Reported / Citable
Background
Plaintiff Samuel Vaughn filed suit on December 1, 2025, against unknown defendants alleging violations of the Telephone Consumer Protection Act (TCPA). In a First Amended Complaint filed May 14, 2026, Vaughn named HD Carrier, LLC and EON Telecom Inc. d/b/a RTE Edge as defendants. The Clerk issued summonses on May 15, 2026, and HD Carrier was served on May 20, 2026, giving it a June 10, 2026 deadline to respond under Federal Rules of Civil Procedure Rule 12(a)(1).
On June 10, Vaughn and EON Telecom filed a joint stipulation extending only EON Telecom’s response deadline to June 30. HD Carrier was not included in this stipulation despite communications between the defendants’ counsel suggesting both would receive the extension. On June 9, EON Telecom’s counsel Mario Iskander emailed HD Carrier’s counsel Lauren Coppola stating, “I was able to negotiate a 21-day stipulation for both parties.” However, the written stipulation named only EON Telecom. On June 11, 2026, Vaughn requested the Clerk enter default against HD Carrier for missing the deadline, and the Clerk complied. HD Carrier immediately opposed, arguing it reasonably believed it was included in the extension based on counsel’s communications.
The Court’s Holding
The Magistrate Judge recommended granting HD Carrier’s motion to set aside the entry of default. Applying the Rule 55(c) “good cause” standard, the court evaluated four factors: (1) whether failure was willful, (2) plaintiff prejudice, (3) existence of a meritorious defense, and (4) promptness in correcting the default. The court found the failure to respond was not willful but resulted from excusable neglect—specifically, a reasonable but mistaken belief based on miscommunication between co-defendants’ counsel about which parties would be included in the extension. The miscommunication occurred during a transition in HD Carrier’s legal representation.
Regarding prejudice, the court found none. Less than one week had elapsed since the original deadline, the case remained in its earliest stages with no discovery commenced, and Vaughn’s alleged damages would not change if the default were set aside. Finally, the court found HD Carrier presented a meritorious defense by arguing it is merely a “wholesale number provider” and that Vaughn’s allegations were conclusory rather than factually pleaded. The court emphasized that courts generally disfavor default judgments as a drastic remedy and prefer resolving cases on the merits.
Key Takeaways
- Courts apply a liberal standard to “good cause” for setting aside default entries under Rule 55(c), favoring resolution on the merits over default judgments.
- Miscommunication between co-defendants’ counsel regarding deadline extensions can constitute excusable neglect if the defendant reasonably relied on those communications and acted promptly to correct the default.
- To deny a motion to set aside default based on willfulness alone, the failure must be intentional; good-faith reliance on counsel communications does not rise to willfulness.
- Mere passage of time does not constitute prejudice; a plaintiff must demonstrate loss of evidence, discovery difficulties, or increased fraud risk to establish prejudice.
Why It Matters
This case illustrates the high bar for obtaining a default judgment in federal court. Even when a defendant misses a procedural deadline entirely, courts will set the default aside if the defendant reasonably relied on communications suggesting an extension and acts promptly to correct the error. The decision reinforces the Fifth Circuit’s policy favoring adjudication on the merits over default judgments as a remedy. For practitioners, the case highlights the importance of ensuring all parties to a stipulation are identified in writing and served with copies—a miscommunication between opposing counsel, even if reasonable, can undermine the stipulated extension’s effect.
The opinion also notes that a defendant meets the “meritorious defense” threshold by alleging facts that, if proven at trial, could constitute a complete defense, even without demonstrating likelihood of success. This relatively low bar for meritorious defense, combined with the liberal good-cause standard, means that pro se plaintiffs seeking default judgments face substantial obstacles unless they can demonstrate willful or egregious misconduct by the defendant.