DeLoach v. TransUnion

Background

Thomas B. Deloach sued TransUnion, LLC, and other defendants, alleging violations of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, New York General Business Law §§ 349 and 380, negligence, fraudulent misrepresentation, tortious interference with prospective economic advantage, and defamation. The case was removed from New York state court to the Southern District of New York.

All defendants except National Recovery Agency, Inc. (NRA) appeared. Deloach served NRA through the New York Secretary of State. After NRA did not respond, the Clerk entered a certificate of default on September 2, 2025. The court later ordered Deloach to send NRA additional copies of the Complaint and other documents by mail. Deloach complied, but NRA still did not appear.

At an October 17, 2025 telephone conference, Deloach asked about a schedule for seeking a default judgment against NRA. The court was not convinced that NRA had received actual notice because delivery of process through the New York Secretary of State could take many months. The court therefore extended NRA’s response deadline to November 10, 2025 and required Deloach to send NRA the court’s order by mail and email. Deloach then moved to clarify and establish a schedule for seeking a default judgment, arguing that the additional service requirements and delay prejudiced him.

Issue and analysis

The issue was whether Deloach should be allowed to begin default-judgment proceedings against NRA at that time. A default judgment is a judgment entered when a defendant fails to respond or otherwise defend. The court explained that the Second Circuit treats default judgment as an extreme remedy and that courts should be cautious before entering one because a default judgment may later be vacated, or set aside.

The court noted that NRA had consented to removal through a lawyer who signed the notice of removal. Based on that fact and the court’s view that NRA was an ongoing business that had recently litigated other cases in the District, the court considered it highly unlikely that NRA would remain absent once it understood that the case was proceeding.

The court also reasoned that proceeding immediately would likely require Deloach to spend substantial time seeking a default judgment and then opposing a later motion by NRA to vacate it. In addition, because Deloach sought overlapping damages from multiple defendants, a separate damages determination against NRA could create inconsistent judgments. Even a default judgment establishing NRA’s liability might not lead to an immediate damages assessment; the damages attributable to NRA could need to be addressed together with the claims against the non-defaulting defendants.

Disposition

Judge Robyn F. Tarnofsky denied Deloach’s motion. The court ordered Deloach, by October 27, 2025, to send this order and the orders at ECF 63 and ECF 69 to the lawyer who signed NRA’s notice of removal, by mail and email, and to file proof of service. The court again warned NRA that failing to respond to the Complaint, or request an extension, by November 10, 2025 might lead the court to order Deloach to begin default-judgment proceedings. The Clerk was asked to terminate ECF 70.