United States District Court, S.D. New York
December 13, 2005.
JUANA VIADA, ET AL., Plaintiffs,
OSAKA HEALTH SPA, INC., ET AL., Defendants.
The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge
REPORT and RECOMMENDATION
In this action, brought pursuant to the Fair Labor Standards
Act and analogous provisions of state law, the plaintiffs have
requested that a default judgment be entered against the
corporate defendants: Osaka Health Spa, Inc. d/b/a Osaka 56;
Osaka Health Spa Center Corp. d/b/a/ Osaka 56; Osaka 46
Traditional Health Spa, Inc. d/b/a Osaka 46; and Osaka Spa
Construction, Inc. ("Osaka"), because they failed to comply with
two Orders of the Court dated April 11, 2005 and May 13, 2005.
Each of the orders directed the Osaka corporate defendants to
obtain new counsel, since their prior counsel had been relieved
by the Court of the obligation of continuing to represent them in
this action. Each of the orders also directed the Osaka corporate
defendants to have their new counsel provide a copy of any Notice
of Appearance counsel might file with the Clerk of the Court to
all other parties to the action and to the undersigned magistrate
The plaintiffs maintain that the Osaka corporate defendants'
failure, repeatedly, to comply with the orders of the Court, that
they obtain new counsel to represent them in this action, warrants the entry of a default judgment against them. Moreover,
the plaintiffs note that a corporate entity cannot appear in an
action pro se; it can conduct litigation only through
counsel. See Shapiro, Bernstein & Co., Inc. v. Continental
Record Co., Inc, 386 F.2d 426, 427 (2d Cir. 1967). In addition,
the plaintiffs contend that the entry of a default judgment
against the Osaka corporate defendants is also warranted because
they did not seek additional time from the Court to comply with
the above-noted orders and failed to apprise the Court of
attempts, if any, they made to comply with the Court's orders.
After the plaintiffs filed the instant motion, a Notice of
Appearance was filed with the Clerk of Court, by an attorney, on
behalf of the Osaka corporate defendants. That attorney prepared
a written submission in opposition to the instant motion. The
submission made on behalf of the Osaka corporate defendants was
untimely. Moreover, it is devoid of citation to any legal
When a corporate defendant fails, repeatedly, to appear by
counsel in an action, a default judgment may be entered against
it. See Shapiro, Bernstein & Co., Inc., 386 F.2d at 427.
However, the Court is mindful that a default judgment is the most
severe sanction that a court, in the exercise of its discretion,
may apply. See Cody v. Mello, 59 F.3d 13, 15 (2d Cir. 1995).
The Court is also mindful that the Second Circuit Court of
Appeals has expressed a strong preference for having litigation
resolved on the merits, and not through the entry of a default
judgment. See Powerserve Int'l, Inc. v. Lavi, 239 F.3d 508,
514 (2d Cir. 2001). Thus, while it is reprehensible that the
Osaka corporate defendants failed to abide by the orders of the
Court directing them to obtain new counsel by dates certain, now
that the Osaka corporate defendants have retained counsel who is
assisting them in defending against this action, the Court finds
that it is reasonable and appropriate to allow the action to be resolved
against the Osaka corporate defendants on the merits, as is the
preference in this circuit. Therefore, the Court recommends that
the plaintiffs' motion for the entry of a default judgment
against the Osaka corporate defendants be denied.
FILING OF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal
Rules of Civil Procedure, the parties have ten (10) days from
service of the Report to file written objections. See also
Fed.R.Civ.P. 6. Such objections, and any responses to
objections, shall be filed with the Clerk of Court, with courtesy
copies delivered to the chambers of the Honorable Victor Marrero,
United States District Judge, 40 Centre Street, Room 414, New
York, New York 10007, and to the chambers of the undersigned, 40
Centre Street, Room 540, New York, New York 10007. Any requests
for an extension of time for filing objections must be directed
to Judge Marrero. FAILURE TO FILE OBJECTIONS WITHIN TEN (10) DAYS
WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE
REVIEW. See Thomas v. Arn, 474 U.S. 140 (1985); IUE AFL-CIO
Pension Fund v. Herrmann, 9 F.3d 1049, 1054 (2d Cir. 1993);
Frank v. Johnson, 968 F.2d 298, 300 (2d Cir. 1992); Wesolek v.
Candair Ltd., 838 F.2d 55, 57-59 (2d Cir. 1998); McCarthy v.
Manson, 714 F.2d 234, 237-38 (2d Cir. 1983).
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