William Hornady v. Outokumpu Stainless USA, LLC

USCA11 Case: 22-13691   Document: 76-1    Date Filed: 10/11/2024   Page: 1 of 34




                                                           [PUBLISH]
                                 In the
                 United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                               No. 22-13691
                         ____________________

        WILLIAM HEATH HORNADY,
        CHRISTOPHER MILLER,
        TAKENDRIC STEWART,
        COLIN HARTERY,
                                 Plaintiffs-Appellees-Cross Appellants,
        LAFAYETTE WILSON,
        BRIAN MOORE,
                                                   Plaintiffs-Appellees,
        versus
        OUTOKUMPU STAINLESS USA, LLC,


                                 Defendant-Appellant-Cross Appellee.
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        2                          Opinion of the Court                    22-13691

                                ____________________

                    Appeals from the United States District Court
                       for the Southern District of Alabama
                        D.C. Docket No. 1:18-cv-00317-JB-N
                              ____________________

        Before BRANCH, GRANT, Circuit Judges, and CALVERT,∗ District
        Judge.
        GRANT, Circuit Judge:
              In this labor dispute, the district court ordered defendant
        Outokumpu Stainless to produce key time and pay records. For
        more than two years, Outokumpu begged for more time and
        promised both the court and the plaintiffs that it would produce
        the records—but time after time, it failed to comply. And as it
        repeated this pattern, Outokumpu began to paint its third-party
        payroll processor as the true culprit. Until, that is, the payroll
        processor caught wind of Outokumpu’s misrepresentations and
        corrected the record. Confronted with a merry-go-round of
        broken promises and blatant misrepresentations, along with an
        upcoming wage-and-hour trial for which no wages or hours were
        known, the district court issued the only sanction remaining in its
        arsenal: default judgment.



        ∗ Honorable Victoria M. Calvert, United States District Judge for the Northern

        District of Georgia, sitting by designation.
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        22-13691               Opinion of the Court                          3

                Outokumpu now turns to this Court for relief, but it will
        find none. First, we conclude that the district court did not err
        when it found Outokumpu’s intentionally subversive approach to
        discovery worthy of the sanction of last resort. Second, because
        district courts have plenary power to reconsider their interlocutory
        orders, we conclude that the court here did not abuse its
        considerable discretion when it declined to revisit the default
        judgment sanction. Third, we determine that the district court
        properly found that the plaintiffs alleged a sufficient basis for their
        claims, entitling them to relief on all counts. Fourth, and finally, we
        conclude that the record does not enable us to analyze the last issue
        raised—the district court’s application of the statute of
        limitations—and so we remand for more explanation.
                                          I.
                Outokumpu Stainless, USA, is the domestic subsidiary of
        Outokumpu Oyj—a multinational steel fabricator and
        manufacturer headquartered in Finland. It has operated a steel mill
        in Calvert, Alabama for over a decade. As Outokumpu admits, at
        least some of its employees are covered by the Fair Labor Standards
        Act, 

 et seq.
                Four of those employees sued Outokumpu under the FLSA
        and Alabama common law. Alleging a series of wage-and-hour
        violations, they sought relief for themselves and all other similarly
        situated employees who opted in to the suit. Specifically, in Count
        I, the named plaintiffs alleged that Outokumpu violated the FLSA
        by (a) failing to pay wages for the entire time they were clocked in
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        4                      Opinion of the Court                22-13691

        and working or available to work, (b) failing to pay overtime for all
        qualifying hours at one and one-half times an hourly rate that
        included monthly bonuses, and (c) failing to pay overtime on the
        regular payment date and instead paying overtime as “trued up”
        wages calculated at a later date. Count II alleges common law
        claims for quantum meruit, or unjust enrichment in the
        alternative. And Count III brings the same FLSA claims as Count
        I, but on behalf of the collective employees.
                                         A.
               Several of the FLSA’s requirements—and how they relate to
        Outokumpu’s pay practices—are relevant to understanding the
        plaintiffs’ claims. The FLSA requires covered employers to pay an
        employee “one and one-half times the regular rate at which he is
        employed” for hours worked beyond forty per week. 

(a)(1). The employee’s “regular rate” of pay must reflect all
        compensation, excluding overtime payments, that the employee
        ordinarily receives during the workweek. 

 § 207(e)(5). The
        correct balance between overtime and so-called “straight time”
        depends on multiple considerations, including the temporal
        relationship between an employee’s work schedule and the
        employer’s fixed workweek, whether the employer has paid the
        employee a nondiscretionary bonus, and whether the employer
        has adopted a “rounding policy” that creates discrepancies between
        the time employees are clocked in and the time for which wages
        are paid.
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        22-13691               Opinion of the Court                        5

               Outokumpu’s pay practices implicated all of the above. As
        an employer subject to the FLSA, the company was required to
        “make, keep, and preserve” all records of its employees, including
        those related to “the wages, hours, and other conditions and
        practices of employment.” 

(c). Indeed, it would be
        nearly impossible for an Outokumpu employee to determine on
        his own whether he was correctly paid for his work. The pay rate
        changed based on the shift worked, the way time was rounded, the
        level of work, and the company’s monthly incentive plan.
        Whether overtime was paid correctly depended on these factors as
        well as how Outokumpu defined its workweek.
               The paychecks themselves did not reflect this level of
        nuance—they categorized total straight time, overtime, and
        holiday pay, but did not identify any step-up rates. Nor did
        Outokumpu otherwise provide this information to its employees,
        who would have needed to record their own daily clock-in and
        clock-out times, along with the applicable pay rates, to confirm that
        they were paid appropriately for their overtime. Outokumpu was
        the only party with access to this information, which was necessary
        to understand if the “regular rate” of pay was calculated correctly.
        See 

.
               Outokumpu’s records were similarly indispensable to
        evaluating the merits of the plaintiffs’ challenge to the rounding
        policy. Rounding clock-in and clock-out times is generally
        permitted, so long as the practice “will not result, over a period of
        time, in failure to compensate the employees properly for all the
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        6                      Opinion of the Court                22-13691

        time they have actually worked.” 

(b).
        Outokumpu used two different rounding policies during the
        relevant time period, both of which the plaintiffs claim resulted in
        chronic underpayment. Neither policy can be adjudged without
        Outokumpu’s time and pay records.
               Finally, whether the plaintiffs were paid properly also hinges
        on the precise details of Outokumpu’s incentive plan. According
        to this plan, Outokumpu pays its employees a nondiscretionary
        bonus every month. These incentive-based payments could
        implicate the calculation of an employee’s “regular rate of pay.”
        See 

. And when they did, any overtime would
        need to be recalculated to reflect the revised regular rate. 

 Here
        too, only Outokumpu had the information necessary to make that
        calculation.
              The bottom line is that Outokumpu was the only party who
        had the evidence at the heart of the plaintiffs’ claims.
                                         B.
              Over the course of nearly two years, the district court
        ordered Outokumpu to produce the key pay, time, and incentive
        plan records twelve separate times. Faced with these orders,
        Outokumpu repeatedly told the court that it would produce the
        necessary records. But when the time came to comply, somehow
        Outokumpu always had another excuse—leaving the plaintiffs
        without any way to prove their case. To cap it all off, Outokumpu
        followed up on these discovery violations with outrageous
        misrepresentations to both the plaintiffs and the court.
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        22-13691               Opinion of the Court                         7

                At the suit’s inception in the fall of 2018, Outokumpu
        stipulated that it would promptly “produce a copy of all time sheets
        and payroll records” and assured the court that the parties were
        “exchanging information effectively.”          This promise was
        memorialized in the first scheduling order, which required
        Outokumpu to produce—in Microsoft Excel format—daily clock-
        in and clock-out times, information about how it calculated
        bonuses, and detailed pay records that included the pay period and
        all applicable hourly rates. On the deadline, Outokumpu produced
        verified pay records for one batch of plaintiffs in an Excel file, and
        PDF spreadsheets of daily clock-in and clock-out times. Although
        the plaintiffs relied on these documents to estimate damages for a
        settlement conference, they would later learn that the records were
        full of false or incomplete data.
               After settlement negotiations failed, the court again ordered
        Outokumpu to produce the necessary time, pay, and bonus
        records. In a pattern of conduct that would repeat itself many
        times over, Outokumpu failed to comply by the deadline, assured
        the plaintiffs that its failure was not intentional but a product of
        “some sort of mistake, confusion, or misunderstanding,” promised
        to “provide responses as soon as reasonably possible”—and then
        did nothing to change its behavior. The company made no
        disclosures, offered no responses to discovery, and gave no
        estimate of when the information would be provided. These
        deficiencies prompted the plaintiffs’ first of many motions to
        compel. After Outokumpu failed to respond to the motion, the
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        8                     Opinion of the Court                22-13691

        magistrate judge sanctioned Outokumpu by striking five of its
        affirmative defenses.
               The sanction did not end Outokumpu’s streak of
        noncompliance—it again refused to produce the necessary records,
        convinced the plaintiffs and the court that it needed more time, and
        then failed to meet the extended deadline too. Faced with another
        motion to compel, Outokumpu stressed that court intervention
        was unwarranted and promised to provide the time and pay
        records “within a reasonable time period” if mediation failed to
        resolve the dispute. Mediation failed, and Outokumpu promised
        to deliver the records by the date of the next settlement hearing.
        Continuing the pattern, the settlement conference came and went
        without any documents being produced, and the plaintiffs filed yet
        another motion to compel. True to form, Outokumpu agreed to
        supplement its production but then failed to produce the records.
                Outokumpu followed-up on that failure by attempting to
        move the goalposts—representing that, even after sixteen months
        of litigation, it would be too burdensome to produce the time and
        pay records without yet another extension. The magistrate judge,
        in a fit of generosity, accommodated this request and ordered
        Outokumpu to produce the records over the next three months.
              During that time, the plaintiffs deposed Outokumpu’s
        payroll specialist and learned that the verified pay summaries and
        time records originally produced in 2018 were incorrect and
        incomplete—ultimately meaningless. The Outokumpu-created
        pay records did not show the correct pay rates, and there was no
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        22-13691                 Opinion of the Court                              9

        way to tell from the daily clock-in and clock-out records whether
        Outokumpu had applied its rounding policy or paid the employee
        for the full time.
               The records that Outokumpu produced in response to the
        court’s latest order fared no better. For each employee and for each
        pay period, the spreadsheets produced included over 120 columns
        of data. Remarkably, none of these columns contained any
        information about pay rates—neither base rate of pay, nor step-up,
        holiday, overtime, or nighttime pay rates. At the next discovery
        hearing, the plaintiffs accused Outokumpu of bad faith, but
        Outokumpu again pleaded innocence and asked for another four
        months to produce the time and pay records. The conference
        ended with a new scheduling order designed to cure Outokumpu’s
        recurring discovery deficiencies the next month—now the ninth
        discovery order related to Outokumpu’s pay and timekeeping
        practices. 1



        1 Outokumpu’s conduct related to the time and pay records starkly illustrates

        its indifferent attitude toward discovery. This pattern of conduct is just as
        visible in Outokumpu’s failures to provide the linchpin incentive plan data.
        Outokumpu was first required to produce this information as part of the
        plaintiffs’ initial discovery requests—a request which Outokumpu objected to
        as “overly broad.” This objection was an issue in the plaintiffs’ second and
        third motions to compel. In response, Outokumpu promised to provide the
        data, then delivered unresponsive information. Outokumpu repeated this
        conduct three more times: either the court ordered Outokumpu to produce
        the documents or Outokumpu represented to the court that it would, and
        then Outokumpu failed to produce anything whatsoever.
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        10                      Opinion of the Court                    22-13691

               Outokumpu, acting consistently if nothing else, flouted this
        order too, failing to produce the required time, pay, and incentive
        plan records by the June 1 deadline. The plaintiffs moved for
        sanctions in mid-June, incensed by the success Outokumpu’s
        repeated discovery violations had in stymying their case. For its
        part, Outokumpu maintained that all of the previous “issues with
        the production,” were inadvertent “errors or oversight,” insisting
        that there was “clearly not any willful or bad faith conduct.”
                                           C.
               While the plaintiffs’ latest motion for sanctions was pending,
        several troubling misrepresentations came to light. These
        misrepresentations centered on Outokumpu’s attempt to blame its
        third-party payroll processor, Automatic Data Processing, Inc., for
        its own discovery violations.
               Outokumpu first raised the specter of ADP’s alleged
        misconduct in the fall of 2018, describing the requested records as
        “ADP pay records.” Then, after it was caught producing false
        records, Outokumpu again blamed ADP, arguing that part of the
        necessary records came “not from the company but from the ADP
        system.” And again—when faced with the possibility of
        sanctions—Outokumpu painted ADP as the real culprit and
        accused it of having “not been very helpful.”
              That was just the start of the ADP narrative. Outokumpu
        successfully delayed the plaintiffs’ motion for summary judgment
        by representing that it was still waiting on information from ADP
        and that it was “just as frustrated as [the plaintiffs] on this particular
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        22-13691               Opinion of the Court                        11

        situation.” Outokumpu later deflected the plaintiffs’ motion for
        sanctions by asking the magistrate judge for time to subpoena
        ADP. Then Outokumpo claimed the subpoena proved fruitless.
        When the plaintiffs renewed their motion for sanctions,
        Outokumpu once again shifted the blame onto ADP.
                In reality, ADP had diligently complied with every request.
        ADP responded to the subpoena within one day, explaining that it
        did not ordinarily create time reports, but still offering PDF records
        of the limited data it had. It also explained that Outokumpu itself
        could create the required reports in Excel format using its payroll
        software. 2 Following these exchanges, ADP rightfully believed
        that it had complied with the terms of the subpoena. It did not
        know that Outokumpu had not produced any documents to the
        plaintiffs or that the plaintiffs had renewed their motion for
        sanctions in response to that continued failure of production.
              Troubled by ADP’s apparent role in the never-ending
        discovery dispute, the district court instructed Outokumpu to
        confer with ADP in advance of a hearing set later that month. At
        that next hearing, Outokumpu reassured the court that it had
        indeed “reach[ed] out” to ADP but “ha[d] not gotten a response
        yet.” Although the court could not have known it, Outokumpu
        had not contacted ADP until three hours before the start of the
        hearing—despite having twelve days to comply. ADP, for its part,

        2  In a follow-up email, ADP provided Outokumpu with the contact
        information of the ADP associate who could help Outokumpu produce the
        reports in Excel format.
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        12                     Opinion of the Court                22-13691

        responded promptly; five hours after Outokumpu made contact, it
        offered to create a responsive Excel report customized for the case.
        No matter—Outokumpu never produced the PDFs or even
        admitted that ADP had offered them. Instead, Outokumpu
        expressed frustration at the hearing and told the court that “it
        would be . . . helpful to hear [ADP’s] explanation to the Court.”
               Believing—understandably—that ADP had intentionally
        flouted the subpoena, the district court entered a show cause order,
        directing an ADP corporate representative to appear fourteen days
        later. The court simultaneously directed Outokumpu to serve
        ADP with the order. It will likely come as no surprise that
        Outokumpu did not comply. First, it waited ten days to tell ADP
        about the hearing. And even then, it led ADP to believe that the
        hearing would be canceled if ADP could provide the necessary data
        before the hearing date.
              Believing Outokumpu’s representations, ADP produced an
        Excel report two days later that included pay data going back to
        2018—everything still retained in its system. But not until the night
        before the hearing did Outokumpu tell ADP that it was still going
        forward as planned. The hearing marked the first time that ADP
        learned what Outokumpu had been telling the court all along,
        which left it understandably unprepared to answer the court’s
        questions. The court set another hearing for a week later.
               At the second show cause hearing, ADP was able to correct
        the record and shine a light on Outokumpu’s misrepresentations.
        In a desperate attempt to avoid a “blame game,” Outokumpu tried
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        22-13691               Opinion of the Court                       13

        to walk back its earlier statements, insisting that it had not
        attributed the discovery delays to ADP. The district court, with
        assistance from ADP, rejected Outokumpu’s attempts to rewrite
        the record. After hearing arguments on the issue, the district court
        informed the parties that “a sanction has to happen here.”
                                         D.
               Although the district court said that it was “loath to enter a
        default as to liability,” it did not see “any other recourse.” On
        November 18, 2021, the court formally entered default judgment
        on liability against Outokumpu under Federal Rule of Civil
        Procedure 37(b)(2)(A)(vi). After detailing Outokumpu’s never-
        ending discovery violations, the court found clear and convincing
        evidence that Outokumpu had acted in bad faith. A review of the
        record showed a “clear picture of willful and prejudicial discovery
        abuse,” including unrebutted evidence that Outokumpu doctored
        and produced false records, refused to produce other records it had
        previously agreed to produce, and made substantial
        misrepresentations to the plaintiffs and the court in an attempt to
        foist the blame for its discovery failures on anyone but itself.
        Finally, the district court concluded that no sanction other than
        default judgment would be sufficient to address Outokumpu’s bad
        faith.
               Outokumpu fired their old counsel and moved for
        reconsideration. New counsel, however, appeared to continue
        singing from the same song sheet, telling the court that the old
        attorney had “accurately characterized the need for ADP’s help in
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        14                      Opinion of the Court                   22-13691

        producing documents in Excel format.” While that motion was
        pending, the parties disputed how damages should be calculated.
        Outokumpu raised a series of objections to the plaintiffs’ proposed
        damages calculation—some of which were sustained—and the
        district court settled on a final methodology. The district court
        denied the motion to reconsider and awarded the plaintiffs
        $13,171,958.56 in damages, $12,606,408.58 of which were for the
        collective FLSA action and $565,549.98 of which were for the 276
        individual claims under Alabama law.
                Both parties appealed. Outokumpu takes issue with the
        district court’s entry of default judgment as a sanction, denial of the
        motion to reconsider sanctions, and its determination that certain
        allegations made by the plaintiffs were well pleaded. In their cross
        appeal, the plaintiffs argue that the district court erred by limiting
        damages to those claims that fell within the FLSA’s statute of
        limitations.
                                           II.
                “This Court reviews sanctions orders for abuse of
        discretion.” J.C. Penney Corp. v. Oxford Mall, LLC, 

 (11th Cir. 2024). That standard means that “we review the
        district court’s legal conclusions de novo and its subsidiary factual
        findings for clear error.” Skanska USA Civ. Se. Inc. v. Bagelheads, Inc.,
        

, 1311 (11th Cir. 2023). We also review for abuse of
        discretion a district court’s decision whether to reconsider its own
        interlocutory order. Region 8 Forest Serv. Timber Purchasers Council
        v. Alcock, 

, 805–06 (11th Cir. 1993). This Court reviews
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        22-13691                  Opinion of the Court                               15

        the sufficiency of the allegations in a complaint de novo. Eagle
        Hosp. Physicians, LLC v. SRG Consulting, Inc., 

        (11th Cir. 2009).
                                              III.
              On appeal, Outokumpu does not argue that this conduct
        was not sanctionable—and how could it. Instead, it says that for
        two reasons the district court should not have awarded the
        ultimate sanction of default judgment. Neither carries the day.
                First, Outokumpu contends that it should not be sanctioned
        for the conduct of its attorneys. This argument is wrong several
        times over. To start, it is generally “not an abuse of discretion to
        charge [parties] personally with ‘the consequences of the acts or
        omissions of their freely selected agent.’” Jochum v. Schmidt, 

 (5th Cir. 1978) (alteration adopted and quotation
        omitted). 3 “There is certainly no merit to the contention that
        dismissal of petitioner’s claim because of his counsel’s unexcused
        conduct imposes an unjust penalty on the client.” Link v. Wabash
        R.R. Co., 

 (1962). To hold otherwise “would be
        wholly inconsistent with our system of representative litigation.”
        

. 4


        3 Decisions by the former Fifth Circuit handed down before October 1, 1981,

        are binding on this Court. Bonner v. City of Prichard, 

 (11th
        Cir. 1981) (en banc).
        4 To be sure, we have suggested that this principle—that the client owns the

        attorney’s errors—does not apply in the Rule 11 sanctions context. Byrne v.
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        16                        Opinion of the Court                     22-13691

                What’s more, the district court sanctioned Outokumpu only
        after specifically finding that it had acted in bad faith. Indeed, the
        district court specifically “rejected the notion” that Outokumpu
        was “an innocent victim of its former counsel.” Outokumpu, not
        its attorney, was responsible for producing the time and pay
        records required for the plaintiffs’ suit. And Outokumpu, not its
        attorney, willfully and repeatedly refused to do so. In its nearly
        100-page order, the district court painstakingly detailed every way
        in which both Outokumpu and its counsel intentionally sabotaged
        the judicial process. Outokumpu presents no evidence on appeal
        that the district court erred at all in making those factual findings,
        much less did so clearly. The harsh sanction of default judgment is
        appropriate here where Outokumpu itself is culpable. See Betty K
        Agencies, Ltd. v. M/V MONADA, 

 (11th Cir.
        2005).
               Second, Outokumpu argues that the district court should
        have imposed lesser sanctions because the plaintiffs eventually
        received all the records they sought. According to Outokumpu,
        ADP’s production of certain records after the second show cause
        order, eighth scheduling order, and fifth motion to compel cured
        any discovery violation and rendered the sanction of default
        unnecessarily severe.
               To call that a remarkable contention is exercising a great
        deal of judicial restraint. To start, any cure would have been only

        Nezhat, 

, 1120 n.88 (11th Cir. 2001). But the district court here
        relied on Rule 37 to sanction Outokumpu, so that limitation is irrelevant.
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        22-13691               Opinion of the Court                         17

        partial because Outokumpu has still failed to produce every
        missing piece of evidence. It has not provided the plaintiffs with
        the time and pay records from 2015 to 2017—the very years when
        its exposure was greatest. Those records no longer exist, and it was
        Outokumpu who failed to maintain them. The district court
        determined that this failure was spoliation, and we have no qualms
        about that conclusion.
                Even if Outokumpu were correct that it had lived up to its
        discovery obligations, the district court’s sanction would not have
        outstripped the company’s disclosure violations. Generally
        speaking, sanctions of last resort—such as dismissals or default
        judgments—are appropriate only “when less drastic sanctions
        would not ensure compliance with the court’s orders.” Malautea v.
        Suzuki Motor Co., 

 (11th Cir. 1993). But “[w]hen
        lesser sanctions would be ineffective, Rule 37 does not require the
        vain gesture of first imposing those ineffective lesser sanctions.” 

. Outokumpu points to no authority supporting its
        argument that eventual production of the required discovery
        displaces sanctions for earlier noncompliance. That ask-for-
        forgiveness-rather-than-permission rule would strip sanctions of
        any deterrent effect—malicious actors could repeatedly violate
        court orders with peace of mind, knowing that any future sanction
        could be nullified after the fact by simple compliance with the
        initial order.
               The record shows that the district court did not abuse its
        discretion by deciding that no sanction short of default judgment
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        18                     Opinion of the Court                22-13691

        was appropriate. In fact, lesser sanctions had already been tried—
        and to no avail. After one of Outokumpu’s many discovery
        violations, the magistrate judge struck five of Outokumpu’s
        affirmative defenses. Neither this nor any of the many other orders
        against Outokumpu deterred Outokumpu’s “unrelenting
        campaign to obfuscate the truth.” See 

 As the district court
        determined, Outokumpu’s “deceitful, subversive and manipulative
        conduct”—set forth above in unflattering detail—would not have
        changed with a sanction less harsh than default judgment. The
        district court properly considered and rejected lesser sanctions. It
        did not abuse its discretion by resorting to the sanction of last
        resort.
                                        IV.
               We next consider the district court’s denial of Outokumpu’s
        motion for reconsideration. That turns out to be a somewhat
        trickier question, if only because our precedents are less than clear
        about what standard of review district courts should employ when
        faced with such a motion in the context of a non-final order.
               The answer is Rule 54(b), which governs a district court’s
        reconsideration of interlocutory orders. Entry of a non-final
        default judgment is one such order. Under Rule 54(b), district
        courts retain plenary power to reconsider an interlocutory order
        before the entry of final judgment. And when a district court
        exercises its power, this Court reviews only for abuse of discretion.
        Here, we find no abuse of discretion and affirm the district court’s
        denial of Outokumpu’s motion to reconsider sanctions.
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        22-13691                Opinion of the Court                          19

                                           A.
                This Court has yet to precisely define the standards
        governing Rule 54(b) motions to reconsider. In our silence, some
        district courts have applied the more definite standards from Rule
        59(e) or Rule 60(b). See, e.g., Reynolds v. Calhoun, 

, 1275 (M.D. Ala. 2023) (collecting cases); Grier v. Griffin Moving
        & Storage, Inc., 

, 1333 (S.D. Fla. 2017). But
        those standards—whether addressing newly discovered evidence
        or manifest errors under Rule 59(e), or mistake, inadvertence,
        fraud, and the like under Rule 60(b)—do not apply here. Rules
        59(e) and 60(b) only come into play after a final, appealable
        judgment is entered. See Alcock, 993 F.2d at 806 & n.5; Toole v.
        Baxter Healthcare Corp., 

 (11th Cir. 2000).
               Rule 54(b) is relevant at earlier stages of a case. It provides
        that an order “that adjudicates fewer than all the claims or the
        rights and liabilities of fewer than all the parties . . . may be revised
        at any time before the entry of a judgment adjudicating all the
        claims and all the parties’ rights and liabilities.” Fed. R. Civ. P.
        54(b). When, as here, a district court enters a non-final order, it
        should evaluate motions to reconsider that order under the
        standards inherent in Rule 54(b)—plenary authority “to reconsider,
        revise, alter or amend” a non-final order before the entry of final
        judgment. Toole, 

 (quotation omitted); see also
        Hardin v. Hayes, 

 (11th Cir. 1995) (“[S]ince an order
        granting a new trial is an interlocutory order, the district court has
        plenary power over it” and may modify it “at any time prior to final
        judgment.” (quotation omitted)).
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        20                     Opinion of the Court                  22-13691

                A federal court’s inherent authority to correct its own errors,
        so long as it possesses jurisdiction over the action, is firmly rooted
        in the common law. See Doss v. Tyack, 

, 312–
        13 (1852); Bucy v. Nev. Constr. Co., 

, 216–17 (9th Cir.
        1942). The Supreme Court too has long recognized that “if an
        interlocutory decree be involved, a rehearing may be sought at any
        time before final decree.” John Simmons Co. v. Grier Bros., 

, 90–91 (1922); see also Dietz v. Bouldin, 

 (2016)
        (“[T]he Court has recognized that a district court ordinarily has the
        power to modify or rescind its orders at any point prior to final
        judgment in a civil case.”). For that reason, until final judgment, a
        district court may “reconsider any portion of its decision and
        reopen any part of the case.” Marconi Wireless Tel. Co. of Am. v.
        United States, 

, 47 (1943); accord 18B Charles Alan Wright
        & Arthur R. Miller, Federal Practice & Procedure § 4478 (3d ed. June
        2024 update).
               This inherent power was recognized—not changed—by
        Rule 54(b). See City of Los Angeles, Harbor Div. v. Santa Monica
        Baykeeper, 

, 886–89 (9th Cir. 2001). Indeed, when Rule
        54(b) was amended in 1946 to add that non-final orders are “subject
        to revision at any time” before final judgment (substantially the
        same language in today’s rule), the Committee explained that this
        change (along with allowing district courts to certify immediate
        appeals) “re-establish[ed] an ancient policy with clarity and
        precision.” Fed. R. Civ. P. 54(b) (1946); 1946 Advisory Committee
        Notes on Rule 54.
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        22-13691                   Opinion of the Court                                 21

                Though district courts enjoy plenary power to reconsider
        non-final rulings, they need not employ plenary review when doing
        so. Indeed, in most instances district courts should hesitate before
        revisiting their earlier interlocutory orders; important interests of
        finality, stability, and predictability underly that justifiable caution.
        Cf. United States v. Williams, 

 (11th Cir. 1984);
        Ins. Grp. Comm. v. Denver & Rio Grande W. R.R. Co., 

 (1947).
                A district court’s discretion in these matters is governed by
        the law-of-the-case doctrine, which in this context functions as a
        guide for courts rather than “a limit to their power.” See
        Christianson v. Colt Indus. Operating Corp., 

, 815–17
        (1988). Operating with more or less force depending on the stage
        of litigation, the doctrine as a whole “expresses the practice of
        courts generally to refuse to reopen what has been decided.” 

 (quotation omitted). So district courts should gently keep in
        mind the general point that “when a court decides upon a rule of
        law, that decision should continue to govern the same issues in
        subsequent stages in the same case.” Arizona v. California, 

 (1983). 5 “Common sense, not a rigid set of rules,” governs
        when there is no higher court mandate. 18 James Wm. Moore et

        5 The part of the law-of-the-case doctrine known as the “mandate rule”—

        which sounds in principles of authority and constrains lower courts in the
        wake of higher court rulings—is not implicated when a court reconsiders its
        non-final order. Bryan A. Garner et al., The Law of Judicial Precedent § 52, at
        442, § 55, at 459–60 (2016); see also Piambino v. Bailey, 

 (11th
        Cir. 1985); 18B Wright & Miller, supra, § 4478.3.
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        22                      Opinion of the Court                  22-13691

        al., Moore’s Federal Practice § 134.21[1] (3d ed. June 2024 update); see
        also White v. Murtha, 

, 431–32 (5th Cir. 1967).
               A district court’s decision to reconsider an interlocutory
        order is thus committed to its sound judgment, which we review
        for abuse of discretion. See Alcock, 993 F.2d at 805–06. If the
        movant is able to meet a significantly higher showing for
        reconsideration—for example, the standards applicable to Rules
        59(e) or 60(b), or the exceptions to the mandate rule—the district
        court should not hesitate to revisit its prior ruling. But just because
        a movant fails to meet these higher standards does not mean that
        reconsideration cannot be had—the district court may still have
        room to conclude that reconsideration is appropriate.
               On the flip side, a district court typically would not abuse its
        discretion when rejecting a motion to reconsider an interlocutory
        order if the movant simply rehashed arguments already considered
        and rejected. Cf. Am. Home Assurance Co. v. Glenn Estess & Assocs.,
        Inc., 

 (11th Cir. 1985). And finally, the more
        time that has passed between a district court’s ruling and a party’s
        motion to reconsider that ruling, the less willing the court ought to
        be to entertain the party’s request. Parties must “be able to rely on
        the rulings that progressively direct proceedings toward trial.” 18B
        Wright & Miller, supra, § 4478.1.
               In short, district courts have discretion to revisit their prior
        interlocutory orders, considering both the weight of the moving
        party’s arguments and the disruption that a change would cause in
        light of the time that has passed since the decision was initially
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        22-13691               Opinion of the Court                        23

        made. Only when the district court abuses that considerable
        discretion will we set aside a Rule 54(b) decision.
               Viewed against this backdrop, the district court here did not
        abuse its considerable discretion by denying Outokumpu’s motion
        to reconsider the sanction order. The district court recognized its
        plenary power to revisit its order and refused to do so for reasons
        well within its discretion. In fact, the district court (though
        understanding that it need not reconsider all aspects of its decision)
        entertained most of Outokumpu’s arguments in full. And
        Outokumpu—after years of misbehavior—simply failed to provide
        the court with an adequate reason to revise the sanction order.
        Instead, the company almost exclusively raised arguments that had
        already been rejected.        The district court’s rejection of
        Outokumpu’s unashamed rehash was no abuse of discretion.
                                         B.
                Outokumpu’s principal argument on appeal is that the
        district court should have applied Rule 55(c)’s “good cause”
        standard to the motion for reconsideration, and it should have
        found that Outokumpu met that standard. That Rule provides that
        a “court may set aside an entry of default for good cause, and it
        may set aside a final default judgment under Rule 60(b).” Fed. R.
        Civ. P. 55(c). What Outokumpu fails to realize, however, is that
        the good cause standard applies to entries of default, not entries of
        default judgment. That may sound like a distinction without a
        difference, but it is not. And the second half of Rule 55(c)—
        directing courts to apply the Rule 60(b) standard—applies only to
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        24                         Opinion of the Court                          22-13691

        final default judgments. The order here is neither an entry of
        default nor a final default judgment; it is the entry of a non-final
        default judgment.        The court entered judgment against
        Outokumpu but did not finalize the damages. Accordingly, Rule
        55(c) does not govern. 6
               The text of Rule 55 draws a distinction between defaults and
        default judgments. Rule 55(a), titled “Entering a Default,” provides
        that “[w]hen a party against whom a judgment for affirmative relief
        is sought has failed to plead or otherwise defend . . . , the clerk must
        enter the party’s default.” By contrast, Rule 55(b), titled “Entering
        a Default Judgment,” requires the clerk to “enter judgment . . .
        against a defendant who has been defaulted for not appearing,” so
        long as “the plaintiff’s claim is for a sum certain or a sum that can
        be made certain by computation.” Otherwise, Rule 55(b) requires
        the plaintiff to “apply to the court for a default judgment,” which
        may be entered against a party if certain other conditions are met.
        So a Rule 55 “default” is when a party does not defend, and section
        (b) directs the court or the clerk to enter a default judgment when
        a party defaults on that basis. Rule 55(c) continues this distinction
        between defaults and default judgments by requiring courts to use
        a different standard when setting aside “an entry of default” as
        opposed to “a final default judgment.”
              The district court here never entered a Rule 55(a) default
        against Outokumpu. Instead, it relied on Rule 37(b)(2)(A)(vi),


        6 It is, of course, a higher standard than Rule 54(b)’s, in any event.
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        22-13691               Opinion of the Court                         25

        which authorized it to “render[] a default judgment against the
        disobedient party” as a sanction for disobeying “an order to provide
        or permit discovery.” Because the district court entered a default
        judgment against Outokumpu rather than a default, Rule 55(c)’s
        “good cause” standard does not apply.
                The second half of Rule 55(c)—permitting courts to “set
        aside a final default judgment under Rule 60(b)”—is similarly inapt.
        A non-final default judgment is “an interlocutory order and thus
        not subject to being vacated under Rule 60(b).” Bon Air Hotel, Inc.
        v. Time, Inc., 

 (5th Cir. 1970) abrogated on other
        grounds by Little v. Liquid Air Corp., 

 (5th Cir. 1994). At
        the time Outokumpu moved for reconsideration, the entry of
        default judgment was not final because the amount of damages to
        be awarded was still outstanding. Guy v. Dzikowski (In re Atlas), 

 (11th Cir. 2000). Instead, the district court had only
        entered default judgment on Outokumpu’s liability. In 2015, Rule
        55(c) was amended “to insert the word ‘final’ before ‘default
        judgment.’” 10A Wright & Miller, supra, § 2692. This change was
        intended “to make plain the interplay between Rules 54(b), 55(c),
        and 60(b).” 2015 Advisory Committee Notes on Rule 55. “A
        default judgment that does not dispose of all of the claims among
        all parties is not a final judgment unless the court directs entry of
        final judgment under Rule 54(b).” Id. So Rule 60(b)’s heightened
        standards “apply only in seeking relief from a final judgment”; until
        then, “Rule 54(b) allows revision of the default judgment at any
        time.” Id. (emphasis added).
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        26                     Opinion of the Court                  22-13691

                                          V.
                We now turn to Outokumpu’s final contention, that the
        district court should not have credited the plaintiffs’ legal
        arguments in support of several claims.
                After a default, the defendant cannot contest the plaintiff’s
        factual allegations. Nishimatsu Constr. Co., v. Houston Nat’l Bank,
        

 (5th Cir. 1975). But the same is not true for
        legal arguments; those can be challenged as not offering a sufficient
        basis for the judgment. 

 When deciding whether the claims are
        sufficiently pleaded, we apply the same analysis we use when
        evaluating Rule 12(b)(6) motions to dismiss. Surtain v. Hamlin
        Terrace Found., 

 (11th Cir. 2015). By that
        standard, the complaint must contain “sufficient factual matter,
        accepted as true, to state a claim to relief that is plausible on its
        face.” Ashcroft v. Iqbal, 

 (2009) (quotation omitted).
        And a claim is plausible “when the plaintiff pleads factual content
        that allows the court to draw the reasonable inference that the
        defendant is liable for the misconduct alleged.” 

 Under 12(b)(6),
        as here, legal theories contained in a complaint are not accepted as
        true. 

 And that makes sense—defendants can forfeit the ability
        to contest the truth of facts asserted, but a default does not give the
        court powers beyond those established by law.
               Outokumpu challenges the district court’s conclusion that
        the plaintiffs’ workweek and bonus claims were well pleaded. In
        the Third Amended Complaint, two of the plaintiffs’ allegations
        were that Outokumpu violated the FLSA by (1) failing to calculate
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        22-13691                  Opinion of the Court                             27

        its workers’ wages on a fixed, 168-hour workweek and
        (2) improperly structuring its incentive bonus plan such that the
        bonus percentage was not applied to the gross amount of pay the
        employee earned during the calendar month in which the bonus
        was calculated. Both allegations state plausible claims for relief.
               First, the workweek claim. The FLSA requires employees to
        be paid overtime at one and one-half times the regular rate of pay
        for any hours worked in excess of forty per workweek. 

(a)(1). The “workweek is a fixed and regularly recurring
        period of 168 hours—seven consecutive 24-hour periods”—that
        “need not coincide with the calendar week but may begin on any
        day and at any hour of the day.” 

. “Once the
        beginning time of an employee’s workweek is established, it
        remains fixed regardless of the schedule of hours worked by him.”
        

               The plaintiffs’ complaint alleges two separate violations of
        this workweek requirement. Each allegation—supported by
        testimony from Outokumpu’s payroll specialist—states a plausible
        claim for relief. One is that from 2015 until January 27, 2019,
        Outokumpu’s workweek ran from Monday to Sunday, but the
        company paid overtime based on the number of hours worked
        between a different sequence of days. 7 That alone is a sufficient
        basis for judgment in their favor; if Outokumpu’s workweek was
        Monday to Sunday, but it calculated overtime based on the hours

        7 Mid-litigation and in response to the plaintiffs’ lawsuit, Outokumpu changed

        its workweek definition to begin on Sunday and end on Saturday
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        28                    Opinion of the Court                22-13691

        worked between Sunday and Saturday, miscalculations would
        have inevitably occurred.
                The plaintiffs also allege that Outokumpu allocated all the
        time associated with an employee’s shift to a single workweek
        regardless of when the shift began or ended. So, for example, a
        shift that spanned the end of one workweek and the beginning of
        the next would have counted only toward the hours worked in the
        first workweek. This too presents a sufficient basis for judgment in
        favor of the plaintiffs on their workweek claim. If Outokumpu
        allocated all hours worked during a shift to only one workweek,
        even if that shift spanned multiple workweeks, overtime
        miscalculations would have been unavoidable.
               Second, the bonus claim. The FLSA requires employers to
        calculate overtime pay as a function of the employee’s “regular
        rate.” 

(a)(1). The “regular rate” includes “all
        remuneration for employment,” save for several exemptions. 

        § 207(e). Sometimes when an employer pays a bonus, that bonus
        is considered part of the employee’s total remuneration for a given
        workweek, which means the employer must recalculate the
        overtime rate to take that bonus into account. 

, 778.209. Other bonuses, however, do not trigger a
        recalculation. 

 When a bonus is a “[p]ercentage of total
        earnings,” employers need not recalculate the overtime rate: a
        “bonus based on a percentage of total wages . . . increases both
        straight time and overtime wages by the same percentage, and
        thereby includes proper overtime compensation as an arithmetic
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        22-13691               Opinion of the Court                       29

        fact.” 

, 778.503. These bonuses, in other
        words, “provide for the simultaneous payment of overtime
        compensation due on the bonus.” 

 § 778.210.
                Every month, Outokumpu paid its employees a
        nondiscretionary incentive bonus if the mill met certain production
        criteria. The plaintiffs allege that this bonus did not qualify as an
        FLSA-approved percentage bonus because the “percentage is
        applied to the gross amount of pay received by the employee during
        the calendar month” and not “the gross amount of pay the
        employee earned during the calendar month.” Paychecks received
        during a 30-day calendar month, for example, may have only
        covered 4 workweeks, or 28 days. And if the mill met production
        goals during that 30-day period, a bonus was applied to only 28
        days’ worth of paychecks.
               The plaintiffs say that this mismatch between pay periods
        and calendar months means Outokumpu’s incentive bonus plan
        did not qualify as a percentage bonus. Because the bonus was
        neither an exemption under § 207(e) nor a proper percentage
        bonus, they argue, the FLSA required Outokumpu to recalculate
        the plaintiffs’ regular rate. And because Outokumpu failed to
        account for the incentive bonuses in the regular rate, Outokumpu
        failed to accurately calculate the overtime rate. As plaintiffs’
        counsel explained to this Court, the rounding and bonus claims
        overlap—there is no way to separate the two.
               Outokumpu tries to rebut the plaintiffs’ arguments, pointing
        to evidence uncovered during discovery that it says contradicts the
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        30                        Opinion of the Court                     22-13691

        plaintiffs’ stated facts. That evidence is irrelevant. The question
        here is whether the plaintiffs’ complaint states a plausible claim for
        relief. And in answering that question, we assume all well-pleaded
        factual allegations are true. See Surtain, 

. Given the
        sparse factual record, we cannot say that the plaintiffs have failed
        to allege a sufficient basis for their claims. It may be that
        Outokumpu could have prevailed on the merits had it chosen to
        litigate this case, and in the process produced records that rebutted
        the plaintiffs’ factual allegations. But Outokumpu gave up that
        right, thumbing its nose at the judicial process and forcing the
        district court to rule on the issue at a premature stage in the
        litigation. The district court committed no error when it awarded
        judgment on the plaintiffs’ workweek and bonus claims.8
                                             VI.
              On cross-appeal, the plaintiffs argue that the district court
        improperly credited Outokumpu’s statute of limitations defense
        when it calculated the damages owed. 9


        8 Outokumpu briefly argues that the plaintiffs’ state-law claims are preempted

        by federal law. As Outokumpu acknowledges, however, this argument
        depends on an affirmative defense that was struck as a sanction along with the
        answer. As a result, the district court did not commit reversible error by
        refusing to credit it.
        9 Outokumpu also challenges the district court’s damages calculation as not

        supported by an adequate evidentiary basis. The joint submission on damages
        included over 100 pages of exhibits showing damages member-by-member
        and period-by-period, with detailed individual examples demonstrating how
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        22-13691                 Opinion of the Court                             31

               The FLSA’s statute of limitations provides that an action
        must commence no later than three years after a willful violation
        of the statute. 

(a). For party plaintiffs the action
        commences on the date the complaint is filed, and for opt-in
        plaintiffs the action commences on the date their consent is filed in
        court. 

 § 256. Here, the class complaint was filed on July 30,
        2018, meaning that only paychecks received on or after July 30,
        2015, are actionable for named party plaintiffs. For any plaintiffs
        who later opted in to the class, the § 255(a) three-year statute of
        limitations would limit claims to only those paychecks received no
        more than three years before the opt-in date.
               The plaintiffs also sought recovery for the later opt-in
        plaintiffs back to July 30, 2015. To get around § 255(a)’s bar, they
        argued that the statute of limitations should be equitably tolled.
        The district court rejected the attempt. In a normal case, that
        would be the end of it—but this is no normal case.
                The statute of limitations provided by § 255(a) is an
        affirmative defense, which means it must be specifically pleaded.
        Day v. Liberty Nat’l Life Ins., 

, 1014–15 (11th Cir. 1997);
        see also Fed. R. Civ. P. 8(c)(1). “[F]ailure to plead the bar of the
        statute of limitations constitutes a waiver of the defense,” even

        damages broke down by individual pay period. The district court used
        “mathematical calculations” supported by submissions from both parties to
        arrive at the final damages figure. See Adolph Coors Co. v. Movement Against
        Racism & the Klan, 

 (11th Cir. 1985). There is no merit to
        the argument that the district court’s calculations lacked an adequate
        evidentiary basis.
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        32                     Opinion of the Court                22-13691

        when the “complaint itself interjected the issue into the case.” Day,
        

. And a forfeited affirmative defense “is excluded
        from the case.” Wood v. Milyard, 

 (2012) (alteration
        adopted and quotation omitted).
               Here, Outokumpu asserted the statute of limitations defense
        in each of its answers. The magistrate judge first struck the defense
        from Outokumpu’s second amended answer as a sanction. And
        although Outokumpu re-pleaded the defense in its third amended
        answer, the district court struck that entire answer as part of its
        final sanction. As a result of these two sanctions, the statute of
        limitations defense was effectively unpleaded.
               Even so, when the plaintiffs submitted proposed damages
        that included claims dating back to July 2015 for opt-in parties,
        Outokumpu objected, arguing that the scope of relief was
        inconsistent with the court’s earlier ruling rejecting equitable
        tolling and applying § 255(a)’s statute of limitations. Although the
        plaintiffs pointed out that any affirmative defense would have
        needed to be asserted in Outokumpu’s now-nonexistent answer,
        the district court sustained Outokumpu’s objection.
               Reviewing the record, we cannot determine why the district
        court decided to sustain the objection. “A court has an obligation
        to assure that there is a legitimate basis for any damage award it
        enters.” Anheuser-Busch, Inc. v. Philpot, 

 (11th
        Cir. 2003). When a court enters default judgment, the award
        entered must be at the very least “a reasonable estimate of
        damages.” Adolph Coors Co. v. Movement Against Racism & the Klan,
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        22-13691                Opinion of the Court                         33

        

 (11th Cir. 1985). While the default judgment
        may not “exceed in amount what is demanded in the pleadings,” a
        court “may award substantially less tha[n] what was requested
        whenever the damage proceeding indicates that only a smaller
        award is warranted.” 10A Wright & Miller, supra, § 2688.
                Although we review a district court’s award of damages
        under a clearly erroneous standard, the sparse record here renders
        this question incapable of meaningful appellate review. See Meader
        ex rel. Long v. United States, 

 (11th Cir. 1989). It
        could be the case that the district court limited the plaintiffs’ claims
        as an attempt to estimate damages more faithfully. Or perhaps the
        court rejected the plaintiffs’ equitable tolling arguments on the
        merits. Or perhaps in the flurry of the case it was not clear that the
        affirmative defense had been stricken. Or perhaps it was
        something else—the record does not say. Consequently, we
        remand to the district court to explain or reconsider its reasoning
        for sustaining Outokumpu’s objection on the statute of limitations
        defense.
                                    *      *      *
               The “most severe in the spectrum of sanctions provided by
        statute or rule must be available to the district court in appropriate
        cases.” Nat’l Hockey League v. Metro. Hockey Club, Inc., 

 (1976). It is hard to imagine a more appropriate case than this
        one. Years of obstinance, dozens of discovery violations, and
        unceasing attempts to blame others finally caught up with
        Outokumpu. Even on appeal, the company displays a remarkable
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        34                    Opinion of the Court               22-13691

        lack of contrition. The district court did not err when it entered
        default judgment, when it refused to reconsider that decision, or
        when it determined which of the plaintiffs’ claims were well
        pleaded. Accordingly, we AFFIRM those decisions. We cannot,
        however, properly evaluate the plaintiffs’ arguments about
        § 255(a)’s statute of limitations. We therefore VACATE AND
        REMAND the calculation of damages for the district court to more
        thoroughly explain its reasoning on that issue.