Opinion
10 Civ. 4643 (PKC)
02-15-2011
PEDRO OLVERA, individually and on behalf of others similarly situated, CESAR AJCHE, individually and on behalf of others similarly situated, CRISTOBAL GALLARES, individually and on behalf of others similarly situated, MARTIN PEREZ, individually and on behalf of others similarly situated, and SALVADOR CANDIDO MALDONADO, individually and on behalf of others similarly situated, Plaintiffs, v. NEW KO-SUSHI, d/b/a Ko Sushi, MAI JIANG ZHU, and JIN CAI WANG, Defendants.
MEMORANDUM AND ORDER
:
Plaintiffs commenced this action on June 15, 2010, alleging that the defendants violated the Fair Labor Standards Act of 1938, 29 U.S.C. §§ 201, et seq., (the "FLSA") and New York Labor Law. (Compl. ¶ 6; Am. Compl ¶ 6.) Plaintiffs allege that defendants unlawfully failed to pay minimum wage and overtime compensation. (Compl. ¶¶ 4-6, 86-106, 118-21; Am. Compl. ¶¶ 4-6, 86-106, 118-121.) They also bring a claim of assault and battery against all defendants. (Compl. ¶¶ 107-17; Am. Compl. ¶¶ 107-17.) For the reasons explained below, the plaintiffs' motion for entry of default judgment is granted. Damages are awarded to all plaintiffs but Salvador Candido Maldonado, who may file supplemental papers.
I. Plaintiffs' Motion is Granted as to Liability.
Plaintiffs have filed affidavits of service reflecting that all defendants were served on June 21, 2010. (Docket # 3, 4, 5.) Defendants failed to appear at a pretrial conference of August 27, 2010. The Court noted the defendants' failure to appear and gave plaintiffs leave to file for entry of default judgment within 21 days. (Docket # 6.) The Court thereafter gave plaintiffs leave to amend the Complaint, and an Amended Complaint was filed on September 21, 2010. (Docket # 7, 8.) Plaintiffs have filed affidavits of service reflecting that all defendants were served with the Amended Complaint on October 12, 2010. (Docket # 9, 10, 11.) No defendant has answered or appeared.
On December 21, 2010, plaintiffs moved for the entry of default judgment. (Docket # 12.) Plaintiffs have submitted certificates of default signed and stamped by the Clerk of Court, which reflect that the defendants were served and have failed to answer or appear. (Faillace Affirmation Exs. I, J, K.) These certificates of default, however, are dated July 28, 2010, and pertain to the Complaint that commenced this action, not to the Amended Complaint filed on September 21, 2010.
Motions for the entry of default judgment for failure to answer or appear may subject a defendant to significant liability. In this case, plaintiffs seek damages and attorneys' fees amounting to $422,694.21, plus interest. (Faillace Affirmation ¶¶ 32-33, 37.) A default motion is often unopposed, and is subject to close scrutiny by the Court. Local Rules of this District and my own Individual Practices govern the contents of a default motion. See Local Rule 55.2; Individual Practices on Default Judgments.
The entry of default judgment has "ancient common law roots," and "a default is an admission of all well-pleaded allegations against the defaulting party." Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 246 (2d Cir. 2004) (reviewing federal rules and origins of default practice and distinguishing the same from summary judgment procedure). "The dispositions of motions for entries of defaults and default judgments and relief from the same under Rule 55(c) are left to the sound discretion of a district court because it is in the best position to assess the individual circumstances of a given case and to evaluate the credibility and good faith of the parties." Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). Relevant factors in weighing a motion for default judgment include whether a movant will be prejudiced by delay, whether the grounds for default are clearly established, whether default was willful and whether there are meritorious defenses. O'Callaghan v. Sifre, 242 F.R.D. 69, 73 (S.D.N.Y. 2007) (citing 10A Wright, Miller & Kane, Federal Practice & Procedure § 2685 (3d ed. 1998); Pecarsky v. Galaxiworld.com, Ltd., 249 F.3d 167, 170-71 (2d Cir. 2001)).
The plaintiffs have submitted stamped certificates of default only as to the initial Complaint, and not to the Amended Complaint. The only apparent change between the two complaints is the addition of plaintiffs Perez and Maldonado. (See Docket #7 (letter from plaintiffs' counsel seeking "leave to amend the complaint in order to add two new plaintiffs").) Because this Court has reviewed the affidavits of service of the Amended Complaint and the docket reflects an absence of any appearance by the defendants, it is appropriate to grant the motion for a default. In In re Suprema Specialities, Inc., 330 B.R. 40, 46-47 (S.D.N.Y. 2005), then-District Judge Lynch discussed in dictum the relationship between the Clerk's entry of default and a district judge's entry of a default judgment. Judge Lynch noted that under the Federal Rules of Civil Procedure, entry of default by the Clerk is a prerequisite to entry of a default judgment, but that the "'efficient administration of justice'" may outweigh "'[r]igid adherence to these rules . . .'" Id. at 47 (alteration in original; quoting Hirsch v. Innovation Int'l, Inc., 1992 WL 316143, at *1 (S.D.N.Y. Oct. 19, 1992)). Hirsch entered a default judgment even though the Clerk had not previously entered a default, and stated that the court would entertain a motion to vacate the default if the defendant chose to file one, 1992 WL 316143, at *2. Relying on Hirsch, Judge Lynch concluded that entry of default judgment was appropriate in Suprema, even though the movant had previously failed to enter a default pursuant to the Local Bankruptcy Rules, 330 B.R. at 47,
The Suprema discussion arose in the context of a default judgment entered by a bankruptcy court pursuant to the Local Bankruptcy Rules. Id. at 46-47.
Here, to require the plaintiffs to file for an additional certificate of default would only delay resolution of the motion and would not further safeguard the defendants' rights. Of course, the defendants, remain free to move to file a timely motion to vacate the default judgment pursuant to Rule 55(c), Fed. R. Civ. P.
The plaintiff has complied with the Individual Practices of this Court in all other respects, and the motion for default is therefore granted as to liability.
II. Plaintiffs Have Set Forth Evidence as to Their Entitlement to Damages.
The defendants' default is an admission to the plaintiffs' well-pleaded allegations, except as they relate to damages. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). Damages must be established to a "reasonable certainty." Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997). A hearing is not required if the movant provides a basis for damages. Id. (collecting cases). When a defendant-employer has defaulted in an FLSA action, a plaintiffs' estimate of hours worked is sufficient evidence in support of a damages calculation. See, e.g., Liu v. Jen Chu Fashion Corp., 2004 WL 33412, at *3 (S.D.N.Y. Jan. 7, 2004) (collecting cases).
A. Plaintiffs' Evidence as to Hours Worked While Employed by Defendants.
Each plaintiff has submitted an affidavit as to hours worked while in the defendants' employment. Each affidavit states that it was originally written in Spanish and translated into English. I summarize the relevant portions of each affidavit.
Although the FLSA claims are brought as a purported collective action on behalf of all similarly situated persons (Compl. ¶¶ 84-85; Am. Compl. ¶¶ 84-85), the plaintiffs have not sought preliminary or final certification of other potential opt-in plaintiffs. 29 U.S.C. § 216(b); see generally Cohen v. Gerson Lehrman Group, Inc., 686 F. Supp. 2d 317, 325-31 (S.D.N.Y. 2010) (reviewing authority as to certification of FLSA collective action). The plaintiffs seek judgment in favor only of the five individual plaintiffs named in the Amended Complaint. Plaintiffs do not seek entry of judgment on their assault and battery claim.
Plaintiff Pedro Olvera states that from July 8, 2009 to present, he has been employed by defendants and has worked from 9 a.m. to 11 p.m. three days a week, 5 p.m. to 11 p.m. one day a week, 5 p.m. to 10:30 p.m. one day a week, and 1 p.m. to 11 p.m. one day a week. (Olvera Aff. ¶ 12.) He was paid in cash twice per month in the sum of $430. (Olvera Aff. ¶¶ 13-14.) He never received documentation reflecting hours worked, and always received a fixed salary regardless of hours worked, (Olvera Aff. ¶¶ 22-24.)
Plaintiff Cristobal Gallares worked for defendants from September 2003 to December 2005 and from September 1, 2007 to present. (Gallares Aff. ¶ 5.) From 2003 to 2005, he worked Monday through Thursday from 11 a.m. to 11 p.m., and Saturday and Sunday from 5 p.m. to 11 p.m. (Gallares Aff. ¶ 12.) From September 2007 to present, he worked 11 a.m. to 11 p.m. on Mondays and Wednesdays, from 9 a.m. to 11 p.m. on Tuesdays and Thursdays, and from 5 p.m. to 11 p.m. on Saturdays and Sundays. (Gallares Aff. ¶ 13.) From September 2003 to December 2005, he was paid $300 every two weeks, and from September 2007 to present, he was paid $490 every two weeks. (Gallares Aff. ¶¶ 15-16.) Gallares was not permitted meal breaks. (Gallares Aff. ¶ 22.) He was paid in cash and never received documentation reflecting hours worked. (Gallares Aff. ¶¶ 14, 24-25.) Gal lares received a fixed salary regardless of hours worked. (Gal lares Aff. ¶ 17.)
Plaintiff Cesar Ajche states that he was employed by defendants from April 2008 to November 2008, and from March 2009 until May 16, 2010. (Ajche Aff. ¶ 5.) He states that he worked from 11 a.m. to 10 p.m. on Monday through Friday and 1 p.m. to 10 p.m. on either Saturday or Sunday. (Ajche Aff. ¶¶ 12, 13.) He estimates that he typically worked 57 hours per week, and that when scheduled breaks are subtracted, he worked 49.5 hours per week. (Ajche Aff. ¶¶ 12-13.) From April 2008 to November 2008, Ajche was paid $400 every two weeks, and from March 2009 to May 2010, he was paid $900 every two weeks. (Ajche Aff. ¶¶ 14-17.) He was paid in cash and never received documentation reflecting hours worked. (Ajche Aff. ¶¶ 24-25.) He received a fixed salary regardless of hours worked. (Ajche Aff. ¶ 15.)
Plaintiff Martin Perez worked for defendants from March 2007 through March 2009. (Perez Aff. ¶ 5.) He worked from 11 a.m. to 11 p.m. on Tuesday through Sunday, with a 30-minute break each day. (Perez Aff. ¶ 12.) Regardless of hours worked, he was paid $450 every two weeks, and was always paid in cash. (Perez Aff. ¶¶ 13, 21.) He never received documentation reflecting hours worked. (Perez Aff. ¶¶ 22-23.)
Plaintiff Salvador Candido Maldonado worked for defendants from January 2005 through January 2008. (Maldonado Aff. ¶ 5.) He worked from 11 a.m. to 11 p.m. on Friday through Wednesday, with a 30-minute break each day. (Maldonado Aff. ¶ 11.) He was paid $800 every two weeks regardless of hours worked. (Maldonado Aff. ¶¶ 12-13, 20.) Maldonado never received documentation reflecting hours worked. (Maldonado Aff. ¶¶ 21, 24, 28.)
B. Calculations of Damages Pursuant to the FLSA and New York Labor Law.
Under the FLSA and New York Labor Law, an employee may recover unpaid wages, overtime compensation and liquidated damages. 29 U.S.C. § 216(b); N.Y. Labor L. § 198(1-a).
The FLSA provides that "no employer shall employ any of his employees . . . for a workweek longer than forty hours unless such employee receives compensation . . . at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207(a)(1). New York Labor Law incorporates the FLSA overtime-pay requirements. 12 N.Y. Comp. Codes. R. & Regs. § 142-2.2. In addition, New York regulation requires employers to pay "spread of hours" wages for an additional hour of overtime-rate pay when the workday exceeds ten hours. Id. § 142-2.4. From March 31, 2000 to December 31, 2004, New York's minimum wage was $5.15 per hour. N.Y. Labor L. § 652(1). It rose to $6.00 on January 1, 2005, $6.75 on January 1, 2006, and $7.15 on January 1, 2007. Id. As of January 25, 2009, the federal minimum wage was raised to $7.25 per hour. 29 U.S.C. § 206(a)(1)(C).
New York Labor Law also provides that if a plaintiff recovers for underpayment of wages, he or she may receive, in addition to actual damages, "an additional amount as liquidated damages equal to twenty-five percent of the total of such underpayments found to be due the employee . . . ." N.Y. Labor L. § 663(1); see also Lanzetta v. Florio's Enterprises, Inc., ___ F. Supp. 2d ___, 2011 WL 253961, at *7 (S.D.N.Y. Jan. 25, 2011) (Chin, J.) (awarding liquidated damages to spread-of-hours damages). An employer's "good faith basis to believe that its underpayment of wages was in compliance with the law" constitutes an affirmative defense to liquidated damages. Id. As of June 15, 2007, the FLSA provides that "[a]ny employer who violates the provisions of . . . section 206 or section 207 . . . shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages." 29 U.S.C. § 216(b).
Helpfully, the plaintiffs have annexed a spreadsheet chart that sets forth the weekly hours worked by each plaintiff, the then-current minimum wage rates, the corresponding overtime wage rates and the differences between wages actually received by the plaintiffs and the amounts to which they were entitled under the law. (Faillace Affirmation Ex. M.) I have reviewed the figures set forth at Exhibit M to ensure consistency with representations made in the plaintiffs' individual affidavits, and also have reviewed entries to ensure that they match then-prevailing minimum wage requirements.
As to plaintiff Maldonado, there appear to be discrepancies between the minimum wage rates set forth at Exhibit M and the minimum wage rates set forth by statute. For Maldonado only, the plaintiffs assert that the prevailing minimum wage from 2005 through 2008 was $7.15, even though the statute established rates of $6.00 and $6.75 for 2005 and 2006, respectively. N.Y. Labor Law § 652(1). Plaintiffs have not explained this apparent discrepancy, and the entries for Maldonado appear to be in error. I decline to award him damages at this time. Plaintiffs' counsel may makes additional submissions reflecting revised calculations as to the damages they claimed are owed to Maldonado, or, alternatively, further explain the basis for the minimum wage rates set forth at Exhibit M.
In all other respects, the plaintiffs appear to have accurately recited the hours worked, wages received and minimum and required overtime wages required by statute. For plaintiffs Gal lares and Ajche, the calculations appropriately reflect the 25-percent liquidated damages provision of New York Labor Law section 663(1) for unpaid sums earned prior to June 15, 2007, and uses the higher FLSA liquidated damages provision for wages owed to all plaintiffs beginning on June 15, 2007,
In addition, while the FLSA does not provide for prejudgment interest when a party is awarded liquidated damages, Thomas v. iStar Financial, Inc., ___ F.3d ___, 2010 WL 5129089, at *3 n.2 (2d Cir. Dec. 17, 2010), a plaintiff awarded liquidated damages under the New York Labor Law remains eligible for prejudgment interest under CPLR § 5004, at a rate of 9 percent per annum. Reilly v. Natwest Markets Group Inc., 181 F.3d 253, 265 (2d Cir. 1999); Dong v. CCW Fashion Inc., 2009 WL 884680, at *5 (S.D.N.Y. Feb. 19, 2009) (collecting cases in the FLSA context). If "damages were incurred at various times," a court may compute interest "upon all of the damages from a single reasonable intermediate rate." CPLR § 5001(b). Plaintiffs have proposed a calculation of prejudgment interest for each individual seeking damages under the New York Labor Law, but not for those seeking FLSA liquidated damages, and for spread-of-hours pay at a rate of nine percent per annum "from the median of each relevant period to the date of judgment." (Pl. Mem. at 10; Failacci Affirmation Ex. M.)
Plaintiffs seek total damages as follows: for Olvera, $26,017.64 in lost wages and overtime, an additional $26,017.64 in FLSA liquidated damages, $2,174.20 in spread-of-hours pay, $543.55 on liquidated damages for spread-of-hours pay and $141.89 in prejudgment interest on spread of hours pay, for a total of $54,894.92; for Gallares, $75,986.60 in lost wages and overtime, an additional $60,343.70 in FLSA and New York Labor Law liquidated damages, $6,773.60 in spread-of-hours pay, $1,693.40 in liquidated damages for spread-of-hours pay, $10,711.98 in prejudgment interest for lost wages and overtime, and $1,670.90 in prejudgment interest on spread-of-hours pay, for a total of $157,180.18; for Ajche, $21,188.86 in unpaid wages and overtime, an additional $21,188.86 in FLSA liquidated damages, $4,827.50 in spread-of-hours pay, $1,206.88 in liquidated damages for spread-of-hours pay and $574.19 in prejudgment interest on spread-of-hours pay, for a total of $48,986.29; and for plaintiff Perez, $40,178.70 in unpaid wages and overtime, an additional $35,993.42 in FLSA and New York Labor Law liquidated damages, $1,842.68 in prejudgment interest on unpaid wages and overtime, $4,663.20 in spread-of-hours pay and $1,158.30 in liquidated damages on unpaid spread-of-hours pay, for a total of $84,959.76, (Failacci Dec. Ex. M.) In total, the plaintiffs seek $346,026.15 in damages, not including any additional damages to which Maldonado claims he is entitled.
Plaintiffs also seek $10,206.25 in attorneys' fees, plus $620 in expenses covering the filing fee and service of process on the defendants. (Faillace Dec. Ex. L.) In support, the plaintiffs have submitted internal billing records. (Faillace Dec. Ex L.) Both the FLSA and New York Labor Law include attorneys' fees provisions for actions to recover unpaid wages. 29 U.S.C. § 216(b); N.Y. Labor Law § 663(1). The plaintiffs' fee request appears to be reasonable, and is granted.
CONCLUSION
Plaintiffs' motion for entry of default judgment is GRANTED to all plaintiffs as to liability. (Docket # 12.) Plaintiffs have established their entitlement to damages as follows: Olvera, $54,894.92; Gallares, $157,180.18; Ajche, $48,986.29; and Perez, $84,959.76. Plaintiffs have established their entitlement to fees and expenses in the amount of $10,826.25. Counsel may make additional submissions by February 23, 2011 that supplement and explain the proposed damages calculations as to plaintiff Maldonado.
SO ORDERED.
/s/_________
P. Kevin Castel
United States District Judge Dated: New York, New York
February 15, 2011