Zhi Li v. SMJ Constr.

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ZHI LI and LUXIU SUN, individually and on behalf of all others similarly situated, Plaintiffs, v. SMJ CONSTRUCTION INC., STEVE KANG, JANE DOE and JOHN DOE #1-10, Defendants.

No. 19 Civ. 5309 (PGG) (JW)

United States District Court, S.D. New York

September 26, 2022

ORDER

PAUL G. GARDEPHE, UNITED STATES DISTRICT JUDGE

Plaintiffs Zhi Li and Luxiu Sun bring this Fair Labor Standards Act (“FLSA”), New York Labor Law (“NYLL”), and New Jersey Wage and Hour Law (“NJWHL”) action against Defendants SMJ Construction Inc. (“SMJ”) and Steve Kang. (Cmplt (Dkt. No 5)) Plaintiffs seek to recover: (1) unpaid overtime compensation under the FLSA, the NYLL and the NJWHL; (2) spread-of-hours compensation under the NYLL; (3) unlawful deductions under the NYLL; (4) statutory damages for violations of the wage notice requirement under the NYLL; and (5) statutory damages for violations of the wage statement requirement under the NYLL.

On December 10, 2020, this Court entered an Order of Default against Defendants (Dkt. No. 28) and referred this case to Magistrate Judge Kevin Nathaniel Fox for an inquest on damages. (Dkt. No. 29) Judge Fox issued a Report and Recommendation (“R&R”) in which he recommends that Plaintiff Li be awarded $48,630 in damages, Plaintiff Sun be awarded $1,212.84 in damages, and Plaintiffs be awarded $3,900 in attorney's fees. (R&R (Dkt. No. 36) at 13) For the reasons stated below, the R&R will be adopted in part and modified in part.

BACKGROUND

I. FACTS^[1]

SMJ is a New Jersey construction company that performs work in both New Jersey and New York. (See Cmplt. (Dkt. No. 5) ¶ 20) From on or about January 1, 2017 to December 19 2018, Plaintiff Li worked for SMJ as a construction worker, seven days per week. (Id. ¶¶ 23, 24) During that period, Li worked at SMJ for approximately ten hours per day, not including a one-hour lunch break. (See Li Aff. (Dkt. No. 31-3) ¶¶ 10, 15, 16) Li was paid a flat rate during the time he worked for SMJ, regardless of how many hours he worked in a given day. SMJ compensated him $130 per day from January 1, 2017 to July 5, 2017, $150 per day from July 6, 2017 to January 15, 2018, and $180 per day from January 16, 2018 to December 19, 2018. (Id. ¶¶ 11-13) In March 2018 and November 2018, SMJ provided paychecks to Li that were returned for insufficient funds. He was never compensated for those pay periods. (Id. ¶ 23)

Plaintiff Sun worked for SMJ five days per week from on or about August 27, 2018 to October 28, 2018. (See Sun Aff. (Dkt No. 31-8) ¶ 9) During that period, Sun worked approximately nine-and-one-half hours per day, not including a one-hour lunch break. (Id. ¶¶ 12-13) Sun was paid a flat rate of $170 per day during the time he worked for SMJ, regardless of how many hours he worked. (Id. ¶ 10) The check SMJ provided to Sun for the pay period between October 8 and October 14, 2018, was returned for insufficient funds. Sun requested another check from Defendant Kang for this pay period, but Sun was never compensated for that workweek. (Id. ¶¶ 16-17)

Plaintiff Li seeks unpaid overtime wages under the FLSA and NYLL in the amount of $60,787.50; unpaid spread-of-hours compensation under the NYLL in the amount of $7,161; liquidated damages under the FLSA and NYLL in the amounts of $60,787.50 and $67,948.50, respectively; statutory damages under the NYLL in the amount of $10,000; and $1,670 for the bounced checks described above. (Proposed Findings of Fact and Conclusions of Law (“Proposed Findings”), Ex. 12 (Dkt. No. 31-12))

Plaintiff Sun seeks unpaid overtime wages under the FLSA in the amount of $1,338.75; unpaid spread-of-hours compensation under the NYLL in the amount of $468; liquidated damages under the FLSA and NYLL in the amount of $1,806.75; statutory damages under the NYLL in the amount of $8,150; and $1,298 for the bounced check. (Id., Ex. 13 (Dkt. No. 31-13))

Finally, Plaintiffs seek pre-judgment interest at a rate of “nine percent per annum simple interest” (Proposed Findings (Dkt. No. 31) at 9), and $6,937.50 in attorney's fees. (Id., Ex. 14 (Dkt. No. 31-14))

II. PROCEDURAL HISTORY

The Complaint was filed on June 4, 2019. (Dkt. Nos. 1, 5) Defendants were served, but did not respond to the Complaint. Plaintiffs obtained Clerk's certificates of default (Dkt. Nos. 12, 19), and on October 23, 2020, this Court issued an order requiring Defendants to show cause why a default judgment should not be entered against them. (See Order to Show Cause (Dkt. No. 25)) Although Defendants were served with the October 23, 2020 order (See Dkt. Nos. 26, 27), Defendants did not respond or appear, and this Court issued an Order of Default on December 10, 2020. (Dkt. No. 28)

On December 10, 2020, this case was referred to Judge Fox for an inquest on damages (see Am. Order of Reference (Dkt. No. 29)), and on December 11, 2020, Plaintiffs were directed to file Proposed Findings of Fact and Conclusions of Law. (See Dkt. No. 30) On January 11, 2021, Plaintiffs submitted Proposed Findings of Fact and Conclusions of Law. (See Dkt. No. 31) Plaintiffs also filed affidavits of service indicating that the proposed findings had been served on Defendants. (See Affs. of Service (Dkt. Nos. 34-35)

On August 25, 2021, Judge Fox issued a 14-page R&R, in which he recommends that Plaintiff Li be awarded $48,630 in damages, Plaintiff Sun be awarded $1,212.84 in damages, and Plaintiffs be awarded $3,900 in attorney's fees. (R&R (Dkt. No. 36) at 13) The R&R notifies the parties that they have fourteen days to file any objections pursuant to 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b). (Id.) The R&R further states: “Failure to file objections within fourteen (14) days will result in a waiver of objections and will preclude appellate review.” (Id. at 14 (emphasis in original)) Neither side has filed objections to the R&R.

DISCUSSION

I. LEGAL STANDARDS

A. Review of a Magistrate Judge's Report & Recommendation

In reviewing a report and recommendation, a district court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1)(C). Where a timely objection has been made to the magistrate judge's recommendations, the district court “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id.

Where, as here, no objections are filed to a magistrate judge's R&R - despite clear warning that a failure to file objections will result in a waiver of judicial review - judicial review has been waived. See Thomas v. Arn, 474 U.S. 140, 147-48 (1985); see also Mario v. P & C Food Markets, Inc., 313 F.3d 758, 766 (2d Cir. 2002) (“Where parties receive clear notice of the consequences, failure timely to object to a magistrate's report and recommendation operates as a waiver of further judicial review of the magistrate's decision.” (citing Small v. Sec'y of Health and Human Servs., 892 F.2d 15, 16 (2d Cir. 1989) (per curiam))); see also Spence v. Superintendent, Great Meadow Correctional Facility, 219 F.3d 162, 174 (2d Cir. 2000) (“Failure to timely object to a report generally waives any further judicial review of the findings contained in the report.”).

II. ANALYSIS

Although the parties have waived their right to judicial review, this Court has nonetheless reviewed Judge Fox's R&R for clear error. As set forth below, this Court adopts Judge Fox's R&R as to Plaintiffs' damages claims, but not as to an attorney's fee award.

A. NYLL Liability

In his R&R, Judge Fox finds that “neither Li nor Sun stated that they worked for the defendants in New York, and no evidence exists in the record that the plaintiffs were employed in New York.” (R&R (Dkt. No. 36) at 10) Accordingly, Judge Fox concludes that “no basis exists to calculate and award damages under New York law.” (Id.) For the reasons stated below, this Court agrees, and Plaintiffs' NYLL claims for damages will be denied.

Although the “NYLL is silent on its extraterritorial application, courts in this district have held that it does not apply extraterritorially.” Warman v. Am. Nat'l Standards Inst., No. 15-CV-5486 (RA), 2016 WL 3676681, at *2 (S.D.N.Y. July 6, 2016); see also O'Neill v. Mermaid Touring Inc., 968 F.Supp.2d 572, 578 (S.D.N.Y. 2013) (“Nothing in the [NYLL] suggests that the legislators intended to give persons who were outside New York the right to come to New York to sue their employers.” (internal citation omitted)). Accordingly, “the NYLL does not apply to work performed outside of New York, even where all the parties are New York employees.” Drozd v. U.S.A. Concepts of New York Corp., 2015 WL 13733713, at *11 (E.D.N.Y. Apr. 23, 2015) (citing O'Neill, 968 F.Supp.2d at 578-79).

Here Plaintiffs have not proffered facts sufficient to provide a basis for a damages award under the NYLL. The Complaint alleges that “Defendant SMJ is a construction company established in the state of New Jersey, serving New York, [the] New York Metropolitan area and New Jersey with a wide range of interior work.” (Cmplt. (Dkt. No. 5) ¶ 20; see id., Ex. A (“[SMJ] ha[s] served in the New York, New York Metropolitan area, and New Jersey for more than a decade. . . .”)) While the Complaint further alleges that Plaintiffs' “major work locations were in New York, New York” (Id. ¶¶ 23, 27), Plaintiffs have not provided dates or specific time periods during which they worked in New York. And while Plaintiff Li states that he “occasionally br[ought] materials from across the states when instructed,” and that he worked on “more than ten construction sites . . . for the clinic called City MD” (Li Aff. (Dkt. No. 31-3) ¶¶ 6, 9), Li has not provided any dates or time periods during which he performed work in New York. ...