ISA Plus, LLC v. Prehired, LLC
- Proceeding
- district
- Area
- civil
- Panel
- John A. Houston (author)
Analysis
Plaintiff ISA Plus, LLC requested entry of default against Defendant Prehired, LLC after the Defendant failed to retain counsel and file a notice of appearance by the court-ordered deadline following the lifting of the automatic stay. The court granted the request and directed the Clerk to enter default against Prehired, LLC.
| What the court decided | The model |
|---|---|
Request for Entry of Default granted“IT IS HEREBY ORDERED that the Clerk of Court is directed to enter default against Defendant Prehired, LLC.” | agree with court The court correctly applied Federal Rule of Civil Procedure 55(a). The record establishes that the Defendant, a corporation, was required to be represented by counsel (citing Rowland v. California Men’s Colony) and failed to do so by the court-ordered deadline of March 31, 2023. The court relied on Ninth Circuit precedent (United States v. High Country Broadcasting Co., Inc.) establishing that entry of default is appropriate when a corporation intentionally fails to participate or comply with court orders to retain counsel. The procedural history confirms the automatic stay was lifted, allowing the action to proceed, and the Defendant's failure to appear constituted a failure to 'otherwise defend.' |
The order itself: sound — The order is procedurally sound. It correctly identifies the legal requirement for corporate representation, cites binding Ninth Circuit authority for the proposition that failure to retain counsel justifies default, and applies Rule 55(a) to the specific facts of the Defendant's non-compliance with the court's deadline. The reasoning directly answers the motion with the appropriate authorities.
Opinion
1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ISA PLUS, LLC, a Delaware Limited Case No.: 3:22-cv-01211-JAH-JLB Liability Company, 12 ORDER DIRECTING CLERK TO Plaintiff, 13 ENTER DEFAULT v. 14 PREHIRED, LLC, a Delaware Limited 15 ECF No. 27. Liability Company; JOSHUA K. 16 JORDAN, an individual; and DOES 1 THROUGH 2, inclusive, 17 Defendants. 18 19 Defendant PREHIRED, LLC, a Delaware Limited Liability Company 20 (“Defendant”) filed a Notice of Automatic Stay based upon the filing of the bankruptcy 21 petition in the United States Bankruptcy Court for the Southern District of New York. 22 (ECF No. 8).1 Pursuant to 11 U.S.C. § 362, Defendant’s bankruptcy petition operates as 23 an automatic stay on the instant action. See 11 U.S.C. § 362(a). 24 25 26 27 1 The case was transferred on September 27, 2022, from the Southern District of New York to the District of Delaware. In re PREHIRED, LLC, et al., Case No. 22-11007 (JTD), 28 1 Plaintiff ISA Plus, LLC, a Delaware Limited Liability Company (“Plaintiff”) sought 2 ||relief from automatic stay from the United States Bankruptcy Court for the District of 3 || Delaware, which was subsequently granted in an order dated May 5, 2023. (Ex. A, ECF 4 ||No. 23). Thereafter, Plaintiff filed a Request for Entry of Default pursuant to Federal Rule 5 |l of Civil Procedure 55(a)’ against Prehired, LLC, based upon Defendant’s failure to retain 6 || counsel and file a notice of appearance by the Court ordered deadline of March 31, 2023. 7 || (ECF No 27 at 1). 8 As a corporation, Defendant must be represented by counsel. See Rowland v. 9 || California Men’s Colony, Unit IT Men's Advisory Council, 506 U.S. 194, 201-02 (1993). 10 || Accordingly, entry of default is appropriate when a corporation fails to appoint counsel to 11 |/act on its behalf and it intentionally fails to participate in the action or comply with court 12 orders. See United States v. High Country Broadcasting Co., Inc., 3 F.3d 1244, 1245 (9th 13 || Cir. 1993) (per curiam) (finding entry of default judgment is “perfectly appropriate” when 14 || plaintiff failed to obey a court order to retain counsel); see also Price Simms Holdings, 15 v. Candle3, LLC, No. 2:18-cv-1851-WBS-KJN, 2020 WL 4227480 (E.D. Cal. Jul. 16 |/30, 2020). As such, based on Defendant’s failure to “otherwise defend” this action by 17 retaining counsel, the Court finds entry of default pursuant to Rule 55(a) is appropriate. 18 || Accordingly, IT IS HEREBY ORDERED that the Clerk of Court is directed to enter default 19 || against Defendant Prehired, LLC. 20 IT IS SO ORDERED. 21 ||DATED: June _, 2023 23 4 JC A. HOUSTON ITED STATES DISTRICT JUDGE 25 2oi}o020tti<“i‘< OO! 27 |I? Federal Rule of Civil Procedure 55(a) provides that a clerk must enter a default 28 “Tw hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend[.]” Fed. R. Civ. P. 50(a).