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Galeana v. Mahasan Inc.

United States District Court, S.D. New York
Dec 21, 2021
14-CV-3625 (VSB) (KNF) (S.D.N.Y. Dec. 21, 2021)

Opinion

14-CV-3625 (VSB) (KNF)

12-21-2021

ADELAIDO GALEANA and NICOLAS GALEANA, individually and on behalf of others similarly situated, Plaintiffs, v. MAHASAN INC. d/b/a/ ENTHAICE and JUNTIMA NETPRACHAK, Defendants.


HONORABLE VERNON S. BRODERICK, UNITED STATES DISTRICT JUDGE

REPORT AND RECOMMENDATION

KEVIN NATHANIEL FOX UNITED STATES MAGISTRATE JUDGE

PROCEDURAL BACKGROUND

Adelaido Galeana (“Galeana”) and Nicolas Galeana commenced this action against Mahasan Inc. (d/b/a Enthaice) (“Mahasan”) and Juntima Netprachak (“Netprachak”), alleging violations of the minimum wage and overtime provisions of the Fair Labor Standards Act (“FLSA”), violations of the minimum wage, overtime, notice and recordkeeping, and wage statement provisions of the New York Labor Law (“NYLL”), and violations of the spread of hours wage order of the New York Commissioner of Labor. See Docket Entry No. 1. Subongkot Longwilai (“Longwilai”) filed a document consenting to join the lawsuit as a party plaintiff, as did five other party plaintiffs. See Docket Entry Nos. 17, 18, 19, 20, 21, and 22. On July 11, 2019, your Honor granted the defendants' motion to compel arbitration with respect to six of the plaintiffs but denied the motion with respect to Galeana and Longwilai. See Docket Entry No. 101. Galeana and Longwilai sought, by order to show cause, a default judgment against Mahasan. See Docket Entry No. 151. A default judgment was entered against Mahasan and the matter was referred to the undersigned for an inquest on the damages, if any, to be awarded against Mahasan. See Docket Entry Nos. 155 and 156. The Court directed the plaintiffs to serve and file their proposed findings of fact and conclusions of law and an inquest memorandum of law, accompanied by supporting affidavits and exhibits, setting forth proof of their damages. See Docket Entry No. 159. The plaintiffs filed their proposed findings of fact and conclusions of law, a memorandum of law, and the declaration of their then-attorney, Michael Faillace (“Faillace”), with: Exhibit A, a copy of the compliant; Exhibit B, a copy of the answer; Exhibit C, Longwilai's notice consenting to become a party plaintiff under the FLSA; Exhibit D, a copy of your Honor's February 23, 2014 order, which appears at Docket Entry No. 138; Exhibit E, a copy of the affidavit of service appearing at Docket Entry No. 139; Exhibit F, a copy of the affidavit of service appearing at Docket Entry No. 140; Exhibit G, a copy of your Honor's March 29, 2021 order, which appears at Docket Entry No. 141; Exhibit H, a copy of the affidavit of service appearing at Docket Entry No. 142; Exhibit I, a copy of the Clerk's Certificate of Default appearing at Docket Entry No. 145; Exhibit J, the Declaration of Galeana; Exhibit K, the Declaration of Longwilai; Exhibit L, “a chart setting out the damages [Galeana and Longwilai] are entitled to recover”; and Exhibit J, “a breakdown of the attorney's fees and costs incurred in litigating the within action, in the form of [plaintiffs' counsels' law firms'] standard billing report.” See Docket Entry Nos. 162, 163, and 164. Subsequently, the case was dismissed as it relates to Netprachak. See Docket Entry No. 174.

Subsequent to filing the plaintiffs' inquest submissions, Faillace was suspended from the practice of law in the United States District Court for the Southern District of New York for a period of two years. See In the matter of Michael Faillace, M-2-238 (Nov. 8, 2021). The suspension order indicates that Faillace “may not share in any fee for legal services rendered by another attorney during the period of suspension but may be compensated on a quantum meruit basis for services rendered prior to the effective date of the suspension. Pursuant to Local Civil Rule 1.4, [Faillace] has advised the Committee that he and his former law firm will be asserting retaining and charging liens in the cases as to which he has filed Motions to Withdraw based upon his suspension.”

FINDINGS OF FACT

Galeana was employed by Mahasan as a delivery worker at Enthaice, a Thai restaurant, from July 15, 2011, to January 31, 2012. Longwilai was employed by Mahasan as a waitress at Enthaice from June 3, 2013, through December 13, 2014.

Galeana worked regularly for over ten hours per day, six days per week, or about 63 hours each week. Galeana was not required to track his time using a clock-in system, time sheet, punch card, or any other method. Galeana performed other than tip-related work for a significant portion of each workday, including dishwashing, food preparation, and cleaning. Galeana was never notified that his tips were being considered as an offset for wages and Mahasan did not account for tips in any daily or weekly accounting of Galeana's wages. Galeana was not provided an accurate statement of his wages when he was paid, nor was he given notice of his rate of pay or his employer's regular pay day. Galeana was not notified about minimum wage compensation or overtime compensation.

Throughout his employment with Mahasan, Galeana was paid in cash at a fixed rate of $275 per week. However, Galeana was frequently paid only $250 because the defendants deducted time for lunch and meal breaks, which he was not permitted to take and did not take.

From June 3, 2013, to October 15, 2014, Longwilai worked from 10:45 a.m. to 9:30 p.m. on Mondays, from 10:45 a.m. until 11:00 p.m. on Tuesdays and Wednesdays, and from 3:30 p.m. to 11:30 p.m. on Fridays and Saturdays, or about 51.25 hours per week. From October 16, 2014, to December 13, 2014, Longwilai worked from 11:00 a.m. to 11:00 p.m. on Mondays and Wednesdays, from 11:00 a.m. to 9:30 p.m. on Tuesdays, and from 5:00 p.m. to 11:30 p.m. on Fridays and Saturdays, or 47.5 hours per week. Longwilai was not required to track her time using a clock-in system, time sheet, punch card, or any other method. Longwilai performed other than tip-related work for a significant portion of each workday, including food and drink preparation and cleaning. Longwilai was never notified that her tips were being considered as an offset for wages and Mahasan did not account for tips in any daily or weekly accounting of her wages. Longwilai was not provided an accurate statement of her wages when she was paid, nor was she given notice of her rate of pay or her employer's regular pay day. Longwilai was not notified about minimum wage compensation or overtime compensation. Longwilai was required to use her own funds to purchase a uniform, which cost $200.00.

From June 3, 2013, to October 15, 2014, Longwilai was paid a fixed rate of $259 per week. From October 15, 2014, to December 13, 2014, Longwilai was paid $5.00 per hour for each hour worked, including for hours she worked in excess of 40 hours per week. Longwilai was paid in cash.

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.

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).
Under certain conditions, an employer is entitled to pay an employee an hourly wage less than the standard minimum wage if the employee receives tips from customers for his or her services. See 29 U.S.C. § 203(m), (t). However, under the FLSA, an employer may not claim a tip credit as to an employee's wages unless the employer has informed that employee of the provisions of the section of the FLSA permitting the tip credit. 29 U.S.C. § 203(m). . . . An employer who fails to provide the required notice is liable under the FLSA for unpaid minimum wages.
Valle v. Gordon Chen's Kitchen LLC, 254 F.Supp.3d 665, 672-73 (S.D.N.Y. 2017).
[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 [the FLSA] shall be liable to the employee or employees affected in the amount of their unpaid minimum wages, or their unpaid overtime compensation, as the case may be, and in an additional equal amount as liquidated damages.” 29 U.S.C. § 216(b). 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.

“[I]n addition to any judgment awarded to the plaintiff or plaintiffs, ” the court shall “allow a reasonable attorney's fee to be paid by the defendant, and costs of the action.” 29 U.S.C. § 216(b).

New York Law

The basic minimum hourly wage rate was $7.25 per hour on and after January 1, 2011, $8.00 per hour on and after December 31, 2013, $8.75 per hour on and after December 31, 2014, until and including December 30, 2015, $9 per hour on and after December 31, 2015, until and including December 30, 2016, $11 per hour on and after December 31, 2016 (for employers of eleven or more employees) and $10.50 per hour on and after December 31, 2016 (for employers of ten or fewer employees). See 12 NYCRR § 146-1.2. “New York law also requires that an employer provide an employee notice before it may deduct a ‘tip credit' from the employee's base wage. N.Y. Comp Codes R & Regs. tit. 12, § 146-2.2 (effective Jan. 1, 2011)” and “[t]he burden is on the defendants to show that they have complied with the tip notice requirement.” Valle, 254 F.Supp.3d at 673. “An employer shall pay an employee for overtime at a wage rate of 11/2 times the employee's regular rate for hours worked in excess of 40 hours in one workweek.” 12 NYCRR § 146-1.4. “The spread of hours is the length of the interval between the beginning and end of an employee's workday.” 12 NYCRR § 146-1.6. “On each day on which the spread of hours exceeds 10, an employee shall receive one additional hour of pay at the basic minimum hourly rate.” 12 NYCRR § 146-1.6(a). “The term regular rate shall mean the amount that the employee is regularly paid for each hour of work, before subtracting a tip credit, if any.” 12 NYCRR § 146-3.5(a).

If an employer fails to pay an employee an hourly rate of pay, the employee's regular hourly rate of pay shall be calculated by dividing the employee's total weekly earnings, not including exclusions from the regular rate, by the lesser of 40 hours or the actual number of hours worked by that employee during the work week.
12 NYCRR § 146-3.5(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 $50 per week, to a maximum of $2,500, and, for the employer's failure to provide the required wage statements, damages of $100 per week, to a maximum of $2,500, “together with costs and reasonable attorney's fees, ” under each of NYLL §§ 195(1) and (3). See NYLL § 198(1-b) and (1-d) (effective April 9, 2011, to February 26, 2015).

The statute of limitations period under the NYLL is six years. See NYLL § 663(3).
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).
“Interest shall be at the rate of nine per centum per annum.” New York Civil Practice Law and Rules (“CPLR”) § 5004.
Interest shall be computed from the earliest ascertainable date the cause of action existed, except that interest upon damages incurred thereafter shall be computed from the date incurred. Where such 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.
CPLR § 5001.
Any judgment or court order awarding remedies under this section shall 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.
NYLL § 198(4).

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)). “Thus, ‘a reasonable hourly rate' is not ordinarily ascertained simply by reference to rates awarded in prior cases.” Id. “[T]he equation in the caselaw of a ‘reasonable hourly fee' with the ‘prevailing market rate' contemplates a casespecific inquiry into the prevailing market rates for counsel of similar, experience and skill to the fee applicant's counsel. This may, of course, include judicial notice of the rates awarded in prior cases and the court's own familiarity with the rates prevailing in the district.” Id. at 209. “[T]he fee applicant has the burden of showing by ‘satisfactory evidence-in addition to the attorney's own affidavits'-that the requested hourly rates are the prevailing market rates.” Id. (quoting Blum, 465 U.S. at 896 n.11, 104 S.Ct. 1547 n.11). 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).

CONCLUSIONS OF LAW

Damages

Galeana

As the applicable statute of limitations under the NYLL is six years, Galeana may recover, from his employer, for the failure to pay him minimum wage, overtime, and “spread of hours” compensation in the six years prior to the date the complaint in this action was filed, May 20, 2014; because all Galeana's employment by the defendants occurred within this period, he may recover for the failure to pay him minimum wage, overtime, and “spread of hours” compensation throughout his employment.

Throughout his employment, Galeana worked 63 hours per week and was paid $275 per week. Galeana's pay rate of $6.875 per hour was below the lawful minimum; because Mahasan did not notify Galeana that it would be taking a tip credit against his wages, Mahasan was not authorized to pay Galeana at a rate below the minimum wage rate. Galeana should have been paid $7.25 per hour for the first 40 hours he worked each workweek and $10.875 for each hour worked in excess of 40 in each workweek, a total of $540.13 per week. Over the course of his 28 weeks of employment, Galeana's total minimum wage and overtime shortfall was $7,423.50.

Although Galeana was frequently paid only $250 per week, the plaintiffs have used the rate of $275 per week in their damages calculation, and the Court will use this rate as well.

In his declaration, Galeana avers that he spent a “significant portion” of each workday performing other than tipped duties; the Court is unable to determine the percentage of each workday Galeana spent on these duties. However, because Mahasan did not provide Galeana with the required notice that it would be taking a tip credit against his wages, Mahasan was not permitted to take a tip credit; therefore, the Court need not decide whether Mahasan was entitled to take a tip credit based on the percentage of each workday Galeana spent performing work that was not tipped work. See Valle, 254 F.Supp.3d at 674 n.8.

Galeana seeks liquidated damages in an amount equal to his unpaid minimum wage and overtime compensation pursuant to NYLL § 663(1). As Mahasan has not put forth a “good faith basis to believe that its underpayment of wages was in compliance with the law, ” Galeana may recover liquidated damages in an amount equal to the sum of his unpaid minimum wage and overtime compensation, $7,423.50.

Galeana should have been paid an additional $7.25 for “spread of hours” pay, for each day that he worked more than 10 hours; this was six days per week for 28 weeks. Galeana's total “spread of hours” shortfall was $1,218.00. Galeana may also recover liquidated damages in an amount equal to his unpaid “spread of hours” pay, $1,218.00.

Galeana seeks statutory damages of $2,500 for Mahasan's failure to provide him the wage notices required by NYLL § 195(1) and $2,500 for Mahasan's failure to provide him the wage statements required by NYLL § 195(3). Under the labor-related regulation in effect at the time, an employee may recover damages of $50 per week, to a maximum of $2,500, for a violation of NYLL § 195(1) and damages of $100 per week, to a maximum of $2,500, for a violation of NYLL § 195(3). See NYLL § 198(1-b) and (1-d) (effective April 9, 2011, to February 26, 2015). Galeana worked 28 weeks; thus, he should receive the maximum statutory damages of $2,500 for his employer's failure to provide wage statements under NYLL § 195(3) but should receive only $1,400 for the failure to provide wage notices under NYLL § 195(1).

Galeana seeks prejudgment interest at the rate of 9 percent per annum on $7,423.50, his total unpaid minimum wage and overtime compensation, and $1,218.00, his total unpaid “spread of hours” compensation. The plaintiffs calculate the prejudgment interest from the middle point of each “pay period” as determined by the plaintiffs-(1) July 15, 2011, to December 31, 2011, and (2) January 1, 2012, to January 31, 2012-to July 28, 2021, the date the plaintiffs' inquest submissions were filed. Because Galeana's pay rate did not change over the course of his employment, nor did the relevant minimum wage and overtime compensation standards change, the Court has determined to calculate the prejudgment interest from the midpoint of Galeana's employment: October 23, 2011. Galeana should receive prejudgment interest in the amount of $6,527.39, on his unpaid minimum wage and overtime compensation, and $1,070.97, on his unpaid “spread of hours” compensation. The Clerk of Court may be directed to calculate additional prejudgment interest at the rate of 9 percent per annum on the amount of $8,641.50 from July 28, 2021, to the date that final judgment is entered.

Longwilai

As the applicable statute of limitations under the NYLL is six years, Longwilai may recover, from her employer, for the failure to pay her minimum wage, overtime, and “spread of hours” compensation in the six years prior to the date the complaint in this action was filed, May 20, 2014; because all Longwilai's employment by the defendants occurred within this period, she may recover for the failure to pay her minimum wage, overtime, and “spread of hours” compensation throughout her employment.

From June 3, 2013, to October 15, 2014, Longwilai worked for 51.25 hours per week and was paid $259 per week; her calculated regular rate of pay was $6.475 per hour. From October 16, 2014, to December 13, 2014, Longwilai worked 47.5 hours per week and was paid $5.00 per hour, or $237 per week; her calculated regular rate of pay was $5.00 per hour. Longwilai's pay rate for both periods of time was below the lawful minimum, which was $7.25 per hour from June 3, 2013, to December 30, 2013, and $8.00 per hour from December 31, 2013, to December 13, 2014. Because Mahasan did not notify Longwilai that it would be taking a tip credit against her wages, Mahasan was not authorized to pay Longwilai at a rate below the minimum wage.From June 3, 2013, to December 30, 2013, Longwilai should have been paid $7.25 per hour for the first 40 hours she worked each week and $10.875 for each additional hour; from December 31, 2013, to December 13, 2014, Longwilai should have been paid $8.00 per hour for the first 40 hours she worked each week and $12.00 for each additional hour. Over the course of her employment, Longwilai's total minimum wage and overtime shortfall was $14,016.31. As Mahasan has not put forth a “good faith basis to believe that its underpayment of wages was in compliance with the law, ” Longwilai may recover liquidated damages in an amount equal to the sum of her unpaid minimum wage and overtime compensation, $14,016.31.

In her declaration, Longwilai avers that she spent a “significant portion” of each workday performing other than tipped duties; the Court is unable to determine the percentage of each workday Longwilai spent on these duties. However, as noted above in connection with Galeana, because Mahasan did not provide Longwilai with the required notice that it would be taking a tip credit against her wages, Mahasan was not permitted to take a tip credit; therefore, the Court need not decide whether Mahasan was entitled to take a tip credit based on the percentage of each workday Longwilai spent performing work that was not tipped work. See Valle, 254 F.Supp.3d at 674 n.8.

Longwilai should have been paid an additional amount of “spread of hours” pay, at the minimum wage rate for each day that she worked more than 10 hours; this was three days per week. Longwilai's total “spread of hours” shortfall was $1,828.00. Longwilai may also recover liquidated damages in an amount equal to her unpaid “spread of hours” pay, $1,828.00.

Longwilai seeks statutory damages of $2,500 for Mahasan's failure to provide her the wage notices required by NYLL§ 195(1) and $2,500 for Mahasan's failure to provide her the wage statements required by NYLL § 195(3). Longwilai worked for 79 weeks; therefore, Longwilai should receive the statutory maximums of $2,500 for her employer's failure to provide wage statements under NYLL § 195(3) and $2,500 for the failure to provide wage notices under NYLL§ 195(1).

Although Longwilai avers that she was required to expend $200 of her own funds to purchase a uniform, the plaintiffs have not included this cost in their damages calculations; therefore, an award of damages related to her uniform purchase is not warranted.

Longwilai seeks prejudgment interest at the rate of 9 percent per annum to the date final judgment is entered in this action on $14,016.31, her total unpaid minimum wage and overtime compensation, and $1,828.00, her total unpaid “spread of hours” compensation. The plaintiffs calculate the prejudgment interest on each amount from the middle point of each “pay period” as determined by the plaintiffs-(1) June 3, 2013, to December 20, 2013; (2) December 31, 2013, to October 15, 2014; and (3) October 16, 2014, to December 13, 2014-to July 28, 2021, the date the plaintiffs' inquest submissions were filed. Upon review of the plaintiffs' calculations, the Court finds that prejudgment interest in the amounts of $9,288.69, on Longwilai's unpaid minimum wage and overtime compensation, and $1,214.47, on Longwilai's unpaid “spread of hours” pay, is warranted. The Clerk of Court may be directed to calculate additional prejudgment interest at the rate of 9 percent per annum on the amount of $15,844.31 from July 28, 2021, to the date that final judgment is entered.

Attorneys' Fees and Costs

The plaintiffs seek $23,572.50 in attorneys' fees and $581.00 in costs. The following attorneys worked on the matter: Faillace, William K. Oates (“Oates”), Joshua Androphy (“Androphy”), and Daniel Tannenbaum (“Tannenbaum”).

Faillace was the managing member of Michael Faillace & Associates, P.C. Faillace began practicing employment law in 1983. He has taught employment discrimination as an adjunct professor at Fordham University School of Law and is “a nationally-renowned speaker and writer on employment law, ” as well as the author of, inter alia, the ADA, Disability Law Deskbook: The Americans with Disabilities Act in the Workplace. The plaintiffs seek a rate of $450.00 per hour for the legal services rendered by Faillace.

Oates has been an associate at Michael Faillace & Associates, P.C. since December 2020. He is a 1995 graduate of New York Law School and previously “practiced labor and employment law, civil litigation, and commercial litigation at the New York City Office of the Corporation Counsel and at a number of private law firms.” The plaintiffs request a rate of $400.00 per hour for the legal services rendered by Oates.

Androphy was an associate at Michael Faillace & Associates, P.C. from December 2012 until 2020, where he “almost exclusively” litigated wage-and-hour cases. He is a 2005 graduate of Columbia Law School. Androphy was named a “Super Lawyers Rising Star for Plaintiff's employment litigation in 2014, 2015, 2016, 2017, and 2018.” The plaintiffs request a rate of $400 per hour for the legal services rendered by Andophy.

Tannenbaum was an associate at Michael Faillace & Associates, P.C. He is a 2008 graduate of Hofstra Law School. He practiced labor and employment law and commercial litigation prior to joining Michael Faillace & Associates, P.C. in 2019, where he litigated employment cases in federal court. The plaintiffs request a rate of $350 per hour for the legal services rendered by Tannenbaum.

In addition, the plaintiffs request a rate of $125 per hour for services rendered by a paralegals, but do not provide information about the paralegal's skills or qualifications.

The Court has determined to reduce the requested rates to bring them in line with those rates found reasonable in recent decisions in this judicial district concerning the attorneys at Michael Faillace & Associates, P.C.: $400 per hour for Faillace, $300 per hour for Oates, $350 per hour for Andophy, and $300 per hour for Tannenbaum. See Estrada v. Therapy PLLC, No. 20-CV-6125, 2021 WL 4427068, at *5 (S.D.N.Y. Sept. 27, 2021) (awarding $400 per hour to Faillace and $300 per hour to Oates); de Jesus Morales v. Stalwart Grp. Inc., No. 20-CV-3950, 2021 WL 3774145, at *6 (S.D.N.Y. Aug. 24, 2021) (awarding $400 per hour to Faillace, $300 per hour to Oates, and $300 per hour to Tannenbaum); Diaz-Caballero v. Midtown Catch Corp., No. 18 Civ. 4672, 2020 WL 8880944, at *2 (S.D.N.Y. Apr. 15, 2020) (awarding $400 per hour to Faillace and $350 per hour to Androphy and noting that “[t]he rates proposed, [$450 per hour for Faillace and $400 per hour for Androphy, ] have been rejected repeatedly by courts in this district within the last year.”). In the absence of any information about the paralegal(s) who worked on this case, the Court has determined to reduce the paralegal's rate to $100 per hour.

The Court observed in its review of the billing data supplied by the plaintiffs that Faillace expended 19.4 hours on the case, Androphy expended 1.6 hours on the case, Tannenbaum expended 20.5 hours on the case, Oates expended 14.8 hours on the case, and a paralegal expended 8.3 hours on the case. Mindful of “the Supreme Court's observation that ‘the most critical factor' in a district court's determination of what constitutes reasonable attorney's fees in a given case ‘is the degree of success obtained' by the plaintiff, ” Barfield v. New York City Health & Hosps. Corp., 537 F.3d 132, 152 (2d Cir. 2008) (quoting Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 574 (1992)), the Court finds the hours expended by the plaintiffs' counsel were unreasonable considering the plaintiffs' degree of success in this case. Although the action was pleaded as a collective action under the FLSA, the plaintiffs appear not to have pursued certification of a collective class; instead, six plaintiffs, including Longwilai, joined the action, in addition to the two plaintiffs named in the Complaint, Galeana and Nicolas Galeana. However, on July 22, 2019, your Honor found that six of the plaintiffs must arbitrate their claims because they had signed employment agreements containing arbitration clauses. See Docket Entry No. 101. Therefore, the instant inquest concerns only Galeana and Longwilai. Some of the time entries in counsel's billing data indicate that time expended related to the plaintiffs who must arbitrate their claims; plaintiffs Tomas Bautista and Enrique Martinez are mentioned. However, it is not possible to determine with any precision how much time captured in the billing data was expended on matters concerning plaintiffs who were unsuccessful in this litigation, since their claims were presented to the court improperly, owing to their agreement with their employer to arbitrate those claims. “Courts in this Circuit have recognized a district court's authority to make across-the-board percentage cuts in hours, as opposed to an item-by-item approach, to arrive at the reasonable hours expended. These across-the-board cuts are based in part on the degree of success achieved by plaintiffs.” Williams v. Epic Sec. Corp., 368 F.Supp.3d 651, 657-58 (S.D.N.Y. 2019). A 30 percent reduction in the hours expended by each attorney and paralegal is warranted in order to remove time spent devoted to the claims of plaintiffs who were required to arbitrate and, notwithstanding that fact, presented improperly their claims to the court for resolution. Reducing the hours expended by each attorney and paralegal by 30 percent yields the following hours reasonably expended on the case: 13.58 hours for Faillace, 1.12 hours for Androphy, 14.35 hours for Tannenbaum, 10.36 hours for Oates, and 5.81 hours for the paralegal(s).

The hours reasonably expended on the case are set forth in the following chart, along with the reasonable hourly rates and total fees attributable to the case for each attorney and paralegal:

Timekeeper

Hourly Rate

Hours

Fees

Faillace

$400.00

13.58

$5,432.00

Androphy

$350.00

1.12

$392.00

Tannenbaum

$300.00

14.35

$4,305.00

Oates

$300.00

10.36

$3,108.00

Paralegal(s)

$100.00

5.81

$581.00

Total fees:

$13,818.00

Attorneys' fees in the amount of $13,818.00 are warranted. “[A]ny attorney's fee award ultimately belongs to [the client], not the attorney.” Porzig v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 141 n.4 (2d Cir. 2007). The suspension order referenced above indicates that Faillace intends to assert “retaining and charging liens in the cases as to which he has filed Motions to Withdraw based upon his suspension.” As of the date of this report, no such liens have been asserted in this action.

The plaintiffs seek $581 in costs, including filing fees and service-associated fees. The Court finds these costs reasonable; an award of $581 in costs is warranted.

RECOMMENDATION

For the foregoing reasons, I recommend that the following be awarded to the plaintiffs:

Galeana

1. Damages in the amount of $13,759.50, representing:

a. $7,423.50 in unpaid wages and overtime;
b. $1,218.00 in unpaid spread-of-hours compensation;
c. $8,641.50 in liquidated damages; and
d. $3,900 in statutory damages.

2. Prejudgment interest in the amount of:

a. $ 7, 598.36, through July 28, 2021 (the date that the plaintiffs filed their inquest submissions);
and
b. additional prejudgment interest at the rate of nine percent per annum on the principal amount of $8,641.50, to be calculated by the Clerk of Court from July 28, 2021, to the date of entry of the final judgment.

Longwilai

1. Damages in the amount of $36,688.62, representing:

a. $14,016.31 in unpaid wages and overtime;
b. $1,828.00 in unpaid spread-of-hours compensation;
c. $15,844.31 in liquidated damages; and
d. $5,000.00 in statutory damages.

2. Prejudgment interest in the amount of:

a. $ 10, 503.16, through July 28, 2021 (the date that the plaintiffs filed their inquest submissions); and
b. additional prejudgment interest at the rate of nine percent per annum on the principal amount of $15,844.31, to be calculated by the Clerk of Court from July 28, 2021, to the date of entry of the final judgment.

I also recommend pursuant to NYLL § 198(4), that the judgment provide with respect to “any amounts remaining 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, [that] the total amount of judgment shall automatically increase by fifteen percent.”

In addition, I recommend that the plaintiffs be awarded attorney's fees in the amount of $13,818.00, and costs in the amount of $581.00.

FILING OF 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. Any requests for an extension of time for filing objections must be directed to Judge Broderick. 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).


Summaries of

Galeana v. Mahasan Inc.

United States District Court, S.D. New York
Dec 21, 2021
14-CV-3625 (VSB) (KNF) (S.D.N.Y. Dec. 21, 2021)
Case details for

Galeana v. Mahasan Inc.

Case Details

Full title:ADELAIDO GALEANA and NICOLAS GALEANA, individually and on behalf of others…

Court:United States District Court, S.D. New York

Date published: Dec 21, 2021

Citations

14-CV-3625 (VSB) (KNF) (S.D.N.Y. Dec. 21, 2021)

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