Solis v. 53rd St. Partners LLC

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PABLO SOLIS, et al., Plaintiffs, v. 53rd STREET PARTNERS LLC d/b/a REMI RESTAURANT, ROBERTO DELLEDONNE, and STEFANO FRITTELLA, Defendants.

Civil Action No. 19 Civ. 11708 (PGG) (SLC)

United States District Court, S.D. New York

October 21, 2022

TO THE HONORABLE PAUL G. GARDEPHE, United States District Judge:

REPORT & RECOMMENDATION

SARAH L. CAVE, United States Magistrate Judge.

I. INTRODUCTION

In this action, filed under the Fair Labor Standards Act (the “FLSA”), 29 U.S.C. §§ 201 et seq., New York Labor Law (“NYLL”) §§ 190 et seq., New York's Wage Theft Prevention Act, NYLL § 195 (“WTPA”), and the New York Worker Adjustment and Retraining Notification Act NYLL §§ 860 et seq. (“NY WARN Act”), Plaintiffs Abraham Fonseca, Amelia Mejia Escobar, Andres Taveras, Armando Ramirez, Bairma Gyndunova Carlos Colmena, Carlos Perez, Cesar Ruiz, Claudia Lodi Freddi, Dilio Urgiles, Erick Cortes Zamora, Esdras Obed Paz Quezada, Filip Kozminski, Gabriel Ruiz, Heriberto Martinez, Julio Vega, Luis Perez, Manuel Molina, Marcelo Vargas, Mariana Iturbide Orozco, Nubia Liliana Velandia, Oscar Fernando Gomez Alzate, Oscar Velandia, Rachel Lovaglio Canal, Ricardo Cortes Zamora, Ruhul Amin Tipu, Walter Calle, Xavier Ortiz, and Yullios Donge Meneses (together, “Plaintiffs”) seek payment of unpaid minimum and overtime wages and related relief from Defendants Roberto Delledonne (“Delledonne”) and 53rd Street Partners, LLC (“53rd Street”) (Delledonne and 53rd Street together, “Defendants”). (ECF No. 1).

Plaintiffs allege that during their employment at Defendants' restaurant, Defendants failed to pay them the proper minimum wage and overtime premiums, improperly took tip credits and withheld owed tips, and failed to provide them with wage notices and a notice of closure as required by state law. (ECF No. 1 at 9-13).

Defendants, although properly served, failed to appear in or defend this action. (See ECF No. 81). On March 25, 2020, the Clerk of Court issued a certificate of default as to them. (ECF No. 61). On April 1, 2020, Plaintiffs submitted a Motion for Default Judgment (the “Motion”) that included Plaintiffs' alleged damages calculations. (ECF Nos. 62-68). On August 6, 2020, the Honorable Paul G. Gardephe found Defendants to be in default^[1] and referred the Motion to the undersigned to conduct an inquest into damages. (ECF No. 81).

II. BACKGROUND

A. Factual Background

Plaintiffs allege that 53rd Street, doing business as Remi Restaurant (“Remi”), is a “luxury restaurant” that is located across from the Museum of Modern Art in New York City and has an annual revenue exceeding $6 million. (ECF No. 1 ¶¶ 12-13).

Plaintiffs allege that, by no later than April 2019, Defendants anticipated that Remi would close, but did not properly notify them under the NY WARN Act. (ECF No. 1 ¶¶ 18, 67-69). In addition, Plaintiffs allege that Defendants “regularly or occasionally failed to pay minimum wage and overtime wages” required by federal and state law, and that “Defendants stopped making regular payments of wages to their employees in or about the summer of 2019.” (Id. ¶¶ 19-20).

Some employees received checks that bounced. (Id. ¶ 20). As of December 11, 2019, Defendants were “five weeks in arrears in paying wages to all or nearly all of their employees,” and those wages remain outstanding. (Id. ¶ 21). On December 11, 2019, Delledonne cancelled all upcoming events at Remi, and on December 12, 2019, told Plaintiffs that the restaurant was closing. (Id. ¶¶ 22-23). Because most Plaintiffs received no wages from November 24, 2019 through December 12, 2019, they allege violations of federal and state minimum wage and overtime requirements. (Id. ¶ 19).

B. Procedural History

Plaintiffs commenced this action on December 20, 2019 by filing the Complaint, in which they asserted the following claims against the Defendants: (1) violations of the minimum wage and overtime provisions of the FLSA and the NYLL; (2) failure to provide adequate annual wage notices under the WTPA; and (3) failure to provide notice of closure under the NY WARN Act. (ECF No. 1).

Defendants did not respond to the Complaint or otherwise appear, and on March 25, 2020, the Clerk of Court issued certificates of default as to both Defendants. (ECF No. 61). On April 1, 2020, Plaintiffs filed the Motion. (ECF Nos. 62-68). On April 2, 2020, Judge Gardephe issued an Order to Show Cause, which scheduled a hearing on the question of why Defendants should not be found in default and held liable for the allegations in the Complaint. (ECF No. 69). Because Defendants did not appear at the hearing or respond to the Order to Show Cause, on August 6, 2020, Judge Gardephe issued an Order of Default as to 53rd Street and Delledonne, and referred the Motion to the undersigned to conduct an inquest into damages. (ECF No. 81). On August 7, 2020, the Court issued an Order that directed Plaintiffs to file proposed findings of fact and conclusions of law as to damages and attorneys' fees, and warned Defendants that if they failed to respond to the Plaintiffs' submissions or contact the Court to request a hearing, the Court would “issue a Report and Recommendation regarding damages and attorneys' fees based on the Plaintiffs' written submissions alone, without an in-court hearing.” (ECF No. 82). Defendants did not respond to Plaintiffs' submissions or otherwise contact the Court.

Plaintiffs' initial damages submission provided only the final calculations for their damages without the underlying documents supporting those calculations (ECF Nos. 62-67, 86, 86-1), which the Court found “d[id] not provide a basis on which the Court [could] establish damages with a reasonable certainty” and thus ordered Plaintiffs to submit individual declarations to supplement their damages request. (ECF No. 89). Thereafter, Plaintiffs submitted individual declarations supplying the missing information (ECF Nos. 92-121) and provided an updated summary of damages (the “Damages Summary”) (ECF No. 122-3).

III. DISCUSSION

No party has requested a hearing on the issue of damages, and Defendants have not submitted any written materials. Therefore, the Court has conducted the inquest based solely on the materials Plaintiffs submitted in support of their Motion. See Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d Cir. 2012) (“[A] district court may determine there is sufficient evidence either based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence”); Action S.A. v. Marc Rich & Co., 951 F.2d 504, 508 (2d Cir. 1991) (“Rule 55(b)(2) of the Federal Rules of Civil Procedure . . . allows but does not require the district judge to conduct a hearing.”); Perez v. 50 Food Corp., No. 17 Civ. 7837 (AT) (BCM), 2019 WL 7403983, at *3 (S.D.N.Y. Dec. 4, 2019), adopted by, 2020 WL 30344 (S.D.N.Y. Jan. 2, 2020); Fed.R.Civ.P. 55(b)(2).

A. Jurisdiction and Venue

As a threshold matter, the Court has subject matter jurisdiction over Plaintiffs' claims. They sue under a federal statute - the FLSA - that gives rise to subject matter jurisdiction under 28 U.S.C. § 1331. Pursuant to 28 U.S.C. § 1367, the Court may exercise supplemental jurisdiction over their NYLL, WTPA, and NY WARN Act claims because they arise out of the same facts and circumstances as their FLSA claims. See Perez, 2019 WL 7403983, at *5.

Personal jurisdiction is “a necessary prerequisite to entry of a default judgment.” Reilly v. Plot Commerce, No. 15 Civ. 05118 (PAE) (BCM), 2016 WL 6837895, at *2 (S.D.N.Y. Oct. 31, 2016), adopted by 2016 WL 5107058 (E.D.N.Y. Sept. 19, 2016) (quoting Sheldon v. Plot Commerce, No. 15 Civ. 5885 (CBA) (CLP), 2016 WL 5107072, at *6 (E.D.N.Y. Aug. 26, 2016)). The Court has personal jurisdiction over 53rd Street because it is a New York limited liability company with its principal place of business in New York City, and over Delledonne because he is a resident of New York. (ECF No. 1 ¶¶ 7-9).

Venue is proper because 53rd Street is a New York domestic business corporation that maintains its principal offices in this District (ECF No. 1 ¶ 4), see 28 U.S.C. § 1391(b)(1), and because a substantial part of the events or omissions giving rise to the claims occurred in this District. See 28 U.S.C. § 1391(b)(2).

B. Statute of Limitations

Under the NYLL, the statute of limitations is six years. See NYLL ¶ 198(3). Under the FLSA, the statute of limitations is two years, or, if the violations were “willful,” three years. See 29 U.S.C. § 255(a); see also McLaughlin v. Richland Shoe Co., 486 U.S. 128, 129 (1988). A FLSA violation is willful if “the employer knew or showed reckless disregard for the matter of whether its conduct was prohibited.” Id. at 133. Although plaintiffs may not recover under both the FLSA and the NYLL for the same injury, courts allow plaintiffs to recover under the statute that provides the greatest relief. Ni v. Bat-Yam Food Servs. Inc., No. 13 Civ. 7274 (ALC) (JCF), 2016 WL 369681, at *1 (S.D.N.Y. Jan. 27, 2016).

Here, multiple Plaintiffs incurred damages outside of the FLSA's shorter statute of limitations but within the NYLL's six-year statute of limitations. (See ECF Nos. 97 (D. Urgiles), 105 (A. Fonseca), 118 (M. Iturbide Orozco)). Because the NYLL provides for equal or greater relief relative to the FLSA, the Court recommends that Plaintiffs be awarded damages under the NYLL. See Schalaudek v. Chateau 20th St. LLC, No. 16 Civ. 11 (WHP) (JLC), 2017 WL 729544, at *5 (S.D.N.Y. Feb. 24, 2017).

C. Legal Standards

1. Default judgment

A party seeking a default judgment must follow the two-step procedure set forth in Federal Rule of Civil Procedure 55. See Bricklayers & Allied Craftworkers Local 2, Albany, N.Y Pension...