Howard v. Redline Glob.

1

Keith Howard, et. al, Plaintiffs, v. Redline Global, LLC., Defendant.

CIVIL No. 21-1538 (RAM)(MDM)

United States District Court, D. Puerto Rico

April 11, 2023

REPORT AND RECOMMENDATION

MARSHAL D. MORGAN, UNITED STATES MAGISTRATE JUDGE

Plaintiffs Keith Howard, Alvin L. Barrington, Leslie M. Diaz, Qiana Taylor, and Tangell Pollard (hereinafter referred to as the “Plaintiffs”)^[1]brought suit against their former employer, Redline Global, LLC (“Redline” or the “Defendant”). Plaintiffs bring claims pursuant to the Fair Labor Standards Act (29 U.S.C. § 201, et seq.) (“FLSA”) and the Puerto Rico Wage Payment Statute (29 L.P.R.A. §§ 171, et seq., §§ 250, et seq., and §§ 271, et seq.) (“PRWPS”) for unpaid overtime. Defendant has failed to appear.

Currently before the Court is Plaintiffs' Motion for Default Judgment (Docket No. 20), which was referred to me for a Report and Recommendation. For the reasons set forth herein i respectfully recommend that this Motion be GRANTED.

I. Background

A. Factual Allegations

Redline is a domestic limited liability company that conducts business throughout the United States. Redline is organized and exits under the laws of Puerto Rico. (Docket No. 1, Complaint at ¶ 25). Redline's corporate headquarters is located in Dorado, Puerto Rico. (Docket No. 1 at ¶ 26). Redline provides disaster relief services such as consulting, planning, and management, among other services. Id. at ¶ 4.

The Plaintiffs worked as Public Assistance Project Specialists, Subject Matter Experts, and Public Assistant Project Executives at Redline's office in Dorado, Puerto Rico. (Docket No. 30-2, Declaration of Keith Howard (“Howard Decl.”) at ¶¶ 3, 4); (Docket No. 30-3, Declaration of Alvin Barrington (“Barrington Decl.”) at ¶¶3, 4); (Docket No. 30-4, Declaration of Qiana Taylor (“Taylor Decl.”)) at ¶¶ 3, 4); (Docket No. 30-5, Declaration of Tangell Pollard (“Pollard Decl.”) at ¶¶ 3, 4). As alleged, Redline is part of interstate commerce and has an annual dollar volume of sales or business that exceeds $500,000.00. (Docket No. 1 at ¶ 37).

The Plaintiffs generally worked six to seven days a week, at an average of 10 to 12 hours per day. (Howard Decl. at ¶ 5; Barrington Decl. ¶¶ 5, 6; Taylor Decl. at ¶¶ 5, 6; Pollard Decl. ¶ 5). Plaintiffs consistently worked over 40 hours per week. Id. Redline paid the Plaintiffs a set hourly rate. (Howard Decl. at ¶ 6 ($65 per hour)); (Barrington Decl. at ¶ 7 ($90 per hour)); (Taylor Decl. at ¶ 7 (started at $55 and ended at $65 per hour)); (Pollard Decl. at ¶ 6 ($60 per hour)). The Defendant did not pay the Plaintiffs overtime at time-and-a-half their hourly rate for any hours worked in excess of 40 hours per workweek. (Howard Decl. at ¶¶ 6, 7; Barrington Decl. at ¶¶ 7, 8; Taylor Decl. at ¶¶ 7, 8; Pollard Decl. at ¶¶ 6, 7). Redline classified Plaintiffs as “independent contractors” and paid them through a Form 1099, which is reserved for payments to non-employees. Id.

While working for Redline, it was management at Redline who created Plaintiffs' schedule and management who instructed them on how to prioritize their projects. (Howard Decl. at ¶¶ 14, 25; Barrington Decl. ¶¶ 15, 25; Taylor Decl. at ¶¶ 16, 26; Pollard Decl. ¶¶ 15, 24). Except for two of the Plaintiffs, who happened to use their personal laptop computers, the Plaintiffs did not rely on their own tools to perform work for Redline. (Howard Decl. at ¶ 16; Barrington Decl. ¶ 16; Taylor Decl. at ¶ 17; Pollard Decl. ¶ 17). Plaintiffs were required to submit their work to Redline's managers for review. (Howard Decl. at ¶ 20; Barrington Decl. ¶ 20; Taylor Decl. at ¶ 21; Pollard Decl. ¶ 23). Plaintiffs were also required to perform their jobs in strict compliance with federal guidelines and in accordance with the policies, tools, and forms provided by Redline. (Howard Decl. at ¶ 20; Barrington Decl. ¶ 20; Taylor Decl. at ¶ 21; Pollard Decl. ¶ 21).

B. Procedural History

Plaintiff Keith Howard commenced this action on November 12, 2021. (Docket No. 1). On November 24, 2021, the Defendant was served with the Summons and Complaint at their actual place of business. (Docket No. 8). The Defendant's answer to the Complaint was due on or before January 12, 2022. Id. To date, however, the Defendant has failed to answer to the Complaint or otherwise appear.

On June 9, 2022, the Plaintiffs moved for an Entry of Default, which the Clerk of the Court entered on June 13, 2022. (Docket Nos. 16-18). On September 21, 2022, Plaintiffs' Counsel appeared before the Honorable Judge Raul M. Arias-Marxuach for a Status Conference. (Docket No. 20). Plaintiffs were directed to file a Motion for Default Judgment by October 28, 2022. Id.

On October 28, 2022, Plaintiffs filed a Motion for Default Judgment seeking damages for unpaid overtime. (Docket Nos. 24-26). While Plaintiffs' Complaint is styled as a “Class/Collective Action,” Plaintiffs are not seeking either classification for purposes of their Motion for Default Judgment. On January 19, 2023, the undersigned Magistrate Judge held a hearing regarding Plaintiffs' Motion for Default Judgment. As a result of the hearing, Plaintiffs' counsel was ordered to review the facts “to ferret out any possible instances of double counting of damages.” On February 16, 2023, the Plaintiffs filed a revised damage calculation. (Docket No. 36.)

II. Legal Standard

Rule 55 of the Federal Rules of Civil Procedure requires “a two-step process for obtaining a default judgment.” Priestley v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). Under the first step, a plaintiff must obtain an entry of default from the clerk of the court when a defendant “has failed to plead or otherwise defend.”

Fed. R. Civ. P. 55(a). The second step requires the plaintiff to apply to the court for a default judgment. Fed.R.Civ.P. 55(b).

As Defendant has failed to defend against Plaintiffs' allegations, a judgment by default is appropriate in the present action. See Hawke Cap. Partners, L.P. v. Aeromed Servs. Corp., 300 F.R.D. 52, 56 (D.P.R. 2014) (quoting Rodriguez-Salgado v. Somoza-Colombani, 937 F.Supp.2d 206, 211 (D.P.R.2013)) (unexcused failure to respond to a motion for default judgment “authorizes the presiding district judge to summarily grant the unopposed motion, ‘at least when the result does not clearly offend equity”). For purposes of a default motion, the well-pleaded factual allegations set forth in the complaint are accepted as true. See Hooper-Haas v. Ziegler Holdings, LLC, 690 F.3d 34, 41 (1st Cir. 2012) (“[w]here the complaint contains facts sufficient to state a claim upon which relief can be granted, the defendant's liability is established at the time of default”); Ramos-Falcon v. Autoridad de Energia Electrica, 301 F.3d 1 (1st Cir. 2002) (the court considers “all well-pleaded factual allegations as true, to determine whether [the complaint] alleges a cause of action”); Franco v. Selective Ins., 184 F.3d 4, 9 n.3 (1st Cir. 1999) (“A party who defaults is taken to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability as to which damages will be calculated.”).

A hearing may be required to set damages when the amount is in dispute or is not ascertainable from the pleadings. The First Circuit has held that when a “court has jurisdiction over the subject matter and parties, the allegations in the complaint state a specific, cognizable claim for relief, and the defaulted party had fair notice of its opportunity to object, the court has the discretion to order a default judgment ‘without a hearing of any kind.'” In re The Home Restaurants, Inc., 285 F.3d 111, 114 (1st Cir. 2002) (quoting HMG Prop. Invs., Inc. v. Parque Indus. Rio Canas, Inc., 847 F.2d 908, 919 (1st Cir. 1988)); Pope v. United States, 323 U.S. 1, 12, 65 S.Ct 16, 22, 89 L.Ed. 3 (1944) (“if arriving at the judgment amount involves nothing more than arithmetic-the making of computations which may be figured from the record-a default judgment can be entered without a hearing of any kind.”); Katahdin Paper Co., LLC v. U & R Sys., Inc., 231 F.R.D. 110, 113-14 (D. Me. 2005) (the court concluded that the Rule 55(b)(2)'s hearing requirement was satisfied based on the complaint and accompanying affidavit and it was unnecessary to proceed with a more formal evidentiary hearing.); KPS & Assoc. v. Designs by FMC, Inc., 318 F.3d 1, 21 (1st Cir. 2003) (where the evidence is sufficient or the “district court [is] intimately familiar with the case,” a plaintiff's damages amount may be determined without the holding of an evidentiary hearing on the matter).

III. Discussion

A. Defendant was engaged in interstate commerce

In order to bring an FLSA claim, a plaintiff has the burden to prove “a nexus to interstate commerce sufficient to trigger coverage under the Act.” Martinez v. Petrenko, 792 F.3d 173, 174 (1st Cir. 2015). Here, Defendant works and performs services throughout the United States and Puerto Rico. Plaintiffs, moreover, were engaged in the processing of Federal Emergency Management Agency grants for Redline's customers. Accordingly, Defendant was engaged in interstate commerce and the FLSA applies. Cruz v. Boston Litigation Solutions, 2016 WL 3568254, at *5 (D. Mass. May 24, 2016). (“If enterprise coverage applies, all of the enterprise's employees are protected under the FLSA, even if they are not personally involved in interstate commerce.”).

B. Plaintiffs were misclassified as “independent contractors”

It is well-settled that, under the FLSA, employers must pay employees overtime compensation for time worked in excess of 40 hours per week, unless the employer can claim an exemption from coverage. See 29 U.S.C. § 201, et seq. Under the FLSA, “the term ‘employee' means any individual employed...