United States: Evidence Adduced At "Prove Up" Hearing Cannot Cure A Deficient Complaint

The Fifth Circuit recently considered the pleading requirements to support a default judgment. In Wooten v. McDonald Transit Associates, No. 13–11035, 2015 U.S. App. LEXIS 28 (5th Cir. Jan 2, 2015), Wooten sued his employer alleging age discrimination and retaliation. The employer defaulted. The district court denied the employer's motion to set aside the default judgment.

Wooten's complaint contained very few factual allegations, but his testimony at the damages hearing provided evidence on the elements of his claim that were absent from his pleadings. The question before the court was whether such testimony could cure fatally deficient pleadings for the purpose of entering a default judgment.

The Fifth Circuit held that it could not, reasoning that allowing de facto amendment of an inadequate complaint through testimony taken at a hearing on damages would (1) give the plaintiff the right to amend the complaint without affording the defendant an opportunity to respond and (2) prevent defendants from intelligently weighing the cost of default against the cost of defending.

The Fifth Circuit explained that a district court confronted with an inadequate complaint has three options. It may (1) dismiss the complaint sua sponte under Rule 12(b)(6) without prejudice, allowing the plaintiff to amend and refile; (2) grant leave to amend the complaint to include the facts presented at the hearing; or (3) treat the hearing evidence as constituting a de facto amendment to the complaint and allow the defendant to answer the complaint as amended.

Justice Wiener dissented, warning that the practical consequence of the majority’s decision was that when faced with a marginal complaint, a district court would likely opt to err on the side of requiring amendment and providing the defendant in default a new opportunity to respond. Allowing the defaulting defendant to lie behind the log until after a Rule 55(b)(2) hearing was, in his view, grossly unfair to an innocent plaintiff and a waste of judicial resources.

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