In the Tenth Circuit, the preferred disposition of any case is on its merits and not by default judgment. But in Danyale Yarger v. Fresh Farms, LLC, 2020 U.S. Dist. LEXIS 144579, Case No. 2:19-CV-2767-JAR-JPO, United States District Court for the District of Kansas, August 12, 2020, the defendant’s conduct in a TCPA class action case taxed even that preference and the “fairly liberal standard” for setting aside an entry of default.
Ms. Yarger claimed that Fresh Farms, “a South Dakota wholesaler that delivers fruit and vegetables to customers nationwide,” violated the Telephone Consumer Protection Act (TCPA) by sending unsolicited automatic text messages to her cellphone. She brought her class action lawsuit in December of 2019. Three months later, in March of 2020, after Fresh Farms had failed to appear or answer the complaint, the plaintiff moved for the entry of a default judgment and the Clerk of the Court obliged.
In May 2020, after Ms. Yarger had moved for class certification and to take discovery in anticipation of entry of a final default judgment, counsel for Fresh Farms appeared and moved to set aside the Clerk’s entry of default, which Ms. Yarger of course opposed. But counsel’s appearance in the case was short lived; the Court approved his withdrawal from the case in June 2020 for “the primary reason… that Fresh Farms wished to terminate his representation due to lack of financial resources.” Finally, in early July, the Court warned Fresh Farms that as an LLC it could not proceed pro se or be represented by a corporate officer. Moreover, get counsel by August 3, 2020 or face entry of default. That date came and went without any new counsel appearing or any responses to pending motions.
With this factual backdrop Chief Judge Julie A. Robinson focused on “whether the default was the result of culpable conduct by” Fresh Farms. The Court observed that “a defendant’s conduct is considered culpable if he defaulted willfully or has no excuse for the default.” Moreover, a “defendant’s knowledge of a lawsuit and his post-service actions ‘play a role in measuring the willfulness of a defendant’s default.’” So, “when the defendant has actual or constructive notice of a lawsuit, yet completely fails to answer or otherwise communicate with the Court, his failure is willful and ‘demonstrates complete disregard for the authority of the Court.’”
Fresh Farms pleaded that it was initially financially challenged in hiring counsel, consulted counsel without TCPA experience and retained counsel as soon as it was able to pay. Therefore, “it in no way attempted to manipulate the legal process to benefit itself or gain leverage through delay, and that because it did not act in bad faith, its conduct is not culpable.”
Judge Robinson would have none of it. Under the circumstances, “Fresh Farms’ failure to appear in this case until months after service amounts to culpable conduct rather than inadvertence or simple neglect.” Moreover, the Court observed “Fresh Farms’ CEO does not appear to be a stranger to the legal process. Yet despite having knowledge of this suit at the time it was filed in December 2019, or at the latest in mid-February 2020, Fresh Farms failed to appear, seek an extension of time to respond, or otherwise communicate with this Court. Fresh Farms’ explanation that it did not have the resources to hire a ‘TCPA attorney’ is not a persuasive justification for having failed to respond until nearly five months after service. No particular TCPA expertise is required to seek an extension of time to respond, nor does Fresh Farms’ contention that it lacks the resources to participate in this case excuse it from its obligations under the Federal Rules of Civil Procedure.”
All of this was more than enough for Judge Robinson. “Because this litigation has been essentially halted due to Fresh Farms’ unresponsiveness, the Court denies Fresh Farms’ motion to set aside the Clerk’s entry of default.”
The TCPAWorld lesson may seem simple and obvious – always be responsive to the Court.