Inga v. Nesama Food Corp.

JUSTO ENRIQUE INGA on behalf of himself and others similarly situated, Plaintiff, v. NESAMA FOOD CORP. d/b/a BIG ARC CHICKEN, MOHAMMED EL HATTAB, and ABDELLATIF MAHMOUD, Defendants.

Civil Action No. 20 Civ. 0909 (ALC) (SLC)

United States District Court, S.D. New York

July 30, 2021

HONORABLE ANDREW L. CARTER, UNITED STATES DISTRICT JUDGE

REPORT AND RECOMMENDATION

SARAH L. CAVE, UNITED STATES MAGISTRATE JUDGE

I. INTRODUCTION

Plaintiff Justo Enrique Inga (“Inga”) filed this action under the Fair Labor Standards Act (the “FLSA”) 29 U.S.C. §§ 201 et seq., New York Labor Law (“NYLL”) §§ 190 et seq., and New York's Wage Theft Prevention Act, NYLL § 195 (“WTPA”), seeking recovery of minimum and overtime wages and related relief from Defendants Nesama Food Corp. d/b/a Big Arc Chicken (“Nesama”), Mohammed El Hattab (“El Hattab”), and Abdellatif Mahmoud (“Mahmoud, ” together with Nesama and El Hattab, “Defendants”). (ECF No. 1). Inga alleges that during his nine-year employment at Defendants' restaurant, Defendants failed to pay him the proper minimum wage and overtime premiums, and failed to provide him with wage statements as required by state law. (ECF No. 1 ¶¶ 1-2, 18-40). In addition, Inga seeks pre- and post-judgment interest, attorneys' fees, and costs. (Id. ¶ 2).

Defendants initially appeared and defended against this action, until the Court granted their counsel's motion to withdraw and ordered new counsel to appear. (ECF Nos. 10, 11, 14, 15, 31). After multiple reminders and warnings, no new counsel appeared, and Inga moved to strike Defendants' answer, for entry of a default judgment against Defendants, and for an award of attorneys' fees and costs. (ECF No. 37 (the “Motion”)). The Honorable Andrew L. Carter referred the Motion to me for a Report and Recommendation. (ECF No. 43).

For the reasons set forth below, I respectfully recommend that the Motion be GRANTED, Defendants' Answer be stricken, Certificates of Default and a default judgment be entered against Defendants, and Inga be awarded attorneys' fees and costs.

II.BACKGROUND

A. Factual Background

The following factual summary is taken from the uncontested allegations in Inga's Complaint, which the Court deems to be true for purposes of the Motion. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 108 (2d Cir. 1997) (deeming all well-pleaded allegations in complaint admitted on motion for default judgment); Arch Ins. Co. v. Sky Materials Corp., No. 17 Civ. 2829 (CBA) (LB), 2021 WL 966110, at *1 n.1, *6 (E.D.N.Y. Jan. 29, 2021) (same).

Nesama owns and operates a restaurant called “Big Arc Chicken, ” on First Avenue in New York City (the “Restaurant”). (ECF No. 1 ¶ 7). El Hattab and Mahmoud are joint owners of Nesama and participate in the day-to-day operation of the Restaurant. (Id. ¶¶ 8, 18, 19). Nesama is engaged in interstate commerce and has an annual gross volume of sales of not less than $500, 000. (Id. ¶ 11).

From 2009 until November 1, 2018, Inga worked for Defendants as a cook and porter. (ECF No. 1 ¶¶ 12, 20-21). Throughout his employment, Inga worked ten hours per day, six days per week, but did not punch a time-clock or other time-recording device at the beginning or ending of his shift. (Id. ¶¶ 22-25). His shift occasionally exceeded ten hours in a single day. (Id. ¶ 24). From February 2014 (the beginning of the six-year limitations period) until August 2018, Inga was paid $450 per week in cash for all the hours he worked. (Id. ¶ 26). From September 2018 until November 2018, Inga was paid $500 per week in cash for all the hours he worked. (Id. ¶ 27).

Throughout his employment, Defendants did not provide Inga with any weekly wage statements. (ECF Nos. 1 ¶ 28; 47 ¶¶ 6, 14).

B. Procedural History

On February 3, 2020, Inga filed his Complaint. (ECF No. 1). On February 12, 2020, Inga served Defendants with the Summons and Complaint. (ECF Nos. 5-8). On March 4, 2020, Joey Tsai, Esq. (“Tsai”) appeared on behalf of Defendants. (ECF No. 10). On April 17, 2020, Defendants filed their Answer. (ECF No. 15). Following a conference on May 27, 2020, the Court set a fact discovery deadline of March 1, 2021, and scheduled a settlement conference for July 22, 2020, which was later rescheduled to March 2, 2021 and then adjourned sine die. (ECF Nos. 19-22, 42). Because this is an FLSA action, the parties were referred to the Court's Mediation Program (ECF No. 13), but no mediation was held after Tsai indicated that Defendants did not wish to engage in settlement discussions. (ECF Nos. 23; 38 ¶ 13).

After Tsai informed Inga's counsel on September 4, 2020 that he intended to withdraw from representing Defendants, Inga's counsel requested a conference with the Court. (ECF Nos. 24, 38 ¶ 14). On September 25, 2020, Tsai filed a motion to withdraw (the “Motion to Withdraw”), accompanied by an affirmation from Mahmoud stating that he intended to proceed pro se. (ECF Nos. 27-29). On October 6, 2020, the Court held a conference with the parties' counsel to discuss the Motion to Withdraw. (ECF No. 30). The Court granted the Motion to Withdraw, ordering, by November 5, 2020, counsel for Nesama to file a notice of appearance, and El Hattab and Mahmoud to notify the Court whether new counsel would appear on their behalf or whether they would proceed pro se. (ECF No. 31 (the “Withdrawal Order”)). During the conference, the Court ordered Tsai to serve a copy of the Withdrawal Order on Defendants and to inform them of the possible consequences of the failure to respond. (ECF No. 38 ¶ 17). Tsai filed a Declaration attesting that he served the Withdrawal Order on Defendants. (ECF No. 46).

On November 6, 2020, after Defendants had failed to respond to the Withdrawal Order, the Court “extend[ed] for a final time” until November 19, 2020 the time for new counsel to appear for Nesama, and for El Hattab and Mahmoud to inform the Court of their intentions. (ECF No. 32 (the “Final Extension Order”)). Defendants did not respond to the Final Extension Order, and on November 24, 2020, the Court ordered Inga to commence default proceedings in accordance with Judge Carter's Individual Practices. (ECF No. 33).

On January 7, 2021, Inga filed the Motion, in which he asks the Court to strike Defendants' Answer, enter default judgment in his favor, and award him attorneys' fees and costs. (ECF Nos. 37-39). Inga also filed a Damages Summary (ECF No. 38-4), and proof of service of the Motion on Defendants. (ECF No. 40). On May 21, 2021, Judge Carter referred the Motion for a Report and Recommendation. (ECF No. 43). Since Mahmoud filed his affirmation with the Motion on September 25, 2020, no Defendant has filed any document or otherwise contacted the Court in any way.

On July 12, 2021, the Court notified Inga that he had failed to file an affidavit attesting to his allegations and damages, and, accordingly, granted him a brief additional period to do so. (ECF No. 45). The Court also granted Defendants one final opportunity to respond to the Motion, or contact the Court, and warned them that if they failed to do so, the Court would conduct the inquest on damages based on Inga's written submissions alone, without an in-person hearing. (Id.) On July 19, 2021, Inga submitted his Affidavit, which corroborates the allegations in his Complaint. (ECF No. 47). Defendants did not respond to Inga's Affidavit or otherwise contact the Court.

III. LEGAL STANDARDS

A. Motion to Strike

Federal Rule of Civil Procedure 16(f), permits a district court to “issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii) - (vii), if a party or its attorney . . . fails to obey a scheduling order o r other pretrial order.” Fed.R.Civ.P. 16(f). The orders authorized by Rule 37(b)(2)(A)(ii) - (vii) include those “striking pleadings in whole or in part, ” “dismissing the action or proceeding in whole or in part, ” and “rendering a default judgment against the disobedient party.” Fed.R.Civ.P. 37(b)(2)(A)(iii), (v), (vi). “The Court may enter a default judgment when the disobedient party has failed to comply with a court order due to willfulness, bad faith, or any fault, including gross negligence.” Arch Ins. Co., 2021 WL 966110, at *3. In addition, “'[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.'” Bratta v. Tramp, No. 08 Civ. 4073 (JFB) (ETB), 2009 WL 10708936, at *2 (E.D.N.Y. Nov. 30, 2009) (quoting Fed.R.Civ.P. 55(a)).

In determining whether to impose these sanctions, courts consider “(1) the party's history of noncompliance; (2) the effectiveness of lesser sanctions; (3) whether a warning has been issued regarding imposition of sanctions; and (4) whether imposing lesser sanctions would prejudice the moving party.” Arch Ins. Co., 2021 WL 966110, at *3. Sanctions are considered “a harsh remedy to be used only in extreme situations, and then only when a court finds ‘willfulness, bad faith, or any fault' by the non-compliant litigant.” Agiwal v. Mid Island Mortg. Corp., 555 F.3d 298, 302 (2d Cir. 2009) (quoting Bobal v. Rensselaer Polytechnic Inst., 916 F.2d 759, 764 (2d Cir. 1990)).

A corporate defendant's failure to comply with a court order to retain counsel is an appropriate basis for striking that defendant's answer and entering default. See Arch Ins. Co., 2021 WL 966110, at *3-4 (collecting cases in which courts struck defendants' answers for failure to comply with orders to retain and appear through counsel); Bratta 2009 WL 10708936, at *2 (striking answer of and entering default against corporate defendant that failed to comply with two court orders to obtain counsel). Similarly, the...