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recommending that the court decline to exercise supplemental jurisdiction over the remaining state law claim where court recommended against granting default judgment on the FLSA claim
Summary of this case from Guanglei Jiao v. Shang Shang Qian Inc.Opinion
14-CV-7310 (SJ) (JO)
03-17-2016
LOURDES PEREZ, Plaintiff, v. QUEENS BORO YANG CLEANER, INC., et al., Defendants.
REPORT AND RECOMMENDATION :
Plaintiff Lourdes Perez ("Perez") accuses defendant Queens Boro Yang Cleaner, Inc. ("Queens Boro") and its principals, defendants Kook Kim ("Kim") and Tony Shfon ("Shfon"), of failing to pay the wages to which she was entitled under federal and state law. See Docket Entry ("DE") 21 (Amended Complaint); 29 U.S.C. § 201, et seq. (the Fair Labor Standards Act, or "FLSA"); New York Labor Law ("NYLL") §§ 190, 650, et seq. The defendants did not respond, and Perez therefore seeks a default judgment. DE 11. Upon the court's referral, I now make this report and for the reasons set forth below respectfully recommend that the court deny the motion as to the individual defendants, grant the motion as against Queens Boro, and enter judgment against Queens Boro in the total amount of $19,862.83 (consisting of $4,323.75 in unpaid minimum and overtime wages; $1,305.00 in unpaid spread-of-hours wages; $5,628.75 in liquidated damages; $1,233.85 in prejudgment interest; $6,820.00 in reasonable attorneys' fees; and $551.48 in recoverable costs).
I. Background
A. Facts
Queens Boro is a New York corporation that operates a dry cleaning business in Long Island City, New York; Kim and Shfon allegedly serve as its owners, officers, directors, shareholders, proprietors, and managing agents. Amended Complaint ¶¶ 6, 10, 14. Perez worked for Queens Boro as a non-exempt employee — responsible for sorting, bagging, and packing customers' garments — from March 2007 until October 2013. Id. ¶ 14. Perez's employment with the individual defendants began in September 2012, when they purchased Queens Boro from its previous owner. Id. ¶¶ 9-12.
Perez is unable to locate the previous owner, Soo Ho Yang. See Amended Complaint ¶¶ 8-9.
Perez worked six days, and a total of just under sixty hours, each week: ten and one-half hours per day Monday through Wednesday, ten hours per day Thursday and Friday, and eight hours per day on Saturday. Id. ¶ 27. The defendants paid her a weekly wage of $430, all of it at the regular hourly rate despite the fact that she regularly worked more than 40 hours each week; they did not pay any overtime premium. Id. ¶ 28.
B. Proceedings
Perez filed her initial Complaint on December 16, 2014. DE 1. She served all three defendants on December 30, 2014. DE 5; DE 6; DE 7. The defendants never responded, and the Clerk entered their default on May 8, 2015. DE 10. Perez filed the instant motion for default judgment, together with supporting papers, on August 6, 2015. DE 11 (notice of motion); DE 12 (affidavit of Lourdes Perez) ("Perez Aff."); DE 13 (declaration of Justin Cilenti) ("Cilenti Decl."); DE 13-5 (billing statement); DE 13-6 (chart of costs); DE 14 (memorandum of law) ("Memo."). Perez filed proof of service of the motion on August 11, 2015. DE 16. The court referred the motion to me on August 10, 2015. That same day, I scheduled a damages inquest, directed Perez to file any further evidence or arguments that she wished me to consider by August 31, 2015, and invited the defendants — notwithstanding their default — to submit a response to any such supplemental submissions by September 9, 2015. DE 15. At my direction, Perez served that order on the defendants on August 11, 2015. DE 17.
In addition to asserting claims on her own behalf, Perez initially sought to litigate collective and class action claims. See id. ¶¶ 37-44. She later abandoned those claims, as well as her request for damages accruing prior to the individual defendants acquisition of Queens Boro based on a theory of successor liability. See DE 19 (minute entry).
I convened a damages inquest on October 8, 2015, at which the defendants did not appear despite being provided notice. I expressed certain concerns at that hearing about the sufficiency of the Complaint and offered plaintiff the opportunity to amend the complaint or to make additional submissions in support of her motion. DE 19 (minute entry). Perez promptly filed a revised damages calculation on October 15, 2015, DE 20-1, and an Amended Complaint on October 22, 2015, DE 21. On December 28, 2015, Perez filed proof of service of the Amended Complaint on Queens Boro and reported that she was unable to serve the new pleading on the individual defendants. DE 23; DE 24.
II. Discussion
A. Applicable Law
1. Default
When a defendant defaults, the court must accept as true all well-pleaded allegations in the complaint, except those pertaining to the amount of damages. Fed. R. Civ. P. 8(b)(6); see Finkel v. Romanowicz, 577 F.3d 79, 83 n.6 (2d Cir. 2009) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). The fact that a complaint stands unanswered does not, however, suffice to establish liability on its claims: a default does not establish conclusory allegations, nor does it excuse any defects in the plaintiff's pleading. With respect to liability, a defendant's default does no more than concede the complaint's factual allegations; it remains the plaintiff's burden to demonstrate that those uncontroverted allegations, without more, establish the defendant's liability on each asserted cause of action. See, e.g., Finkel, 577 F.3d at 84; see also Greyhound Exhibitgroup, 973 F.2d at 159 (complaint's assertion of proximate cause necessary for finding of liability must be "properly alleged"). Accordingly, before considering the issue of damages as to each cause of action, I first examine whether the Complaint successfully states a claim for relief.
If the defaulted complaint suffices to establish liability, the court must conduct an inquiry sufficient to establish damages to a "reasonable certainty." Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (quoting Transatl. Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997)). Detailed affidavits and other documentary evidence can suffice in lieu of an evidentiary hearing. Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991); see also Alcantara, 183 F.3d at 155. When a defendant defaults in an action brought under the FLSA, the plaintiff's recollection and estimates of hours worked are presumed to be correct. Chun Jie Yin v. Kim, 2008 WL 906736, at *3 (E.D.N.Y. Apr. 1, 2008) (citing Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680, 687-88 (1946); Reich v. S. New Eng. Telecomms. Corp., 121 F.3d 58, 66 (2d Cir. 1997)).
2. Federal and State Wage Laws
Both federal and state law require employers to pay their employees the statutory minimum wage as well as a premium (150 percent of the legally mandated minimum regular wage) for hours worked above 40 hours per week. 29 U.S.C. §§ 206(a), 207(a)(1); 12 N.Y.C.R.R. § 142-2.2. An employee bringing an action for unpaid overtime compensation under either statute has the burden of proving that she performed work for which she was not properly compensated. S. New Eng. Telecomms. Corp., 121 F.3d at 66-67 (citing Mt. Clemens Pottery Co., 328 U.S. at 687); Rivera v. Ndola Pharmacy Corp., 497 F. Supp. 2d 381, 388 (E.D.N.Y. 2007) (citations omitted); Wing Kwong Ho v. Target Constr. of N.Y., Corp., 2011 WL 1131510, at *13 (E.D.N.Y. Mar. 28, 2011) (citing Yang v. ACBL Corp., 427 F. Supp. 2d 327, 331-32, 335-37 (S.D.N.Y. 2005)). If an employer fails to keep the required records, the plaintiff may meet this burden "'if he proves that he has in fact performed work for which he was improperly compensated and if he produces sufficient evidence to show the amount and extent of that work as a matter of just and reasonable inference.'" S. New Eng. Telecomms. Corp., 121 F.3d at 66-67 (quoting Mt. Clemens Pottery Co., 328 U.S. at 687). A plaintiff may do so solely through her own recollection. Rivera, 497 F. Supp. 2d at 388 (citing Yang, 427 F. Supp. 2d at 335); Monterossa v. Martinez Rest. Corp., 2012 WL 3890212, at *5 (S.D.N.Y. Sept. 7, 2012) (citing Amaya v. Superior Tile & Granite Corp., 2012 WL 130425, at *7 (S.D.N.Y. Jan. 17, 2012)).
B. Personal Jurisdiction
"[B]efore a court grants a motion for default judgment, it may first assure itself that it has personal jurisdiction over the defendant." Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading Corp., 619 F.3d 207, 213 (2d Cir. 2010) (internal citations omitted)). Moreover, "a court may not properly enter a default judgment unless it has jurisdiction over the person of the party against whom the judgment is sought, which also means that he must have been effectively served with process." OS Recovery, Inc. v. One Groupe Int'l, Inc., 2005 WL 1744986, at *1 (S.D.N.Y. July 26, 2005) (internal quotation marks omitted). The plaintiff bears the burden of proving that service was adequate. See, e.g., Doe v. Alsaud, 12 F. Supp. 3d 684, 687 (S.D.N.Y. 2014). An affidavit of service constitutes "a prima facie case of the account of the method of service." Old Republic Ins. Co. v. Pac. Fin. Servs. of Am., Inc., 301 F.3d 54, 57 (2d Cir. 2002). Perez demonstrated effective service of the Amended Complaint on Queens Boro, DE 23, and service of the original Complaint on the individual defendants, DE 6; DE 7. However, she failed to serve the individual defendants with the Amended Complaint. DE 24. Accordingly, I respectfully recommend that the court deny the motion for the individual defendants' default on the Amended Complaint for failure to demonstrate proper service.
C. Liability
If the court accepts the foregoing analysis, it need proceed no further with respect to the individual defendants' liability under the Amended Complaint; I analyze the individual defendants' liability based on the original Complaint and Queens Boro's liability based on the Amended Complaint in turn below. Should the court reject that analysis, I respectfully recommend that it find the individual defendants joint and severally liable with the corporate defendant based on the analysis of the Amended Complaint below.
The defendants' default establishes that they failed to pay Perez any minimum wage, overtime, and spread-of-hours wages. See Complaint ¶¶ 26-36; Amended Complaint ¶¶ 22-32. In order to establish the defendants' liability, Perez must also establish that the defendants were her employers within the meaning of the law, and that she is within the class of persons entitled to the wage laws' protections. I discuss those issues for the individual defendants and the corporate defendant in turn below.
1. Kim and Shfon
To establish her right to relief under the FLSA in the circumstances of this case, Perez must demonstrate that her employer was "an enterprise engaged in commerce or in the production of goods for commerce." 29 U.S.C. § 207(a)(1); see also Jacobs v. N.Y. Foundling Hosp., 483 F. Supp. 2d 251, 257-58 (E.D.N.Y. 2007). That in turn requires her to adequately allege that her employer's annual gross volume of sales was at least $500,000 and that her employer had two or more employees who regularly and recurrently either engaged in commerce or handled, sold, or otherwise worked on goods or materials that had been moved in or produced for commerce. 29 U.S.C. § 203(s)(1)(A); 29 C.F.R. § 779.238. Although the Complaint adequately alleged that the defendants' gross annual sales exceeded $500,000 and that they employed approximately two or more employees, see Complaint ¶¶ 13-14, it has not satisfied the rest of the statutory requirement. Instead, the Complaint makes only a conclusory allegation that Queens Boro is "an 'enterprise engaged in commerce' ... in that it ... has and has had employees engaged in commerce or the production of goods for commerce, or that handle, sell, or otherwise work on goods or materials that have been moved in or produced for commerce[.]" Id. ¶ 14. The Complaint does not allege any specific facts supporting that conclusory assertion. Such non-specific pleading does not suffice to state a viable claim under the FLSA. See, e.g., Jones v. E. Brooklyn Servs. Corp., 2012 WL 909830, at *2-3 (E.D.N.Y. Feb. 28, 2012) (report and recommendation urging denial of motion for default judgment where the complaint contained "only conclusory statements about interstate commerce"), adopted, 2012 WL 909825 (E.D.N.Y. Mar. 16, 2012); Day An Zhang v. L.G. Apparel, Inc., 2011 WL 900183, at *2-3 (E.D.N.Y. Feb. 18, 2011) (report and recommendation urging denial of motion for default judgment where the complaint "allege[d] only in conclusory terms and without any factual support whatsoever that defendants [we]re enterprises subject to the requirements of the FLSA or that [the plaintiff was] individually covered under the FLSA."), adopted, 2011 WL 900950 (E.D.N.Y. Mar. 15, 2011).
A plaintiff may also demonstrate that she enjoys the protections of the FLSA by establishing that she personally "engaged in commerce or in the production of goods for commerce[.]" 29 C.F.R. § 206(a). According to the Department of Labor, individual employees are engaged in commerce "when they are performing work involving or related to the movement of persons or things (whether tangibles or intangibles, and including information and intelligence)" between states. Id., § 779.103. Perez makes no such allegation in the original Complaint, and relies exclusively on the "enterprise" portion of the statute's defined scope.
The FLSA defines "commerce" as "trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof." 29 U.S.C. § 203(b). In contrast to the FLSA, the NYLL does not require a plaintiff to show a nexus with interstate commerce or any minimum amount of annual sales. I do not question whether Perez is within the class of persons protected under the NYLL; however, as explained below, if the court dismisses the only federal claim against the individual defendants at this stage, it should also decline to exercise supplemental jurisdiction over the similar claim under state law.
While some judges in this district disagree, and have granted default judgments notwithstanding a similar lack of specificity in other cases, I conclude that requiring non-conclusory allegations is more consonant with applicable case law concerning pleading requirements, and that it does not frustrate the FLSA's remedial purpose to require a plaintiff seeking the statute's protection to explain in her pleading just what it is about her employer's business that brings it within the law's ambit. Moreover, even if the court adopts the contrary view as a general matter, I conclude that there is simply not enough information about the defendants' business in the Complaint to support a logical inference that its employees regularly handled, sold, or otherwise worked on goods or materials that have been moved in or produced for interstate commerce. The Complaint discloses only that the defendants employed Perez to sort, bag, and pack customers' garments; it does not allege whether any products moved in or were produced for interstate commerce.
See, e.g., Huerta v. Victoria Bakery, 2012 WL 1107655, at *1-3 (E.D.N.Y. Mar. 30, 2012) (finding it "inconceivable that some of the bread-making materials used by plaintiffs did not originate out of state or that the bakery did not sell its products outside the State of New York"); Maribel Rodriguez v. Almighty Cleaning, Inc., 784 F. Supp. 2d 114, 118, 121 (E.D.N.Y. 2011) (finding it "logical to infer ... that the cleaning supplies utilized by [janitors] originated outside of New York"); Shim v. Millennium Grp., 2009 WL 211367, at *3 (E.D.N.Y. Jan. 29, 2009) (finding it "simply inconceivable that none of the ... custodial ... supplies ... originated outside of New York"). The district judge to whom this case is now assigned has not explicitly addressed this issue in any reported decision.
Because an assessment of liability may consider only the Complaint's well-pleaded allegations, I do not consider the allegations in the Amended Complaint, which was never served on the individual defendants.
I therefore respectfully recommend against reading factual allegations into the Complaint — and then assuming them to be proved true by virtue of the defendants' default — that cannot fairly be found there. Going to such lengths to find the individual defendants liable would be in tension with the principle that because defaults are "generally disfavored," any doubt about the propriety of finding default "should be resolved in favor of the defaulting party." Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 96 (2d Cir. 1993). More fundamentally, drawing such inferences in favor of a plaintiff who can and should make sufficient allegations to establish liability undermines the efficiency that Federal Rule of Civil Procedure 55 otherwise serves to promote. That rule not only provides a just and efficient remedy for a plaintiff confronted by a defendant's recalcitrance; it also allows a defendant to review a deficient complaint and make the rational decision to expend no resources in answering it. See Klimchak v. Cardrona, Inc., 2014 WL 3778964, at *5 n.5 (E.D.N.Y. July 31, 2014) (citing Siemieniewicz v. CAZ Contracing Corp., 2012 WL 5183375, at *9 (E.D.N.Y. Sept. 21, 2012) (report and recommendation), adopted as modified on other grounds, 2012 WL 5183000 (E.D.N.Y. Oct 18, 2012)).
I recommend against granting a default judgment on the FLSA claim against the individual defendants on the ground that it is not adequately pleaded. In addition, because I recommend dismissal of the Complaint's sole federal claim against the individual defendants, I also recommend that the court decline to exercise supplemental jurisdiction over the remaining state law claim. See 28 U.S.C. § 1367(c)(3); Castellano v. Bd. of Trs., 937 F.2d 752, 758 (2d Cir. 1991) (noting that applicable case law suggests the court "should" decline to exercise supplemental jurisdiction where all federal claims are dismissed before trial (citing United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966)). Accordingly, I respectfully recommend that the court deny the motion for a default judgment against the individual defendants in its entirety.
2. Queens Boro
Unlike the original Complaint, the Amended Complaint — which was only served on Queens Boro — adequately pleads each of Perez's claims. The Amended Complaint adequately pleads that Queens Boro has annual revenues in excess of $500,000 and that defendants "engaged in interstate commerce ... within the meaning of the FLSA" because they "utilized essential business equipment, such as cleaning and pressing equipment, as well as washers and dryers that ... were manufactured outside the State of New York and moved in interstate commerce." Amended Complaint ¶¶ 34-38. The Amended Complaint also adequately alleges that all of the defendants were Perez's employers and acted jointly with respect to the pertinent wage practices, that the defendants failed to pay her the wages (including minimum wage, overtime and spread-of-hours premiums) required under state and federal law. Amended Complaint ¶¶ 20-28, 33-51. I therefore conclude that Perez has adequately pleaded her claims against Queens Boro.
D. Relief
Perez seeks to recover unpaid minimum wage, overtime, spread-of-hours, liquidated damages, prejudgment interest, attorneys' fees, and costs. See Memo. at 18; DE 20-1 (Revised Damages Spreadsheet). I discuss each component of her requests for relief below after first addressing two overarching preliminary issues.
1. Willfulness and the Limitation Periods
The FLSA permits Perez to recover unpaid wages that accrued up to two years before she filed her original Complaint, unless she can demonstrate that the defendants' violation was willful, in which case the limitations period extends to three years. See 29 U.S.C. § 255(a). A violation of the FLSA is willful if the employer "either knew or showed reckless disregard for the matter of whether its conduct was prohibited" by the statute. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988); Young v. Cooper Cameron Corp., 586 F.3d 201, 207 (2d Cir. 2009). Perez bears the burden to show such willfulness. Id. (citation omitted). Mere negligence is insufficient, Richland Shoe, 486 U.S. at 133, and "an employer does not willfully violate the FLSA even if it acted 'unreasonably, but not recklessly, in determining its legal obligation.'" Clarke v. JPMorgan Chase Bank, N.A., 2010 WL 1379778, at *10 (S.D.N.Y. Mar. 26, 2010) (citing Richland Shoe, 486 U.S. at 135 n.13; Reich v. Waldbaum, Inc., 52 F.3d 35, 39 (2d Cir. 1995)).
Perez alleges that the defendants "knowingly and willfully disregarded provisions of the FLSA as evidenced by their failure to compensate Plaintiff ... when they knew or should have known such was due and that non-payment ... would financially injure Plaintiff." Amended Complaint ¶ 45. Those allegations are conclusory and do not suffice to establish the defendants' willfulness. Accordingly, I conclude that Perez's claims under the FLSA are timely only with respect to the wages she earned in the two-year period ending on December 16, 2014, when she filed the Complaint. See Day An Zhang, 2011 WL 900183, at *4; Siemieniewicz, 2012 WL 5183375, at *13; Solis v. Tally Young Cosmetics, LLC, 2011 WL 1240341, at *5 (E.D.N.Y. Mar. 4, 2011) (report and recommendation), adopted, 2011 WL 1240108 (E.D.N.Y. Mar. 30, 2011). The damages period is not so circumscribed under the NYLL, which has a six-year limitations period. See NYLL § 663(3). As a result, on her state law claim, Perez may recover all of the unpaid overtime wages she earned during the period of her employment, September 2012 through October 2013.
The claim can be separated into discrete temporal components in this way because "for the purposes of establishing the statute of limitations under the FLSA, a new cause of action accrues with each payday following an allegedly unlawful pay period." Hosking v. New World Mortg., Inc., 602 F. Supp. 2d 441, 446 (E.D.N.Y. 2009) (citations and internal quotation marks omitted); see also 29 C.F.R. § 790.21(b) (regulation providing same).
2. Hours Worked
When an employer fails to maintain accurate wage and hour records, or when no such records have been produced as a consequence of the defendants' default, the "plaintiff's recollection and estimates of hours worked are presumed to be correct." Apolinar v. Global Deli & Grocery, Inc., 2013 WL 5408122, at *6 (E.D.N.Y. Sept. 25, 2013). Thus, although Perez has not submitted formal documentation such as pay stubs or bank statements to support her recollections as to hours or compensation, I presume that her allegations are true. Perez provided varying statements about the numbers of hours per week that she work. See Amended Complaint ¶ 28 (59½ hours per week); Memo. ¶ 16 (61½ hours per week). However, the most recent revised damages calculation, DE 20-1, adopts the lower number of hours consistent with the Amended Complaint. I therefore conclude that Perez worked 59½ hours per week, specifically from 7:30 a.m. to 6:00 p.m. Monday through Wednesday, from 7:30 a.m. to 5:30 p.m. Thursday through Friday, and from 7:30 a.m. to 3:30 p.m. on Saturday.
3. Minimum and Overtime Wages
At all relevant times, the defendants were required to pay Perez a minimum hourly wage of $7.25 under both the FLSA and NYLL. See 29 U.S.C. § 206(a)(1); 12 N.Y.C.R.R. § 141-1.3. Additionally, both laws require the defendants to pay Perez a fifty percent premium for her overtime hours — that is, the hours in excess of 40 that she worked in each work week. See 29 U.S.C. § 207(a)(1); 12 N.Y.C.R.R. § 146-1.4. Perez is not entitled to recover cumulative damages for unpaid wages under both federal and state law, but she may recover under the statute which provides the greatest amount of damages. See, e.g., Cao v. Wu Liang Ye Lexington Rest., Inc., 2010 WL 4159391, at *2 n.2 (S.D.N.Y. Sept. 30, 2010).
The defendants paid Perez an hourly wage of $7.23 from September 2012 through October 2013; they never paid overtime premiums. Amended Complaint ¶ 28; DE 20-1. For relevant period in which Perez received wages below the statutory minimum, she is entitled to recover the difference between the statutory minimum of $7.25 per hour and the wages she actually received. Based on the foregoing, I calculate that Perez is entitled to recover unpaid minimum and overtime wages in the total amount of $4,320.11 (consisting of $55.46 in minimum wage and $4,264.65 in overtime wages).
Perez seeks a slightly higher amount. See DE 20-1 at 2. The negligible difference between my calculation and hers — $3.64 in overtime wages and the same amount in liquidated damages — appears to be the result of a difference in rounding methods.
4. Spread-of-Hours Wages
The NYLL's "spread-of-hours" provision entitles Perez to one additional hour of pay at the minimum hourly wage for each day she worked over ten hours. NYLL § 650 et seq.; 12 N.Y.C.R.R. § 142-2.4. Perez worked more than ten hours each day for three days each week throughout her employment without receiving such premium wages. Amended Complaint ¶ 28; DE 20-1. Based on the foregoing and my own independent calculations, I agree with Perez that she is entitled to recover a total of $1,305.00 in unpaid spread-of-hours wages.
5. Liquidated Damages
Federal and state law provide for an additional award of liquidated damages to a plaintiff who establishes that her employer has failed to pay required wages. An employer who violates the FLSA "shall be liable" for unpaid minimum and overtime wages in "an additional equal amount as liquidated damages." 29 U.S.C. § 216(b). The same amount of liquidated damages is available under the NYLL for violations occurring on or after April 9, 2011; for earlier violations, the statute provided for liquidated damages equal to one-quarter of the unpaid wages. See NYLL § 198(1-a).
A defendant employer can avoid such an award by proving that the violation was the result of a good faith error. See 29 U.S.C. § 260; see S. New Eng. Telecomms. Corp., 121 F.3d at 70-71. A defaulting defendant necessarily fails to meet that burden and should therefore be liable for liquidated damages. See Castellanos v. Deli Casagrande Corp., 2013 WL 1207058, at *6 (E.D.N.Y. Mar. 7, 2013) (report and recommendation), adopted, 2013 WL 1209311 (E.D.N.Y. Mar. 25, 2013).
The overlapping remedies under federal and state law require an analysis of whether the court should award cumulative liquidated damages under both statutes or only one such award. Courts in this circuit have disagreed on that issue. I conclude that a cumulative award is not appropriate. Now that New York has amended its statute so that the comparable federal and state laws "provide for essentially identical remedies with respect to liquidated damages, it is harder to argue that they are designed to compensate a plaintiff for disparate harms." Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 91 n.11 (E.D.N.Y. 2012); see also Gortat v. Capala Bros., 949 F. Supp. 2d 374, 381 & n.3 (E.D.N.Y. 2013) (rejecting request for cumulative awards of liquidated damages and noting that New York's "amendments have resolved the disagreement among the district courts" on the issue of overlapping remedies), aff'd, 568 F. App'x 78 (2d Cir. 2014). To the contrary, now that the remedies are so similar — and now that New York has acted to bring its statute in line with its federal counterpart — it seems more reasonable to conclude that the two statutes adopt the same remedies to achieve the same goals. Moreover, a decision to the contrary would have the effect of granting a prevailing plaintiff treble damages (in addition to other remedies) as a remedy for wage law violations — a windfall that neither the state nor the federal legislature appears explicitly to have intended. I therefore conclude that for the period after April 9, 2011, when the FLSA and NYLL both provided for liquidated damages equal to the amount of unpaid wages, the court should award such relief only under one statute.
For the sake of simplicity, in calculating the liquidated damages in this case, I have used the NYLL provision. That is because the NYLL — which guarantees spread-of-hours wages in addition to minimum and overtime wages — includes unpaid spread-of-hours wages as a predicate for its award of liquidated damages. See, e.g., Carrasco-Flores v. Comprehensive Health Care & Rehab. Servs., LLC, 2014 WL 4954629, at *5-7 (E.D.N.Y. Oct. 2, 2014); Gonsalez v. Marin, 2014 WL 2514704, at *6 (E.D.N.Y. Apr. 25, 2014) (report and recommendation), adopted, 2014 WL 2526918 (E.D.N.Y. June 4, 2014); Berrezueta v. Royal Crown Pastry Shop, Inc., 2013 WL 6579799, at *5 (E.D.N.Y. Dec. 16, 2013). Based on the foregoing, I calculate that Perez is entitled to liquidated damages in the total amount of $5,625.11.
6. Prejudgment Interest
New York law generally provides for an award of prejudgment interest on a variety of claims, including the claims for unpaid wages asserted here, at an annual rate of nine percent. See N.Y. C.P.L.R. §§ 5001, 5004. Where, as here, "damages were incurred at various times, interest shall be computed upon each item from the date it was incurred or upon all of the damages from a single reasonable intermediate date." Id. § 5001(b). A court has discretion to choose a reasonable accrual date. Conway v. Icahn & Co., Inc., 16 F.3d 504, 512 (2d Cir. 1994). The median date between the earliest ascertainable date the cause of action existed and the date the action was filed is the one most commonly used. See, e.g., Pavia v. Around the Clock Grocery, Inc., 2005 WL 4655383, at *8 (E.D.N.Y. Nov. 15, 2005).
Prior to the April 2011 statutory amendment, the availability of prejudgment interest on NYLL wage claims was a matter of judicial interpretation. See Angamarca v. Pita Grill 7 Inc., 2012 WL 3578781, at *9 (S.D.N.Y. Aug. 2, 2012) ("Unlike under the FLSA, '[p]re-judgment interest and liquidated damages under [the NYLL] are not functional equivalents[,]' ... because 'the liquidated damages provided for in the New York Labor Law are punitive in nature' rather than compensatory.") (quoting Ke v. Saigon Grill, Inc., 595 F. Supp. 2d 240, 262 (S.D.N.Y. 2008)). In 2011, New York amended the statute so as to explicitly provide for an award of prejudgment interest on NYLL wage claims. See NYLL § 663(1).
For Perez, who started working for the defendants in September 2012 and filed the Complaint on December 16, 2014, that median date is October 24, 2013; I therefore use that date to calculate her award of prejudgment interest. I calculate interest for the period from that median date through April 5, 2016 (the earliest likely date of judgment after allowing time for objections to this report and recommendation), or a total of two years and 164 days. As noted above, the total amount of unpaid minimum, overtime, and spread-of-hours wages that the defendants owe Perez under the NYLL is $5,628.75. Interest on that amount, calculated at an annual rate of nine percent for the relevant period, is $1,239.99.
7. Attorney's Fees
Both federal and state law authorize the court to award the plaintiff reasonable attorneys' fees. See 29 U.S.C. § 216(b); NYLL § 663(1). Courts in this circuit assess fee applications using the "lodestar method," under which a reasonable hourly rate is multiplied by a reasonable number of hours expended. See Luciano v. Olsten Corp., 109 F.3d 111, 115 (2d Cir. 1997); King v. JCS Enters., Inc., 325 F. Supp. 2d 162, 166 (E.D.N.Y. 2004) (citing cases). A reasonable hourly rate is the rate a "reasonable, paying client" would be willing to pay. Simmons v. N.Y.C. Transit Auth., 575 F.3d 170, 174 (2d Cir. 2009); see also McDaniel v. Cnty. of Schenectady, 595 F.3d 411, 420-21 (2d Cir. 2010); Manzo v. Sovereign Motor Cars, Ltd., 2010 WL 1930237, at *7 (E.D.N.Y. May 11, 2010). Reasonable hourly rates are informed in part by the rates "prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Ferrara v. All Am. Trucking Servs., Inc., 2012 WL 1042936, at *7 (E.D.N.Y. Feb. 17, 2012) (report and recommendation, quoting Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984)), adopted, 2012 WL 1041820 (E.D.N.Y. Mar. 28, 2012). District courts have broad discretion, using "their experience with the case, as well as their experience with the practice of law, to assess the reasonableness" of each component of a fee award. Fox Indus., Inc. v. Gurovich, 2005 WL 2305002, at *2 (E.D.N.Y. Sept. 21, 2005) (quoting Clarke v. Frank, 960 F.2d 1146, 1153 (2d Cir. 1992)). A fee applicant bears the burden of demonstrating the hours expended and the nature of the work performed through contemporaneous time records that describe with specificity the nature of the work done, the hours, and the dates. N.Y. State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1147-48 (2d Cir. 1983). The absence of contemporaneous records precludes any fee award in all but the most extraordinary of circumstances. Scott v. City of N.Y., 626 F.3d 130, 133-34 (2d Cir. 2010). Inadequate documentation warrants reduction of a fee award. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Levy v. Powell, 2005 WL 1719972, at *7-8 (E.D.N.Y. July 22, 2005).
I use the term "lodestar" only for ease of reference. See Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany, 522 F.3d 182, 190 n.4 (2d Cir. 2008); see also Millea v. Metro-N. R.R. Co., 658 F.3d 154, 166-67 (2d Cir. 2011) (describing the lodestar as producing a "presumptively reasonable fee" and noting that failure to calculate it as a starting point in determining a fee award is "legal error").
Perez seeks reimbursement for her counsel at the following hourly rates: $400 for attorney Justin Cilenti, who has over 18 years of experience, and $100 for paralegal assistant Jennett Pena. Cilenti Aff. ¶ 12; DE 13-5 (Billing Statement). Such rates are higher than those this court typically awards. See Cuevas v. Ruby Enterprises of New York Inc., 2013 WL 3057715, at *2 (E.D.N.Y. June 17, 2013) (reducing Mr. Cilenti's hourly rate from $400 to $350, noting "[t]hough the case proceeded through trial, the issues were relatively straightforward and the case was not particularly complex."); see also First Keystone Consultants, Inc. v. Schlesinger Elec. Contractors, Inc., 2013 WL 950573, at *7 (E.D.N.Y. Mar. 12, 2013) (collecting cases and finding that reasonable hourly rates in this district range from $300 to $400 for partners and $200 to $300 for senior associates); Hernandez v. Prof'l Maint. & Cleaning Contractors Inc., 2015 WL 128020, at *7 (E.D.N.Y. Jan. 8, 2015) (awarding a rate of $350 for an experienced attorney in an FLSA case); Gonzales v. Gan-Israel Pre-School, 2014 WL 1011070, at *20 (E.D.N.Y. Mar. 14, 2014) (finding that $125 hourly rate for paralegal work was "too high" and reducing it to $85 because paralegals' Spanish speaking skills aided their work); Guzman v. Joesens Auto Parts, 2013 WL 2898154, at *5 (E.D.N.Y. June 13, 2013) (finding hourly rate of $75 for paralegals to be "presumptively reasonable"); Gesualdi v. Tapia Trucking LLC, 2013 WL 831134, at *2 (E.D.N.Y. Mar. 6, 2013) (adopting hourly rate of $75 for paralegals). I therefore recommend that the court award fees based on the following hourly rates: $350 for Cilenti and $75 for Pena.
Plaintiff's counsel's contemporaneous billing records detail a total of 22 hours of work in this case, including 18.8 hours by Cilenti and 3.2 hours by Pena. See Cilenti Decl. ¶ 12; DE 13-5 (Billing Statement). Having reviewed the records, I conclude that the hours claimed are reasonable. Multiplying the recommended hourly rates by the number of billed hours produces a total of $6,820.00, and I respectfully recommend a fee award in that amount.
8. Costs
The plaintiffs seek the reimbursement of costs in the amount of $551.48, including the $400 filing fee, $99 for service of the summons and complaint, and $52.48 in various mail and photocopy charges. Cilenti Decl. ¶ 14; DE 13-6 (Chart of Costs); see also NYLL § 663(1) (authorizing an award of costs). The costs are reasonable and adequately documented; I therefore respectfully recommend that the court award costs in the total amount of $551.48.
III. Recommendation
For the reasons set forth above, I respectfully recommend that the court deny the motion for default judgment as to both of the individual defendants, grant the motion as against defendant Queens Boro Yang Cleaner, Inc., and enter judgment against the latter defendant in the total amount of $19,862.83 (consisting of $4,323.75 in unpaid minimum and overtime wages; $1,305.00 in unpaid spread-of-hours wages; $5,628.75 in liquidated damages; $1,233.85 in prejudgment interest; $6,820.00 in reasonable attorneys' fees; and $551.48 in recoverable costs).
IV. Objections
I respectfully direct the plaintiff to serve a copy of this Report and Recommendation on each defendant by certified mail, and to file proof of service no later than March 21, 2016. Any objections to this Report and Recommendation must be filed no later than April 4, 2016. Failure to file objections within this period designating the particular issues to be reviewed waives the right to appeal the district court's order. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(2); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).
SO ORDERED. Dated: Brooklyn, New York
March 17, 2016
/s/_________
JAMES ORENSTEIN
U.S. Magistrate Judge