Summary
recommending that a 20% discount be applied to Chen's requested rate and hours
Summary of this case from Burns v. ScottOpinion
19-CV-5309 (R (KNF)
08-25-2021
ZHI LI AND LUXIU SUN, individually and on behalf of others similarly situated, Plaintiffs, v. SMJ CONSTRUCTION INC., STEVE KANG, JANE DOE AND JOHN DOE #1-10, Defendants. $606.42 $24,315
THE HONORABLE PAUL G. GARDEPHE, UNITED STATES DISTRICT JUDGE
REPORT AND RECOMMENDATION
KEVIN NATHANIEL FOX UNITED STATES MAGISTRATE JUDGE
BACKGROUND
Plaintiffs Zhi Li (“Li”) and Luxiu Sun (“Sun”) commenced this action against defendants SMJ Construction Inc. (“SMJ”) and Steve Kang (“Kang”) seeking damages pursuant to the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, New York Labor Law (“NYLL”) and New Jersey Wage and Hour Law (“NJWHL”) to recover: (1) unpaid overtime compensation under FLSA, NYLL and NJWHL; (2) spread-of-hours compensation under NYLL; (3) unlawful deductions under NYLL; (4) money for violations of the time of hire wage notice requirement under NYLL; and (5) money for violations of the wage statement requirement under NYLL. On December 10, 2020, an order of default was entered against the defendants and the matter referred to the undersigned for an inquest on damages.
The Court directed the plaintiffs to file: “(1) proposed findings of fact and conclusions of law; and (2) an inquest memorandum of law, accompanied by supporting affidavits and exhibits, setting forth proof of their damages. The plaintiffs must serve these documents on SMJ Construction Inc. and Steve Kang, and file proof of such service with the Clerk of Court.” The plaintiffs filed: (1) “Proposed Findings of Fact and Conclusions of Law”; (2) “Memorandum of Law in Support of Plaintiff's [sic] Inquest for Damages”; (3) the plaintiffs' affidavits; and (4) various exhibits. On July 20, 2021, the Court noted that the plaintiffs “filed their inquest submissions but not ... proof of service,” and directed that, “[o]n or before July 23, 2021, the plaintiffs shall file proof of service, as directed by the December 11, 2020 order.” Docket Entry No. 32. On the same date, the Court also issued an order directing the plaintiffs as follows:
On or before July 27, 2021, the plaintiffs shall: (1) file and serve supplemental materials consisting of (i) their attorney's affidavit explaining the calculation of damages for each plaintiff and supporting the request for attorney's fees as required by the relevant caselaw and (ii) the plaintiffs' supplemental affidavits identifying and explaining exhibits relevant to them that have been filed but not mentioned in the plaintiffs' original affidavits, identifying the state and location in which they performed work for the defendants, identifying the frequency with which they worked spread-of-hours; and any other pertinent information helpful to the Court's understanding of the basis for calculating damages; and (2) file proof of service of the supplemental documents with the Clerk of Court.
Docket Entry No. 33.On July 23, 2021, the plaintiffs filed an “Affidavit of Service,” indicating that “Barry Boswell being sworn says” that he served on Kang the “Memorandum of Law In Support of Plaintiff's Inquest for Damages with Exhibits” at 1050 Cumermeade Road, Fort Lee, N.J. 07024, on July 21, 2021, by delivering the document to a person of suitable age, “Min Kang,” at the actual place of residence. Docket Entry No. 34. On July 23, 2021, the plaintiffs also filed an “Affidavit of Service,” indicating that Aziza Amer served on “SMJ Construction Inc. c/o Department of Treasury, Division of Revenue and Enterprise Services” the “Memorandum of Law in Support of Plaintiff's Inquest for Damages with Exhibits; Affidavit of Non-service Re: Palisades Park Address,” at 33 West State Street Trenton N.J. 08628, on July 22, 2021, by delivering the documents to “Sandra (last name refused).” Docket Entry No. 35. The plaintiffs failed to comply with the Court's order, Docket Entry No. 33, directing that they file and serve supplemental materials. The plaintiffs' submissions are unopposed.
PLAINTIFFS' SUBMISSIONS
The plaintiffs asserted in their complaint violations of FLSA, NYLL and NJWHL and that: (i) each plaintiff “traveled between New York and New Jersey for his work”; and (b) each plaintiff's “major work locations were in New York, New York.” The plaintiffs asserted failure to pay overtime as follows: “COUNT I (Fair Labor Standard Act - Failure to Pay Over-time)”, “COUNT II (NYLL - Failure to pay Overt-time),” and “COUNT VII (N.J.S.A. § 34:11-56a4 -Nonpayment of Over-time.).” In their memorandum of law and proposed conclusions of law, the plaintiffs make citation to FLSA and NYLL, appearing to seek damages under FLSA and NYLL and to abandon their Count VII, failure to pay overtime under NJWHL. However, no evidence exists about the state in which the plaintiffs performed work for which they claim failure to pay overtime. The plaintiffs' “Memorandum of Law in Support of Plaintiff's Inquest for Damages,” recites legal standards under FLSA and NYLL without applying them to the circumstances of this case, erroneously referring to both the plaintiffs and the defendants in singular form, including in the title of their memorandum of law, and making citation to “Exhibit ‘K' and Exhibit ‘L'” in support of their request for prejudgment interest. In the “Proposed Findings of Fact,” the plaintiffs make citations to exhibits A, B, C, D, E, F and G, asserting that each is “incorporated by reference.” However, no exhibits filed by the plaintiffs are lettered or numbered. The plaintiffs filed their “Proposed Findings of Fact and Conclusions of Law” with 14 exhibits, not lettered or numbered, but described for filing purposes as follows: (1) “Memo of Law in Support of Inquest of Damages”; (2) “Bank Slips and Payment Envelope”; (3) “Plaintiff Li's Affidavit”; (4) “daily Report”; (5) “Plaintiff Li's Bank Notices”; (6) “Plaintiff Sun's Payment Envelope”; (7) “Plaintiff Sun's Returned Check”; (8) “Plaintiff Sun's Affidavit”; (9) “Plaintiff Sun's Bank Notices”; (10) “Corporate Defendant Website Printout”; (11) “Table of Relevant Minimum Wage”; (12) “Damage Calculations for Plaintiff Li”; (13) “Damage Calculations for Plaintiff Sun”; and (14) “Attorney's Fee Calculation.” The only affidavits filed in support of the request for damages by Li and Sun do not reference, identify or explain any exhibits filed by the plaintiffs. No other affidavit was filed by any person with personal knowledge of the content of the exhibits filed in support of the plaintiffs' request for damages, even after the Court's July 20, 2021 order directing supplemental filings and providing an opportunity for the plaintiffs to cure the lack of evidentiary support for their damages request. The plaintiff's attorney did not file an affidavit identifying and explaining any exhibits filed, including the “Damages Calculations for Plaintiff Li,” the “Damages Calculations for Plaintiff Sun” and the “Attorneys' Fee Calculation,” even after the Court's July 20, 2021 order directing the plaintiffs to file their attorney's affidavit explaining the calculation of damages for each plaintiff and supporting the request for attorney's fees as required by the relevant caselaw. The meaning of “incorporated by reference” asserted by the plaintiffs in their “Proposed Findings of Fact” with respect to exhibits A, B, C, D, E, F and G, is not clear, since neither Li nor Sun identifies or explains any exhibits filed in support of their request for damages and, apart from Li's and Sun's affidavits, no other affidavit was filed identifying and explaining any exhibits filed.
The plaintiffs described each of the 14 exhibits for filing purposes only. None of the exhibits filed is lettered or numbered when each electronic file is open for viewing. When opened for viewing, exhibits filed as 2, 4, 5, 6, 7, 9, 10, 11, 12, 13 and 14 do not bear the corresponding descriptions used for filing purposes and most of them do not bear any description.
Li states in his affidavit, inter alia: (a) “I was hired by SMJ Construction Inc on or about January 1, 2017”; (b) “Steve Kang told me I was going to be working from 7AM to 4PM with an hour lunch break in between, and that I was going to be paid One Hundred Thirty Dollars ($130) per day” and “I was never given a written wage notice when I was hired by Defendants”; (c) “I know supplies and equipment are sometimes brought to New York from New Jersey, and vice versa. I also occasionally bring materials from across the states when instructed”; (d) “[d]uring the two years I worked for SMJ Construction, I worked on over twenty construction sites, more than ten construction sites of which are for the clinic called City MD”; (e) “I worked for Defendants every day from on or about January 1, 2017 to December 19, 2018; (f) “I often worked past 4PM, sometimes even working as late as midnight”; (g) “I worked approximately Seventy (70) hours per week during the period from on or about January 1, 2017 to December 19, 2018”; (h) “[o]n average, I worked approximately Ten (10) hours per day every day not including one (1) hour of meal time”; (i) “I was paid a flat rate during the time that I worked for Defendant, regardless of how many hours I actually worked for the days in the pay period,” namely, $130 per day from January 1, 2017, to July 5, 2017, $150 per day, from July 6, 2017, to January 15, 2018, and $180 per day, from January 16, 2018, to December 19, 2018; (j) “I never got a paystub when I was paid”; (k) “I often did work over 10 hours a day”; and (1) “[t]wo bounced checks that I have records for is [sic] once in March of 2018 and once in November of 2018. I was never reimbursed for these two bounced checks.”
Sun states in his affidavit, inter alia: (i) “I was hired by Steve Kang on or about August 27, 2018”; (ii) “Steve Kang told me I would be paid One Hundred seventy Dollars ($170.00) per day, and that I would work from 7AM to 4PM but that I would have an hour for lunch” and “I did not receive any wage statement from Steve Kang when he hired me”; (iii) “Steven Kang only paid me One Hundred Seventy Dollars ($170.00) regardless of how many hours I worked a day”; (iv) “I worked for Defendants five days a week from on or about August 27, 2018 to October 28, 2018”; (v) “[d]uring the period from August 27, 2018 to October 28, 2018, I often had to work beyond 4PM, sometimes even as late as 10PM”; (vi) “[o]n average, I worked approximately Nine and a Half (9.5) hours per day for five (5) out of the seven (7) days in a week not including one (1) hour of meal time”; (vii) “I worked approximately Seventy (47) hours per week during the period of August 27, 2018 to October 28, 2018”; (viii) “I never got any paystubs when I got paid”; (ix) “I was not paid any spread of hours for days I worked over 10 hours”; and (x) “[t]he check I got for the period that I worked from October 8, 2018 to October 14, 2018 bounced” and Sun was not reimbursed for the bounced check.
LEGAL STANDARD
“Even when a default judgment is warranted based on a party's failure to defend, the allegations in the complaint with respect to the amount of the damages are not deemed true. The district court must instead conduct an inquiry in order to ascertain the amount of damages with reasonable certainty.” Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citation omitted). Establishing the appropriate amount of damages involves two steps: (1) “determining the proper rule for calculating damages on . . . a claim”; and (2) “assessing plaintiff's evidence supporting the damages to be determined under this rule.” Id. When assessing damages, a court cannot “just accept [the plaintiff's] statement of the damages”; rather, damages must be established “with reasonable certainty.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 111 (2d Cir. 1997).
FLSA
Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages . . . not less than . . . $7.25 an hour.
29 U.S.C. § 206(a)(1)(C).
[N]o employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified 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).“The regular rate of pay at which the employee is employed may in no event be less than the statutory minimum.” 29 C.F.R. § 778.107. “The ‘regular rate' under the Act is a rate per hour,” unless an employee's earnings are determined on another basis. 29 C.F.R. § 778.109. “The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except statutory exclusions) in any workweek by the total number of hours actually worked by him in that workweek for which such compensation was paid.” 29 C.F.R. § 778.109.
Any employer who violates the provisions of section 206 or section 207 of this title 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. . . . The court in such action shall, in addition to any judgment awarded to the plaintiff or plaintiffs, allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.
29 U.S.C. § 216(b).However,
if the employer shows to the satisfaction of the court that the act or omission giving rise to [an action under FLSA] was in good faith and that he had reasonable grounds for believing that his act or omission was not a violation of the [FLSA], as amended, the court may, in its sound discretion, award no liquidated damages or award any amount thereof not to exceed the amount specified in section 216 of this title.
29 U.S.C. § 260.
NYLL
Every employer of eleven or more employees shall pay to each of its employees for each hour worked in the city of New York a wage of not less than:
$11.00 per hour on and after December 31, 2016,
$13.00 per hour on and after December 31, 2017,
$15.00 per hour on and after December 31, 2018, or, if greater, such other wage as may be established by federal law pursuant to 29 U.S.C. section 206 or its successors or such other wage as may be established in accordance with the provisions of this article.
NYLL § 652(1)(a)(i).“An employer shall pay an employee for overtime at a wage rate of one and one-half times the employee's regular rate in the manner and methods provided in and subject to the exemptions of sections 7 and 13 of 29 USC 201 et seq., the Fair Labor Standards Act of 1938, as amended[.]” N.Y. Comp. Codes R. & Regs. (“NYCRR”) tit. 12, § 142-2.2. “An employee shall receive one hour's pay at the basic minimum hourly wage rate, in addition to the minimum wage required in this Part for any day in which: (a) the spread of hours exceeds 10 hours.” NYCRR § 142-2.4(a).
1. No employer shall make any deduction from the wages of an employee, except deductions which:
a. are made in accordance with the provisions of any law or any rule or regulation issued by any governmental agency including regulations promulgated under paragraph c and paragraph d of this subdivision; or b. are expressly authorized in writing by the employee and are for the benefit of the employee, provided that such authorization is voluntary and only given following receipt by the employee of written notice of all terms and conditions of the payment and/or its benefits and the details of the manner in which deductions will be made.NYLL § 193(1)(a)-(b).
NYLL requires every employer to provide written notice of the rate of pay and the basis thereof, whether paid by the hour or otherwise, any allowances and certain other work-related information, as well as statements, “with every payment of wages, listing” certain work-related information, including the dates of work covered by that payment of wages and the rate of pay and basis thereof. NYLL §§ 195(1) and (3). A plaintiff may recover, for the employer's failure to provide required notices, damages of “fifty dollars for each work day that the violations occurred or continue to occur, but not to exceed a total of five thousand dollars, together with costs and reasonable attorney's fees,” under each of NYLL §§ 195 (1) and (3). See NYLL §§ 198 (1-b) and (1-d). NYLL Article 19 provides:
If any employee is paid by his or her employer less than the wage to which he or she is entitled under the provisions of this article, he or she shall recover in a civil action the amount of any such underpayments, together with costs all reasonable attorney's fees, prejudgment interest as required under the civil practice law and rules, and unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law, an additional amount as liquidated damages equal to one hundred percent of the total of such underpayments found to be due. Any agreement between the employee, and the employer to work for less than such wage shall be no defense to such action.NYLL § 663(1).
Attorney's Fees
When exercising their discretion to determine the reasonableness of the attorney's fees sought in an action based on a federal question, courts in this Circuit use the “presumptively reasonable fee” standard. Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182, 190 (2d Cir. 2008). The presumptively reasonable fee, also known as the lodestar, is “the product of a reasonable hourly rate and the reasonable number of hours required by the case.” Millea v. Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011). In calculating the presumptively reasonable fee, a district court must consider, among others, the twelve factors articulated in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). See Arbor Hill Concerned Citizens Neighborhood Ass'n, 522 F.3d at 190. Those factors are:
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the level of skill required to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the attorney's customary hourly rate; (6) whether the fee is fixed or contingent; (7) the time limitations imposed by the client or the circumstances; (8) the amount involved in the case and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
Id. at 186-87 n.3.A reasonable hourly rate is “the rate prevailing in the [relevant] community for similar services by lawyers of reasonably comparable skill, experience, and reputation.” Farbotko v. Clinton Cty. of N.Y., 433 F.3d 204, 208 (2d Cir. 2005) (quoting Blum v. Stenson, 465 U.S. 886, 896 n.11, 104 S.Ct. 1541, 1547 n.11 (1984)). A fee application that is not supported by evidence of “contemporaneous time records indicating, for each attorney, the date, the hours expended, and the nature of the work done” should normally be denied. New York State Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1154 (2d Cir. 1983).
APPLICATION OF LEGAL STANDARD
NYLL
The plaintiffs do not identify what amounts of damages they seek in their “Proposed Findings of Fact and Conclusions of Law” and “Memorandum of Law in Support of Plaintiff's Inquest for Damages.” They assert in their memorandum of law, without identifying amounts or the plaintiff, that “Plaintiff is entitled to back pay, liquidated damages, a three-year limitations period under the FLSA, pre-judgment interest, and cost and attorneys' fees.” Although the plaintiffs assert in their “Proposed Conclusions of Law” that they “were employees as defined by the FLSA and the NYLLL,” seemingly abandoning Count VII in their complaint without explicitly stating so, neither Li nor Sun stated that they worked for the defendants in New York, and no evidence exists in the record that the plaintiffs were employed in New York. Having asserted claims for unpaid overtime under both New York and New Jersey law and having submitted no evidence that the plaintiffs were employed in New York, or any evidence identifying the damages sought and explaining the methodology used to calculate damages, no basis exists to calculate and award damages under New York law.
FLSA
Putting aside the hearsay nature of Li's and Sun's statements that Steve Kang told each of them that “I was going to be working from 7AM to 4PM,” neither Li nor Sun stated that they actually worked “from 7AM to 4PM,” and they make no citation to any evidence in support of any assertion that they worked “from 7Am to 4PM.” Based on Li's and Sun's affidavits, the Court finds as follows, pursuant to 29 C.F.R. § 778.109:
Days worked per week
Hours worked per day
Paid by day
Regular rate
Overtime rate
Should have been paid per week
Owed per week worked
Total owed
Sun 8/27/18-10/29/18 (9 weeks)
5
9.5
$170
$17.90
$26.85
$917.38
($17.90 x 40hr=$716 plus
$26.85 x7.5hr=$201.38)
$67.38 ($917.38-$850)
$606.42 ($67.38x 9 weeks)
Sun Total
$606.42
Li 1/1/17-7/5/17 (26 weeks &3 days rounded to 26.5 weeks)
7
10
$130
$13
$19.5
$1,105
($13 x 40hr=$520 plus $19.5 x 30hrs=$585)
$195 ($1,105 -$910)
$5,167.5
Li 7/6/17-1/15/18 (27 weeks &4 days rounded to 27.5 weeks)
7
10
$150
$15
$22.5
$1,275
($15 x 40hr=$600 plus $22.5 x 30hr=$675)
$225 ($1,275-$1,050)
$6,187.5
Li 1/16/18- 12/19/18 (48 weeks & 1 day
7
10
$180
$18
$27
$1,530 ($18 x 40hr=$720 plus $27 x 30hr=$810)
$270 ($1,530-
$1,260)
$12,960
Although Li and Sun assert that certain checks received from the defendants bounced, neither Li nor Sun indicates the amount of any check nor makes citation to any evidence demonstrating that the defendants' checks issued to Li and Sun bounced. The plaintiffs are entitled to recover liquidated damages equal to their damages. Accordingly, the Court finds that the defendants are liable to; (1) Sun for $1,212.84 ($606.42 in overtime compensation plus $606.42 in liquidated damages); and (2) Li for $48,630 ($24,315 in overtime compensation plus $24,315 in liquidated damages).
Rounded to 48 weeks)
Li Total
$24,315
Attorney's Fees
The plaintiffs failed to submit evidence supporting their request for attorney's fees and to comply with the Court's July 20, 2021 order providing an opportunity to cure the initial evidentiary gaps and directing them to file their attorney's affidavit supporting the request for attorney's fees as required by relevant caselaw. Having failed to provide any affidavit in support of their request for attorney's fees identifying and explaining the exhibit filed and described by the plaintiffs as “Attorney's Fee Calculation,” which appears on its face to be an invoice directed to Li by the “Law Offices of Hui Chen and Associates, P.C.,” showing that “HC,” presumably Hui Chen, expended “Total Hours: 13” at an hourly rate of $375, for the “Total Invoice Amount: $6,937.50,” the plaintiffs failed to provide evidence that would enable the Court to determine whether the attorney's fees are reasonable. No evidence was provided by the plaintiffs of their attorney's experience and skills or any other relevant factors that would enable the Court to assess the reasonableness of the hourly rate and hours expended. However, given FLSA's remedial nature and statutory entitlement to attorney's fees, the Court finds that 13 hours requested by the plaintiffs' counsel in the circumstances of this case are reasonable. As the Court has no basis to determine whether counsel's hourly rate of $375 is reasonable, and under the circumstances of this case, including counsel's failure to remedy evidentiary deficiencies in this case, the Court finds it appropriate to apply a 20% reduction to $4,875 (13 hours x $375 hourly rate) the fees requested, reducing $4,875 by $975. See Fox v. Vice, 563 U.S. 826, 838, 131 S.Ct. 2205, 2216 (2011) (“The essential goal in shifting fees (to either party) is to do rough justice, not to achieve auditing perfection. So trial courts may take into account their overall sense of a suit, and may use estimates in calculating and allocating an attorney's time.”). The Court finds that an award of $3,900 in attorney's fees is warranted.
Counsel's itemized invoice indicates that he expended 15.5 hours. However, the invoice indicates at the bottom that counsel requested payment for “Total Hours: 13.”
The “Total Invoice Amount: $6,937.50” is inconsistent with the “Total Hours: 13” at the hourly rate of $375, which multiplied results in $5,812.50. It appears from the “Total Invoice Amount: 6,937.50” that the plaintiff's counsel charged 18.5 hours at the rate of $375; however, the invoice's itemized hours show that counsel expended 15.5 hours, not 18.5.
RECOMMENDATION
For the foregoing reasons, I recommend that damages be awarded as follows: (1) $1,212.84 to Sun; (2) $48,630 to Li; and (3) $3,900 in attorney's fees to the plaintiffs.
FILINGOF OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections. See also Fed.R.Civ.P. 6. Such objections, and any responses to objections, shall be filed with the Clerk of Court. Any requests for an extension of time for filing objections must be directed to Judge Gardephe. Failure to file objections within fourteen (14) days will result in a waiver of objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466 (1985); Cephas v. Nash, 328 F.3d 98, 107 (2d Cir. 2003).