number of hours reasonably expended on the 15 litigation by the reasonable hourly rate”). In this regard, Local Rule 293 requires a party seeking 16 an award of attorney’s fees to submit an affidavit addressing certain criteria that the court will 17 consider in determining whether an award of attorney’s fees is appropriate. 18 Plaintiffs submitted an affidavit indicating attorney’s fees in the amount of $4,900 and 19 costs in the amount of $840. ECF No. 21 at 21. Counsel’s billing rate of $400 per hour is an 20 acceptable billing rate for the Sacramento region. See Goodson v. County of Plumas, 2024 WL 21 99847 at *3 (E.D. Cal. January 9, 2024) (surveying cases and stating that fees awarded in civil 22 cases involving some complexity in this District “commonly are greater than $500 per hour, and 23 in some cases $600 per hour, for reputable attorneys with a great deal of relevant experience and 24 $300 or less for attorneys with less than ten years’ experience, depending on the type of 25 litigation.”). The Court has reviewed the billing records submitted and finds the total of 12.25 26 hours to be reasonable. Thus, the Court finds that the costs and fees are reasonable in light of the 27 complexity of this type of litigation, and that counsel has over fifteen years of practice 28 experience. An award of the reasonable requested attorney’s fees and costs is appropriate. 1 IV. Conclusion 2 It is RECOMMENDED THAT: 3 1. Plaintiffs’ May 31, 2024 motion for default judgment (ECF No. 21) be granted; 4 2. The Court enter judgment against the Defendants on Plaintiffs’ claims of violation of 5 || the wage and hour provisions of the FLSA and California Labor Code; 6 3. The Court award damages in the following amount: 1) in favor of Candelario Paredes 7 || Quintero and against Defendants RCO Reforesting, Inc. and Roberto C Ochoa, jointly and 8 | severally, in the amount of $29,840.00; 2) in favor of Pedro Paredes Aguilar and against 9 || Defendants RCO Reforesting, Inc., and Roberto C Ochoa, jointly and severally, in the amount of 10 | $35,153.50; and 3) in favor of Candelario Paredes Quintero and Pedro Paredes Aguilar and 11 | against Defendants RCO Reforesting, Inc., and Roberto C Ochoa, jointly and severally, in the 12 | amount of $5,740.00, representing attorney’s fees and costs; and 13 4. This case be closed. 14 These findings and recommendations are submitted to the United States District Judge 15 || assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within fourteen days 16 | after being served with these findings and recommendations, any party may file written 17 || objections with the court and serve a copy on all parties. /d.; see also Local Rule 304(b). Such a 18 || document should be captioned “Objections to Magistrate Judge’s Findings and 19 || Recommendations.” Any response to the objections shall be filed with the court and served on all 20 || parties within fourteen days after service of the objections. Local Rule 304(d). Failure to file 21 | objections within the specified time may waive the right to appeal the District Court’s order. 22 | Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Yist, 951 F.2d 1153, 1156-57 23 | (9th Cir. 1991). 24 | DATED: September 15, 2024 25 mk 26 SEAN C. RIORDAN UNITED STATES MAGISTRATE JUDGE 27 28