Deficient Complaint Cannot Be Cured by Testimony at Default Judgment Hearing: Fifth Circuit | Practical Law

Deficient Complaint Cannot Be Cured by Testimony at Default Judgment Hearing: Fifth Circuit | Practical Law

In Wooten v. McDonald Transit Associates, Inc., the US Court of Appeals for the Fifth Circuit held in a matter of first impression that evidence presented at a default judgment hearing cannot cure a factually deficient complaint.

Deficient Complaint Cannot Be Cured by Testimony at Default Judgment Hearing: Fifth Circuit

by Practical Law Litigation
Published on 05 Jan 2015 • USA (National/Federal)
In Wooten v. McDonald Transit Associates, Inc., the US Court of Appeals for the Fifth Circuit held in a matter of first impression that evidence presented at a default judgment hearing cannot cure a factually deficient complaint.
On January 2, 2015, in Wooten v. McDonald Transit Associates, Inc., the US Court of Appeals for the Fifth Circuit held in a matter of first impression that evidence presented at a default judgment hearing cannot cure a factually deficient complaint (No. 13-11035 (5th Cir. Jan. 2, 2015)).
Plaintiff Eddie Wooten filed suit against his former employer, McDonald Transit Associates, Inc. (McDonald), under the Age Discrimination in Employment Act (ADEA), alleging discrimination and retaliation. After McDonald failed to appear, plead or otherwise defend the suit, the clerk entered default against McDonald. Wooten then moved for a default judgment. At the hearing to "prove-up" damages for a default judgment, Wooten provided testimony that elaborated on the sparse factual allegations of the complaint. His testimony included evidence on the required elements of the ADEA claim that was absent from his complaint. The district court entered a default judgment in favor of Wooten. McDonald filed a motion to set aside the default judgment, which the district court denied. McDonald appealed.
The Fifth Circuit reversed, holding that a factually deficient complaint cannot be cured by testimony at a default judgment prove-up hearing. The court determined that Wooten's complaint was impermissibly bare and that the district court improperly considered Wooten's testimony at the default judgment hearing when determining the sufficiency of his ADEA cause of action. The court reasoned that:
  • Precedents from sister circuits support the conclusion that a default judgment must be based on adequate pleadings.
  • Hearings under Federal Rule of Civil Procedure (FRCP) 55(b)(2) are not intended to adduce facts that are necessary to state a claim but that are absent from the complaint.
  • Introducing necessary facts for the first time at a damages hearing unfairly disadvantages defaulting defendants.
  • Treating testimony at a prove-up hearing as curative of inadequate pleadings gives trial judges impermissible latitude to assist individual parties.
The court set out three options for a district court when a plaintiff's pleadings are inadequate and additional, necessary factual allegations have been asserted during a hearing:
  • Dismiss the complaint sua sponte under FRCP 12(b)(6) without prejudice, allowing the plaintiff to amend and refile.
  • Grant leave to amend the complaint to include the facts presented at the hearing.
  • Treat the hearing evidence as a de facto amendment to the complaint and then allow the defendant to answer the complaint as amended.
Practitioners in the Fifth Circuit should ensure that the complaint contains sufficient factual allegations before moving for a default judgment.