Paguirigan v. Prompt Nursing Employment Agency LLC et al
Filing
95
OPINION & ORDER: For the reasons set forth herein, the Clerk of Court is directed to enter partial summary judgment as follows: 1. Defendants' summary judgment motion regarding plaintiff's breach of contract claim is granted as to Landa and Philipson. Except for Prompt Nursing's counterclaim for breach of contract against the named plaintiff, which remains undecided, the rest of defendants' summary judgment motion is denied. 2. Plaintiffs' summary judgment motion a s to liability on the breach of contract claim is granted against Prompt Nursing and Rubenstein. Damages to the plaintiff and the class caused by defendants' breach of contract are to be determined at a later time. 3. Plaintiffs' requeste d declaratory and injunctive relief is granted. The Clerk of Court is directed to enter judgment declaring the liquidated damages provision in all plaintiffs' contracts, and the confessions of judgment, to be unenforceable and to enter an inj unction permanently enjoining defendants from attempting or threatening to enforce either. 4. Plaintiffs' summary judgment motion as to liability on the TVPA claims is granted against all defendants. Damages to the plaintiff and the class unde r the TVPA are to be determined. The class is also entitled to reasonable attorneys' fees, which are to be determined at a later date. The parties are directed to appear for a status conference on 11/4/2019, at 2:00 PM to address how damages are to be determined and to address Prompt Nursing's counterclaim for breach of contract as to the named plaintiff. By 10/17/2019 the parties should submit written proposals to the court. Ordered by Judge Nina Gershon on 9/23/2019. (Barrett, C)
FILED
IN CLERK'S OFFICE
U.S. DISTRICT COURT E.D.N.Y.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----x
ROSE ANN PAGUIRIGAN, individually and on
behalf of all others similarly situated,
Plaintiff,
- against-
*
SEP 24 2019
*
BROOKLYN OFFICE
OPINION & ORDER
17-cv-1302 (NG) (JO)
PROMPT NURSING EMPLOYMENT AGENCY
LLC d/b/a/ SENTOSA SERVICES,
SENTOSACARE LLC, SENTOSA NURSING
RECRUITMENT AGENCY, BENJAMIN LANDA,
BENT PHILIPSON, BERISH RUBENSTEIN a/k/a
BARRY RUBENSTEIN, FRANCIS LUYUN,
GOLDEN GATE REHABILITATION & HEALTH
CARE CENTER LLC, and SPRING CREEK
REHABILITATION AND NURSING CENTER,
Defendants.
----------------x
GERSHON, United States District Judge:
Plaintiff Rose Ann Paguirigan brings claims, on behalf of herself and a class of similarly
situated Filipino nurses, for violations of the Trafficking Victims Protection Act ("TVPA"), 18
U.S.C. §§ 1589 et seq., against defendants Prompt Nursing Employment Agency LLC ("Prompt
Nursing"), Sentosacare LLC ("Sentosacare"), Sentosa Nursing Recruitment Agency ("Sentosa
Agency"), Benjamin Landa, Bent Philipson, Berish Rubenstein, Francis Luyun, Golden Gate
Rehabilitation and Health Care Center LLC ("Golden Gate"), and Spring Creek Rehabilitation and
Nursing Center ("Spring Creek"). Plaintiffs also seek damages for breach of contract against
Prompt Nursing, Rubenstein, Landa, and Philipson, and a declaratory judgment regarding certain
aspects of their employment contracts.
All defendants previously moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss
the TVP A claims and the declaratory judgment claim, and defendants Landa, Philipson, and
Rubenstein moved to dismiss the breach of contract claim as alleged against them individually. I
denied that motion in full. Paguirigan v. Prompt Nursing Emp 't Agency LLC, 286 F. Supp. 3d
430 (E.D.N.Y. 2017). I subsequently granted the named plaintiff's motion to certify a class
comprised of ''all nurses who were recruited by the defendants in the Philippines and were
employed by the defendants in the United States at any time since December 23, 2008," and I
appointed her counsel as class counsel under Rule 23(g). Paguirigan v. Prompt Nursing Emp 't
Agency LLC, 2018 WL 4347799 (E.D.N.Y. Sept. 12, 2018). The records defendants produced at
the class certification stage establish that there are more than 200 known class members.
Defendants now move for summary judgment dismissing all of plaintiffs' claims, and
granting Prompt Nursing's counterclaim for breach of the named plaintiff's employment contract.
Plaintiffs also move for summary judgment on all of their claims, including a declaration that the
liquidated damages provision and confessions of judgment are unenforceable, and a permanent
injunction preventing defendants from threatening or attempting to enforce either.
I.
Factual Background
Except as otherwise noted, the following facts are undisputed.
A.
Defendants' Employment of the Named Plaintiff and their Legal Actions
Against Her
In either 2006 or 2007, plaintiff, a Filipino citizen, attended a meeting in the Philippines
regarding a nursing home job in New York. The meeting was organized by defendant Sentosa
Agency, a recruiting agency registered in the Philippines. Defendants Luyun-who is the sole
proprietor of Sentosa Agency-and Philipson were in attendance.
In 2007, defendant Golden Gate, a nursing home located in Staten Island, New York,
submitted a visa application on plaintiff's behalf. After plaintiff and Golden Gate agreed that a
visa application would be submitted, the U.S. government issued a Prevailing Wage Determination
2
for plaintiff of $26.87 per hour. Eight years later, plaintiff was notified of a visa interview with
the United States Consulate in the Philippines. At the time of the interview, the United States
Consulate required confirmation that a job was still available. On April 15, 2015, defendant Landa,
who is the CEO, managing partner, and one of the owners of Golden Gate, 1 signed a letter
addressed to the U.S. Consulate affirming that an employment position was still available and
stating that Golden Gate had offered plaintiff a position at $29.00 per hour. On that day, Landa
also signed the last page of plaintiffs employment contract with Golden Gate.
On April 22, 2015, one week later, plaintiff herself signed the employment contract with
defendant Golden Gate, which was for a three-year term. When plaintiff signed the contract,
Landa's letter to the U.S. Consulate was attached to the front of the contract. Plaintiffs signature
appears on each page of the contract, but does not appear on the letter. 2
The contract states the following regarding wages:
As of the Commencement Date, Employee will be paid a base salary in
accordance with the prevailing wage for the geographic area in which the
employee is assigned to work, as determined by the National Prevailing Wage and
Helpdesk Center (NPWC) of the United States Department of Labor.
Contract IV (1). (The parties dispute the exact mechanism by which the National Prevailing Wage
and Helpdesk Center ("NPWC") determines a prevailing wage, but it is agreed that in essence the
NPWC determines prevailing wages at the request of an employer for a particular employee as
1
Landa owns approximately 55 percent of Golden Gate. Philipson's wife also has an ownership
interest in Golden Gate of approximately 25 percent.
2
This appears to have been a standard practice for defendants. Each of the contracts produced at
the class certification stage has a letter attached to it. Like plaintiffs contract, each page of the
contract is signed by the employee, but none of the attached letters is signed by the employee.
3
part of the visa process and also lists the prevailing wage by geographic area online and elsewhere.
NPWC determines prevailing wages on an hourly and annual salary basis.)
"Commencement Date" is defined as the "date when Employee first starts to provide direct
nursing care to residents/patients after completing the orientation and training as described in
Article IV." Contract III.
The contract further provides that:
Both the Employer and Employee agree that the Employer and/or its
designee/assignee has or will incur substantial expenses and has or will expend
enormous resources and time in recruiting the Employee for employment as
contemplated herein, sponsoring the Employee for an Immigrant Visa, training the
Employee in practice and procedures, and orienting the Employee to living in the
New York area. In as much as the parties agree that damages would be difficult to
calculate if the Employee willfully, voluntarily, and without cause terminates the
Agreement before the completion of the three (3) year term, and/or if the Employer
terminated the Agreement pursuant to Article VI(2)(i) or (ii),3 the parties agree that
such an act shall result in an obligation by the Employee to pay the Employer and/or
its designee/assignee Twenty Five Thousand Dollars ($25,000) as liquidated
damages (the "Liquidated Damage").
Contract VII (4). Section VII (4)(a) states that the liquidated damages are reduced to $16,666.67
should plaintiff pre-terminate or breach the employment contract in her second year, and are
reduced to $8,333.34 should she do so in her third year. Contract VII (4)(a).
Finally, "in order to secure Employee's performance of the Employment Term," Section
VII (4) of the contract requires plaintiff to execute a confession of judgment for the amount of
3
Under Article VI (2)(i) and (ii), the employer may terminate the agreement under the following
conditions:
i.
Employee willfully or intentionally undertakes or commits any conduct that is harmful
to Employer's practice or reputation;
ii.
Breach of any term or condition of this Agreement as determined by Employer and/or
its designee/assignee, which shall include, but not be limited to, Employee's failure or
refusal to comply with the reasonable directions, policies, standards and regulations
that Employer and/or its designee/assignee may establish from time to time.
4
liquidated damages, which may be filed in court in the event that she fails "to complete the
employment term." Plaintiff is also required to "pay upon demand all reasonable costs and
expenses (including attorney's fees), and disbursements[] incurred by the Employer and/or its
designee/assignee to enforce any of [the] rights of the Employer and/or its designee/assignee
hereunder and/or collect the aforementioned liquidated damages." Contract VII (4).
In a separate document dated April 22, 2015, plaintiff signed an acknowledgment of costs
related to her recruitment. This document is titled "Declaration and Undertaking" and states that
Sentosacare expended $3,685 for attorneys' fees, filing fees, visa fees, airfare, and miscellaneous
fees in connection with plaintiffs hiring and travel to the United States. Sentosacare is a company
co-owned by defendants Landa and Philipson that provides consultants to nursing homes.
Once plaintiff arrived in the United States, Golden Gate verbally assigned her contract to
defendant Prompt Nursing, a staffing agency owned by defendant Rubenstein that provides nurses
to nursing homes. On June 22, 2015, plaintiff began working at defendant Spring Creek, a nursing
home located in Brooklyn, New York. Landa is a managing partner and owner of Spring Creek.4
On or about June 22, 2015, plaintiff signed an "Employer and Wage Acknowledgment" form,
which states that her employer is Prompt Nursing and that her pay is $29.00 per hour.
Plaintiff quit her job on March 7, 2016. Defendant Prompt Nursing then sued plaintiff and
two other Filipino nurses to enforce the $25,000 liquidated damages provision in their contracts
and for $250,000 from each for tortious interference with contract and prospective business
relations, and an additional $250,000 from each in punitive damages. Those lawsuits were
voluntarily dismissed after plaintiff filed this action.
4
Landa owns approximately 48 percent of Spring Creek, and Philipson, or his wife, owns
approximately 38 percent.
5
B.
Legal Actions Directed at Other Nurses
Plaintiff has presented evidence concerning past legal actions taken by defendants against
Filipino nurses.
Defendants acknowledge that these actions occurred, but they dispute their
responsibility. The events are recounted in detail in other judicial opinions, including one case-
Anilao v. Spota, 774 F. Supp. 2d 457 (E.D.N.Y. 2011)-which is ongoing in this district. See
Matter of Vinluan v. Doyle, 60 A.D.3d 237, 240 (2d Dep't 2009); SentosaCare LLC v. Anilao,
Index No. 6079/2006 (Sup. Ct. Nassau Cty. May 20, 2010) (hereafter "Anilao, Order").
Briefly, in April 2006, ten nurses recruited by Sentosa Agency in the Philippines resigned
from their jobs at nursing homes in New York. Following these resignations, an administrator at
one of the nursing homes alerted the New York State Education Department ("Education
Department") that the nurses had abandoned their patients by simultaneously resigning without
adequate notice. After an investigation, the Education Department took no action against the
nurses.
Subsequently, defendants Philipson and Landa met with the Suffolk County District
Attorney on May 31, 2006. In March 2007, a Suffolk County grand jury indicted the ten nurses
and their attorney for conspiracy to endanger the welfare of a child and endangering the welfare
of a physically disabled person. The nurses and the attorney sought a writ of prohibition to stop
the criminal proceeding. The Appellate Division, Second Department, granted the writ, declining
to find that "this is such an 'extreme case' that the State's interest in prosecuting the petitioners
for misdemeanor offenses based upon the speculative possibility that the nurses' conduct could
have harmed the pediatric patients at Aval on Gardens justifies abridging the nurses' Thirteenth
Amendment rights by criminalizing their resignations from the service of their private employer."
Vinluan, 60 A.D.3d at 249. The court further held that "the prosecution impermissibly violates
6
[the attorney's] constitutionally protected rights of expression and association in violation of the
First and Fourteenth Amendments." Id. at 250.
During the period from 2006 through 2008, defendants Sentosacare, Sentosa Agency,
Prompt Nursing, Philipson, Rubenstein, Luyun, Golden Gate, and other nursing homes owned by
defendants brought a series of civil suits against more than 30 Filipino nurses in attempts to enforce
the liquidated damages provision. In one decision related to those lawsuits, the New York State
Supreme Court, Nassau County, found that "the liquidated damages provision at issue is
unenforceable as damages flowing from any proven breach by defendant Nurses will easily be
ascertained at trial." Anilao, Order at 6.
Additional relevant undisputed facts not discussed here will be addressed in the discussion
section below.
II.
Discussion
A.
Legal Standard
A party is entitled to summary judgment if "there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). Only disputes relating to material facts-Le., "facts
that might affect the outcome of the suit under the governing law"-will properly preclude the
entry of summary judgment. Anderson v. Liberty Lobby, Inc., 4 77 U.S. 242, 248 ( 1986). An issue
of fact is "genuine" if ''the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Id.
The moving party bears the burden of demonstrating "the absence of a genuine issue of
material fact." Celotex, 477 U.S. at 323. Once the moving party has asserted facts showing that
the non-movant's claims cannot be sustained, the nonmoving party must "come forward with
7
specific facts showing that there is a genuine issue for trial." Matsushita Electric Ind Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal quotation marks omitted).
In determining whether to grant summary judgment, the court must "construe all evidence
in the light most favorable to the nonmoving party, drawing all inferences and resolving all
ambiguities in its favor." Dickerson v. Napolitano, 604 F.3d 732, 740 (2d Cir. 2010). However,
the mere existence of a scintilla of evidence in support of the non-moving party's position will be
insufficient; there must be evidence on which the jury could reasonably find for the non-moving
party. Anderson, 477 U.S. at 252. Where, as here, both parties move for summary judgment, the
court need not "grant judgment as a matter of law for one side or the other." Schwabenbauer v.
Bd. ofEd of City Sch. Dist. ofCity ofOlean, 667 F.2d 305, 313 (2d Cir. 1981). "Rather, the court
must evaluate each party's motion on its own merits, taking care in each instance to draw all
reasonable inferences against the party whose motion is under consideration." Id
B.
Plaintiffs' Breach of Contract Claim
Both sides move for summary judgment on plaintiffs' breach of contract claim against
defendants Prompt Nursing, Rubenstein, Landa, and Philipson. The named plaintiff claims she
was owed more than $29.00 per hour under the contract and that she was to be paid a base salary
as opposed to an hourly wage. In order to recover for breach of contract, "a plaintiff must prove
(a) the existence of a contract between plaintiff and defendant; (b) performance of the plaintiffs
obligations under the contract; (c) breach of the contract by the defendant; and (d) damages to the
plaintiff caused by the defendant's breach." Javier v. Beck, 2014 WL 3058456, at *9 (S.D.N.Y.
July 3, 2014).
"In a dispute over the meaning of a contract, the threshold question is whether the contract
is ambiguous." Lockheed Martin Corp. v. Retail Holdings, N. V., 639 F.3d 63, 69 (2d Cir. 2011).
8
"Under New York law ... the question of whether a written contract is ambiguous is a question
oflaw for the court." JA Apparel Corp. v. Abboud, 568 F.3d 390, 396 (2d Cir. 2009). "Ambiguity
is determined by looking within the four comers of the document, not to outside sources," Kass v.
Kass, 91 N.Y.2d 554, 566 (1998), and if one party's interpretation of the contract would "strain[]
the contract language beyond its reasonable and ordinary meaning," the court is not required to
find the language ambiguous, Hunt Ltd v. Lifschultz Fast Freight, Inc., 889 F.2d 1274, 1277 (2d
Cir. 1989) (citing Bethlehem Steel Co. v. Turner Const. Co., 2 N.Y.2d 456,459 (1957)).
If the contract is not ambiguous, then its meaning is likewise a question of law for the court
to decide. JA Apparel Corp., 568 F.3d at 397. In interpreting an unambiguous contract, the "court
is to consider its '[p]articular words' not in isolation 'but in the light of the obligation as a whole
and the intention of the parties as manifested thereby,' but the court is not to consider any extrinsic
evidence as to the parties' intentions ...." Id (citations omitted).
As stated above, the contract's relevant wage provision provides:
As of the Commencement Date, Employee will be paid a base salary in
accordance with the prevailing wage for the geographic area in which the
employee is assigned to work, as determined by the National Prevailing Wage and
Helpdesk Center (NPWC) of the United States Department of Labor.
Contract IV (1). "Commencement Date" is defined as the "date when Employee first starts to
provide direct nursing care to residents/patients after completing the orientation and training as
provided in Article IV." Contract III.
Neither party argues that the contract is ambiguous. Defendants urge me to find that the
phrase "as determined by National Prevailing Wage and Helpdesk Center" refers to the prevailing
wage determination provided to plaintiff in 2007. They also note that, under the contract, plaintiff
was entitled to only $12.00 per hour for her first four weeks of employment and argue that the
contract's inclusion of the phrase "[a]s of the Commencement Date" is meant only to indicate
9
when this initial four-week period ends. Plaintiff argues that defendants' interpretation is contrary
to the contract's plain language and that the contract requires that plaintiff be paid the prevailing
wage as of the Commencement Date. In 2007, the hourly prevailing wage was $26.87. The parties
agree that, when plaintiff began working for Prompt Nursing in 2015, the prevailing wage
exceeded this amount.
The contract is unambiguous. I also find that defendants' interpretation is at odds with the
contract's plain language and must be rejected. The phrase "prevailing wage" refers to the
prevailing wage as of the Commencement Date. There is nothing in the text of the contract to
suggest that the phrase "as determined by National Prevailing Wage and Helpdesk Center" is
meant to refer to the prevailing wage determination that was made almost a decade prior to the
Commencement Date.
Even if one purpose for the inclusion of the phrase "[a]s of the
Commencement Date" was to indicate when the initial four-week period ends, the meaning of the
text is unchanged.
Defendants argue that the holding in Rosales v. Hispanic Emp. Leasing Program, LLC,
2008 U.S. Dist. LEXIS 96417, at *4-6 (W.D. Mich. Nov. 26, 2008), must be treated "as part of
the contract 'as though it were expressed or referred to therein."' Defs.' Reply at 11. That
decision, of course, is not binding on this court, and there is no sound basis for treating it as part
of the contract. Moreover, the Rosales court was not addressing the issue presented here. In
Rosales, the court held that the employer was obligated to pay the prevailing wage previously
calculated by the government and not the prevailing wage in effect when the employees began
working. There is no indication that the Rosales court was asked to interpret a contract that
provides for payment of the prevailing wage as of the employee's Commencement Date.
10
Alternatively, defendants argue that I should reject plaintiffs interpretation because it
undermines the protections given United States workers under 8 U.S.C. § l l 82(a)(5)(A) and 20
C.F .R. § 656.21. But defendants have failed to convince me that an interpretation that requires
defendants to pay their employees the prevailing wage "(a]s of the Commencement Date"
undermines the policies underlying these provisions.
Defendants also make much of the letter affixed to plaintiffs contract, which states that
she was to be paid $29.00 per hour; they argue that it should be treated as the "first page" of the
contract. Whether multiple writings should be construed as one agreement depends on the intent
of the parties. See TVT Records v. Island Def Jam Music Grp., 412 F.3d 82, 89 (2d Cir. 2005).
"Under New York law, 'all writings which form part of a single transaction and are designed to
effectuate the same purpose [must] be read together, even though they were executed on different
dates and were not all between the same parties.'" Id
Here, the letter is plainly not part of the contract. According to Philipson, the letter was
created for the purpose of confirming that a job was still available. Philipson Declaration,
,r 9.
Therefore, it did not share the "same purpose" as the contract. TVT Records, 412 F.3d at 89. The
letter is from Landa to the U.S. Embassy in Manila, was signed by Landa a week prior to the
contract's execution and, unlike each of the 10 pages of the contract, was not signed by plaintiff.
Although "the fact that the two documents at issue here were not executed at the same time or by
the same parties is not dispositive, this fact does weigh against a conclusion that the documents
were intended to be read together as a single contract." In re Lehman Bros. Holdings Inc., 479
B.R. 268,279 (S.D.N.Y. 2012), ajfd, 513 F. App'x 75 (2d Cir. 2013) (citations omitted). While it
is typically a fact issue whether multiple writings should be construed as one agreement, the
11
question is a matter oflaw if, as here, "the documents in question reflect no ambiguity as to whether
they should be read as a single contract." TVT Records, 412 F.3d at 89.
Defendants contend that Hallmark Synthetics Corp. v. Sumitomo Shoji New York, Inc., 26
A.D.2d 481,484 (1st Dep't 1966), affd, 20 N.Y.2d 871 (1967), requires me to treat the letter as
part of the contract because "letters and other instruments may be construed as part of a contract
where they are referred to therein or annexed thereto." Id However, that case held that "[t]he
purpose of a written agreement must be ascertained from the instrument itself, if it is possible to
do so ...." Id (internal quotation marks omitted). Here, I can do just that: the contract is
straightforward, and defendants may not introduce parol evidence, such as the letter, to "create an
ambiguity in the agreement" that is otherwise unambiguous. W.W. W Assocs., Inc. v. Giancontieri,
77 N. Y.2d 157, 163 ( 1990) (emphasis in original).
Notably, the contract's integration clause provides that the contract "supersedes all
previous employment contracts and constitutes the entire agreement between the parties," Contract
VIII (7) (emphasis added), and Section VIII (3) states that any amendments are to be "in writing
and executed in multiple copies." In sum, I decline to treat the letter as part of the contract.
I further reject defendants' argument that plaintiff ratified the contents of the April 15 letter
through her subsequent conduct.
In support of this argument, defendants rely on a wage
acknowledgment form that plaintiff signed, which states that her hourly pay is $29.00 per hour, as
well as plaintiffs deposition testimony, where she stated that she understood that the letter was an
offer to be paid $29.00 per hour pursuant to the contract, and that the contract was for $29.00 when
she signed it.
The cases that defendants rely on discuss whether a party has ratified the contract such that
it may no longer assert claims for fraud and fraudulent inducement, Sotheby's Fin. Servs., Inc. v.
12
Baran, 2003 WL 21756126, at *5-6 (S.D.N.Y. July 29, 2003), ajfd, 107 F. App'x 235 (2d Cir.
2004), or that a deed was forged, Cashel v. Cashel, 94 A.D.3d 684, 686-687 (2d Dep't 2012), or
that the principal did not authorize its agent to enter into the contract, Cologne Life Reinsurance
Co. v. Zurich Reinsurance (N. Am.), Inc., 286 A.D.2d 118, 126-129 (1st Dep't 2001). In other
words, these cases focus on parties' attempts to be relieved from contractual obligations.
Here, plaintiff is not attempting to disavow or dispute the contract. Rather, relying on the
contract's clear language, she asserts that the defendants breached by failing to pay her the
prevailing wage and a base salary. Plaintiff should not be faulted for initially accepting defendants'
representation that the $29.00 hourly rate was in fact the prevailing wage. Indeed, she testified
that she learned the prevailing wage was higher than $29.00 per hour only after she came to New
York and spoke to her colleagues, which was after she had signed the wage acknowledgment form.
Finally, defendants assert that plaintiff has provided no basis for her claim that she was to
be paid a base salary as opposed to an hourly wage. To the contrary, plaintiff has provided a basis:
the contract's clear language. As noted above, the contract states that, "[a]s of the Commencement
Date, Employee will be paid a base salary in accordance with the prevailing wage for the
geographic area in which the employee is assigned to work . . . ." Contract IV ( 1) (emphasis
added). In light of the contract's unambiguous text, no further support is needed. Defendants also
assert that plaintiff has failed to satisfy the damages element of her breach of contract claim and
argue that she was actually overpaid. Plaintiff has submitted a summary pursuant to Federal Rule
of Evidence 1006 depicting the difference between what each class member was paid and what
each is owed if paid the prevailing wage as of their Commencement Date and a base salary. This
document is sufficient to show that damages accrued, and, because plaintiff was owed a base
13
salary, it is apparent that her damages exceed the amount by which defendants claim she was
overpaid.
Based on these undisputed facts, I find that plaintiff has met the elements for her breach of
contract claim. She has proven that a contract existed between her and defendant Prompt Nursing;
that she performed under the contract; that Prompt Nursing breached the contract by failing to pay
her the prevailing wage as of her Commencement Date and by failing to pay her a base salary; and
that she was damaged. See Javier, 2014 WL 3058456, at *9.
As for the rest of the class, the provisions specifying the wage and defining
"Commencement Date" are identical in each contract defendants produced at the class certification
stage. Each contract references a base salary, and each was assigned to Prompt Nursing. It is
undisputed that none of the class members was paid a base salary commensurate with the
prevailing wage in effect as of his or her "Commencement Date." There is therefore no meaningful
difference between the named plaintiff and the class as to each element of the breach of contract
claim. Accordingly, class-wide liability has been established against Prompt Nursing for breach
of contract.
C.
Plaintiffs' Application
Unenforceable
to
Find
the Liquidated
Damages
Provision
Plaintiffs request a declaratory judgment finding the liquidated damages provision
unenforceable. They also request that defendants be enjoined from attempting or threatening to
enforce the liquidated damages provision or the confessions of judgment.
The question of whether a liquidated damages provision is enforceable "is a question of
law, giving due consideration to the nature of the contract and the circumstances." HLT Existing
Franchise Holding LLC v. Worcester Hosp. Grp., LLC, 609 F. App'x 669, 672 (2d Cir. 2015)
(internal quotation marks omitted). Such a provision is, in effect, an estimate "made by the parties
14
at the time they enter into their agreement, of the extent of the injury that would be sustained as a
result of breach of the agreement"; it will not be enforced if it is contrary to public policy, "and
public policy is firmly set against the imposition of penalties or forfeitures for which there is no
statutory authority." Truck Rent-A-Ctr., Inc. v. Puritan Farms 2nd, Inc., 41 N.Y.2d 420, 424
( 1977). Accordingly, "[a] provision that does not serve the purpose of reasonably measuring the
anticipated harm, but is instead punitive in nature, serving as a mere 'added spur to performance,'
will not be enforced." Agerbrink v. Model Serv. LLC, 196 F. Supp. 3d 412,417 (S.D.N.Y. 2016)
(quoting Priebe & Sons v. United States, 332 U.S. 407,413 (1947)).
'"New York courts will construe a purported liquidated damages provision strictly,' and
'where the damages flowing from a breach of a contract are easily ascertainable, or the damages
fixed are plainly disproportionate to the contemplated injury, the stipulated sum will be treated as
a penalty and disallowed."' Agerbrink, 196 F. Supp. 3d at 417 (quoting U.S. Fid. & Guar. Co. v.
Braspetro Oil Servs. Co., 369 F.3d 34, 71 (2d Cir. 2004)). While the New York Court of Appeals
has cautioned courts against interfering with liquidated damages provisions, if either of these
factors is not satisfied, the provision will be deemed unenforceable. Union Capital LLC v. Vape
Holdings Inc., 2017 WL 1406278, at *7 (S.D.N.Y. Mar. 31, 2017). In doubtful cases, courts tend
"to favor the construction which makes the sum payable for breach of contract a penalty rather
than liquidated damages," and the party challenging the liquidated damages provision bears the
burden of proving its unenforceability. Rattigan v. Commodore Int'! Ltd., 739 F. Supp. 167, 169170 (S.D.N.Y. 1990) (internal quotation marks omitted).
Courts also often consider the
sophistication of the parties, whether they were represented by counsel, and whether the contract
was negotiated at arms length "in determining whether one side is not exacting an unconscionable
penalty." Id. at 172 (internal quotation marks omitted).
15
Here, the liquidated damages provision is a penalty. The contract required plaintiff to
submit a confession of judgment, for an amount of $25,000 if she quit in her first year, that would
be held by defendants during her employment term, and could be filed in the event that plaintiff
terminated her contract early. Contract VII (4).
Considering that plaintiffs payroll records
indicate that she typically made less than $700.00 per week after taxes, it would have taken her
almost nine months to pay off the liquidated damages amount, assuming she had no other
expenditures such as food or housing. This supports the conclusion that this provision is "intended
to operate as a means to compel performance," ensuring that plaintiff and other nurses did not
resign prior to the end of their contract terms. Rattigan, 739 F. Supp. at 169; see Perthou v.
Stewart, 243 F. Supp. 655, 658 (D. Or. 1965). Indeed, even though it is immaterial that the parties
may describe the provision as a penalty, Truck Rent-A-Ctr., 41 N.Y.2d at 425, the confession of
judgment provision goes much further and outright states that its purpose is to "secure Employee's
performance of the Employment Term," Contract VII (4). Furthermore, although New York courts
are hesitant to invalidate such provisions when they are negotiated at arms length, here I agree
with the Nassau County Supreme Court's assessment that the parties were of"unequal bargaining
power" and that the contract was "not achieved through arms length negotiation." Anilao, Order
at 6. Plaintiff was not represented by counsel when she executed the contract, and there is no
evidence she had any familiarity with American contract law. 5
Turning to the question of ascertainability, I agree with the Nassau County Supreme
Court's conclusion that the liquidated damages provision is unenforceable because defendants'
5
Other class members who were deposed indicated they were not represented by counsel when
they signed their contracts or did not show the contract to a lawyer before signing.
16
damages were ascertainable. See Anilao, Order at 6. 6 The contract states that the liquidated
damages provision was implemented to reimburse defendants for several types of costs:
the Employer and/or its designee/assignee has or will incur substantial expenses
and has or will expend enormous resources and time in recruiting the employee for
employment as contemplated herein, sponsoring the Employee for an Immigrant
Visa, training the Employee in practice and procedures, and orienting the Employee
to living in the New York area.
Contract VII (4).
Plaintiff signed a Declaration and Undertaking indicating that $3,685.50 in costs were
incurred on her behalf for lawyer's fees, filing fees, visa fees, ICHP visa screening fees,
miscellaneous expenses, and airfare. As demonstrated by this form, many of the costs listed in
Section VII (4) of the contract were tracked, easy to determine, and could be ascertained at the
time the contract was entered into. Upon arrival in New York, defendants gave plaintiff temporary
housing for two months. The apartment's monthly rent was $1,500 per month, totaling $375 per
nurse living there. Thus, the total cost of plaintiffs housing was $750-one could not reasonably
argue that this was unascertainable. Finally, the contract permitted defendants to recoup "further
orientation and 'hands on' training costs"7 by initially only paying plaintiff $12 per hour for her
first four weeks on the job, which invites the question why liquidated damages would be needed
to account for training and orientation costs in the first place. Contract IV (2). In light of
6
Defendants argue that the Anilao decision does not have res judicata effect because the case
settled before trial, and in the same decision, the court denied the nurses' motion for summary
judgment. Plaintiff has not argued that the decision constitutes res judicata, and I do not rely on it
as such.
7
Although the contract refers to "further" orientation and training, there is no evidence, and
defendants do not argue, that any training or orientation occurred prior to the nurse beginning work
in the United States. As with each provision discussed above, the provision concerning "further"
orientation and training is in each contract, but several contracts specify that the applicable
minimum wage would be paid as opposed to $12.00 per hour.
17
defendants' extensive experience in this business, it is simply not possible that any of these costs
would be difficult or impossible to determine from one nursing contract to the next. See, e.g.,
Philipson Deposition ("Dep.") at 9-10 (stating that he first went to the Philippines to recruit nurses
around 2000 and has been there "many" times).
In order to demonstrate that the liquidated damages provision is proportional to their
probable loss, defendants offer the expert testimony of Michael Kupka. Kupka is the Managing
Director of the Forensic Accounting and Dispute Resolution Department of Mazars USA LLP's
New York location. He has more than 17 years of experience in public and forensic accounting.
He is a certified public accountant, accredited in business evaluation and financial forensics, a
certified fraud examiner, and a certified valuation analyst. Kupka concludes that, as to the named
plaintiff, Golden Gate's potential damages are up to $26,182 in recruiting costs and up to $114,114
in increased operating costs, and that Prompt Nursing's damages can be measured as either
$26,182 in recruiting costs or $35,951 in lost profits. Kupka Report ("Rep.") at 13.
Rule 56(e) requires that affidavits submitted on summary judgment "set forth such facts as
would be admissible in evidence." "Therefore 'it is appropriate for district courts to decide
questions regarding the admissibility of evidence on summary judgment,' and the trial court need
only consider admissible evidence in ruling on a summary judgment motion." Cibbarelli v.
Bombardier, Inc., 2004 WL 3090594, at *3 (E.D.N.Y. Sept. 3, 2004) (quoting Raskin v. Wyatt Co.,
125 F.3d 55, 66 (2d Cir.1997). The admissibility of expert testimony is governed by Rule 702 of
the Federal Rules of Evidence, which provides:
A witness who is qualified as an expert by knowledge, skill, experience, training,
or education may testify in the form of an opinion or otherwise if: (a) the expert's
scientific, technical, or other specialized knowledge will help the trier of fact to
understand the evidence or to determine a fact in issue; (b) the testimony is based
on sufficient facts or data; (c) the testimony is the product of reliable principles and
18
methods; and (d) the expert has reliably applied the principles and methods to the
facts of the case.
Fed. R. Evid. 702; see Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 588 (1993).
"[W]hen an expert opinion is based on data, a methodology, or studies that are simply inadequate
to support the conclusions reached, Daubert and Rule 702 mandate the exclusion of that unreliable
opinion testimony." Amorgianos v. Nat'/ R.R. Passenger Corp., 303 F.3d 256,266 (2d Cir. 2002).
An expert's assumptions "based on conclusory statements of the expert's client, rather than on the
expert's independent evaluation are not reasonable." Supply & Bldg. Co. v. Estee Lauder Int'/,
Inc., 2001 WL 1602976, at *4 (S.D.N.Y. Dec. 14, 2001). Here, Kupka's opinion lacks a proper
evidentiary basis and is therefore unreliable.
First, Kupka assumed that Golden Gate incurred direct recruiting costs, and used that as a
basis for calculating Golden Gate's potential damages of $26,182. Kupka Rep. at 3; Kupka Dep.
at 15. This assumption, however, is belied by Philipson's testimony that the nursing home does
not pay anything towards the cost of recruiting. Defendants argue that Golden Gate, and Prompt
Nursing, once it was assigned the contract, were responsible for paying recruitments costs that
were expended by other entities. But when asked about the costs listed in the Declaration and
Undertaking, Kupka admitted that he did not see any documents stating that "Golden Gate was
responsible for any of' those expenses and that his basis for believing that Golden Gate paid for
or was responsible for these costs "was communicated to [him] as part of the underlying facts of
this case" by counsel. Kupka Dep. at 18-20. Similarly, Kupka stated that his assumption that
Golden Gate was responsible for costs associated with sponsoring nurses' visa status was based
on "discussions with the counsel" and "[a]n employment agreement that was signed by Golden
Gate," but admitted that he has not "seen any evidence that Golden Gate actually paid any" of
these costs. Id at 21-23. Nor does the "Documents and Information Considered" page in Kupka's
19
report reference any documents purporting to show that Golden Gate reimbursed other entities for
recruitment costs. Kupka Rep., Attachment 3; see Supply & Bldg. Co., 2001 WL 1602976, at *5
(excluding expert testimony when expert's opinion was based on client's assurances that were
contradicted by other evidence).
Furthermore, Kupka reached the $26,182 recruiting costs figure by assuming that Prompt
Nursing incurred a variety of costs related to recruitment in 2015, including but not limited to,
$388,510 for office expenses, $105,225 for auto and travel expenses, and $97,352 for licenses and
permits, for a total of $864,373. Kupka Dep. at 50-57. Kupka determined the average cost of
recruiting a nurse in 2015 was $26,182 by rounding down the recruiting costs to $864,000, and
then dividing by 33, the number of nurses that were recruited in that year. Kupka Rep. at 11. The
figures Kupka relied on, however, were solely derived from a one-page summary that was
provided by defendants' counsel that Kupka refers to as a "Profit and Loss Statement" for Prompt
Nursing. 8
Kupka, at his deposition, revealed that he knew little about the numbers listed in this onepage summary. Kupka did not know where the numbers came from, who created the document,
when it was created, or why it was created. For the "general and administrative" expenses, Kupka
did not know the specifics of what is included in each number listed (such as what is included in
office expenses). Kupka Dep. at 50-89. Kupka did not know whether the summary was created
in the ordinary course of business or whether it was created specifically for this lawsuit. Id. at 48.
When asked whether a specific cost, such as "Maintenance" costs, constituted all of Prompt
Nursing's "Maintenance" costs (as it seems), or just its "Maintenance" costs allocated to
8
Kupka, however, admitted that this document does not show income or losses and that it could
be argued that Profit and Loss Statement is "not the best description of this document." Kupka
Dep. at 47-49.
20
recruitment, Kupka either stated that he did not know, or that he assumed the cost was only related
to recruitment because the document's header says recruitment costs and because that is what
defendants' attorneys told him. Id. at 50-89. Other than defendant Rubenstein, Kupka never
spoke with anyone at Prompt Nursing about its recruitment costs. Id at 10.
Similarly, regarding Golden Gate's increased operating costs of up to $114,114, Kupka
determined that number by assuming that Golden Gate would have to pay $52.20 per hour for a
permanent replacement nurse from a third-party staffing agency for the remainder of plaintiffs
contract term, or approximately 27 months. Kupka Report at 3; Kupka Dep. at 32, 36-37. The
$52.20 figure is based solely on a redacted invoice provided to Kupka by defendants' counsel for
a staffing agency nurse in 2015 addressed to Sentosacare. Kupka' s assumption that "defendants
could not simply replace one sponsored nurse from the Philippines with another" was based on his
understanding of the facts of the case presented to him by counsel for defendants and "[his]
understanding of the overall industry." Kupka Dep. at 28-32. When asked about the sources that
informed his understanding of the industry, Kupka referenced only "articles I have read, just to
familiarize myself with the overall state of the industry," and stated that he did not list these in his
report because "[i]t's general information that I obtained with no specific documents that I could
list as part of the research." Id.
Like the recruiting cost summary, Kupka knew little about this invoice and the nurse
referenced in it. For example, he did not know how many years of experience she had, whether
she was assigned to work at Golden Gate, whether she worked on a temporary or permanent basis,
whether she was a staff or supervising nurse, what shift she worked, and whether she was paid a
shift differential. Id. at 37-40. He did not know why the invoice says Sentosacare on it or whether
Sentosacare or Golden Gate paid the amount owed. Id. at 40. Kupka also did not know, and did
21
not ask, who actually replaced plaintiff at Spring Creek when she resigned from Prompt Nursing,
what Spring Creek did to find a replacement for her, how long it took Spring Creek and Prompt
Nursing to find a replacement, whether Prompt Nursing ever found a replacement for her, whether
she was replaced with a sponsored nurse, a nurse from an agency, or a nurse from Prompt Nursing.
Id. at 33-36. Kupka never reviewed any Golden Gate documents. Id at 16. Kupka never asked
anyone from Golden Gate whether they would in fact need to find a permanent replacement for
plaintiff from a staffing agency; his assumption that Golden Gate would face increased operating
costs was based on his "discussions with the counsel." Id at 11, 32.
Courts have excluded expert testimony when it is based "on the conclusory statements of
[the expert's client], and not on his independent evaluation of the facts." CIT Grp./Bus. Credit,
Inc. v. Graco Fishing & Rental Tools, Inc., 815 F. Supp. 2d 673, 677 (S.D.N.Y. 2011) (quoting
Argus, Inc. v. Eastman Kodak Co., 612 F. Supp. 904,926 (S.D.N.Y. 1985), ajf'd, 801 F.2d 38 (2d
Cir. 1986)). "[A]ny expert should be aware that a party and counsel in a litigation have an interest
in the outcome and that an expert study should not be dependent on the information they supply."
Rowe Entm 't, Inc. v. William Morris Agency, Inc., 2003 WL 22124991, at *3 (S.D.N.Y. Sept. 15,
2003).
Moreover, "[a]n expert who simply repeats the hearsay of the client who retained him,
without any independent investigation or analysis, does not assist the trier of fact in understanding
matters that require specialized knowledge." Arista Records LLC v. Usenet. com, Inc., 608 F. Supp.
2d 409, 429 (S.D.N. Y. 2009). Here, Kupka's failure to base his recruiting costs and increased
operating costs analysis on his own "independent evaluation," but rather on a one-page summary,
an invoice, untested and contradicted facts provided by defense counsel, and a discussion with one
of the defendants in this action, makes his testimony unreliable and does not assist the trier of fact.
22
CIT Grp, 815 F. Supp. 2d at 677 (quoting Argus, 612 F. Supp. at 926). Kupka's expert opinion is
therefore inadmissible. 9
For this reason, I decline to consider the damages provided in defendants' expert report in
my assessment of the liquidated damages provision, which is present in each class member's
contract. I also decline to consider defendants' declarations concerning these damages, all of one
of which was submitted on reply, that essentially restate and comment upon the analysis provided
in the Kupka report, and fail to provide a sufficient evidentiary basis for concluding what their
costs were. Given that the record contains admissible evidence of only $4,435.50 10 in damages,
which plaintiff has demonstrated were ascertainable at the time of the contract, it is evident that
the liquidated damages provision does not bear "a reasonable proportion to the probable loss" and
is an unenforceable penalty. Truck Rent-A-Ctr., Inc., 41 N.Y.2d at 425. Because each class
member's contract contains the same liquidated damages provision, this conclusion applies across
all contracts.
9
In addition, the section of Kupka's report concerning lost profits is irrelevant. "Lost profits are
consequential damages when, as a result of the breach, the non-breaching party suffers loss of
profits on collateral business arrangements." Tractebel Energy Mktg., Inc. v. AEP Power Mktg.,
Inc., 487 F .3d 89, 109 (2d Cir. 2007). Here, Kupka' s analysis is based on Prompt Nursing' s losses
in relation to its nursing home clients, and is therefore properly categorized as consequential
damages that "must have been brought within the contemplation of the parties as the probable
result of a breach at the time of or prior to contracting." Kenford Co. v. Cty. of Erie, 73 N. Y.2d
312, 319 (1989). There is no evidence that any nurse contemplated, or should have contemplated
lost profit damages at the time the contracts were executed. Id; see also Valentine Dolls, Inc. v.
McMillan, 25 Misc. 2d 551 (Sup. Ct. Kings Cty. 1960) (holding that lost profits are not recoverable
in a breach of contract action against an employee). Therefore, even if Kupka's testimony were
admissible, I would still not consider his lost profits analysis.
10
This figure is comprised of the amounts listed in the Declaration and Undertaking together with
plaintiffs rent.
23
Prompt Nursing's counterclaim for breach of contract against the named plaintiff is
therefore limited to "actual damages proven." JMD Holding Corp. v. Cong. Fin. Corp., 4 N.Y.3d
373,380 (2005) (internal quotation marks omitted).
D.
Plaintiffs' Requested Declaratory and Injunctive Relief
In order to be entitled to a declaratory judgment, a plaintiff must demonstrate that there is
"a substantial controversy, between the parties having adverse legal interests, of sufficient
immediacy and reality to warrant the issuance of a declaratory judgment." Niagara Mohawk
Power Corp. v. Tonawanda Band of Seneca Indians, 94 F.3d 747, 752 (2d Cir. 1996) (internal
quotation marks omitted). Further, in deciding whether to entertain a declaratory judgment action,
district courts should ask: "( 1) whether the judgment will serve a useful purpose in clarifying or
settling the legal issues involved; and (2) whether a judgment would finalize the controversy and
offer relief from uncertainty." Duane Reade, Inc. v. St. Paul Fire & Marine Ins. Co., 411 F.3d
384, 389 (2d Cir. 2005). Here, there is a substantial controversy concerning whether plaintiff and
the other class members may be sued under their contracts' liquidated damages provisions for
resigning prior to the end of their contract terms. And a decision regarding plaintiffs' requested
declaratory relief will serve the useful purpose of finalizing this aspect of the parties' dispute.
Having found the provision to be a penalty, I therefore grant plaintiffs' requested
declaratory relief. The liquidated damages provision and confessions of judgment will be
declared unenforceable, and defendants will be enjoined from attempting or threatening to enforce
either.
24
E.
Piercing the Corporate Veil
Because defendants Rubenstein, Philipson, and Landa 11 were not signatories to the
contract, plaintiffs seek to hold these individual defendants liable for breach of contract by piercing
the corporate veil of Prompt Nursing. 12 Under New York law, a non-signatory to the contract may
be held liable for breach of contract where the plaintiff demonstrates "that the non-signatory was
the 'alter ego' of one or more of the signatories to the contract." Kaliner v. Mt. Vernon Monetary
Mgmt. Corp., 2008 WL 4127767, at *2 (S.D.N.Y. Sept. 3, 2008). In order to pierce the corporate
veil, plaintiff must demonstrate "(i) that the owner exercised complete domination over the
corporation with respect to the transaction at issue; and (ii) that such domination was used to
commit a fraud or wrong that injured the party seeking to pierce the veil." Thrift Drug, Inc. v.
Universal Prescription Adm 'rs, 131 F.3d 95, 97 (2d Cir. 1997) (internal quotation marks omitted).
In determining whether complete control exists, courts have considered the following factors, none
of which is decisive:
(1) disregard of corporate formalities; (2) inadequate capitalization; (3)
intermingling of funds; (4) overlap in ownership, officers, directors, and personnel;
(5) common office space, address and telephone numbers of corporate entities; (6)
the degree of discretion shown by the allegedly dominated corporation; (7) whether
the dealings between the entities are at arms length; (8) whether the corporations
are treated as independent profit centers; (9) payment or guarantee of the
corporation's debts by the dominating entity, and ( 10) intermingling of property
between the entities.
Freeman v. Complex Computing Co., 119 F.3d 1044, 1053 (2d Cir. 1997).
11
Landa signed the contract as a representative of Golden Gate, and not in his personal capacity.
12
LLC veil-piercing is permitted under New York law. Retropolis, Inc. v. 14th St. Dev. LLC, 17
A.D.3d 209,210 (N.Y. 2005).
25
Plaintiffs argue that Prompt Nursing is a corporate shell used by defendants to harm
Filipino nurses, including by paying them less than what is owed under their contracts, using an
unenforceable liquidated damages provision to secure their employment, and suing them for the
liquidated damages amount. Prompt Nursing does business as Sentosa Services and the other nonindividual defendants (other than the nursing homes Golden Gate and Spring Creek) all bear the
same Sentosa name. Plaintiffs argue that this arrangement was created so that nurses would view
the Sentosa companies as a single, integrated corporate enterprise. When the nurses want to pursue
legal action against defendants, however, defendants insist that Prompt Nursing is an entirely
separate entity.
Plaintiffs contend that this arrangement benefited defendants Rubenstein,
Philipson, and Landa and nursing homes, such as Spring Creek and Golden Gate, owned by
Philipson, Landa, or Philipson's wife.
The deposition testimony supports the conclusion that Prompt Nursing, which is owned by
Rubenstein, did not adhere to corporate formalities and that dealings between Prompt Nursing and
its nursing home clients were not conducted at arms length. Philipson travels to the Philippines to
recruit nurses. When asked who pays for his trips to the Philippines to recruit nurses, Philipson
stated that "[s]ometimes the nursing homes would pay for it, at times Prompt Nursing recruitment
-- I don't recall, Prompt something, would have paid for it." Philipson Dep. at 14. He later clarified
that initially the nursing homes paid for his trips, but once Prompt Nursing came into existence,
only Prompt Nursing would. Id When asked how Prompt Nursing would pay for his travel
expenses, Philipson said that there was "no set specific way," and that he may be reimbursed by
Prompt Nursing, or Prompt Nursing would pay his expenses in advance. Id. at 15.
Rubenstein testified that Prompt Nursing pays Sentosa Agency for all "expenses for the
recruitment [of the nurse]" as part of the responsibilities it takes on when it assumes the nurse's
26
contract. Rubenstein Dep. at 86. He also stated that Prompt Nursing reimburses Sentosa Agency
for its personnel and office expenses. Id. at 89-90. Prompt Nursing pays Sentosa Agency by wire
after it receives an invoice, but only sometimes keeps a record of the payment. Id. Similarly,
Prompt Nursing's nursing home clients pay Prompt Nursing for its services, but there is no written
agreement "on what those payments are." Id. at 91. Rather, the amount Prompt Nursing will
charge is negotiated between Philipson and Rubenstein, and nothing is put in writing.
Id.
Rubenstein stated that Prompt Nursing does not engage in any nurse recruiting, but did not know
why his email address appears on letters to the U.S. Embassy. Id. at 12, 92.
Rubenstein testified that all of the nursing contracts produced by defendants in this action
were assigned to Prompt Nursing. Id. at 27-83. He also testified that, for all but one of the
contracts, 13 assignment negotiations occurred between him, negotiating on behalf of Prompt
Nursing, and Philipson, negotiating on behalf of the nursing home. Id. at 27-83. Landa is also
authorized to enter into a general agreement to assign nurse contracts to Prompt Nursing. Philipson
Dep. at 16-17. When asked if there were any contracts with Filipino nurses that Golden Gate did
not assign to Prompt Nursing, Philipson stated that "I would have to check my records," and "I
wouldn't know. Sitting here, I would not be able to tell you." Id. at 18. No evidence has been
presented that Prompt Nursing provides nurses to nursing homes other than those affiliated with
defendants, or that the nursing homes affiliated with defendants assign contracts to staffing
agencies other than Prompt Nursing.
13
As to this one contract, which was between nurse Robin Ancheta and Immediate Home Care,
Rubenstein could not recall who negotiated on behalf of the nursing home. At the time this contract
was assigned, Rubenstein was a managing partner of Immediate Home Care. Rubenstein Dep. at
56-57.
27
When it receives a nurse's contract by assignment, Prompt Nursing never pays anything
for the assignment. Id. at 18-19. There is never a written record of the assignment, and Philipson
testified that he did not think there is ever a record of the date of the assignment. Id. at 19.
Rubenstein's deposition also indicates that he directed Prompt Nursing's wrongful
conduct. Regarding the unenforceable penalty provision that Prompt Nursing used to secure
nurses' employment, Rubenstein stated that he selected 14 the liquidated damages amounts himself
based on "costs of business," stating that "I went over the numbers and it made sense," and "[i]t
costs Prompt Nursing a lot of money to run the business, and based on my calculations, this is an
estimated number that's what I feel is the damages." Rubenstein Dep. at 37-39. Rubenstein does
not recall whether any nurses ever directly paid him the liquidated damages amount after resigning,
and he does not know whether Prompt Nursing has records of any of those payments. Id. at 9294.
When asked how Prompt Nursing determined what to pay a particular nurse under her
employment contract, Rubenstein stated that "we based" the wage on the prevailing wage
determination that was issued in 2007, and that Prompt Nursing did not calculate what the
appropriate prevailing wage was for the contract. Id. at 41--42. As for the lawsuits Prompt Nursing
brought against the nurses who resigned in 2016, Rubenstein testified to the facts that he believes
support Prompt Nursing's tortious interference claims:
he discussed how the nurses were
threatening to leave, and, "being in the business for a while," he could tell that "this was a
coordinated effort" that was being instigated by the three nurses who resigned. Id. at 95-101.
Defendants have offered no evidence to rebut plaintiffs claim that Prompt Nursing's
corporate veil should be pierced. They merely make a conclusory statement that each corporate
14
Philipson testified that he was also involved in calculating the liquidated damages amounts.
Philipson Dep. at 43--44.
28
defendant operates separately and maintains corporate formalities. Most importantly, defendants
have offered no explanation as to why the nurses' contracts were assigned, seemingly
gratuitously, 15 to Prompt Nursing without any documentation or payment. Freeman, 119 F.3d at
1053 (listing corporations' failure to deal at arms length as a corporate control factor).
The critical question in any veil piercing analysis is "whether the corporation is a 'shell'
being used by the individual shareowners to advance their own 'purely personal rather than
corporate ends."' Wm. Passalacqua Builders, Inc. v. Resnick Developers S., Inc., 933 F.2d 131,
138 (2d Cir. 1991). Here, I am satisfied that Prompt Nursing is just that, a shell used to carry out
defendants' scheme of paying nurses less than they are owed, using an unenforceable liquidated
damages provision to secure the nurses employment, and suing those nurses who quit for the
liquidated damages amount. By assigning the nurses' contracts to Prompt Nursing, defendants
were able to carry out this scheme while simultaneously protecting themselves, and the other
nursing homes affiliated with defendants, from liability arising from these activities.
While it is apparent that this scheme benefitted all defendants, I find that only Rubenstein,
as the owner of Prompt Nursing, exercised sufficient control over the company to be held liable.
As for Philipson and Landa-who assign and have the authority to assign nurse contracts to Prompt
Nursing-it is apparent that they participated in this scheme. But they are unaffiliated with Prompt
Nursing 16 and their dealings with Prompt Nursing were on behalf of other corporate entities.
Plaintiffs have failed to prove that Philipson and Landa sufficiently dominated Prompt Nursing
15
Defendants argue that there was consideration for these assignments because Prompt Nursing
assumed all liabilities and responsibilities under the contract. Defs.' Mot. at 7. This does not
explain the purpose of this arrangement and why its existence was never documented.
16
No evidence has been presented indicating that either Philipson or Landa have an ownership
interest in Prompt Nursing.
29
such that they may be held liable as "equitable owners" of the company. Freeman, 119 F.3d at
1051. Therefore, Prompt Nursing's veil may be pierced only to reach Rubenstein, the actual owner
of the company.
Based on the undisputed facts, plaintiffs' summary judgment motion to pierce the corporate
veil is granted as to Rubenstein but denied as to the other individual defendants. Defendants'
summary judgment motion on the veil piercing issue is denied as to Rubenstein but granted as to
Philipson and Landa. In light of my finding class-wide liability on the breach of contract claim,
both Prompt Nursing and Rubenstein are liable for breach of contract damages owed to the class.
F.
TVPA Claims
Both sides move for summary judgment on plaintiffs' claims brought under 18 U.S.C. §§
1589 et seq.
1.
18 U.S.C. § 1589(a)
TVPA § 1589 prohibits obtaining the labor or services of a person by using:
(1) "force, threats of force, physical restraint, or threats of physical restraint," (2)
"serious harm or threats of serious harm," (3) "the abuse or threatened abuse of law
or legal process," or (4) "any scheme, plan, or pattern intended to cause the person
to believe that, if that person did not perform such labor or services, that person
would suffer serious harm or physical restraint."
18 U.S.C. § 1589(a). Congress enacted § 1589 in response to the Supreme Court's holding in
United States v. Kozminski, 487 U.S. 931 (1988), which limited the definition of involuntary
servitude to "physical" or "legal" coercion. United States v. Dann, 652 F.3d 1160, 1169 (9th Cir.
2011) (quoting Kozminski, 487 U.S. at 952).
Through § 1589, Congress "intended to provide
federal prosecutors with the tools to combat severe forms of worker exploitation" and to address
situations in which "traffickers threaten harm to third persons" or "restrain their victims without
physical violence," all while taking into account "the individual circumstances of [the] victim[] ...
30
including [] age and background." Paguirigan, 286 F. Supp. 3d at 438-439 (quoting H.R. Conf.
Rep. No. 106-939, at 101) (internal quotation marks omitted).
Here, plaintiffs contend that defendants violated § 1589(a) in two ways. First, plaintiffs
argue that defendants' conduct constituted a threat of "serious harm" under§ 1589(a)(2). TVPA
§ 1589(c)(2), which defines serious harm broadly and includes financial harm as a means by which
someone can be threatened under the TVP A, states:
any harm, whether physical or nonphysical, including psychological, financial, or
reputational harm, that is sufficiently serious, under all the surrounding
circumstances, to compel a reasonable person of the same background and in the
same circumstances to perform or to continue performing labor or services in order
to avoid incurring that harm.
Thus, the relevant question under§ 1589(a)(2) is whether defendants' conduct constituted a threat
of harm serious enough to "compel a reasonable person of the same background and in the same
circumstances to perform or to continue performing labor or services in order to avoid incurring
that harm." As articulated by the Second Circuit in United States v. Rivera, 199 F.3d 180 (2d Cir.
2015), this standard is a hybrid one. The factfinder is permitted to consider the "particular
vulnerabilities of a person in the victim's position," but is required to find that "her acquiescence
be objectively reasonable under the circumstances." Id at 186-187; see Hongxia Wang v.
Enlander, 2018 WL 1276854, at *5 (S.D.N.Y. Mar. 6, 2018). In the class action context, "the
inquiry will not look at how each Plaintiff perceived the Defendants' actions or whether he or she
subjectively felt compelled to work. Instead, the inquiry will look at the Defendants' actions and
assess how a reasonable person from the Plaintiffs' background would respond to those actions."
Tanedo v. E. Baton Rouge Par. Sch. Bd, 2011 WL 7095434, at *8 (C.D. Cal. Dec. 12, 2011).
Second, plaintiff argues that defendants' actions constituted "abuse or threatened abuse of
law or legal process" under§ 1589(a)(3). That phrase is further defined as "the use or threatened
31
use of a law or legal process, whether administrative, civil, or criminal, in any manner or for any
purpose for which the law was not designed, in order to exert pressure on another person to cause
that person to take some action or refrain from taking some action." § 1589(c)(l).
Plaintiff relies on the following actions by defendants to support her claims under TVP A
§§ l 589(a)(2) and (a)(3): The inclusion of a $25,000 liquidated damages provision in each
contract; defendants' filing of lawsuits to enforce the $25,000 liquidated damages provision
against nurses who resigned, including lawsuits in 20 I 6 that included claims for $250,000 in
tortious interference with contract and business relations damages, despite the liquidated damages
provision having been found unenforceable by the Nassau County Supreme Court in 201 O; the
filing of a professional disciplinary complaint against 10 nurses who resigned in 2006 that resulted
in no action against the nurses; Philipson and Landa's meeting with the Suffolk County District
Attorney, followed by the prosecution of those same 10 nurses and their attorney. Defendants
make multiple arguments as to why the TVPA's prohibitions are inapposite here. Each will be
discussed in tum.
Defendants first correctly note that plaintiff, as well as several other nurses, testified that
they were never verbally threatened by defendants. Paguirigan Dep. at 26-31, 404; Valdez Dep.
at 83, 104-105; Bane Dep. at 61-62, 99; Pademal Dep. at 74. That fact alone, however, is
insufficient to avoid TVPA liability, as the statute applies to subtle, nonviolent threats that may
still effectively compel an individual to keep working. See Dann, 652 F.3d at 1169.
Second, defendants argue that, because the liquidated damages provision is not a penalty,
their efforts to enforce the provision constituted a valid exercise of their contractual rights, and
therefore cannot give rise to liability under the TVP A. In support, defendants rely on Panwar v.
Access Therapies, Inc., 2015 U.S. Dist. LEXIS 38117, at *8-15 (S.D. Ind. Mar. 25, 2015), which
32
found that defendants' efforts to enforce a liquidated damages provision that was valid under
Indiana law did not give rise to TVP A liability. Since I have already found the provision to be
unenforceable as a penalty under New York law, this argument fails.
In a similar vein, defendants argue that plaintiff is essentially claiming that her labor was
obtained through economic duress, and they make several arguments as to why economic duress
is not applicable in this context. But plaintiff is not arguing that she was subjected to economic
duress. Economic duress is typically used to void a contract on the ground that "the complaining
party was compelled to agree to its terms by means of a wrongful threat which precluded the
exercise of its free will." Stewart M Muller Constr. Co. v. New York Tel. Co., 40 N.Y.2d 955,
956 (1976). Here, plaintiff is not seeking to void or disavow the contract. Economic duress is
simply not in issue.
Defendants' reference to 20 C.F.R. § 655.73 l(c)(I0)(i)(B), which states that "the employer
is permitted to receive bona fide liquidated damages from the H-1 B nonimmigrant who ceases
employment with the employer prior to an agreed date," is similarly misplaced. First, the visas at
issue in this lawsuit are not H-1 B visas, but EB-3 visas. Second, of course, there is no prohibition
against defendants placing a valid liquidated damages provision in their contracts. The provision
at issue here, however, is a penalty under New York law, and 20 C.F.R. § 655.73l(c)(I0)(i)(A)
explicitly provides that the "employer is not permitted to require (directly or indirectly) that the
nonimmigrant pay a penalty for ceasing employment with the employer prior to an agreed date."
Defendants also make much of the named plaintiffs and other class members' deposition
testimony, and argue that it supports their argument that the liquidated damages provision did not
amount to a "threat of serious harm." For example, class member Pademal testified that she
entered into the contract with the intent to work only for the first two years of her contract because
33
the remaining payment of $8,000 was "affordable to [her]," Pademal Dep. 58, and Paguirigan
testified that she entered into the contract knowing she would have to pay a penalty if she
terminated her contract early, Paguirigan Dep. at 166-167. Pademal also stated that she viewed
working for Sentosa as a stepping-stone; class member Bane stated that his ultimate goal was to
come to America. Pademal Dep. at 94-95; Bane Dep. at 32.
Defendants misapprehend the serious harm requirement. As noted above, the serious harm
requirement asks whether a reasonable person "of the same background and in the same
circumstances" would "perform or . . . continue performing labor or services in order to avoid
incurring that harm." One nurse's testimony that she could afford $8,000 by no means establishes
how a reasonable person would respond to the $25,000 penalty during the first year of work.
Section 1589 was designed to combat "severe forms of worker exploitation" that do not amount to
actual involuntary servitude. Paguirigan, 286 F. Supp. 3d at 437. An employee's prior awareness
of the harm does not make a defendant's actions, if indeed in violation of the TVPA, any less
exploitative. Nor does a nurse's desire to come to the United States, or that he or she viewed the
job as a stepping stone, give an employer license to subject him or her to unlawful work conditions
in violation of the TVPA. 17
Moreover, defendants' references to the record omit several notable statements by plaintiff.
Plaintiff stated during her deposition that the liquidated damages provision "is the reason why we
were not able to leave or we are scared. We have that fear because we don't have that ability to
17
Defendants also point out that several nurses were aware of the "2007 incident," presumably
referring to the administrative complaint, the attempted prosecution, or the civil suits for breach of
contract defendants filed against the nurses, through news reports in the Philippines, yet entered
into their contracts anyway. Defs.' Mot. at 12. This argument fails for the same reasons as the
others addressed above.
34
pay the $25,000." Paguirigan Dep. at 354. She also stated that she quit because she was working
"in the unsafe environment" due to understaffing, such that she felt she was putting "my
professional license at stake ... if I continue working," and because of fear she felt from being
"trapped because I'm thinking about the contract which says that there's the provision of the
$25,000 to be paid or I will be penalized with the $25,000 if I just leave." Paguirigan Dep. at 2630.
Finally, defendants contend that plaintiff has not provided evidence of damages resulting
specifically from the TVPA violations, so her TVPA claims must be dismissed. TVPA § 1595(a)
provides that "an individual who is a victim of a violation of this chapter may bring a civil action
against the perpetrator ... and may recover damages and reasonable attorneys fees." The statute
has been interpreted to provide both compensatory damages, including compensation for
emotional distress, and punitive damages. See Ditullio v. Boehm, 662 F.3d 1091, 1096-1098 (9th
Cir. 2011); Lagasan v. Al-Ghasel, 92 F. Supp. 3d 445, 457-458 (E.D. Va. 2015). Defendants offer
no persuasive authority that a finding of TVP A liability requires a finding of damages. In any
event, the record here sufficiently supports the existence of damages under the TVP A, and this
argument therefore fails.
Having reviewed the record and considered the parties' arguments, I find on the undisputed
facts that defendant Prompt Nursing violated TVPA § 1589(a)(2). 18 The nurses in this lawsuit
were all recent arrivals from the Philippines. They were not paid the prevailing wage and a base
salary, despite the terms of their contracts. Three of the nurses who were deposed complained of
being overworked or that the nursing home was understaffed, and the fourth stated that he was
18
Having found liability under § l 589(a)(2), I do not reach whether any defendant violated §
l 589(a)(3).
35
unjustifiably suspended. Pademal Dep. at 51; Bane Dep. at 60-61; Paguirigan Dep. at 29; Valdez
Dep. at 83. Paguirigan testified that "[w]e were just ... fed the good side, but they never told us
that you're going to work 16-hour shift, with less staff ...." Paguirigan Dep. at 146. Critically,
if she or any nurse wanted to stop working for defendants during the first year of the contract, he
or she would have had to pay the employer $25,000 pursuant to the liquidated damages provision.
This provision constitutes a threat of sufficiently serious financial harm "to compel a reasonable
person of the same background and in the same circumstances to perform or to continue
performing labor or services in order to avoid incurring that harm." TVPA § 1589(c)(2). Indeed,
the confession of judgment requirement, which is part of the liquidated damages provision,
explicitly states that it is meant to "[s]ecure Employee's performance of the Employment Tenn."
Contract VII (4). I also note that the $25,000 figure is larger than any sum threatened in the TVP A
cases referenced by the parties. See Dann, 652 F.3d 1160 at 1171 (threat of $8,000 payment);
Javier, 2014 WL 3058456, at *6 (threatened enforcement of $15,000 confession of judgment);
Nunag-Tanedo, 790 F.Supp.2d 1134, 1144 (C.D. Cal. 2011) (threatened payment of $10,000);
Maco/or v. Libiran, 2016 WL 1488121, at *4 (S.D.N.Y. Mar. 25, 2016), report and
recommendation adopted, 2016 WL 1453039 (S.D.N.Y. Apr. 13, 2016) ($20,000 liquidated
damages provision that applied if plaintiff stopped working). In reaching my conclusion, I have
considered the "particular vulnerabilities" of plaintiff and other class members-all of them recent
immigrants to the United States-and have also focused on whether it would be objectively
reasonable for them to continue working under the circumstances. Rivera, 799 F.3d at 186--187.
Regarding TVPA § 1589(a)'s scienter requirement, the statute contains an express scienter
requirement, ("[w]hoever knowingly provides or obtains the labor or services of a person .... "),
and one of its subsections, TVPA § 1589(a)(4), contains a second scienter requirement ("by means
36
of any scheme, plan, or pattern intended to cause the person to believe that, if that person did not
perform such labor or services, that person or another person would suffer serious harm or physical
restraint ...."). 18 U.S.C. § 1589(a)(4) (emphasis added); United States v. Calim/im, 538 F.3d
706, 710-711 (7th Cir. 2008). As stated in Muchira v. Al-Rawaf,
There must be evidence from which the jury could find that the employer intended
to cause the victim to believe that she would suffer serious harm-from the vantage
point of the victim-if she did not continue to work. The linchpin of the serious
harm analysis under§ 1589 is not just that serious harm was threatened but that the
employer intended the victim to believe that such harm would befall her if she left
her employment.
850 F.3d 605, 618 (4th Cir. 2017) (internal quotation marks and citations omitted). Here, the
contract, of which Prompt Nursing was the assignee, explicitly states that the confession of
judgment provision was meant "to secure Employee's performance of the Employment Tenn."
Prompt Nursing also attempted to enforce the liquidated damages provision against plaintiff and
two other nurses in 2016-in addition to suing for $250,000 in tortious interference damageseven though the liquidated damages provision had been found unenforceable in 2010 by the
Nassau County Supreme Court. On these undisputed facts, it is apparent that Prompt Nursing
acted with knowledge and intent that the liquidated damages provision would effectively coerce
nurses into continuing to work.
2.
18 U.S.C. § 1589(b)
Having found that Prompt Nursing violated TVPA § 1589(a), I also find on the undisputed
facts that the remaining defendants are liable under TVPA § 1589(b). Section 1589(b) provides
that "[w]hoever knowingly benefits, financially or by receiving anything of value, from
participation in a venture which has engaged in the providing or obtaining of labor or services by
any of the means described in subsection [1589](a), knowing or in reckless disregard of the fact
that the venture has engaged in the providing or obtaining of labor or services by any of such
37
means, shall be punished as provided in subsection (d)." As discussed above, Rubenstein is the
owner of Prompt Nursing; Luyun is the sole proprietor of Sentosa Agency; Landa and Philipson
co-own Sentosacare; Landa is an owner of Spring Creek and Golden Gate; and Philipson or his
wife is an owner of Spring Creek. 19 Therefore, each defendant played a role in this commercial
enterprise, the purpose of which is to recruit Filipino nurses to the United States to work at nursing
homes affiliated with defendants. Thus, each defendant "knowingly benefit[ed]" financially from
labor obtained in violation of TVPA § 1589(a).
Moreover, each defendant acted with "know[ledge] or in reckless disregard of the fact that
the venture . . . engaged in the providing or obtaining of labor or services" through means
prohibited by TVPA § 1589(a)-in this case, through the contracts' liquidated damages provisions.
Indeed, defendants Philipson, Luyun, and Rubenstein all testified regarding their direct knowledge
of the provision, and Landa signed the contract itself. Philipson Dep. at 43-44; Luyun Dep. at 5560; Rubenstein Dep. at 36-40; Hahn Dec. Exh. H. The standard Golden Gate contract and the
standard Spring Creek contract both contain the liquidated damages provision-as do all the
contracts defendants produced. Thus, Golden Gate and Spring Creek knew of the provision.
As for Sentosa Agency, Luyun is the sole proprietor of Sentosa Agency, and the latter
therefore has "no separate existence, but rather exists as the so-called 'alter ego' of the owner."
United Parcel Serv. of Am., Inc. v. Net, Inc., 225 F.R.D. 416, 421 (E.D.N.Y. 2005). As for
Sentosacare, Landa and Philipson are the owners of the company, with each retaining a 50 percent
ownership share. Philipson Dep. at 6-7. "As a general matter, knowledge that an agent acquires
in the scope of his agency is imputed to the principal, meaning that the latter is bound by that
19
For several of the nursing homes that Philipson was asked about in his deposition, he could not
recall whether he or his wife has an ownership interest. Philipson Dep. at 9, 37.
38
information even if he never actually received it." J.J.J. Properties Inc. v. Travelers Indem. Co.,
2008 WL 2735865, at *3 (S.D.N.Y. July 7, 2008). 20 Because there is no evidence that Landa or
Philipson acted outside the scope of his agency, their knowledge as Sentosacare's sole owners may
therefore be imputed to the company itself. See also Baker v. Latham Sparrow bush Assocs., 72
F.3d 246, 255 (2d Cir. 1995) ("The knowledge of a director, officer, sole shareholder or controlling
person of a corporation is imputable to that corporation.") (internal quotation marks omitted). In
any event, both Sentosa Agency and Sentosacare operated with at least "reckless disregard" of the
liquidated damages provision in light of their involvement in bringing nurses to the United States.
18 U.S.C. § 1589(b).
3.
18 U.S.C. § 1590(a)
TVP A § 1590(a) extends liability to "any person who knowingly recruits, harbors,
transports, provides, or obtains by any means, any person for labor or services in violation of this
chapter ...." Defendants Luyun, Philipson, and Sentosa Agency "knowingly recruit[ed]" nurses
to work in nursing homes; defendants Prompt Nursing, Sentosacare, Rubenstein, and Landa
knowingly "provid[ed]" nurses to work in nursing homes 21 ; and defendants Spring Creek and
Golden Gate knowingly "obtain[ed]" nurses. Thus, each defendant knowingly recruited, provided,
20
This general rule does not apply when the agent has "totally abandoned" the interests of the
principal, an exception that is inapplicable here. In re Mediators, Inc., 105 F.3d 822, 827 (2d Cir.
1997).
21
Prompt Nursing is a staffing agency that "provides" nursing homes with nurses. Landa is
involved in the visa application process-he provided the letter addressed to the embassy for
plaintifrs visa-and thus he also "provides" nursing homes with nurses. Sentosacare paid the
costs listed on the Declaration and Undertaking that plaintiff signed, and thus it is also involved in
"provid[ing]" nursing homes with nurses. Rubenstein, in addition to being the owner of Prompt
Nursing, testified to his personal involvement in Prompt Nursing's business, as described earlier.
He is therefore also involved in "provid[ing]" nursing homes with nurses.
39
or obtained persons "for labor or services in violation of this chapter." 18 U.S.C. § 1590(a). The
same undisputed facts regarding each defendant's role in this enterprise therefore support their
liability under TVPA § 1590(a).
4.
18 U.S.C. § 1594(b)
Defendants have also violated TVP A § 1594(b), the conspiracy provision, which extends
liability to whoever conspires with another to violate, inter alia, TVPA §§ 1589 and 1590.22 For
there to be a conspiracy, there must be an agreement to violate the prohibition on forced labor.
Stein v. World-Wide Plumbing Supply Inc., 71 F. Supp. 3d 320,330 (E.D.N.Y. 2014). There need
not be proof of an explicit agreement, but the "evidence must be sufficient to permit the jury to
infer that the defendant and other alleged coconspirators entered into a joint enterprise with
consciousness of its general nature and extent." United States v. Svoboda, 347 F.3d 471,477 (2d
Cir. 2003) (internal quotation marks omitted).
As detailed above, on the undisputed facts,
defendants "entered into a joint enterprise" for purposes of bringing nurses to the United States to
work at nursing homes, including at defendants Spring Creek and Golden Gate, and violated TVPA
§§ 1589 and 1590 in doing so. Id Defendants acted with "consciousness of [the conspiracy's]
general nature and extent," as each defendant was aware of the liquidated damages provision. Id.
Thus, each defendant is liable under TVPA § 1594(b).
G.
Damages and Attorneys' Fees Under TVPA § 1595(a)
TVPA § 1595(a) provides that "[a]n individual who is a victim of a violation of this chapter
may bring a civil action ... in an appropriate district court of the United States and may recover
damages and reasonable attorneys fees." Because the liquidated damages provision is in each
22
Having found that defendants violated§§ 1589 and 1590, there is no need to consider whether
they are liable for attempt under§ 1594(a).
40
contract, plaintiff has established class-wide liability under the TVPA against all defendants. And
having found that the plaintiff and the rest of the class are entitled to damages under the TVP A, I
also find that they are entitled to reasonable attorneys' fees. Class counsel may file a motion for
fees at the conclusion of the case. Damages under the TVP A will be determined at a later time.
H.
Prompt Nursing's Breach of Contract Counterclaim Against the Named
Plaintiff
The only remaining claim is Prompt Nursing's counterclaim against the named plaintiff for
breach of her employment contract and attorneys' fees under the contract, which as discussed
above, is limited to "actual damages proven." JMD Holding Corp., 4 N.Y.3d at 380. Resolution
of this claim also will be determined at a later time.
III.
Conclusion
For the reasons set forth above, the Clerk of Court is directed to enter partial summary
judgment as follows:
1. Defendants' summary judgment motion regarding plaintiffs breach of contract claim is
granted as to Landa and Philipson. Except for Prompt Nursing' s counterclaim for breach
of contract against the named plaintiff, which remains undecided, the rest of defendants'
summary judgment motion is denied.
2. Plaintiffs' summary judgment motion as to liability on the breach of contract claim is
granted against Prompt Nursing and Rubenstein. Damages to the plaintiff and the class
caused by defendants' breach of contract are to be determined at a later time.
3. Plaintiffs' requested declaratory and injunctive relief is granted. The Clerk of Court is
directed to enter judgment declaring the liquidated damages provision in all plaintiffs'
contracts, and the confessions of judgment, to be unenforceable and to enter an injunction
permanently enjoining defendants from attempting or threatening to enforce either.
41
4. Plaintiffs' summary judgment motion as to liability on the TVPA claims is granted against
all defendants. Damages to the plaintiff and the class under the TVP A are to be determined.
The class is also entitled to reasonable attorneys' fees, which are to be determined at a later
date.
5. The parties are directed to appear for a status conference on November 4, 2019, at 2:00 PM
to address how damages are to be determined and to address Prompt Nursing's
counterclaim for breach of contract as to the named plaintiff. The parties are further
directed to promptly meet and confer on these issues and attempt to present a joint plan to
the court. By October 17, 2019 the parties should submit written proposals to the court.
SO ORDERED.
Nina Gershon
/s/
NINA GERSHON
United States District Judge
Dated: September-1] 2019
Brooklyn,~ York
42
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