Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-02191/USCOURTS-casd-3_07-cv-02191-0/pdf.json

Nature of Suit Code: 895
Nature of Suit: Freedom of Information Act of 1974
Cause of Action: 05:552 Freedom of Information Act

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MICHELLE YVETTE WILLIAMS,

Plaintiff,

CASE NO. 07CV2191 JLS (BLM)

ORDER (1) GRANTING PNS

STORES, INC.’S MOTION TO SET

ASIDE ENTRY OF DEFAULT, (2)

GRANTING PNS STORES, INC.’S

MOTION TO DISMISS

COMPLAINT, (3) GRANTING

SEDONA STAFFING’S MOTION

TO SET ASIDE ENTRY OF

DEFAULT, (4) GRANTING

SEDONA STAFFING’S MOTION

TO DISMISS COMPLAINT, and (5)

DENYING AS MOOT

PLAINTIFF’S MOTION FOR

JUDGMENT ON THE MERITS 

(Doc. Nos. 12, 13, 20, 22, 23)

vs.

PNS STORES, INC., erroneously sued as

“MAIN OFFICE BIG LOTS”, and SEDONA

STAFFING,

Defendants.

Michelle Yvette Williams (“plaintiff”) pleads a single cause of action for violation of the

Freedom of Information Act because defendants PNS Stores, Inc., erroneously sued as “Main

Office Big Lots,” and Sedona Staffing are alleged to have unlawfully withheld documents relating

to the termination of plaintiff’s employment. (Doc. No. 1.) Plaintiff has obtained entry of default

against both defendants. (Doc. No. 9.) Each defendant has filed a motion to set aside the entry of

default against it (Doc. Nos. 12 (PNS Stores) & 22 (Sedona Staffing)) and to dismiss plaintiff’s

complaint (Doc. Nos. 13 (PNS Stores) & 23 (Sedona Staffing)). Plaintiff has moved for

“judgment on the merits”. (Doc. No. 20.) Assuming the parties’ familiarity with the underlying

Case 3:07-cv-02191-JLS-BLM Document 27 Filed 08/28/08 Page 1 of 4
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facts, the Court addresses these motions as follows:

The Court will grant each defendant’s motion to set aside entry of default. The Court’s

reasoning is equally applicable to both defendants’ motions. “The court may set aside an entry of

default for good cause[.]” Fed. R. Civ. P. 55(c). Factors relevant to the “good cause” inquiry

include “(1) whether [defendant] engaged in culpable conduct that led to the default; (2) whether

[defendant] had a meritorious defense; or (3) whether reopening the [action] would prejudice

[plaintiff].” Franchise Holding II, LLC v. Huntington Rests. Group, Inc., 375 F.3d 922, 926 (9th

Cir. 2004). The Court enjoys “especially broad” discretion to find good cause when setting aside

an entry of default, rather than a default judgment. Mendoza v. Wight Vineyard Mgmt., 783 F.2d

941, 945 (9th Cir. 1986); McManus v. Am. States Ins. Co., 201 F.R.D. 493, 500 (C.D. Cal. 2000).

All three factors favor setting aside the entry of default. Defendant did not engage in

culpable conduct because service of the summons and complaint was improper. See Fed. R. Civ.

P. 4(h)(1) (explaining that domestic corporations may be served by delivering a copy of the

summons and complaint to the authorized agent for service of process or by following the law of

the state where the district court is located); Cal. Civ. Proc. Code § 416.10 (explaining permissible

ways to serve a corporation, including service on designated agent for service of process or

delivering copy to any one of listed executives); Randell v. Cal. State Comp. Ins. Fund, 2008 WL

2946557, at *2-*3 (E.D. Cal. July 29, 2008) (finding good cause to set aside entry of default where

service was inadequate). The proof of service for Sedona Staffing was signed by Delia Puentes, an

operations administrator who was not authorized to receive service of process. The proof of

service for PNS Stores, Inc. lacks any signature. In short, plaintiff failed to serve the summons

and complaint properly on either corporate defendant.

For the reasons stated post in the Court’s analysis of the motion to dismiss, each defendant

has a meritorious defense to plaintiff’s complaint. 

Finally, the Court finds that setting aside the entry of default and litigating the case on the

merits will not prejudice plaintiff. To establish prejudice, there must be “greater harm than simply

delaying resolution of the case. Rather, ‘the standard is whether [plaintiff’s] ability to pursue [her]

claim will be hindered.’” TCI Group Life Ins. Plan v. Knoebber, 244 F.3d 691, 701 (9th Cir. 2001)

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(quoting Falk v. Allen, 739 F.2d 461, 463 (9th Cir. 1984)). The Court finds that delay is the only

harm that will result from setting aside the entry of default.

Having set aside the entry of default, the Court will grant each defendant’s motion to

dismiss. The Court’s reasoning is equally applicable to both defendants’ motions. The Freedom

of Information Act (“FOIA”), 5 U.S.C. § 552(a), imposes duties on “each agency [to] make

available to the public information[.]” The statute defines “agency” as “any executive department,

military department, Government corporation, Government controlled corporation, or other

establishment in the executive branch of the Government (including the Executive Office of the

President), or any independent regulatory agency[.]” Id. § 552(f)(1). The FOIA does not apply to

private corporations, which defendants claim to be. Unt v. Aerospace Corp., 765 F.2d 1440, 1447

(9th Cir. 1985); Furlong v. Cochran, 2006 WL 3254505, at *1 (W.D. Wash. Nov. 9, 2006); The

complaint does not allege that PNS Stores, Inc. and Sedona Staffing, both purporting to be private

corporations, fall within the FOIA’s definition of “agency.” 

Having granted the motion to dismiss, the Court will deny as moot plaintiff’s motion for

judgment on the merits. Also, having dismissed the complaint, the Court must determine whether

to grant leave to amend. When dismissing a complaint, the Court may deny leave to amend only if

it appears with certainty that the plaintiff cannot state a claim and any amendment would be futile. 

See Fed. R. Civ. P. 15(a) (stating leave to amend “shall be freely given when justice so requires”);

DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992); Schreiber Distrib. Co. v.

Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). Here, the Court grants leave to

amend to allow plaintiff to plead that defendants are “agencies” within the meaning of the FOIA. 

Also, plaintiff’s request for judgment on the merits “alleges that such wrongfully [sic] termination

was due to Racial [sic] and other discrimination.” (Doc. No. 20-1, at 3.) Therefore, leave to

amend is also appropriate so that plaintiff may allege any additional causes of action, other than an

FOIA claim. 

//

//

//

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In summary, the Court GRANTS each defendant’s motion to set aside entry of default and

DIRECTS the Clerk to set aside the entry of default as to both defendants. The Court GRANTS

each defendant’s motion to dismiss the complaint WITHOUT PREJUDICE. If plaintiff wishes

to file an amended complaint, plaintiff SHALL FILE the amended complaint on or before

October 3, 2008. Plaintiff MUST COMPLY with Federal Rule of Civil Procedure 4(h)(1) when

serving the summons and complaint. The Court DENIES AS MOOT plaintiff’s motion for

judgment on the merits.

IT IS SO ORDERED.

DATED: August 27, 2008

Honorable Janis L. Sammartino

United States District Judge

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