Xie v. Cityspade Inc.

Background

This was a wage-and-hours case brought by Xing Xie and other plaintiffs against Cityspade Inc., Cityspade Moving and Delivery LLC, and Zi Jun Wang. The case had been pending for nearly five years. The defendants appeared and answered, but two different attorneys later reported communication problems with the defendants and withdrew. The opinion states that the defendants failed to participate in discovery as required and eventually ceased participating in the litigation.

The plaintiffs also repeatedly failed to prosecute the case. The court issued three orders requiring them to explain why the case should not be dismissed for failure to prosecute, along with at least eight other warnings about possible sanctions. The court had specifically warned that the plaintiffs’ final chance to prosecute was to file a compliant motion for default judgment by December 11, 2023, and that failure to comply would result in dismissal.

Default-judgment application

The plaintiffs filed an application for default judgment on December 11, 2023, but the court found numerous defects. The plaintiffs filed a proposed order to show cause, a declaration with exhibits, and a damages statement instead of a motion. They also omitted required materials, including a copy of the affidavit showing service of the summons and complaint. They did not serve the application on the defendants until after the court scheduled a hearing and ordered them to do so.

The court also criticized the plaintiffs’ proposed Clerk’s Certificate of Default. The certificate suggested that the court had concluded that the defendants failed to defend and had ordered the plaintiffs to begin default proceedings. The court said that suggestion was misleading because the plaintiffs, not the court, had advised the court that they planned to seek default judgment.

The day before the hearing, the plaintiffs reported a possible typo or miscalculation in their damages statement but did not provide a corrected statement or explain how the error affected the requested damages. At the hearing, the plaintiffs’ attorney, Ziyi Gao, was unable to answer basic questions about the case and asked for another opportunity. The court stated that, after nearly five years and repeated warnings, the plaintiffs had no further opportunities.

Court’s observations about the claims

The court explained that default judgments are discretionary and generally disfavored because courts prefer to decide cases on their merits. The court also stated that deciding this case on the merits was not possible because of the conduct of both sides.

Although the court did not decide the merits, it identified possible defenses and pleading problems. Based on the complaint, some plaintiffs might have been exempt employees under the Fair Labor Standards Act because they were bona fide professionals or commissioned salespersons. The court also said that the allegations for plaintiffs He, Dai, Guo, and Qu were likely insufficient because they did not specifically describe the work those plaintiffs performed.

The court further identified inconsistencies in the allegations concerning Plaintiff Xi. The complaint described a work schedule that added up to 57 hours per week, although it alleged 52 hours. The complaint and damages statement also used inconsistent hourly-pay figures without explanation.

Ruling

The court ordered that the plaintiffs’ application for default judgment was DENIED and that the case was DISMISSED for failure to prosecute. The court also directed the Clerk of Court to terminate all pending motions, including Yuezhu Liu’s motion to withdraw as plaintiffs’ counsel, and to close the case. The opinion does not state that the court adjudicated the underlying wage claims on their merits.