Owusu v. Corona Tire Shop, Inc. et al
Filing
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MEMORANDUM & ORDER granting Defendants' 55 motions to file an amended responsive pleading and for summary judgment. The Clerk of Court is directed to close the case. So Ordered by Judge Nicholas G. Garaufis on 4/15/2013. (fwd'd for jgm) (Lee, Tiffeny)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-------------------------------------------------------------)(
JAMES OWUSU,
NOT FOR PUBLICATION
Plaintiff,
-against-
MEMORANDUM & ORDER
09-CV-3744 (NGG) (JO)
CORONA TIRE SHOP, INC., MOHAMMAD
NAWAZ, and MOHAMED TAJ,
Defendants.
-------------------------------------------------------------)(
NICHOLAS G. GARAUFIS, United States District Judge.
Plaintiff James Owusu brought this case on August 27, 2009, alleging that his employer
Corona Tire Shop, Inc. ("Corona") and the shop's owners, Mohammad Nawaz and Mohamed
Taj, violated the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. ("FLSA") and New York
Labor Law by failing to pay him overtime. (See Compl. (Dkt. 1); Am. Compl. (Dkt. 36).)
Defendants have moved pursuant to Federal Rule of Civil Procedure 15 to amend their Answer,
and pursuant to Rule 56 for summary judgment. (See Def. Second Mot. for Summ. J. and to
Amend (Dkt. 55) ("Def. Mot.").) Plaintiff opposes both of these motions. (See Pl. Opp'n (Dkt.
56).) For the reasons explained below, Defendants' motions are GRANTED.
I.
BACKGROUND
Both sides submitted statements of material fact pursuant to Local Civil Rule 56.1,
including three undisputed facts: (1) Corona is a "small retail shop" and does less than $200,000
in sales per year; (2) Plaintiff was employed by Corona from November 1997 until December
2008 primarily as an automobile tire changer and also did some automobile mechanic work; and
(3) Plaintiff "had some use of [D]efendant's credit card machine for customers to pay for
merchandise purchased at the shop, and services rendered at the shop." (See Def. 56.1 St. (Dkt.
55); Pl. 56.1 St. (Dkt. 57).) Plaintiff claims that he was paid a fixed weekly wage and, despite
working over forty hours per week on several occasions, he was not paid overtime wages. (Am.
Compl.
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13-17.)
After some discovery, Defendants moved for summary judgment on the ground that
Corona does not have annual gross receipts of at least $500,000 and therefore is not covered by
the FLSA. (See Def. Mot. for Summ. J. (Dkt. 25).) Plaintiff opposed Defendants' motion and
cross-moved for summary judgment. (See Pl. Opp'n to Summ. J. (Dkt. 30).) He failed to submit
evidence to counter Defendants' assertion concerning Corona's annual gross receipts, but argued
that he was individually covered under the FLSA because he "engaged in [interstate] commerce"
within the meaning of the statute. (See Def. Mot. for Summ. J.; see also First Summ. J. Mem. &
Order (Dkt. 32) at 2-4.) To support his contention, Plaintiff cited only deposition testimony of
Defendant Nawaz that Plaintiff would occasionally use the credit card machine, and an opinion
letter from the Department of Labor explaining that individuals who regularly engage in credit
card transactions are individually covered under the FLSA. (See Pl. Opp'n to Summ. J.)
The court found serious deficiencies in the parties' submissions, but concluded based on
the submissions that "there is no genuine issue of material fact with regard to Corona's gross
receipts; the undisputed evidence establishes that it did not engage in business greater than
$500,000 as required for 'enterprise coverage' under FLSA." (First Summ. J. Mem. & Order at
3-4.) The court also concluded that there was a genuine issue of material fact whether Plaintiff
was a covered individual under the FLSA. (Id.) Therefore, the court denied Defendants' motion
for summary judgment, and denied Plaintiffs cross-motion for summary judgment. (See id.)
After the court's Memorandum and Order, the parties unsuccessfully attempted
mediation. (See Rep. of Med. (Dkt. 33); Dec. 14, 2011, Rep. of Med. Unsettled.) Thereafter,
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Plaintiff amended his Complaint. (See Am. Comp!.) Defendants filed an Amended Answer,
then a Second Amended Answer. (See Dkts. 41-42.) After additional discovery, Magistrate
Judge James Orenstein certified the action ready for trial without prejudice to any anticipated
motion for dispositive relief. (Aug. 7, 2012, Order (Dkt. 51).) The court held a conference with
the parties on January 14, 2013, wherein Defendants requested leave to move to amend their
answer and for summary judgment with respect to the applicability of the FLSA. (See Jan. 14,
2013, Minute Entry.) The court granted leave and set a briefing schedule. (See id.) The motions
are now before the court.
II.
MOTION TO AMEND DEFENDANTS' ANSWER TO THE
AMENDED COMPLAINT
Rule l 5(a) of the Federal Rules of Civil Procedure provides that leave to amend a
pleading "shall be freely given when justice so requires." Fed. R. Civ. P. l 5(a)(2). The decision
whether to grant or deny leave to amend is within the sound discretion of the district court. See
Foman v. Davis, 371 U.S. 178, 182 (1962). Leave should be given "[i]n the absence of any
apparent or declared reason-such as undue delay, bad faith or dilatory motive on the part of the
movant, repeated failure to cure deficiencies by amendments previously allowed, undue
prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the
amendment." Id.
Defendants seek to amend their Second Amended Answer to the Amended Complaint to
correct "inadvertent errors." (Def. Mot. at 8.) The "inadvertent errors" at issue are Defendants'
failure to deny that: ( 1) Plaintiff worked in excess of 40 hours per week and yet Defendants
willfully failed to pay him overtime (Am. Comp!. ii 16); (2) Defendants are employers engaged
in interstate commerce within the meaning of the FLSA (id. ii 19); (3) Plaintiff was employed
within the meaning of New York Labor Law§§ 2 and 651(id.ii28); and (4) Defendants'
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violations of New York Labor Law have caused Plaintiff irreparable harm (id.
iJ 32). Defendant
argues that these amendments should be allowed because they are consistent with the positions
they have taken throughout the lawsuit, and the court previously allowed Plaintiff to file an
Amended Complaint almost two years late. (Def. Reply (Dkt. 60) at 8-9.) Plaintiff opposes
Defendants' motion, arguing that he relied upon Defendants' admissions in formulating his
discovery requests, and that he would be prejudiced by the amendment at this point in the
lawsuit. (See Pl. Opp'n at 1-5.)
Although Defendants' failure to file a responsive pleading that accurately reflects their
litigation positions is inexplicable, the court agrees that Defendants' proposed amendments are
indeed in line with their positions over the course of the lawsuit. As noted by both the court and
Judge Orenstein in various orders, the delays and deficiencies that have characterized this lawsuit
are due to irresponsible lav;yering from both sides, not just Defendants. (See, e.g., Mar. 8, 2012,
Minute Entry (Dkt. 39); Tr. of Jan. 11, 2013, Conf. (Dkt. 59) at 2: 18-3:08.) Therefore,
Defendants' motion to amend is granted. Their responsive pleading is deemed amended as
reflected in their proposed Amended Answer. (See Def. Mot. at 8.)
III.
MOTION FOR SUMMARY JUDGMENT
A.
Standard
Under Federal Rule of Civil Procedure 56(a), summary judgment is proper if"the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter oflaw." Fed. R. Civ. P. 56(a). The burden to make this showing rests
upon the party moving for summary judgment. See Adickes v. S.H. Kress & Co., 398 U.S. 144,
157 (1970). "[T]he court must draw all reasonable inferences in favor of the nonmoving party."
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000).
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A fact is material if its existence or non-existence "might affect the outcome of the suit
under the governing law," and an issue of fact is genuine if "the evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobbv,
Inc., 477 U.S. 242, 248 (1986). A genuine issue is created by "specific facts" grounded in
testimony or other admissible evidence, not by "mere allegations or denials" of the adverse
party's pleadings, id., "by the presentation of assertions that are conclusory," Patterson v. Cnty.
of Onieda, N. Y., 375 F.3d 206, 219 (2d Cir. 2004), or "by conjecture[] or speculation" from the
non-movant, Kulak v. City of New York, 88 F.3d 63, 71 (2d Cir. 1996).
Summary judgment must be granted "[w]hen no rational jury could find in favor ofthe
nonmoving party because the evidence to support [her] case is so slight." Gallo v. Prudential
Res. Servs., L.P., 22 F.3d 1219, 1224 (2d Cir. 1994). In particular, it must be granted "against a
party who fails to make a showing sufficient to establish the existence of an element essential to
that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v.
Catrett, 4 77 U.S. 317, 322 (1986). In such a situation, "there can be 'no genuine issue as to any
material fact,' since a complete failure of proof concerning an essential element of the
nonmoving party's case necessarily renders all other facts immaterial." Id. at 323.
B.
Analysis
The court has previously ruled that there is no material issue of fact that Corona is not a
covered entity under the FLSA. (First Summ. J. Mem. & Order at 3-4.) Defendants now argue
that the court must grant their motion for summary judgment because Plaintiff is not a covered
individual under the FLSA. (See Def. Mot.)
In cases brought under the FLSA alleging that an employee is individually covered, the
employee bears the burden of establishing his individual coverage. Bockemeier v. Fourth
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Universalist Soc'y in the City of New York, 86 F. Supp. 2d 280, 285 (S.D.N.Y. 2000). An
individual is covered by the FLSA if he has either "engaged in commerce or in the production of
goods for commerce." 29 U.S.C. § 207(a)(l ); see also Xelo v. Mavros, No. 03-CV-2665 (NG),
2005 WL 2385724, at *4 (E.D.N.Y. Sept. 29, 2005). An employee engages in commerce by
"performing work involving or related to the movement of persons or things (whether tangibles
or intangibles, and including information and intelligence) among the several States or between
any State and any place outside thereof." 29 C.F.R. § 779.103. Such activities must be a
"substantial part" of the employee's work. Boekemeier, 86 F. Supp. 2d at 287. The test "is not
whether the employee's activities affect or indirectly relate to interstate commerce but whether
they are actually in or so closely related to the movement of the commerce as to be a part of it."
Id. (citing McLeod v. Threlkeld, 318 U.S. 491, 497 (1942)).
According to the undisputed facts, Plaintiff was employed as an automobile tire changer
and also did some automobile mechanical work. (Pl. 56.1
St.~
2.) He also had "some use" of
defendant's credit card machine for customers to pay for merchandise purchased at the shop, and
services rendered at the shop.
(Id.~
3.) The only other evidence of Plaintiffs activities comes
from the deposition testimony of Defendants, his employers. According to Defendant Taj,
Plaintiff "used the credit card machine on [sic] few times a week and it did not constitute a
substantial part of his employment." (Aff. of Mohammad Taj. in Supp. of Mot. for Summ. J.
(Dkt. 55)
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5.) According to Defendant Nawaz:
Question:
Nawaz:
Question:
Nawaz:
Question:
Nawaz:
Do you know how often [Plaintiff] used the credit card machine?
We don't have a lot of credit card[s]. Just use one or two a day. That's it.
Sometimes none.
So, it's possible thaty eah. [Plaintiff] can use it.
Is it possible that [Plaintiff] used the credit card machine once or twice a
day?
Yeah.
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(Dep. of Mohammad Nawaz (Ex. 1 to Aff. in Supp. of Pl. Opp'n) (Dkt. 58-1) at 7:15-8:2.)
These facts, even if construed in the light most favorable to Plaintiff, do not show that Plaintiff
was an employee engaged in interstate commerce.
Plaintiff relies on an Opinion Letter from the Department of Labor regarding individual
coverage under the FLSA, which provides that covered employees include "those who regularly
handle interstate mail and telephone calls, engage in banking or credit card transactions, or
receive or handle goods or materials from or destined for out-of-state sources." Dep 't of Labor,
March 5, 1999, Opinion Letter (1999 WL 1002373). However, it is well-settled that to be
considered sufficient activity to warrant individual coverage, the employee's work involving
interstate commerce must be a "substantial part" of the employee's work. Boekemeier, 86 F.
Supp. 2d at 287; see also Lock v. St. Augustine's Episcopal Church, 690 F. Supp. 2d 77, 90
(E.D.N. Y. 2010). Evidence that an employee sometimes engaged in an activity that can be
considered interstate commerce, such as bank transactions or mail delivery. is not sufficient to
show that the employee was "in the channels of commerce" rather than merely affecting
commerce. See Locke, 690 F. Supp. 2d at 90 (regularly delivering mail to the post office was
not sufficient to establish a plaintiffs individual coverage under the FLSA); Xelo, 2005 WL
2385724, at *4 (making infrequent deposits at banks was not sufficient for the court to consider
plaintiff "engaged in commerce").
In order to defeat summary judgment, Plaintiff must show a material dispute of fact as to
whether he was individually covered by the FLSA. See Monterossa v. Martinez Rest. Corp., No.
11-CV-3689 (JMF), 2012 WL 3890212, at *3 (S.D.N.Y. Sept. 7, 2012). Plaintiff insists that
there is a dispute of material fact as to whether his use of the credit card machine constituted a
substantial part of his employment. (Pl. Opp'n at 7-8.) However, there is no such dispute: the
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evidence, taken in the light most favorable to Plaintiff, shows that Plaintiff used the credit card at
most once or twice a day, and sometimes not at all. 1 Plaintiff has not put forth any evidence
indicating that he used the credit card machine more frequently than that. As discussed above,
these activities are not sufficient to put Plaintiff within the ambit of the FLSA' s coverage. 2
Accordingly, Defendants' motion for summary judgment is granted as to Plaintiffs claims under
the FLSA. Cf. Locke, 690 F. Supp. 2d at 91 (granting summary judgment where a plaintiff
failed to show the essential elements of individual coverage for which he had the burden of
proof).
Because the federal claims in the case have been dismissed, the court declines to exercise
supplemental jurisdiction over Plaintiffs New York Labor Law claims. See N.Y. Mercantile
Exch., Inc. v. IntercontinentalExchange. Inc., 497 F.3d 109, 119 (2d Cir. 2007) ("In general,
where the federal claims are dismissed before trial, the state claims should be dismissed as
well.").
Plaintiff attempts to create a factual dispute between Defendant Taj 's statement that Plaintiff used the credit
card machine "a few times a week" and Nawaz's deposition testimony that Plaintiff used the machine at most once
or twice a day. (Pl. Opp'n at 6.) These two statements are not inconsistent by any means; both support the notion
that Plaintiff used the credit card machine at most once or twice a day. Plaintiff also argues that the evidence before
the court in this second motion for summary judgment is "nearly identical" to the evidence in the parties' previous
cross-motions for summary judgment, and that the court must necessarily draw the conclusion that there remains a
material dispute of fact. (lil_) In the cross-motions, however, the court was without statements of material facts
from the parties, and the only evidence before the court on Plaintiffs use of the credit card machine was Nawaz's
deposition testimony. (See First Summ. J. Mem. & Order at 3-4.) Here, the body of evidence is only slightly larger,
but is enough to satisfy the court that there is no genuine dispute of fact that Plaintiff was not individually covered
by the FLSA.
Plaintiff did not argue that any other aspect of his employment, or any of his other duties, would have put
him within the channels of commerce. Therefore, the court's conclusion is based solely on Plaintiffs use of the
credit card machine.
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IV.
CONCLUSION
Defendants' motions to file an amended responsive pleading and for summary judgment
are GRANTED. The Clerk of the Court is directed to close the case.
SO ORDERED.
s/Nicholas G. Garaufis
i'JICHOLAS G. GARAUFI§ •
United States District Judge
Dated: Brooklyn, New York
April I~, 2013
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