Summary
The United States District Court for the Southern District of Illinois denied Plaintiff Tuan Steward’s motion for default judgment and granted Defendant Wilson Outdoor Services, LLC’s motion to vacate the entry of default. The court found good cause, prompt corrective action, and arguably meritorious defenses under Federal Rule of Civil Procedure 55(c), and vacated the Clerk’s entry of default.
Topics
Practice areas
Questions Presented
- Whether Defendant established good cause to set aside the Clerk's entry of default under Federal Rule of Civil Procedure 55(c).
- Whether Plaintiff was entitled to default judgment after the entry of default.
- Whether Defendant identified an arguably meritorious defense to Plaintiff's retaliatory-discharge and overtime claims.
Holdings
- Defendant established good cause because its failure to respond was inadvertent rather than willful, it took prompt steps to correct the default after learning of it, and it identified arguably meritorious defenses.
- Defendant identified arguably meritorious defenses sufficient for purposes of Rule 55(c), including that Plaintiff was discharged because there was no available work for him because he lacked a valid driver's license and could not operate Defendant's vehicles or equipment, and that employment records conflicted with Plaintiff's allegations regarding hours worked and hiring date.
- Plaintiff was not entitled to default judgment because the Clerk's entry of default was vacated.
Key quotations
“Under Federal Rule of Civil Procedure 55(c), “[t]he court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b).””
“To vacate an entry of default, the moving party must show “good cause for the defendant’s inaction, prompt steps to correct the default, and an arguably meritorious defense to the lawsuit.””
“In this context, a “meritorious defense . . . mean[s] more than bare legal conclusions . . . but less than a definitive showing that the defense will prevail.””
Factual background
Plaintiff alleged that Defendant failed to pay overtime wages under the FLSA and Illinois Minimum Wage Law and terminated Plaintiff in retaliation for protected activity. Defendant was served on November 18, 2025, but did not answer by the December 9 deadline, resulting in a Clerk's entry of default on December 30. Defendant explained that its registered agent believed the insurer was handling the defense, and Defendant later identified defenses concerning Plaintiff's lack of a valid driver's license, the availability of work, and inconsistencies in the alleged hours worked and hiring date.
Procedural history
Plaintiff filed claims under the Fair Labor Standards Act, the Illinois Minimum Wage Law, and Illinois law concerning retaliatory discharge. Defendant was served but failed to answer by the deadline, and the Clerk entered default. Defendant's registered agent initially attempted to proceed without counsel, but the Court struck that filing because a legal entity cannot appear pro se and ordered Defendant to retain counsel. After counsel appeared, Defendant moved to vacate the entry of default. The Court granted Defendant's motion, vacated the Clerk's entry of default, and denied Plaintiff's motion for default judgment.