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Equal Employment Opportunity Commission v. Roark-Whitten Hospitality 2, LP

United States District Court, D. New Mexico

November 2, 2017

ROARK-WHITTEN HOSPITALITY 2, LP d/b/a Whitten Inn, and JAI HANUMAN, LLC, d/b/a Whitten Inn Taos and/or El Camino Lodge, SGI, LLC, d/b/a El Camino Lodge, Defendants.



         THIS MATTER comes before the Court on plaintiff Equal Employment Opportunity Commission's (“EEOC”) Motion for Civil Contempt of Court Against Defendant Roark-Whitten 2, LP d/b/a Whitten Inn (“RW 2”) and Defendant Jai Hanuman, LLC (“Jai”), filed on October 6, 2017. Doc. 181. None of the defendants filed a response to the motion. The Honorable M. Christina Armijo, Chief United States District Judge, referred the motion to me “to conduct hearings, if warranted, including evidentiary hearings, and to perform any legal analysis required to recommend to the Court an ultimate disposition.” Doc. 182. Having reviewed the motion and the relevant law, and noting that no response has been filed, I find that the motion is well taken and recommend that the Court GRANT the motion and enter default judgment against defendants RW 2 and Jai.

         I. Background Facts and Procedural Posture

         This case arises from allegations of racial discrimination and retaliation by RW 2, in violation of Title VII of the Civil Rights Act of 1964[1] and Title I of the Civil Rights Act of 1991.[2] The EEOC alleges that RW 2 created a hostile work environment and discriminated against a class of minority workers. See generally Doc. 179. The EEOC's claims are based on RW 2's former owner Larry Whitten's behavior at the Whitten Inn in Taos, New Mexico. As the EEOC described in its motion to compel, it alleges that Mr. Whitten

routinely used vulgar language and directed racial slurs at the hotel's Hispanic employees, demoted an employee because of his Hispanic accent, Anglicized the names of Hispanic employees, forb[ade] the use of Spanish in his presence and/or on hotel premises, imposed more onerous work standards on Hispanic employees than Anglo employees, directed employees not to rent rooms to Hispanic customers, terminated and forced the resignation of Hispanic employees, and retaliated against employees who brought the discriminatory employment practices to Mr. Whitten's attention.

Doc. 134 at 2-3. In May of 2014, Whitten sold RW 2 to defendant Jai. Doc. 134-3 at 2. In its Second Amended Complaint, the EEOC added defendant Jai as a successor employer. See Doc. 87. Jai subsequently sold the hotel to SGI, LLC (“SGI”). Doc. 134 at 4. SGI was added as a successor employer in the EEOC's Third Amended Complaint.[3] Doc. 179.

         On August 15, 2017, Charles Archuleta, attorney for defendants RW 2 and Jai, filed a motion to withdraw as counsel. Doc. 160. At the hearing on the motion to withdraw, Mr. Archuleta explained that he had not been in contact with RW 2 since July of 2017 and had not communicated with Mr. Whitten since June of 2017. Doc. 176. Mr. Archuleta also made clear that Jai did not oppose his motion to withdraw. Doc. 174 at 2. Accordingly, the Court granted the motion. See Docs. 176, 177. Pursuant to the Court's local rules, “[a] corporation, partnership or business entity other than a natural person must be represented by an attorney authorized to practice before this Court.” D.N.M.LR-Civ. 83.7. In granting the motion to withdraw, the Court ordered defendants RW 2 and Jai to obtain new counsel no later than October 2, 2017. Doc. 177 at 2. The Court further ordered that certain discovery be completed by October 27, 2017, and that the depositions of the principals of RW 2 and Jai be scheduled and taken no later than November 13, 2017. Id.

         The Court took several steps to ensure that RW 2 and Jai were informed of their obligations pursuant to its order. First, the Court ordered Mr. Archuleta to inform his former clients of the Court's orders. Id. Second, the Court directed the Clerk of the Court to mail a copy of its order to RW 2 and Jai at the addresses provided by Mr. Archuleta. Id. Finally, the Court emailed a copy of its order to RW 2 and to Jai at email addresses also provided by Mr. Archuleta. See Doc. 160 at 2; Exh. 1 (attached).

         By letter dated October 11, 2017, Larry Whitten, President of RW 2, notified the Court that he was aware of the Court's September 11, 2017 order but could not retain a new attorney because of lack of funds. Doc. 183. On October 27, 2017, David Patel, the principal of Jai, called the Court to inform it that Jai also had been unable to retain a lawyer. During the call, a law clerk confirmed that the physical and email addresses to which the order had been sent were correct. At Mr. Patel's request, the law clerk emailed the order again, along with additional materials, to the same email address where she sent the order originally. See Exhs. 1, 2 (attached).

         Despite these notifications, no attorney entered an appearance on behalf of RW 2 or Jai by October 2, 2017. Even now, no attorney has entered an appearance on behalf of these corporations. On October 6, 2017, the EEOC filed the instant motion asking the Court to issue an order to show cause why RW 2 and Jai should not be held in civil contempt and, upon a finding of civil contempt, enter default judgment against these two defendants.

         I find that an order to show cause or a contempt order would not be productive and is not necessary. All the factors that the Court should consider in deciding whether to enter a default judgment weigh in favor of doing so. I therefore recommend that the Court enter default judgment against RW 2 and Jai.

         II. Discussion

         A. Defendants' failure to respond.

         Under the Court's local rules, “[t]he failure of a party to file and serve a response in opposition to a motion within the time prescribed for doing so constitutes consent to grant the motion.” D.N.M.LR-Civ. 7.1(b). While the Court could grant the EEOC's motion merely because RW 2 and Jai failed to file a response, justice requires that the Court ...

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