Summary
approving hourly rates of $310 to $550 for attorneys with 8 to 15 years experience, respectively
Summary of this case from Stengel v. BlackOpinion
10 Civ. 8237 (PAE) (JCF)
05-15-2012
BRYAN SMITH, Plaintiff, v. ISAMI NAGAI, Defendant.
REPORT AND RECOMMENDATION
TO THE HONORABLE PAUL A. ENGELMAYER, U.S.D.J.:
Bryan Smith brings this action against his former employer, Saki Restaurant Corp. ("Saki") and its former owner, Isami Nagai. The plaintiff alleges that Saki failed to pay him required overtime wages in violation of the Fair Labor Standards Act (the "FLSA"), 29 U.S.C. § 215(c)(3), and New York State Labor Law ("NYLL") § 215.
Following entry of a default judgment, the plaintiff discontinued the action as against Saki and the case was referred to me for an inquest on damages against Mr. Nagai. A hearing was held on March 23, 2012, and despite being afforded notice of the hearing, Mr. Nagai did not appear. The following findings are therefore based on the evidence presented at the hearing and on the information submitted by the plaintiff.
Background
Mr. Nagai's principle place of business was in New York, New York at all relevant times. (Complaint ("Compl."), ¶ 6). He employed Mr. Smith as a cook at Saki from approximately June 2003 until September 23, 2010. (Compl., ¶ 11). During Mr. Smith's term of employment he regularly worked more than 40 hours per week but was not paid overtime. On or about September 21, 2010, Mr. Smith spoke to a representative from the New York Department of Labor regarding the overtime issue. (Compl., ¶ 25). Mr. Nagai was aware of this communication (Compl., ¶ 26), and on September 23, 2010, he terminated Mr. Smith. (Compl., ¶ 27). The plaintiff filed the instant action on October 25, 2010.
Discussion
A. Jurisdiction
As this action arises under the FLSA, this Court has jurisdiction pursuant to 29 U.S.C. § 216(b), as well as federal question jurisdiction under 28 U.S.C. § 1331. In addition, Mr. Nagai is subject to personal jurisdiction in this Court since he conducted business in New York at all relevant times. (Defendant Answer ("Def. Ans."), ¶¶ 6, 7).
B. Liability
All of the plaintiff's factual allegations, except those relating to damages, must be accepted as true where, as here, the defendant has defaulted. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997); Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Gucci America, Inc. v. MyReplicaHandbag.com, No. 07 Civ. 2438, 2008 WL 512789, at *1 (S.D.N.Y. Feb. 26, 2008) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). In this case, the allegations of the Complaint establish Mr. Nagai's liability under the FLSA and NYLL.
In order to establish a violation of the FLSA, the plaintiffs must first show they are "covered employees," who "'[were] employed in an enterprise engaged in interstate commerce or in the production of goods for interstate commerce.'" Rodriguez v. Almighty Cleaning, Inc., ___ F. Supp. 2d ___, ___, No. 09 CV 2997, 2011 WL 691184, at *2 (E.D.N.Y. March 28, 2011) (alteration in original) (quoting Shim v. Millennium Group, No. 08 CV 4022, 2009 WL 211367, at *2 (E.D.N.Y. Jan. 28, 2009)); see also 29 U.S.C. §§ 206(a), 207(a). As an initial matter, Mr. Smith is a "covered employees" under the FLSA. The term "employee," as defined in the FLSA includes restaurant cooks. See 29 U.S.C. § 203(e).
Furthermore, Saki is an "enterprise engaged in interstate commerce." Under the FLSA, an enterprise consists of "related activities performed (either through unified operation or common control) by any person or persons for a common business purpose," with no less than $500,000 in annual gross income. 29 U.S.C. § 203(r)(1), (s)(1)(A)(ii). Even "local business activities fall within the reach of the FLSA when an enterprise employs workers who handle goods or materials that have moved or been produced in interstate commerce." Archie v. Grand Central Partnership, Inc., 997 F. Supp. 504, 530 (S.D.N.Y. 1998). The plaintiff has alleged that in the past year Saki's gross receipts exceeded $500,000 (Compl., ¶ 18), and the U.S. Department of Labor's investigation of Saki reached the same conclusion (Pl. Exh. 1). That same investigation further found that Saki "purchases fish, ginger and flour, among other items" from a supplier in New Jersey, thus fulfilling the interstate commerce requirement for FLSA coverage. (Pl. Exh. 1).
"Pl. Exh. 1" refers to the exhibit offered into evidence by the plaintiff at the March 23, 2012 hearing.
Finally, Mr. Nagai is an "employer" under the FLSA. The statute defines an employer as "any person acting directly or indirectly in the interest of an employer in relation to an employee," 29 U.S.C. § 203(d), and the "'overwhelming weight of authority is that a corporate officer with operational control of a corporation's covered enterprise is an employer along with the corporation, jointly and severally liable under the FLSA for unpaid wages,'" Moon v. Kwon, 248 F. Supp. 2d 201, 237 (S.D.N.Y. 2002) (quoting Donovan v. Agnew, 712 F.2d 1509, 1511 (1st Cir. 1983)). Under the FLSA's broad definition of the term "employer," Mr. Nagai, the owner and Chief Executive Officer of Saki, is an employer and therefore jointly and severally liable for FLSA violations. (Plaintiff's Proposed Findings of Fact and Conclusions of Law ("Findings")); see also Kopec v. GMG Construction, No. 09 CV 2187, 2010 WL 3925210, at *2 (E.D.N.Y. Sept. 10, 2010), report and recommendation adopted, 2010 WL 3909273 (E.D.N.Y. Sept. 30, 2010); Tracy v. NVR, Inc., No. 04 CV 6541L, 2009 WL 3153150, at *4 (W.D.N.Y. Sept. 30, 2009) ("Generally, corporate officers and owners held to be employers under the FLSA have had some direct contact with the plaintiff employee, such as personally supervising the employee's work, including determining the employee's day-to-day work schedule or tasks, signing the employee's paycheck or directly hiring the employee."), report and recommendation adopted in relevant part, 667 F. Supp. 2d 244 (W.D.N.Y. Nov. 5, 2009).
"'New York law adopts a similarly broad definition of "employer" in the context of its minimum wage and overtime laws,'" Heng Chan v. Sung Yue Tung Corp., No. 03 Civ. 6048, 2007 WL 313483, at *12 (S.D.N.Y. Feb. 1, 2007) ("Heng Chan I") (quoting Moon, 248 F. Supp. 2d at 236), and under NYLL an employer need not "show either a nexus with interstate commerce or that the employer has any minimum amount of annual sales," Chun Jie Yin v. Kim, No. 07 CV 1236, 2008 WL 906736, at *4 (E.D.N.Y. April 1, 2008). Furthermore, employee exemptions under NYLL are "identical" to those under the FLSA. Henderson v. Transportation Group, Ltd., No. 09 Civ. 7328, 2010 WL 2629568, at *1 n.1 (S.D.N.Y. July 1, 2010). Therefore, to the extent that the FLSA is applicable to these plaintiffs and defendants, NYLL is also applicable. See, e.g., Heng Chan I, 2007 WL 313483, at *30.
The plaintiff's proposed Findings include several errors with regard to the dates when Mr. Smith's regular rate of pay increased during the course of his employment. As a result, I have calculated the amounts owed to Mr. Smith without reliance on the table found in ¶ 41 of the Findings and have resolved any discrepancies to the defendant's benefit
Mr. Smith is entitled to recover unpaid overtime wages plus an additional equal amount in liquidated damages. 29 U.S.C. § 216(b). In support of his claim, Mr. Smith has submitted calculations showing his regular wage rates and the number of hours he worked at Saki. (Findings). The FLSA requires that an employee receive overtime pay "at a rate not less than one and one-half times the regular rate at which he is employed." 29 U.S.C. § 207. NYLL imposes the same requirement. 12 NYCRR 142-2.2; see also NYLL §§ 191, 663. The FLSA statute of limitations is two years, and 3 years if the violation is willful as the plaintiff here asserts. 29 U.S.C. § 255. (Findings, ¶ 26). Under the NYLL, the statute of limitations is six years. NYLL § 198(3); NYLL 663(3). Mr. Smith filed his Complaint on October 29, 2010, and thus he is entitled to recover unpaid overtime dating back six years to October 29, 2004. (Findings, ¶ 25).
For the time period from October 31, 2004 until the beginning of November 2008, Mr. Smith's regular rate was $10.59 per hour. (Findings, ¶ 22). He was not paid the half-time overtime premium, and thus is due an additional $5.30 for each hour he worked over 40 in a workweek. (Findings, ¶ 22). During the 191 week period from October 31, 2004 through June 2008, he worked an average of 65 hours per week (Findings, ¶ 18) and is therefore entitled to $132.50 per week in unpaid overtime, for a total of $25,307.50. During the 18 weeks from July 2008 through the end of October 2008, he worked an average of 48 hours per week (Findings, ¶ 18). He is therefore owed $42.40 per weeks or $763.20 in unpaid overtime. Altogether, for the time in which Mr. Smith's regular rate was $10.59 per hour, he is owed $26,070.70.
From November 2008 until November 15, 2009, Mr. Smith was paid a day rate of $130.00 per day, which amounts to a regular rate of $13.54 per hour. He is therefore due an additional $6.77 for each hour he worked over 40 in a workweek. (Findings, ¶ 23). For the 34 weeks from November 200 through the end of June 2009, he worked an average of 48 hours per week. (Findings, ¶ 18). He is therefore entitled to $54.16 per week during that time or $1,841.44 total. For July, 2009 until November 15, 2009, Mr. Smith's average hours fell from 48 to 45 hours per week. (Findings, ¶¶ 18, 23). Thus he is entitled to $33.85 per week in overtime for each of the 20 weeks during this period, for a total of $677.00.
Finally, from November 16, 2009 to September 12, 2010, the plaintiff's regular rate was $13.96 per hour. (Findings, ¶ 23). He thus is due an additional $7.22 for each hour he worked over 40 per week. (Findings, ¶ 23). During this time, his average hours remained stable at 45 hours per week. (Findings, ¶ 18). Thus, he is entitled to $36.10 per week in unpaid overtime. This period lasted for 43 weeks, for $1,552.30 in unpaid overtime. (Findings, ¶ 41). In total, Mr. Smith is owed $26,070.70 plus $1,841.44 plus $677.00 plus $1,552.30, or $30,141.44 in unpaid overtime.
The FLSA and NYLL also provide for liquidated damages. A defendant found to have violated the FLSA is required to pay the employee an additional amount in liquidated damages equal to the unpaid overtime. 29 U.S.C. § 216(b); (Findings, ¶ 31). Thus, Mr. Smith is entitled to $9,471.44 in FLSA liquidated damages for the period from October 29, 2007 until September 12, 2010. NYLL allows an employee to recover liquidated damages equal to twenty-five percent of the total damages due for unpaid wages. NYLL § 198(1-a); NYLL § 663 (before April 9, 2011). Thus, Mr. Smith is entitled to $7,535.36 in NYLL liquidated damages for the period October 31, 2004 until the end of his employment.
Thus, the total due to the plaintiff for overtime damages and FLSA and NYLL liquidated damages for the entire time period from October 31, 2004 to September 23, 2010 is $47,148.24.
Additionally, NYLL provides that a plaintiff is entitled to prejudgment interest at a rate of nine percent calculated, "[w]here such damages were incurred at various times, . . . from the date it was incurred or upon all of the damages from a single reasonable intermediate date." N.Y. CPLR §§ 5001(b), 5004; (Findings, ¶ 38). Prejudgment interest is not, however, available where a plaintiff's FLSA and NYLL claims overlap. Wicaksono v. XYZ 48 Corp., No. 10 Civ. 3635, 2011 WL 2022644 (S.D.N.Y. 2011). Based on the FLSA's three-year statute of limitations, this means that Mr. Smith is entitled to prejudgment interest for his NYLL claims during the period from October 31, 2004 until October 28, 2007. (Findings, ¶ 39).
As discussed above, the plaintiff is owed unpaid overtime in the amount of $5.30 per hour for each of the average 25 hours per week he worked in excess of 40 during this period. That amount totals to $6,837 for the span from October 31, 2004 through October 28, 2007. Thus, at the nine percent interest rate set by the NYLL, Mr. Smith is entitled to interest at a rate of $1.69 per diem. Under the circumstances, a reasonable intermediate date from which to calculate the accrual of interest is April 30, 2006, the mid- point of the interest period. Thus, the prejudgment interest due to the plaintiff totals $3,729.83 as of May 15, 2012 and will continue to accrue at a daily rate of $1.69.
Finally, the FLSA provides that an employer who retaliates against an employee is liable for, "the payment of wages lost and an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The plaintiff is entitled to payment of lost wages from the date of his termination, September 23, 2010, until the closing of the restaurant on March 16, 2011, a period of 25 weeks. (Findings, ¶ 50). Prior to being fired, Mr. Smith was paid $13.96 per hour and worked 45 hours per week. Thus, he is entitled to $16,596.25 in lost wages and $16,596.25 in liquidated damages. Compensatory damages are also appropriate for the mental anguish suffered by Mr. Smith as a result of his retaliative termination. Mr. Smith is entitled to damages in the amount of $5,000 as requested. (Findings, ¶ 51). Thus, the total due to the plaintiff for violation of the anti-retaliation provisions of the FLSA and NYLL is $16,596.25 plus $16,596.25 plus $5,00 or $38,192.50.
In total, then, the plaintiff is entitled to an award of $47,148.24 in unpaid overtime and liquidated damages plus $3,729.83 prejudgment interest as of May 11, 2012 plus $38,192.50 in retaliation-related damages for a grand total of $89,070.57.
D. Attorneys' Fees and Costs
When a plaintiff prevails in an action under the FLSA or NYLL for unpaid overtime, he is entitled to "reasonable attorneys' fees and costs." 29 U.S.C. § 216(b); NYLL § 198. In determining the award, courts utilize the analytical framework for civil rights cases under 42 U.S.C. § 1988. See Ayres v. 127 Restaurant Corp., No. 96 Civ. 1255, 1999 WL 328348, at *1 (S.D.N.Y. May 21, 1999); ("the law on attorney's fees is no different in FLSA cases than it is in employment discrimination cases"), aff'd, 201 F.3d 430 (2d Cir. 1999) (table); see also Hensley v. Eckerhart, 461 U.S. 424, 433 n.7 (1983) ("The standards set forth in this opinion [construing § 1988] are generally applicable in all cases in which Congress has authorized an award of fees to a 'prevailing party.'"). The first step is to calculate the "lodestar" amount by multiplying the number of attorney hours reasonably expended by a reasonable hourly rate. See Blanchard v. Bergeron, 489 U.S. 87, 94 (1989); Hensley, 461 U.S. at 433; Cruz v. Local Union No. 3 of the International Brotherhood of Electrical Workers, 34 F.3d 1148, 1159 (2d Cir. 1994). While there is a strong presumption that this amount represents a reasonable fee, it may be adjusted upward or downward based on other considerations. See Quaratino v. Tiffany & Co., 166 F.3d 422, 425 (2d Cir. 1999).
1. Reasonable Hours
The party seeking fees has the burden of establishing that the hours billed are reasonable. In New York State Association for Retarded Children, Inc. v. Carey, 711 F.2d 1136 (2d Cir. 1983), the Second Circuit held that "any attorney . . . who applies for court-ordered compensation in this Circuit . . . must document the application with contemporaneous time records . . . specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." Id. at 1148. Here, the plaintiff's attorneys have satisfied the documentation requirement, and their total hours are reasonable, especially in light of the defendant's repeated failure to cooperate during the course of litigation and eventual default. (Time Records attached at Exh. 1 to Memorandum of Law in Support of Plaintiff's Motion for Attorney's Fees and Costs ("Fee Memo.")).
2. Reasonable Rates
The plaintiffs' attorney is entitled to be reimbursed at rates equivalent to those "in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984); Rosacdo v. City of New York, No. 11 Civ. 4285, 2012 WL 955510, at *4 (S.D.N.Y. March 15, 2012); see also Gierlinger v. Gleason, 160 F.3d 858, 882 (2d Cir. 1998). The relevant community in this case is the Southern District of New York. Rosado, 2012 WL 955510, at *4 ("The relevant community to which the court should look is the district in which the case brought."); see also Luciano v. Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997); In re Agent Orange Products Liability Litigation, 818 F.2d 226, 232 (2d Cir. 1987). A reasonable rate is "the rate a paying client would be willing to pay." Arbor Hill Concerned Citizens Neighborhood Association v. County of Albany and Albany Board of Elections, 522 F.3d 182, 190 (2d Cir. 2008). The burden of establishing that the "requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation" lies with the party seeking attorney's fees. Rozell v. Ross-Holst, 576 F. Supp. 2d 527, 544 (S.D.N.Y. 2008).
The plaintiff retained the firm of Getman & Sweeney, PLLC to represent him. Dan Getman, a founding partner with more than twenty years of experience handling complex litigation, seeks fees at the rate of $550 per hour. (Fee Memo. at 7). Michael Sweeney, a partner with over fifteen years of experience in "complex employee-rights class litigation" (Fee Memo. at 7, 10), seeks $440 per hour. Matthew Dunn, an associate at Getman & Sweeney with more that eight years of experience, seeks $310 per hour. (Fee Memo. at 8). In addition, Getman & Sweeney employed four paralegals, at an hourly rate of $135 and an information technology specialist at an hourly rate of $195. (Fee Memo. at 8). These rates are comparable to rates regularly approved in the Southern District of New York and are therefore reasonable. See, e.g., Scott v. City of New York, 643 F.3d 56, 59 (2d Cir. 2011) (holding $550 per hour rate in FLSA case to be reasonable); Barbour v. City of White Plains, 788 F. Supp. 2d 216, 225 (S.D.N.Y. 2011) (awarding rate of $625 to experienced civil rights litigator and $450 per hour for attorney with substantial legal experience); Tatum v. City of New York, No. 06 Civ. 4290, 2010 WL 334975, at *5 (S.D.N.Y. Jan. 28, 2010) (awarding $450 per hour for experienced civil rights attorney); New York District Council of Carpenters Pension Fund v Quantum Construction, 657 F. Supp. 2d 410, 424 (S.D.N.Y. 2009) (noting that rates of $425 for partners, $300 for an associate, and $150 for paralegals were "commensurate with those generally charged for similar work in this district" in ERISA/LMRA case); Rozell, 576 F. Supp. 2d at 546 (awarding $600 per hour partner and between $250 and $350 for associates in employment discrimination case); Ansoumana v. Gristedes Operating Corp., No. 00 Civ. 253, 2004 WL 504319, at *3 (S.D.N.Y. Jan. 4, 2004) (approving rate of for $400 per hour in FLSA case for experienced attorneys).
3. Calculation of the Lodestar
Mr. Dunn billed 167.7 hours at a rate of $310 for a total of $51,057.00. Mr. Sweeney billed 3.7 hours at a rate of $440 for a total of $1,628.00. Mr. Getman billed 0.3 hours at a rate of $550 for a total of $165.00. Paralegals at Getman & Sweeney billed 49.8 hours at $135 for a total of $5,791.50. Getman & Sweeny also documented 10.2 hours of clerical work at a rate of $50 and 0.1 hours of IT work by Mr. Russo at a rate of $195, for totals of $510 and $19.50, respectively. Thus, the lodestar is $51,057.00 plus $1,628.00 plus $165.00 plus $5,791.00 plus $510.00 plus $19.50, or $59,171.00. As there is no basis for adjusting the lodestar, that amount shall be the fee award.
4. Costs
Finally, the plaintiff has documented costs totaling $2,669.74. (Fee Memo. at 14; Invoices, attached as Exh. 3 to Fee Memo.). These costs are fully compensable under the FLSA.
Conclusion
For the reasons set forth above, I recommend that judgment be entered in favor of the plaintiff and against Isami Nagai in the amount of $89,070.57 in unpaid overtime and damages for violations of the FLSA and NYLL, $59,171.00 in attorneys' fees, and $2,669.74 in costs, for a total of $150,906.24. In addition, prejudgment interest on Mr. Smith's back pay will continue to accrue at a rate of $1.69 per day until the entry of a final judgment.
Pursuant to 28 U.S.C. § 636(b)(1) and Rules 72, 6(a), and 6(d) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from this date to file written objections to this Report and Recommendation. Such objections shall be filed with the Clerk of the Court, with extra copies delivered to the chambers of the Honorable Paul A. Engelmayer, Room 660, and to the chambers of the undersigned, Room 1960, 500 Pearl Street, New York, New York 10007. Failure to file timely objections will preclude appellate review.
Respectfully Submitted,
/s/_________
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE Dated: New York, New York
May 15, 2012 Copies mailed to: Matthew T. Dunn, Esq.
Getman & Sweeney, PLLC
9 Paradise Lane
New Paltz, New York 12561 Isami Nagai
30 Saint Marks Place
New York, New York 10003