Opinion
1:23-cv-06978 (JLR) (SDA)
01-09-2024
Ruben Ortega Juarez, and on behalf of others similarly situated, Plaintiff, v. Mi Mexico Mini Market & Grocery Inc., et al., Defendants.
TO THE HONORABLE JENNIFER L. ROCHON, UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE.
On October 30, 2023, after the defendants had failed to appear in this wage-and-hour action brought under the Fair Labor Standards Act (“FLSA”) and the New York Labor Law (“NYLL”), the action was referred to me for purposes of an anticipated default judgment motion. (See 10/30/23 Mem. End., ECF No. 18; Order of Ref., ECF No. 19.) On November 14, 2023, Certificates of Default were entered in favor of Plaintiff Ruben Ortega Juarez (“Plaintiff” or “Juarez”) and against Defendants Mi Mexico Mini Market & Grocery Inc. (“Mi Mexico”), as well as Cecilio Lezama, Rene Lezama and Jael Lezama (the “Individual Defendants,” and together with Mi Mexico, the “Defendants”). (Certs. of Default, ECF Nos. 26-29.)
On November 15, 2023, the Court entered an Order directing that Plaintiff file his motion for default judgment no later than November 29, 2023; that Plaintiff serve his motion papers, along with a copy of the Order, on Defendants no later than December 15, 2023; and that Defendants send to Plaintiff's counsel and file with the Court their responses, if any, to Plaintiff's submissions no later than January 1, 2024. (11/15/23 Order, ECF No. 30.)
On November 29, 2023, Plaintiff filed his application for entry of a default judgment against Defendants. (See OTSC, ECF No. 31; Bodo Decl., ECF No. 32.) On December 15, 2023, Plaintiff filed his certificate of service. (Cert., ECF No. 34.) To date, no response has been filed by Defendants.
For the reasons set forth below, I respectfully recommend that the Court enter a default judgment against Defendants as set forth in the Conclusion below.
In light of Defendants' default, the Court is required to accept all of Plaintiff's allegations as true, except for those pertaining to damages. See, e.g., Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009).
Defendants owned, operated or controlled a Mexican food market, located at 1526 Westchester Ave, Bronx, NY 10472, under the name “Mi Mexico Meat Market.” (Compl., ECF No. 2, ¶ 2.) The Individual Defendants possessed operational control over Mi Mexico and controlled significant functions of Mi Mexico. (Id. ¶¶ 19-21.) They determined the wages and compensation of the employees of Defendants, including Juarez, established the schedules of the employees, maintained employee records, and had the authority to hire and fire employees. (Id.)
Juarez was employed by Defendants as a produce clerk at Mi Mexico from approximately March 2017 until on or about June 7, 2023. (Compl. ¶¶ 15, 32, 34.) Throughout his employment with Defendants, Juarez regularly worked in excess of 40 hours per week. (Id. ¶ 38.) From approximately June 2017 until on or about June 7, 2023, Juarez worked from approximately 8:00 a.m. until on or about 8:00 p.m. to 8:20 p.m., 6 days a week (typically 66 to 68 hours per week). (Id. ¶ 39.)
Throughout his employment, Defendants paid Juarez his wages in cash. (Compl. ¶ 40.) From approximately June 2017 until on or about March 2019, Defendants paid Juarez $650 per week. (Id. ¶ 41.) From approximately April 2019 until on or about April 2020, Defendants paid Juarez $850 per week. (Id. ¶ 42.) From approximately May 2020 until on or about June 7, 2023, Defendants paid Juarez $950 per week. (Id. ¶ 43.) Juarez was not required to keep track of his time, nor to his knowledge, did Defendants utilize any time tracking device such as punch cards, that accurately reflected his actual hours worked. (Id. ¶ 47.)
DISCUSSION
I. Liability
A party “against whom a judgment for affirmative relief is sought” is in default when it “has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). As a “default is an admission of all well-pleaded allegations against the defaulting party[,] . . . a district court must accept as true all of the factual allegations of the non-defaulting party and draw all reasonable inferences in its favor.” Belizaire v. RAV Investigative and Sec. Servs. Ltd., 61 F.Supp.3d 336, 344 (S.D.N.Y. 2014) (citations & quotation marks omitted). Nonetheless, a district court must “determine whether the [plaintiff's] allegations establish [the defendant's] liability as a matter of law.” Id. (quoting Finkel, 577 F.3d at 84). “[A] default judgment entered on well-pleaded allegations in a complaint establishes a defendant's liability.” Id. (quoting Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 69 (2d Cir. 1971), rev'd on other grounds, 409 U.S. 363 (1973)). “To determine whether the plaintiff's allegations are well pleaded [for purposes of a default judgment], the Court applies the same standards that govern a motion to dismiss under [Rule] 12(b)(6).” Conan Props. Int'l LLC v. Sanchez, No. 17-CV-00162 (FB) (RLM), 2018 WL 3869894, at *2 (E.D.N.Y. Aug. 15, 2018) (citing Steginsky v. Xclera Inc., 741 F.3d 365, 368 (2d Cir. 2014)).
In the present case, Plaintiff adequately pled violations of the minimum wage and overtime provisions of the FLSA and NYLL. He plausibly alleged that Defendants failed to pay him at the applicable minimum hourly rate, in violation of the FLSA and the NYLL. (Compl. ¶¶ 73-79, 84-88.) He also plausibly alleged that Defendants failed to pay him overtime compensation at a rate of one and one-half times the regular rate of pay for each hour worked in excess of forty hours in a work week, in violation of the FLSA and the NYLL. (Id. ¶¶ 80-83, 89-92.) In addition, he plausibly alleged spread of hours violations. Thus, Defendants' liability has been established for these violations.
II. Damages
The remaining issue is the amount of damages to which Plaintiff is entitled. Plaintiff bears the burden of establishing his entitlement to recovery and thus must substantiate his claims with evidence to prove the extent of his damages. See, e.g., Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992).
Although the Court may hold a hearing to assess damages, a hearing is not required when a sufficient basis on which to make a calculation exists. See Fed.R.Civ.P. 55(b)(2); see also Bricklayers & Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Const., LLC, 779 F.3d 182, 189 (2d Cir. 2015). Indeed, the Second Circuit has approved the holding of an inquest by affidavit, without an in-person court hearing, “as long as [the Court] ensured that there was a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (citation omitted). Here, I rely on Plaintiff's submissions, which contain a sufficient evidentiary basis to determine Plaintiff's damages.
An employee seeking to recover unpaid wages has the burden of proving that he performed work for which he was not properly compensated. See Angamarca v. Pita Grill 7 Inc., No. 11-CV-07777 (JGK) (JLC), 2012 WL 3578781, at *3 (S.D.N.Y. Aug. 2, 2012). An employer is required to maintain “records of the persons employed by him and of the wages, hours, and other conditions and practices of employment maintained by him ....” 29 U.S.C. § 211(c); see also 12 N.Y. Compilation Codes R. & Regs. (“NYCRR”) § 146-2.1. Absent such documentation, an employee may establish his right by relying on his recollection alone. An affidavit or declaration that sets forth the number of hours worked is sufficient. See Angamarca, 2012 WL 3578781, at *3.
Once an employee has presented his evidence, an employer then may “come forward with evidence of the precise amount of work performed or with evidence to negative the reasonableness of the inference to be drawn from the employee's evidence.” Angamarca, 2012 WL 3578781, at *4 (internal citations and quotations omitted). “If the employer fails to do so, the court may enterjudgment in the employee's favor, using her recollection to determine damages, even though the result be only approximate.” Id. Because Defendants have defaulted, Plaintiff's representations as to the dates and hours he worked will be credited and his damages will be calculated on that basis.
A. Unpaid Minimum And Overtime Wages And Spread Of Hours Pay
Plaintiff asserts claims under both the NYLL and the FLSA. The statute of limitations under the NYLL is six years. See N.Y. Lab. Law § 663(3). This action was filed on August 8, 2023. Plaintiff is seeking damages commencing August 9, 2017, which is within the statutory period.
1. Legal Standards
State and federal law require employers to pay to employees at least a minimum hourly rate for every hour they work. See 29 U.S.C. § 206(a); 12 NYCRR § 146-1.2. Plaintiff may not recover under both the NYLL and the FLSA for the same injury, but he is entitled to recover damages under the statute that provides him the greatest relief. See Angamarca, 2012 WL 3578781, at *4. Here, New York's minimum wage during the relevant period was greater than the minimum wage under federal law. Thus, the New York minimum wage will be applied. The relevant minimum wage under the NYLL (see Bodo Decl., ECF No. 32, ¶ 42) was $10.50 on and after December 31, 2016; $12.00 on and after December 31, 2017; $13.50 on and after December 31, 2018; and $15.00 on and after December 31, 2019. See 12 N.Y.C.R.R. 142-2.1.
Under the FLSA, employees must be paid one-and-one-half times their regular rate for each hour worked over forty (40) hours in a week. See 29 U.S.C. § 207(a)(1). New York's rules on overtime explicitly incorporate those of the FLSA, and thus require pay at one-and-one-half times the regular rate for each hour over forty hours worked in a week. See 12 NYCRR § 142-2.2. In cases where the regular rate is less than minimum wage, overtime is calculated by multiplying the statutory minimum wage by 1.5. See Baltierra v. Advantage Pest Control Co., No. 14-CV-05917 (AJP), 2015 WL 5474093, at *5 (S.D.N.Y. Sept. 18, 2015).
Under the NYLL, employers must pay covered employees one extra hour of compensation, at the basic minimum wage rate, for each day on which they worked more than ten hours. 12 N.Y.C.R.R. § 142-2.4(a). Spread of hours is defined as “the interval between the beginning and end of an employee's workday” and “includes working time plus time off for meals plus intervals off duty.” Id. § 142-2.18. An employee may recover spread-of-hours wages in addition to federal and state overtime wages. See Doo Nam Yang v. ACBL Corp., 427 F.Supp.2d 327, 339-41 (S.D.N.Y. 2005).
2. Plaintiff's Minimum And Overtime Wages And Spread Of Hours Pay
Where an employee receives a straight weekly salary, there is a rebuttable presumption under the FLSA that their salary covers 40 hours worked. See Cabrera v. New York Fresh Meat Inc., No. 15-CV-01325 (JGK) (SDA), 2018 WL 3300647, at *6 (S.D.N.Y. Mar. 29, 2018), report and recommendation adopted, 2018 WL 2192187 (S.D.N.Y. May 14, 2018). Similarly, “[u]nder the NYLL, the Court divides the pay the plaintiff in question actually received by the lesser of 40 hours or the actual number of hours he worked during the work week.” Hernandez v. Jrpac Inc., 14-CV-04176 (PAE), 2016 WL 3248493, at *32 (S.D.N.Y. June 9, 2016) (citation omitted).
Plaintiff submitted to the Court calculations of the amounts of minimum and overtime wages, as well as spread of hours pay, that the Plaintiff contends are due to him. (See Bodo Decl., Ex. K (ECF No. 32-11).) The Court finds the calculations set forth by the Plaintiff to be sound. Accordingly, Plaintiff is entitled to the sum of $108,624.75 (i.e., $83,235.75 in minimum and overtime wages plus $25,389.00 in spread of hours pay).
B. Liquidated Damages
Plaintiff is entitled to liquidated damages under both the FLSA and the NYLL, but not both. See Rana v. Islam, 887 F.3d 118, 123 (2d Cir. 2018). The NYLL entitles Plaintiff to liquidated damages since Defendants' wage violations were “willful.” N.Y. Lab. Law §§ 198(1-a), 663(1). NYLL § 663(1) provides that Plaintiff is entitled to “liquidated damages equal to one hundred percent of the total of such underpayments found to be due.” Plaintiff is entitled to liquidated damages on the total amounts of unpaid minimum and overtime wages under the NYLL in an amount equaling 100% of the total amount due. Thus, the Court finds that Plaintiff is entitled to liquidated damages under the NYLL in the amount set forth above, i.e., $108,624.75.
Since Defendants defaulted, they have made no showing of good faith to merit reducing or denying liquidated damages. See Pastrana, 2022 WL 16857111, at *10.
C. Pre-Judgment Interest
Plaintiff seeks pre-judgment interest on his NYLL claims. Plaintiff is entitled under New York law to pre-judgment interest at the statutory rate of 9% per year. See N.Y. C.P.L.R. §§ 5001, 5004. Pre-judgment interest applies only to the amount of compensatory damages and excludes the amount of liquidated damages. See Angamarca, 2012 WL 3578781, at *9. Where unpaid wages “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.” N.Y. C.P.L.R. § 5001(b). I recommend that pre-judgment interest be calculated by applying the statutory interest rate to the entire principal amount due under the NYLL, beginning on such an “intermediate date” and running up until and including the date judgment is entered. See Angamarca, 2012 WL 3578781, at *9.
The relevant period for the calculation of prejudgment interest is from August 9, 2017 (see footnote 2, supra) to June 7, 2023, when Plaintiff's employment ended. Therefore, I recommend that pre-judgment interest start to run on the reasonable intermediate date of July 8, 2020 (i.e., the median date between August 9, 2017 and June 7, 2023) on the sum of $108,624.75. Pre-judgment interest should be calculated up to the date of the entry of judgment.
III. Attorneys' Fees And Costs
Plaintiffs seek $3,330.00 in attorneys' fees and costs in the amount of $488.00, totaling $3,818. (Bodo Decl. ¶ 72.) Under the FLSA and NYLL, a prevailing party is entitled to recover reasonable attorneys' fees and costs. See 29 U.S.C. § 216(b); N.Y. Lab. Law §§ 198(1-a), 663. “[T]he fee applicant bears the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
While a district court retains discretion to determine what constitutes a reasonable fee, “this discretion is not unfettered.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). “[W]hen a prevailing party is entitled to attorneys' fees, the district court must abide by the procedural requirements for calculating those fees articulated by [the Second Circuit] and the Supreme Court.” Id. “Both [the Second Circuit] and the Supreme Court have held that the lodestar-the product of a reasonable hourly rate and the reasonable number of hours required by the case-creates a ‘presumptively reasonable fee.'” Id. (citations omitted). This approach is intended to “produce[] an award that roughly approximates the fee that the prevailing attorney would have received if he or she had been representing a paying client who was billed by the hour in a comparable case.” Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551 (2010) (citations and emphasis omitted); see also Bergerson v. N.Y. State Office of Mental Health, 652 F.3d 277, 289-90 (2d Cir. 2011) (“A reasonable hourly rate is what a reasonable, paying client would be willing to pay, given that such a party wishes to spend the minimum necessary to litigate the case effectively.”) (internal quotation marks and citations omitted).
A. Reasonable Hourly Rates
Plaintiff seeks an hourly rate of $350.00 for attorneys Jarret Bodo and Catalina Soto and $125.00 for paralegals. (Bodo Decl. ¶¶ 75-77.) Considering their backgrounds and experience (see id.), and taking into account the so-called Johnson factors, the Court reduces the hourly rate for Attorney Bodo to $200.00, see Tarax v. Blossom W. Inc., No. 19-CV-06228 (JSR), 2022 WL 2132749, at *2 (S.D.N.Y. June 14, 2022) (reducing Bodo hourly rate from $350.00 to $200.00); reduces the hourly rate for Attorney Soto to $225.00, see id. (reducing Soto hourly rate from $350.00 to $225.00); and finds the hourly rate for paralegal time to be reasonable. See id. (setting hourly rate for paralegal Hernandez at $125.00).
See Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974).
See also Farez v. Pinery Cleaners, No. 22-CV-06728 (VSB) (SDA), 2023 WL 6977058, at *6 (S.D.N.Y. July 21, 2023), report and recommendation adopted, 2023 WL 6977446 (S.D.N.Y. Oct. 23, 2023).
B. Reasonable Hours Expended
Plaintiff submitted a copy of an invoice setting forth the hours worked on this case. (Bodo Decl., Ex. L, ECF No. 32-12.) The Court finds the hours billed to be reasonable. Accordingly, based upon the reasonable hourly rates set forth above, Plaintiff is entitled to recover attorneys' fees, as follows:
Timekeeper
Hourly Rate
Hours Billed
Total per timekeeper
Jarret Bodo
$200.00
7.0
$1,400.00
Catalina Soto
$225.00
18
$ 405.00
Paralegals
$125.00
20
$ 250.00
TOTAL
$2,055.00
C. Costs
Finally, Plaintiff seeks recovery of costs. Pursuant to the NYLL, an employee who prevails in a wage-and-hour action is entitled to recover costs. N.Y. Lab. Law § 663(1). The Court finds the $402.00 filing fee and the $82.00 in service-related expenses reflected in the invoice filed with the Court (see Bodo Decl., Ex. L), in the total amount of $488.00, to be reasonable.
Accordingly, the Court finds that Plaintiff should recover $2,055.00 in attorneys' fees and $488.00 in costs, for a total of $2,543.00.
IV. Additional Damages If Judgment Not Satisfied
Plaintiff also requests that the judgment provide that if any amounts remain unpaid upon the expiration of ninety days following issuance of judgment, or ninety days after expiration of the time to appeal and no appeal is then pending, whichever is later, the total amount of judgment shall automatically increase by fifteen percent, as required by Section 198(4) of the NYLL. (See Bodo Decl. ¶ 84.) This request is in accordance with the provisions of the NYLL, and therefore I recommend that it be granted. See N.Y. Lab. Law § 198(4); see also Elisama v. Ghzali Gourmet Deli Inc., No. 14-CV-08333 (PGG) (DF), 2016 WL 11523365, at *19 (S.D.N.Y. Nov. 7, 2016), report and recommendation adopted, 2018 WL 4908106 (S.D.N.Y. Oct. 10, 2018).
CONCLUSION
For the foregoing reasons, I respectfully recommend that the Court enter judgment in favor of Plaintiff against Defendants in the amount of $217,249.50 (consisting of $108,624.75 in minimum and overtime wages and $108,624.75 in liquidated damages). I further recommend that Plaintiff be awarded $2,543.00 in attorneys' fees and costs. In addition, I recommend that pre-judgment interest should be awarded, as set forth in Discussion Section II.C. above; and that additional damages be awarded if the judgment is not satisfied, as set forth in Discussion Section IV above.
No later than January 12, 2024, Plaintiff's counsel shall mail copies of this Report and Recommendation to Defendants and promptly thereafter shall file proof of service.
* * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. A party may respond to another party's objections within fourteen days after being served with a copy. Fed.R.Civ.P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Rochon.
THE FAILURE TO OBJECT WITHIN FOURTEEN (14) DAYS WILL RESULT IN A WAIVER OF OBJECTIONS AND WILL PRECLUDE APPELLATE REVIEW. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).