Zhang v. Zhang

MEIDE ZHANG, et al., Plaintiffs, v. LIANG ZHANG, Defendant.

16 Civ. 4013 (LGS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

February 14, 2019

OPINION AND ORDER

LORNA G. SCHOFIELD, District Judge:

After a two-day retrial, a jury returned a verdict in favor of Defendant Liang Zhang ("Defendant"), finding that he was not Plaintiffs Meide Zhang and Zhongliang Qiu's employer under the Fair Labor Standards Act ("FLSA") and New York Labor Law ("NYLL"). Although Plaintiffs did not move for judgment as a matter of law under Federal Rule of Civil Procedure 50(a), Plaintiffs now move for judgment as a matter of law pursuant to Federal Rule of Civil Procedure 50(b) or, in the alternative, a new trial pursuant to Federal Rule of Civil Procedure 59(a)(1)(A). For the following reasons, both motions are denied.

I. BACKGROUND

Familiarity with the facts and circumstances of this case is assumed. A brief summary of the relevant procedural history follows. Plaintiffs commenced this action against Defendants Liang Zhang, Ru Qiu Li and Sunshine USA, Inc. ("Sunshine USA") on May 29, 2016, alleging violations of FLSA and NYLL.

On February 1, 2018, a jury rendered a verdict in favor of Plaintiffs on both the FLSA and NYLL claims in the first trial in this case ("Trial 1") against Defendants Liang Zhang and Sunshine USA, finding that Liang Zhang was Plaintiffs' employer. After the jury was discharged, a binder of unadmitted deposition excerpts was discovered in the jury room, which Plaintiffs' Counsel had given the Courtroom Deputy to provide to the jury for their deliberations. The jury had highlighted and/or underlined some testimony, and had written notes in the transcript margins pertaining to whether Defendant was Plaintiffs' employer. On April 17, 2018, a new trial was ordered on the sole issue of whether Defendant was Plaintiffs' employer under FLSA and NYLL.

On July 18, 2018, a Final Pretrial Conference was held for the retrial where, among other things, Plaintiffs' motions in limine to exclude Yuelong Liu, an employee at the restaurant where Plaintiffs had worked, as a trial witness was denied, and Defendant's motion in limine to exclude the expert testimony of Stephanie Liu, a Chinese language interpreter, was granted. Plaintiffs' motion for reconsideration was subsequently denied. On July 25, 2018, evidence of payments to Plaintiffs under aliases was excluded.

On July 25, 2018, a jury trial commenced on the question of whether Defendant was Plaintiffs' employer under FLSA and NYLL ("Trial 2"). On July 26, 2018, the jury returned a verdict for Defendant, finding that Plaintiffs had not shown that Defendant was their employer.

II. DISCUSSION

A. Judgment as a Matter of Law -- Rule 50(b)

Plaintiffs fail to show that the jury's verdict was wholly without legal support, as required for a judgment as a matter of law when the motion is made for the first time after the jury's verdict. A motion for judgment as a matter of law under Rule 50(a) must be made before the case is submitted to the jury. Fed. R. Civ. P. 50(a)(2). After the jury returns a verdict, the movant may file a "renewed motion" for judgment as a matter of law. Fed. R. Civ. P. 50(b). "The law is pellucid that a party's failure to move under Rule 50(a) has consequences." ING Glob. v. United Parcel Serv. Oasis Supply Corp., 757 F.3d 92, 97 (2d Cir. 2014). For a partywho fails to move for judgment as a matter of law under Rule 50(a) but "later moves under Rule 50(b), the standard for granting judgment as a matter of law is elevated, and the motion may not properly be granted by the district court, or upheld on appeal, except to prevent manifest injustice." Id. "Manifest injustice exists where a jury's verdict is wholly without legal support." Id.; accord Greenaway v. County of Nassau, 327 F. Supp. 3d 552, 562 (E.D.N.Y. 2018).

"When evaluating a motion under Rule 50, courts are required to consider the evidence in the light most favorable to the party against whom the motion was made and to give that party the benefit of all reasonable inferences that the jury might have drawn in [its] favor from the evidence." ING Glob., 757 F.3d at 97 (alteration in original) (internal quotation marks omitted); accord LifeTree Trading Pte., Ltd. v. Washakie Renewable Energy, LLC, No. 14 Civ. 9075, 2018 WL 2192186, at *2 (S.D.N.Y. May 14, 2018). "The court cannot assess the weight of conflicting evidence, pass on the credibility of witnesses, or substitute its judgment for that of the jury." Wiercinski v. Mangia 57, Inc., 787 F.3d 106, 113 (2d Cir. 2015) (internal quotation marks omitted).

The jury's verdict finding that Defendant was not Plaintiffs' employer is not "wholly without legal support." ING Glob., 757 F.3d at 97. The jury was instructed¹:

[T]he liability of an individual defendant depends on whether that individual possessed the power to control the plaintiffs' work. The focus is on the economic reality of the situation rather than technical concepts or job titles.

Several facts may be relevant in determining whether a defendant is an employer. No single fact is controlling, and you must make your decision based on the totality of the circumstances. You may consider whether the defendant had[] [t]he power to hire and fire the plaintiff; had the power to supervise and control the plaintiffs' work schedules or the power to supervise or control theplaintiffs' conditions of employment; had the power to determine the plaintiffs' rate of pay and method of payment; and had the power to maintain employment records.

The factors I have just listed are not exhaustive. You may also consider any other factors that you think are relevant to determining whether the defendant had the power to control the means and manner of the plaintiffs' employment.

You may also consider whether the defendant had operational control of the company that employed the plaintiff, possessed an ownership interest in the company or controlled significant functions of the business. However, being an owner or officer of the company is not enough, standing alone, to make the defendant an employer; he must also have some involvement in the way the company interacts with employees, such as workplace conditions and operations, personnel or compensation.

A defendant can be an employer under the law even if his or her control over the employee is restricted, indirect or exercised only occasionally. The law does not require an individual to have been personally complicit in any wage violations.

July 26, 2018, Transcript 19:25-21:7.

The evidence at trial was sufficient for a reasonable jury to conclude that Defendant was not Plaintiffs' employer. For example, Defendant testified that he was not involved in the day-to-day operations of the restaurant and did not interact with employees on a regular basis. Herman Tang, the manager, testified that he had the power to hire, fire and control the pay of the restaurant employees, in addition to supervising employees on a day-to-day basis. Yuelong Liu testified that Defendant did not have anything to do with his day-to-day work at the restaurant. Because the jury's verdict was not wholly without legal support, the motion for judgment as a matter of law is denied. See, e.g., RBC Aircraft Prod., Inc. v. Precise Machining & Mfg., LLC, 630 F. App'x 11, 13 (2d Cir. 2015) (summary order) (a jury's verdict is not wholly without legal support where "[a]t least two pieces of evidence provide some support for the jury verdict") (emphasis in original).

Plaintiffs' contention that the evidence was legally sufficient to find that Defendant was Plaintiffs' employer misses the mark; the inquiry is whether there was evidence to support the jury's conclusion that Defendant was not Plaintiffs' employer.

Plaintiffs appear to argue that they will suffer "manifest injustice" unless they are permitted to collect against Defendant as the president of Sunshine USA, because the judgement against Sunshine USA from the Trial 1 may be uncollectable. This argument misunderstands the nature of a Rule 50 judgment as a matter of law. The issue is whether the jury's verdict is so wholly without legal support that enforcing it would result in manifest injustice. See ING Glob., 757 F.3d at 97. The question is not whether Plaintiffs can fashion some other equitable argument of injustice to overturn the jury's verdict.

B. New Trial -- Rule 59(a)

Plaintiffs fail to show that the weight of the evidence, conduct by counsel or evidentiary rulings warrant a new trial.

1. Rule 59(a)

Under Rule 59(a), a court may grant a new trial "for any reason for which a new trial has heretofore been granted in an action at law in federal court." Fed. R. Civ. P. 59(a)(1). "A trial court should not grant a motion for a new trial unless it is 'convinced that the jury . . . reached a seriously erroneous result or that the verdict is a miscarriage of justice.'" Ali v. Kipp, 891 F.3d 59, 64 (2d Cir. 2018) (alteration in original) (quoting Amato v. City of Saratoga Springs, N.Y., 170 F.3d 311, 314 (2d Cir. 1999)); accord LifeTree Trading Pte., Ltd., 2018 WL 2192186, at *2. A new trial may be granted if (1) "'the verdict is against the weight of the evidence,'" Santa Maria v. Metro-N. Commuter R.R., 81 F.3d 265, 273 (2d Cir. 1996) (quoting Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251 (1940)); accord Duarte v. St. Barnabas Hosp., 341 F. Supp.3d 306, 318 (S.D.N.Y. 2018); (2) misconduct by counsel so tainted the verdict as to warrant a new trial, Crockett v. City of New York, 720 F. App'x 85, 86-87 (2d Cir. 2018) (summary order); Tesser v. Bd. of Educ., 370 F.3d 314, 321 (2d Cir. 2004); or (3) there were substantial errors in the admission or exclusion of evidence, see O & G Indus., Inc. v. Nat'l R.R. Passenger Corp., 537 F.3d 153, 166 (2d Cir. 2008); accord Jackson v. Tellado, 295 F. Supp. 3d 164, 181 (E.D.N.Y. 2018).

"On new trial motions, the trial judge may weigh the evidence and the credibility of witnesses and need not view the...