Limelight Trading Cards, LLC v. Fye et al

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Limelight Trading Cards, LLC,
Plaintiff,
v.
David Fye, Logan Cox, and
Black Label Breaks LLC,
Defendants.
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Civil Action H-25-1562
MEMORANDUM AND RECOMMENDATION
TO DENY MOTION FOR DEFAULT JUDGMENT
Pending before the court is Plaintiff Limelight Trading
Cards, LLC’s (Limelight) Motion for Default Judgment Against
Defendant Black Label Breaks LLC (BLB). ECF No. 47. The court
recommends that the motion be DENIED.
On January 15, 2026, the court granted BLB’s counsel’s
motion to withdraw and ordered that BLB secure new counsel by
February 13, 2025. ECF No. 41. The court ordered that Limelight
could move for default judgment in the event that BLB failed to
hire new counsel. Id. BLB failed to hire counsel by the deadline,
and Limelight filed its motion for default judgment on March 9,
2026. ECF No. 47. On April 30, 2026, former counsel for BLB
entered a notice of appearance stating that he had again been
retained by BLB. ECF No. 53.
Judgment by default is a drastic remedy that is disfavored
by the courts. Charlton L. Davis & Co. v. Fedder Data Ctr., Inc.,
556 F.2d 308, 309 (5th Cir. 1977); Lindsey v. Prive Corp., 161 F.3d
886, 893 (5th Cir. 1998). In determining whether to grant default
judgment, the court must determine: (1) if default judgment is
procedurally appropriate; (2) if the plaintiff has presented a
colorable claim; and (3) how to calculate damages or equitable
United States District Court
Southern District of Texas
ENTERED
June 02, 2026
Nathan Ochsner, Clerk
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relief. Vela v. M&G USA Corp., No. H-17-0013, 2020 WL 421188,
at *1 (S.D. Tex. Jan. 27, 2020).
To determine whether a motion for default judgment is
procedurally appropriate, the court must consider relevant factors,
including:
whether material issues of fact are at issue, whether
there has been substantial prejudice, whether the
grounds for default are clearly established, whether
the default was caused by a good faith mistake or
excusable neglect, the harshness of a default
judgment, and whether the court would think itself
obliged to set aside the default on the defendant’s
motion.
Lindsey, 161 F.3d at 893.
The court concludes that entering default judgment under
the facts of this case would not be procedurally appropriate. BLB
answered this lawsuit, ECF No. 21, and fully litigated a motion for
temporary injunction, ECF No. 28. It is true that BLB was without
counsel for approximately ten weeks, but it now appears that BLB
has counsel and is intending to defend itself. See ECF No. 53
(noticing the second appearance of BLB’s counsel). Dispositive
motions have not yet been filed, and docket call is not until
January 15, 2027. Default judgment under these circumstances
would be unduly harsh, and the court would likely be obliged to set
it aside later. Any minimal prejudice to Limelight can be
ameliorated through appropriate court orders, if necessary.
For these reasons, the court recommends that the motion for
default judgment be DENIED.
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The parties have fourteen days from service of this
Memorandum and Recommendation to file written objections. 28
U.S.C. § 636(b)(1); Fed. R. Civ. P. 72. Failure to timely file
objections will preclude appellate review of factual findings or legal
conclusions, except for plain error. See Thomas v. Arn, 474 U.S.
140, 147–49 (1985); Rodriguez v. Bowen, 857 F.2d 275, 276–77 (5th
Cir. 1988).
Signed at Houston, Texas, on June 2, 2026.
______________________________________
Peter Bray
United States Magistrate Judge
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