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

United States District Court, D. New Mexico

December 30, 2019



          Paul Kelly, Jr. United States Circuit Judge.

         THIS MATTER came before the court on a default hearing pursuant to Fed.R.Civ.P. 55(b)(2), and the court now enters its findings of fact and conclusions of law.

         Findings of Fact

         1. The Equal Employment Opportunity Commission (EEOC) filed this public enforcement action on September 30, 2014 seeking relief for eight named charging parties. Compl. (ECF No. 1). The Complaint alleged that Defendant Roark-Whitten Hospitality 2 (RW2) engaged in unlawful employment practices by creating a hostile work environment, engaging in discriminatory practices, and retaliating against employees at a hotel owned by RW2 in Taos, New Mexico (Taos Hotel). Id. at 9 ¶ 77-12 ¶ 97.

         2. After learning that RW2 sold the Taos Hotel, the EEOC filed an amended complaint on December 22, 2014, adding as a defendant “the unknown owner and/or XYZ Company(s)/Corporations.” Am. Compl. at 2 (ECF No. 4).

         3. Thereafter, on August 5, 2016, the EEOC moved to substitute Jai Hanuman LLC (Jai) “for the previously unknown XYZ Company(s)/Corporations.” Pl.'s Renewed Mot. to Am. Compl. at 1 (ECF No. 52). The court granted the request, and the EEOC filed its Second Amended Complaint (SAC) on December 30, 2016. See SAC (ECF No. 87).

         4. After learning that Defendant Jai sold the Taos Hotel to SGI, LLC (SGI), the EEOC filed its second motion to amend the complaint to add SGI as a defendant. Pl.'s Second Mot. to Am. Compl. to Add SGI, Ltd. as a Def., Dec. 16, 2016 (ECF No. 86). Jai and RW2 opposed the addition of SGI, Def.'s Resp. to Pl. EEOC's Second Mot. to Am. Compl. to Add SGI, LLC as a Def., Jan. 17, 2017 (ECF No. 94), and Jai moved to dismiss the SAC pursuant to Fed.R.Civ.P. 12(b)(6). Def. Jai Hanuman LLC's 12(b)(6) Mot. to Dismiss, Jan. 19, 2017 (ECF No. 96). The court granted the EEOC's second motion to amend and denied Jai's motion to dismiss. Mem. Op. & Order, Sept. 21, 2017 (ECF No. 178).

         5. Counsel for RW2 and Jai withdrew on September 11, 2017. Order Granting Mot. to Withdraw, Sept. 11, 2017 (ECF No. 177). The EEOC moved for civil contempt against RW2 and Jai based upon a failure to obtain new counsel by October 2, 2017 and otherwise defend. Pl. EEOC'S Mot. for Civil Contempt of Ct. Against Def. Roark Whitten 2, LLP & Def. Jai Hanuman, LLC, Oct. 6, 2017 (ECF No. 181). Larry Whitten, President of RW2, informed the court that RW2 was unable to retain an attorney due to lack of funds but offered to pay a total of $35, 000. Letter, Oct. 12, 2017 (ECF No. 183); Proposed Findings & Recommended Disposition, Nov. 2, 2017 at 3 (ECF No. 187). David Patel, principal of Jai, informed the court that Jai was unable to retain a lawyer. Proposed Findings at 3, Nov. 2, 2017 (ECF No. 187). Of course, the business entities would require counsel to represent them. D.N.M. LR-Civ. 83.7.

         6. Upon recommendation of a magistrate judge, the district court entered a default judgment against RW2 and Jai on all issues of liability, Fed.R.Civ.P. 55(a), envisioning a separate hearing as to damages and any injunctive relief, Fed.R.Civ.P. 55(b)(2). Am. Order Adopting Proposed Findings & Recommended Disposition, Nov. 30. 2017, at 2 (ECF No. 190).

         7. The EEOC filed its Third Amended Complaint and added SGI as a party under a theory of successor liability. Pl.'s Third Am. Compl., Sept. 28, 2017 (ECF No. 179). SGI moved to dismiss it, arguing that the EEOC failed to adequately plead the essential elements necessary to establish successor liability, including that SGI had notice of the lawsuit at the time it purchased the Taos Hotel. Def.'s Mot. to Dismiss, Oct. 26, 2017 (ECF No. 186). The court ruled that the Third Amended Complaint failed to adequately plead that SGI had notice of the lawsuit at the time it purchased the Taos Hotel. Mem. Op. & Order at 8- 10, July 30, 2018 (ECF No. 199). While the court granted SGI's motion to dismiss, it also granted leave to the EEOC to amend its complaint to cure the notice issue. Id. at 9-10.

         8. On August 13, 2018, the EEOC filed its Fourth Amended Complaint. Fourth Am. Compl., Aug. 3, 2018 (ECF No. 201). On September 10, 2018, SGI moved to dismiss the Fourth Amended Complaint under Rule 12(b)(1) for lack of subject matter jurisdiction and under Rule 12(b)(6) for failure to state a claim upon which relief can be granted. Def. SGI LLC's Mot. to Dismiss (ECF No. 203). This court granted the motion to dismiss on the basis that the Fourth Amended Complaint failed to allege sufficient facts to show that SGI had notice of the employment dispute when it purchased the Taos Hotel. Mem. Op. & Order, Aug. 20, 2019, at 10 (ECF No. 215).

         9. The court set default matters for hearings on October 3, 2019. Notice of Settings-Default Hr'gs, Aug. 23, 2019 (ECF No. 216). Parties were allowed to file ten-page pre-hearing briefs. Id. Upon telephonic inquiries from counsel, the court extended the time for the default hearing to 90 minutes and allowed 50 pages of exhibits to the pre-hearing briefs. Min. Order, Sept. 5, 2019 (ECF No. 217). The court placed no restrictions on what the parties could present (including live testimony) at the hearing.[1]

         10. At the hearing Defendants RW2 and Jai were represented by counsel, Pat Rogers, on a limited entry of appearance and the EEOC was represented by counsel Jeff Lee and Loretta Medina. Clerk's Min., Oct. 10, 2019 (ECF No. 225).

         11. The EEOC requests a judgment for injunctive relief and damages from Defendants RW2 and Jai (successor liability): (1) permanently enjoining them from engaging in discrimination or retaliation against employees in New Mexico, and (2) directing them to file a written notice containing specific information with EEOC within five days of opening a new hotel business in this state. See Pl.'s Prehr'g Br., at 3, 8 (ECF No. 221). At the hearing, the EEOC submitted a proposed form of injunction. EEOC also requested (1) $600, 760.38 in back pay and prejudgment interests for the seven charging parties and one aggrieved individual, (2) $500, 000.05 - or $45, 454.54 per claimant - in compensatory damages for 11 aggrieved individuals, and (3) $49, 999.95 in punitive damages to be distributed among the 11 aggrieved individuals. Id. at 5-7; see 42 U.S.C. §§ 1981a, 2000e-5(g)(1).

         12. The EEOC claimed backpay as follows:


Termination Date[3]


Plus Interest

Kathy Archuleta

July 31, 2009

$115, 608.36

$156, 009.20

Martín Gutierrez

August 16, 2009

$99, 355.73

$122, 847.80

Marcos Jeantette

August 9, 2009

$2, 087.00

$3, 023.51

Michelle Martinez

August 16, 2009

$7, 276.60

$10, 485.37

Dale Quintana

August 17, 2009

$3, 071.25

$4, 434.03

Jennie Valdez

August 17, 2009

$77, 357.80

$105, 277.97

Rebecca del Palacio

August 30, 2009

$118, 526.46

$148, 664.15

Maria Tafoya

June 23, 2011

$38, 699.34

$50, 018.35

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