Zhang et al v. Wen Mei Inc. et al

Filing 172

ORDER granting [149, 160, 164, 167]. For the reasons set forth in the attached Memorandum and Order: (1) Plaintiffs' Motion for Leave to Amend the Second Amended Complaint, DE [149, 167], is Granted. On or before January 3, 2017, Plaintiffs a re directed to serve and file the Third Amended Complaint; (2) Plaintiffs' Motion for Leave to File Late Consent to Join, DE 160 , is Granted. The Consent to Join Lawsuit signed by Plaintiff Hua and attached to Plaintiffs' Motion for Late Consent to Join, DE [160-1], is deemed filed; (3) Plaintiffs' Motion to Compel a Non-Party to Produce Documents, DE 164 , is Granted. Plaintiffs are directed to re-serve the subpoena on the non-party by January 3, 2017, indicating that the do cuments must be produced no later than February 3, 2017; (4) Defendants' Cross-Motion for Sanctions, DE 165 , is denied; and (5) the parties' requests for an extension of discovery, DE [166, 169], are Granted. A status conference is set for January 20, 2017 at 10:00 a.m. in Courtroom 820 of the Central Islip courthouse, at which time the Court will issue a Third Amended Scheduling Order. Ordered by Magistrate Judge Steven I. Locke on 12/21/2016. (Cea, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------------------------------------X
JIE ZHANG a/k/a JIMMY ZHANG, RU HAO
LIU a/k/a JASON LIU, XIU QIN LIN, HSIA
SHENG CHENG and CHEIN WEN HSIEH
a/k/a KEVIN HSIEH, on behalf of themselves
and others similarly situated,
-against-

MEMORANDUM AND
ORDER
14-CV-1647 (JS)(SIL)

Plaintiffs,

WEN MEI, INC. d/b/a HUNAN DYNASTY,
HUNAN DYNASTY AT LEVITTOWN, INC.
d/b/a HUNAN DYNASTY, FENNY JAPANESE
AND CHINESE RESTAURANT INC. d/b/a
HUNAN DYNASTY, XIANG RONG CHEN
a/k/a KEVIN CHEN, CAI FEN CHEN, and
CINDY CHEN,
Defendants.
---------------------------------------------------------------------X
LOCKE, Magistrate Judge:
Plaintiffs Jie Zhang a/k/a Jimmy Zhang 1 (“Zhang”), Ru Hao Liu a/k/a Jason
Liu (“Liu”), Xiu Qin Lin (“Lin”), Hsia Sheng Cheng (“Cheng”) and Chein Wen Hsieh
a/k/a Kevin Hsieh (“Hsieh”), on behalf of themselves and others similarly situated
(collectively, “Plaintiffs”) commenced this action alleging wage and hour violations of
the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq. (“FLSA”)
and the New York Labor Law, N.Y. Lab. Law § 650 et seq. (“NYLL”) against
Defendants Wen Mei, Inc. d/b/a Hunan Dynasty (“Wen Mei”), Hunan Dynasty at
Levittown, Inc. d/b/a Hunan Dynasty (“Hunan Dynasty”), and Xiang Rong Chen a/k/a
On July 20, 2015, Defendants Wen Mei, Hunan Dynasty, Cindy Chen, and Kevin Chen
submitted a notice to Court that “they have learned of the recent death of the plaintiff” Zhang. See
DE [81]. Plaintiffs filed no response and to date no motion for substitution has been filed.
1

1

Kevin Chen (“Kevin Chen”). See Complaint (“Compl.”), Docket Entry (“DE”) [1]. On
May 12, 2015, Plaintiffs filed a Second Amended Complaint (“SAC”) adding
Defendants Fenny Japanese and Chinese Restaurant Inc. d/b/a Hunan Dynasty
(“Fenny”), Cai Fen Chen, and Cindy Chen (collectively, “Defendants”). See DE [55].
Subsequently, on October 23, 2015, the action was conditionally certified as a
collective action. See Amended Memorandum and Order (“Am. Mem. and Order”),
DE [102]. Presently before the Court are the following motions:
1. Plaintiffs’ Motion for Leave to File the Third Amended Complaint
(“TAC”) and two supplemental letters filed by Plaintiffs in connection
with the motion. In their submissions, Plaintiffs seek leave to add two
corporate defendants, one individual defendant, and a minimum wage
claim under the FLSA and NYLL. See Plaintiffs’ Letter Motion to Seek
Leave of Court to Amend Complaint and Add Defendants (“Motion to
Amend”), DE [149]; Supplemental Letter Motion to Seek Leave of Court
to Amend Complaint and Add Defendants (“Supp. Motion to Amend.”),
DE [167]; Cover Letter Regarding Third Amended Complaint (“Second
Supp. Motion to Amend”), DE [170]. The motion was referred to this
Court for decision by United States District Judge Joanna Seybert. See
DE [152].
2. Plaintiffs’ Motion for Leave to File Late Consent to Join regarding
proposed Plaintiff Peifeng Hua (“Hua”), who seeks consent to join the
suit after the expiration of the deadline to opt-in. See Plaintiffs’ Letter
Motion for Leave to File a Late Consent to Join (“Motion for Late
Consent to Join”), DE [160]. This motion was also referred to this Court
for decision by Judge Seybert. See DE [163].
3. Plaintiffs’ Motion to Compel the production of documents by a nonparty, and Defendants Hunan Dynasty, Wen Mei, Kevin Chen, and
Cindy Chen’s Cross-Motion for Sanctions in connection with Plaintiffs’
Motion to Compel. See Plaintiffs’ Letter to Compel Defendants to
Respond to Plaintiffs Request for Document Production (“Motion to
Compel”), DE [164]; Defendants’ Letter Motion for Sanctions and
Defendants’ Opposition to Plaintiffs’ Letter Motion to Compel (“Motion
to Compel Opp.”), DE [165].

2

4. Plaintiffs’ and Defendants Hunan Dynasty, Wen Mei, Kevin Chen,
and Cindy Chen’s requests for extension of discovery deadlines. See
Request for Extension of Time to Complete Discovery (“Pl.’s Request for
Extension”), DE [166]; Response to Plaintiffs’ letter motion for a further
extension of time to complete discovery (“Def.’s Request for Extension”),
DE [169].
Defendants Hunan Dynasty, Wen Mei, Kevin Chen, and Cindy Chen oppose
all motions by Plaintiffs except the motion to extend the discovery schedule. See
Defendants’ Opposition to Plaintiffs’ Letter Motion for Leave to File a Third Amended
Complaint Adding New Claims and a New Defendant (“Motion to Amend Opp.”), DE
[150]; Defendants’ Opposition to Plaintiffs’ Letter Motion for Leave to File a Third
Amended Complaint Adding The Individual Defendant Luqi Xie (“Supp. Motion to
Amend Opp.”), DE [168]; Defendants’ Response to Plaintiffs’ December 9, 2016 Letter
and Attached Proposed Third Amended Complaint (“Second Supp. Motion to Amend
Opp.”), DE [171]; Defendants’ Opposition to Plaintiffs’ Letter Motion for Leave to
Allow Peifeng Hua to Opt in After the February 15, 2016 Deadline (“Motion for Late
Consent to Join Opp.”), DE [162]. Defendants Fenny and Cai Fen Chen have filed no
opposition to any of the motions, with the exception of joining the other Defendants’
initial opposition to Plaintiffs’ Motion to Amend. 2 See Defendants Fenny Japanese
and Chinese Restaurant Inc. and Cai Fen Chen Letter Opposition to Plaintiffs’ Letter
Motion to Seek Leave of Court to Amend Complaint and Add Defendants, DE [155].
For the reasons set forth herein, the Court grants: (1) Plaintiffs’ Motion for
Leave to Amend; (2) Plaintiffs’ Motion for Late Consent to Join; (3) Plaintiffs’ Motion

Even though Defendants Fenny and Cai Fen Chen only join in the opposition to the Motion
to Amend, for the sake of simplicity and as Fenny and Cai Fen Chen make no arguments to the
contrary, the Court refers to the collective “Defendants” throughout this motion.
2

3

to Compel; (4) and the parties’ request for an extension of discovery deadlines.
Defendants’ cross-motion for sanctions is denied.

The Court has set a status

conference for January 20, 2017 in Courtroom 820 of the Central Islip courthouse,
at which time a Third Amended Scheduling Order will be entered.
I.

BACKGROUND
A. History of the Case
This action involves alleged wage and overtime violations at restaurant Hunan

Dynasty (the “Restaurant”) located at 2993 Hempstead Turnpike in Levittown, New
York. By way of Complaint filed March 12, 2014, Plaintiffs commenced this action
alleging: (1) overtime violations under the FLSA and NYLL; (2) spread of hours
violations under the NYLL; and (3) violations of notice requirements pursuant to the
NYLL. See Compl. Plaintiffs claim that they worked for Defendants as waiters and
“non-tipped packers,” and that their collective employment spanned the time period
from May 2006 through May 2013. Id. at ¶¶ 5-15. The original defendants include
Hunan Dynasty and Wen Mei, two corporate entities doing business as Hunan
Dynasty at the Levittown Restaurant, and Kevin Chen, the “owner, operator,
manager, principal and/or agent” of Hunan Dynasty and Wen Mei. Id. at ¶¶ 5-6. It
appears that, according to Plaintiffs, Hunan Dynasty operated the Restaurant until
2012, at which time Wen Mei was incorporated and overtook operation of the venue.
On March 10, 2015, Plaintiffs moved for conditional certification of this matter as a
collective action pursuant to the FLSA. See Motion to Certify FLSA Collective Action
(“Motion to Certify”), DE [24].

4

While the Motion to Certify was pending, Plaintiffs moved for leave to amend
the Complaint to add three additional defendants. See Plaintiffs’ Letter Motion to
Seek Leave of Court to Amend Complaint and Add Defendants (“Motion for Second
Amended Complaint”), DE [41]; Plaintiffs’ Letter Motion to Seek Leave of Court to
Amend Complaint and Add Defendants (“Supp. Motion for Second Amended
Complaint”), DE [50]. Specifically, Plaintiffs sought to add individual Cai Fen Chen
and corporate entity Fenny, claiming that Hunan Dynasty has an “active on-premises
liquor license under the principal ‘Cai Fen Chen’ and operating premises name as
‘Fenny Japanese and Chinese Restaurant, Inc.’” See Motion for Second Amended
Complaint at 1-2. They also sought to add Cindy Chen, the alleged principal of Wen
Mei, arguing that they discovered documents suggesting that “transfers were done to
protect Defendants’ interest in keeping a restaurant in that location and to avoid any
potential lawsuits or liabilities.” See Supp. Motion for Second Amended Complaint
at 1-2. The motion for leave to amend was granted by Judge Seybert and on May 12,
2015, the SAC was filed. See DE [54-55].
Following the filing of the SAC, Plaintiffs’ Motion to Certify was granted. See
Am. Mem. and Order. In so granting, the Court found that although a minimum
wage claim was not plead “as a separate count, the factual allegations in the SAC and
the declarations [submitted in connection with the Motion to Certify] ‘were sufficient
to place Defendants on notice of their claims related to their alleged failure to pay the
minimum wage under the FLSA’” in addition to the overtime claims expressly set
forth. Id. at 5, n.4 (quoting Alonso v. Uncle Jack’s Steakhouse, Inc., 648 F. Supp. 2d

5

484, 487 (S.D.N.Y. 2009)). The Court further approved the Notice of Pendency and
Consent to Join Lawsuit (“Notice of Pendency”) proposed by Plaintiffs. Id. at 12-13.
As approved, the Notice of Pendency applies to all current and former employees of
Hunan Dynasty, Wen Mei, Fenny, “and/or any other entities affiliated with or
controlled by any one or more of the foregoing businesses” and any “restaurant
workers” at Hunan Dynasty from March 25, 2012 through the present. See Notice of
Pendency, DE [97-1]. It also explains that “the lawsuit seeks the payment of overtime
wages pursuant to the Fair Labor Standards Act” and that “[y]ou may be owed
payment if you worked for HUNAN DYNASTY and were not paid at least the
minimum wage for all hours worked . . . [or] if you worked for HUNAN DYNASTY
more than forty (40) hours per week and you were not paid overtime . . . .” Id. at 1-2.
Thirty-four executed consents to join the lawsuit have been filed. See DE [106-121,
125-129, 134-146].
B. Current Motions
On March 31, 2016, Plaintiffs moved for leave to amend the SAC. See Motion
to Amend. Claiming that “[d]uring the intake . . . Plaintiffs’ counsel discovered that
many opt-in deliverymen and waiters are paid less than the full minimum wage,”
Plaintiffs seek to add formal minimum wage causes of action under both the FLSA
and NYLL. See id. at 2. Further, they seek to add three new defendants: (1) Chen’s,
a restaurant located at 2292 Hempstead Turnpike, East Meadow, NY 11554, and an
alleged “joint employer and a subsequent employer” of Fenny; (2) Andy Chen, alleged
“owner, operator, manager, principal and/or agent” of Chen’s and son of Kevin Chen;

6

and (3) Luqi Xie, “owner, operator, manager, principal and/or agent” of Fenny and
Chen’s, and girlfriend of Andy Chen. Id. at 2-3; Proposed Third Amended Complaint
(“TAC”), DE [170-1], ¶¶ 32-33. The TAC outlines the following relationships between
the corporate entities:
ENTITY

ADDRESS

Hunan
Dynasty

2993 Hempstead
Turnpike, Levittown,
NY 11756
2993 Hempstead
Turnpike, Levittown,
NY 11756
2993 Hempstead
Turnpike, Levittown,
NY 11756

Wen Mei
Fenny

Chen’s

RELEVANT
YEARS
Operated
restaurant
10/1/03-8/15/12
Incorporated
3/6/12
Incorporated
5/30/14

2292 Hempstead
Turnpike, East
Meadow, NY 11554

THEORY OF
LIABILITY
Employer

Successor
employer; Joint
employer with
Chen’s
Successor
employer; Joint
employer with
Fenny

Incorporated
12/13/13

Successor
employer

The TAC further alleges that Kevin Chen controls the business, either individually
or by sharing common control with the other individual Defendants, whose
relationships are set out as follows:
NAME

CORPORATE AFFILIATION

Kevin
Chen

Owner/operator/manager/principal/agent of
“Defendant Corporations”

Cai Fen
Chen
Cindy
Chen
Luqi Xie

Owner/operator/manager/principal/agent of
Fenny
President/cashier/manager/principal/agent of
Wen Mei
Owner/operator/manager/principal/agent of
Fenny and Chen’s
7

PERSONAL
RELATIONSHIP
Husband of Cai Fen
Chen; Brother of
Cindy Chen; Father
of Andy Chen
Wife of Kevin Chen
Sister of Kevin Chen
Girlfriend of Andy
Chen

Andy Chen

CEO/owner/operator/manager/principal/agent Son of Kevin Chen
of Chen’s

Defendants oppose the Motion to Amend in its entirety. See Motion to Amend Opp.
Following the Motion to Amend, Plaintiffs filed several other motions. On
September 23, 2016, they moved for leave to file a late consent to join the collective
action. See Motion for Late Consent to Join. Specifically, Plaintiffs seek leave to file
a consent to join for prospective plaintiff Hua, who was a busboy for Defendants in
2013 and “came to the office to sign the consent to join[] form” after the expiration of
the opt-in period. See id. at 1. By their opposition, Defendants submit the declaration
of Cai Fen Chen, who asserts that Hua was never an employee of Wen Mei. See
Declaration of Cai Fen Chen (“Cai Fen Chen Decl.”), DE [162].
Plaintiffs also move to compel the production of documents by non-party Xue
Hua Xu (“Xu”). 3 They claim that Xu failed to produce responsive documents despite
being served with a subpoena requesting the production of documents at his
deposition on September 29, 2016. See Motion to Compel at 2. Defendants challenge
this motion, claiming that counsel was not provided sufficient notice of the subpoena
in violation of Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 45(a)(4), and that
the deposition of Xu occurred without notice to or presence of defense counsel in
violation of Fed. R. Civ. P. 30. See Motion to Compel Opp. Due to these violations,
Defendants cross-move for sanctions including attorneys’ fees and preclusion of the

These documents concern the relationship between Fenny and Shanghai Gourmet Food, Inc.
(“Shanghai Gourmet”), which is not a Defendant.
3

8

testimony procured at the deposition. Id. at 3. No opposition to the cross-motion for
sanctions was filed.
Finally, in light of the pending motions, both parties move for an extension of
discovery deadlines. Plaintiffs seek a 90 day extension, and Defendants request up
to 120 days. See Pl.’s Request for Extension; Def.’s Request for Extension.
The Court addresses each motion below.
II.

MOTION FOR LEAVE TO AMEND
A. Legal Standard
Motions for leave to amend pleadings are governed by Fed. R. Civ. P. 15, which

provides that “[t]he court should freely give leave [to amend] when justice so
requires.” Fed. R. Civ. P. 15(a)(2); see also Amaya v. Roadhouse Brick Oven Pizza,
Inc., 285 F.R.D. 251, 253 (E.D.N.Y. 2012) (“A court should freely give leave [to amend]
when justice so requires and such leave is in the court’s discretion.”) (internal
quotation marks omitted). Courts interpret Fed. R. Civ. P. 15 liberally. See Assam
v. Deer Park Spring Water, Inc., 163 F.R.D. 400, 404 (E.D.N.Y. 1995) (“Federal Rule
of Civil Procedure 15(a) dictates that motions to amend complaints be liberally
granted absent a good reason to the contrary . . . .”).

Motions to add parties are

governed by Fed. R. Civ. P. 21, which states that, “[o]n motion or on its own, the court
may at any time, on just terms, add or drop a party.” Fed. R. Civ. P. 21; see also Rosas
v. Alice's Tea Cup, LLC, 127 F. Supp. 3d 4, 13 (S.D.N.Y. 2015) (citing standard under
Rule 21). Rule 21 motions are afforded the “same standard of liberality afforded to
motions to amend pleadings under Rule 15.” Addison v. Reitman Blacktop, Inc., 283

9

F.R.D. 74, 79 (E.D.N.Y. 2011). Indeed, “[t]here is . . . little practical difference
between Rule 15 and Rule 21 since they both leave the decision whether to permit or
deny an amendment to the district court’s discretion.” See Amaya, 285 F.R.D. at 253.
Leave to amend a complaint should only be denied “if there is delay, bad faith,
futility, or prejudice to the non-moving party.” Hosking v. New World Mortg., Inc.,
602 F. Supp. 2d 441, 445 (E.D.N.Y. 2009) (citing Foman v. Davis, 371 U.S. 178, 182,
83 S. Ct. 227, 230 (1962)); see also Copantitla v. Fiskardo Estiatorio, Inc., No. 09 CIV.
1608, 2010 WL 1327921, at *3 (S.D.N.Y. Apr. 5, 2010) (applying the same four factors
in deciding whether to permit joinder). The party opposing a motion to amend bears
the burden of establishing that the amendment should be denied. See Joinnides v.
Floral Park–Bellerose Union Sch. Dist., No. 12-CV-5682, 2015 WL 1476422, at *9
(E.D.N.Y. Mar. 31, 2015) (“With respect to the Rule 15(a) factors, ‘[t]he party opposing
the motion for leave to amend has the burden of establishing that an amendment
would be prejudicial or futile.’”) (quoting Cummings–Fowler v. Suffolk Cty. Cmty.
Coll., 282 F.R.D. 292, 296 (E.D.N.Y. 2012)). Here, Defendants oppose the proposed
amendments on the grounds of futility and prejudice.
B. Futility
An amendment is futile if “the proposed claim could not withstand a Fed. R.
Civ. P 12(b)(6) motion to dismiss.” Salazar v. Browne Realty Assocs., L.L.C., 796 F.
Supp. 2d 378, 383 (E.D.N.Y. 2011). Therefore, a proposed amended complaint must
“contain enough allegations of fact to state a claim for relief that is ‘plausible on its
face.’” Mendez v. U.S. Nonwovens Corp., 2 F. Supp. 3d 442, 451 (E.D.N.Y. 2014)

10

(quoting Bell Atl. Corp. v. Twombley, 550 U.S. 544, 570, 127 S. Ct. 1955, 1974 (2007)).
When a party opposes a motion to amend on futility grounds, “the moving party must
merely show that it has at least colorable grounds for relief.” Copantitla v. Fiskardo
Estiatorio, Inc., No. 09 Civ. 1608, 2010 WL 1327921, at *3 (S.D.N.Y. Apr. 5, 2010)
(internal quotation marks omitted). On a motion to amend, “the Court is required to
accept the material facts alleged in the amended complaint as true and draw
reasonable inferences in the plaintiff’s favor.” Mendez, 2 F. Supp. 3d at 451 (citing
Ashcroft v. Iqbal, 556 U.S. 662, 678-79, 129 S. Ct. 1937, 1949 (2009)).

Here,

Defendants’ futility arguments include that: (1) Plaintiffs lack standing to assert
claims against Chen’s and Andy Chen because their employment ended before Chen’s
came into existence; (2) Xie is not an individual employer under the FLSA; (3) the
minimum wage claims are barred due to a lack of standing; (4) the minimum wage
claims are untimely; and (5) employment records prove that the Wen Mei did, in fact,
pay the minimum wage. Motion to Amend Opp. at 2-3; Supp. Motion to Amend Opp.
at 1-2; Second Supp. Motion to Amend at 2. The Court addresses each argument in
turn.
1. Additional Defendants
i. Successor Liability: Chen’s
Defendants assert that the named Plaintiffs do not have standing to assert
claims against Chen’s because their “employment ceased before Chen’s (and Fenny)
came into existence . . . .” Motion to Amend Opp. at 2. Although this is true, see TAC
¶ 45 (last date of employment of a named Plaintiff May 5, 2013); ¶ 23 (Chen’s began

11

using employees on September 29, 2014), Plaintiffs contend that Chen’s is liable as a
successor of the previous chain of employers: Fenny, Wen Mei, and Hunan Dynasty.
See Motion to Amend at 2; TAC ¶ 24. For the reasons set forth below, the Court finds
that Plaintiffs sufficiently plead that Chen’s is liable under the theory of successor
liability, and, as such, grants the Motion to Amend for leave to add Chen’s.
Although a company is not typically liable for the actions of its predecessor,
Courts in this Circuit “have employed two tests to determine if liability should be
imposed on a successor . . . .” Chen v. DG&S NY, Inc., No. 14CV03435, 2016 WL
5678543, at *4 (E.D.N.Y. Sept. 29, 2016). Under the traditional test, successor
liability “will attach where: (1) a successor expressly or impliedly assumed the
predecessor's liabilities; (2) there was a consolidation or ‘de facto merger’ of
predecessor and successor; (3) the successor corporation was a mere continuation of
its predecessor; or (4) the transaction between successor and predecessor was entered
into fraudulently to escape obligations.” Id. (citing N.Y. v. Nat'l Serv. Indus., Inc.,
460 F.3d 201, 209 (2d Cir. 2006)). Under the second test, substantial continuity,
courts “focus[] on whether the new company has ‘acquired substantial assets of its
predecessor and continued, without interruption or substantial change, the
predecessor’s business operations.’” Id. (quoting Bautista v. Beyond Thai Kitchen,
Inc., No. 14-cv-4335, 2015 WL 5459737, at *5 (S.D.N.Y. Sept. 17, 2015)).
Here, Plaintiff alleges in the TAC facts concerning successor liability sufficient
to pass either test. Plaintiffs claim that in October 2014, Kevin Chen opened a new
restaurant for Hunan Dynasty at 2292 Hempstead Turnpike, the current location of

12

Chen’s. TAC ¶ 22. On the day before the opening of the restaurant, Kevin Chen
“began assigning” workers from Fenny to work at Chen’s, and, throughout their coexistence, the two entities “frequently transport[ed] restaurant goods, materials and
equipment” between each other. Id. at ¶¶ 23, 25. Further, Plaintiffs claim that when
Fenny closed in 2015, all of Chen’s employees were “ordered” by Kevin Chen to
“transport all remaining restaurant goods, including foodstuffs and equipment” to
Chen’s, and certain employees were transferred as well. Id. at ¶¶ 26-27. At this stage
of the litigation, these allegations are sufficient under either test to establish
successor liability, as they support the conclusion that Chen’s continued the business
of Fenny, including utilizing the same workers, and that Chen’s acquired the
equipment, hence assets, of Fenny. See, e.g., Alvarez v. 40 Mulberry Rest., Inc., No.
11 CIV. 9107, 2012 WL 4639154, at *6 (S.D.N.Y. Oct. 3, 2012) (finding a question of
fact as to whether a restaurant is subject to successor liability where it shared the
same equipment and personnel of its predecessor).
Because Plaintiffs sufficiently allege successor liability, the fact that the
named Plaintiffs did not work for Fenny is of no consequence. In the TAC, Plaintiffs
assert that Fenny is liable as a successor employer of Wen Mei and Hunan Dynasty,
claiming that after the commencement of this action, Defendants transferred all
interest in the Restaurant from Wen Mei to Fenny. See TAC ¶ 10. Thereafter, Fenny
operated the restaurant at the Levittown location, shared the same employees, and
perpetuated the same working conditions of Wen Mei. Id. at ¶¶ 11, 13, 20-21. See
Chen, 2016 WL 5678543, at *5 (finding a question of fact as to successor liability

13

where the alleged predecessor and successor shared the same location, utilized the
same employees, offered the same food, and had the same manager). Accordingly,
that no named Plaintiff worked at Fenny or Chen’s does not defeat the Motion to
Amend, as the Plaintiffs successfully plead potential successor liability.
ii. Individual Liability: Andy Chen and Xie
Defendants also oppose the addition of individual Defendants Andy Chen and
Xie. Notably, they assert that the TAC fails to adequately allege individual liability
under the FLSA. See Supp. Motion to Amend Opp. The Court disagrees.
To determine whether an individual qualifies as an “employer” under the
FLSA, the Second Circuit applies the economic realities test, which focuses on four
factors—“whether the alleged employer (1) had the power to hire and fire the
employees, (2) supervised and controlled employee work schedules or conditions of
employment, (3) determined the rate and method of payment, and (4) maintained
employment records.” Irizarry v. Catsimatidis, 722 F.3d 99, 104-105 (2d Cir. 2013);
see also Schear v. Food Scope Am., Inc., 297 F.R.D. 114, 134 (S.D.N.Y. 2014) (citing
the same four factors). This test “applies equally to the FLSA and NYLL . . . .” Chen,
2016 WL 5678543, at *3. Further, no one factor is dispositive. Irizarry, 722 F.3d at
105; see also Ramirez v. Riverbay Corp., 35 F. Supp. 3d 513, 521 (S.D.N.Y. 2014),
appeal withdrawn (Dec. 8, 2014), appeal withdrawn (Dec. 9, 2014) (“This set of factors
is intended to be “nonexclusive and overlapping . . . .”) (internal quotation marks
omitted). Rather, the analysis depends on whether the defendant had “operational
control” over employees, which requires that “the relationship between the

14

individual’s operational function and the plaintiffs’ employment must be closer in
degree than simple but—for causation.” Irizarry, 722 F.3d at 110.
The Court finds that the Third Amended Complaint sufficiently establishes
individual liability of both Andy Chen and Xie. Regarding Andy Chen, Plaintiffs
allege that he is the “CEO, owner, operator, manager, principal and/or agent of”
Chen’s, and that he controls “the restaurant’s day-to-day operations . . . .” TAC ¶ 34.
They further claim that he transferred materials between Chen’s and Fenny. Id. at
¶ 25. As to Xie, there are similar allegations, including that she “serves as owner,
operator, manager, principal, and/or agent” of Fenny and Chen’s, and exercises
control over the day-to-day affairs of the Restaurant.

Id. at ¶¶ 32-33.

These

statements are sufficient to establish that Andy Chen and Xie are employers under
the FLSA and NYLL, as they served as managers over the day-to-day affairs of the
restaurants.
Defendants argue in opposition that Xie testified at her deposition that she
was only an “investor,” and that she did not employ anyone at Fenny, set wages, or
maintain payroll records. See Supp. Motion to Amend Opp. at 2. Although such
testimony, if true, may defeat a finding that Xie is an employer under the FLSA or
NYLL at summary judgment or at trial, Plaintiffs are entitled to offer evidence to
prove their claim. See A.V.E.L.A., Inc. v. Estate of Monroe, 34 F. Supp. 3d 311, 319
(S.D.N.Y. 2014) (“[T]he proper inquiry ‘is not whether a [moving party] will ultimately
prevail but whether [that party] is entitled to offer evidence to support the claims.’”)
(quoting Todd v. Exxon Corp., 275 F.3d 191, 198 (2d Cir.2001) (alterations in

15

original)).

Accordingly, the Court grants Plaintiffs’ motion for leave to file an

amended complaint to add Defendants Chen’s, Andy Chen, and Xie.
2. Minimum Wage Claim
Plaintiffs also seek leave to add minimum wage claims pursuant to the FLSA
and NYLL “for those Plaintiffs who were not paid at least the hourly minimum wage
for all hours worked.” See Motion to Amend at 1. By way of opposition, Defendants
argue that such amendment is futile as the named Plaintiffs lack standing to assert
this claim, and, in any event, they are time barred. See Mtn. to Amend Opp. at 2.
Further, they argue that the “proposed addition of a claim for alleged failure to pay
minimum wage flies in the face of payroll records produced by Defendants and filed
with this Court, showing that Defendants paid the minimum wage . . . .” Second
Supp. Motion to Amend at 2. The Court addresses each argument in turn.
i. Standing
Defendants first argue that amendment is futile as “the named plaintiffs’
employment ceased before Chen’s (and Fenny) came into existence,” and therefore
they lack standing to assert the minimum wage claims as individual claims. Motion
to Amend Opp. at 2. However, the TAC alleges the minimum wage causes of action
against all Defendants, including Hunan Dynasty and Wen Mei, which both
indisputably employed the named Plaintiffs. See TAC ¶ 5 (Hunan Dynasty operated
from October 1, 2003 through August 15, 2012); ¶¶ 7, 11 (Wen Mei incorporated on
March 6, 2012 and presumably operated restaurant until Fenny’s incorporation in
May 2014); ¶¶ 43-45 (Plaintiff Liu’s employment spanned 2006 through 2013); ¶ 46

16

(Plaintiff Lin’s employment spanned 2008 through 2012); ¶ 48 (Plaintiff Cheng’s
employment spanned 2007 through 2012); ¶ 49 (Plaintiff Hsieh was employed in
2012). As employees of the corporate entities, the named Plaintiffs have standing to
assert claims against Hunan Dynasty and Wen Mei. See, e.g., Lin v. Great Rose
Fashion, Inc., No. 08-CV-4778, 2009 WL 1544749, at *11 (E.D.N.Y. June 3, 2009)
(analyzing whether an employment relationship exists to determine if an employee
has standing to sue). Moreover, as set forth above, although the named Plaintiffs did
not work for either Fenny or Chen’s, they are potentially liable as successors. As
such, Defendants’ standing argument fails, and cannot defeat the Motion to Amend.
ii. Statute of Limitations
Next, the Court turns to Defendants’ timeliness argument.

Although

Defendants only assert that the claims are untimely under the FLSA, the Court
analyzes the pertinent statute of limitations under both the FLSA and NYLL, and
concludes that the minimum wage claim is not barred under either statute.
1. FLSA
“[I]n an FLSA collective action, the statute of limitation[s] runs for each
plaintiff until he or she affirmatively opts in to the lawsuit.” Chimes v. Peak Sec.
Plus, Inc., 137 F. Supp. 3d 183, 204 (E.D.N.Y. 2015); see also Jacobsen v. The Stop &
Shop Supermarket Co., No. 02 CIV. 5915, 2004 WL 1918795, at *2 (S.D.N.Y. Aug. 27,
2004) (“The parties agree that, under the FLSA, the statute of limitations with
respect to an individual's claim is not tolled until he or she files a written consent to
join the collective action.”). Under the FLSA, the statute of limitations is two years,

17

and is extended to three years for willful violations. Davis v. Lenox Hill Hosp., No.
03 CIV.3746, 2004 WL 1926086, at *7 (S.D.N.Y. Aug. 31, 2004). Although, “whether
this action is governed by a two or three year statute of limitations is an issue of fact,”
because Defendants rely on the three-year limitation in their opposition, the Court
assumes for the purposes of this motion that the longer time period applies. Id.; see
also Motion to Amend Opp. at 2 (“April 1, 2016 is more than 3 years after the latest
date of employment by the living plaintiffs, December 31, 2012.”). Here, Defendants
contend that since no minimum wage claims are formally set forth, and Plaintiffs
have not filed consents with respect thereto, they are time barred.
The statute of limitations is tolled on the date on which the consents to join
suit were filed. Accordingly, the Court initially turns to the consents filed on March
25, 2015 by the five named Plaintiffs. See Arena v. Plandome Taxi Inc., No. CV 121078, 2013 WL 1748451, at *1 (E.D.N.Y. Apr. 23, 2013) (“An FLSA action is deemed
commenced on the date of filing only for those named plaintiffs who have
simultaneously filed consents to join the action.”) (internal quotation marks omitted).
Upon review, the Court finds that the consents encompass the minimum wage claim,
expressly stating that the named Plaintiffs authorize the prosecution of claims on
their behalf to contest the failure of Hunan Dynasty “to pay [them] overtime wages
and/or minimum wages as required under state and/or federal law including the Fair
Labor Standards Act . . . .” See DE [29-33]. Moreover, in this Court’s October 23,
2015 Memorandum and Order granting the Motion to Certify, it found that the
allegations in the SAC and the declarations sufficiently placed Defendants on notice

18

of Plaintiffs’ minimum wage claims. See Am. Mem. and Order at 5, n.4. Although
the SAC had not yet been filed at the time the named Plaintiffs filed their consents
to join, their declarations in connection with the Motion to Certify were on the docket.
See DE [26]. As such, the Court deems the consents filed by the named Plaintiffs
sufficient to encompass a minimum wage cause of action.
The same is true for the opt-in Plaintiffs. These Plaintiffs filed their consents
based on the Notice of Pendency, the purpose of which is it provide “accurate and
timely notice concerning the pend[ing] . . . collective action, so that [an individual
receiving the notice] can make an informed decision about whether to participate.”
Delaney v. Geisha NYC, LLC, 261 F.R.D. 55, 59 (S.D.N.Y. 2009) (citing Fasanelli v.
Heartland Brewery, Inc., 516 F. Supp. 2d 317, 323 (S.D.N.Y. 2007)). Here, the Notice
of Pendency includes references to minimum wage claims, stating that Plaintiffs
“have brought this action on behalf of all other current and former employees to
recover unpaid minimum wages and overtime compensation.” Notice of Pendency at
1. The second page states that “[y]ou may be owed payment if you worked for
HUNAN DYNASTY and were not paid at least the minimum wage for all hours
worked.” Id. at 2. It continues that “[i]f you wish to participate in the portion of this
lawsuit that seeks payment of improperly withheld minimum wages . . . you must
sign and return the enclosed Consent to Joinder form as directed below.” Id. This
language in the Notice of Pendency sufficiently provides the potential plaintiffs with
enough information concerning the minimum wage claim to support an “informed
decision[] about whether to participate.”

19

As the consents by both the named and opt-in Plaintiffs properly gave notice
of the minimum wage claims, the Court utilizes the last date of which a consent was
filed to calculate the statute of limitations:

February 14, 2016.

See DE [146].

Further, the Memorandum and Order granting the Motion to Certify equitably tolled
the statute of limitations period from May 25, 2015 through October 23, 2015, the
date of the Order. See Am. Mem. and Order at 14. This equitable tolling is for 151
days and therefore the statute of limitations has run on any claim under the FLSA
prior to September 16, 2012 (three years plus 151 days). As the last named Plaintiff
who complains of minimum wage violations was employed after September 2012, the
Court concludes that the minimum wage claim is not time barred. See Affidavit of
Ru Hao Liu (“Liu Aff.”), DE [26-4], ¶¶ 5, 22 (stating that he worked from March 29,
2013 through May 5, 2013 and was paid “well below the minimum hourly wage” and
without overtime pay). 4
2. NYLL
Turning to the NYLL, the Court initially focuses on the purported class
members, as Plaintiffs allege the NYLL minimum wage cause of action on behalf of
themselves and a class pursuant to Fed. R. Civ. P. 23. It is well established that
“commencement of a class action suspends the applicable statute of limitations as to
all asserted members of the class who would have been parties had the suit been
permitted to continue as a class action.” Am. Pipe & Const. Co. v. Utah, 414 U.S. 538,
554, 94 S. Ct. 756, 766 (1974). However, Plaintiffs have not yet moved to certify the
Whether any individual Plaintiff’s minimum wage claim is time-barred can be addressed in
subsequent motions or at trial on a case-by-case basis.
4

20

class under Rule 23. As such, it is premature to rule on whether the minimum wage
claims are barred by the statute of limitations for the purported class members. See
In re Gilat Satellite Networks, Ltd., No. CV-02-1510, 2005 WL 2277476, at *24
(E.D.N.Y. Sept. 19, 2005) (declining to decide whether an amendment to add class
plaintiffs is time barred because the class had not yet been certified as a class action
pursuant to Rule 23). Rather, this determination is better reserved for a motion to
certify the class, and is not grounds, at this time, to deny the Motion to Amend. See
Sperber Adams Assocs. v. Jem Mgmt. Assocs. Corp., No. 90 CIV. 7405, 1992 WL
28444, at *3 (S.D.N.Y. Feb. 7, 1992) (finding that the determination of whether a
claim is time barred for purported class members where no class was certified is
“premature,” “tantamount to an advisory opinion,” and better addressed “at the time
plaintiffs move for class certification.”).
Turning to the named Plaintiffs, these individuals allege that they were
employed by Defendants as early as 2006 and through 2013. See TAC ¶¶ 41-49. As
the statute of limitations under the NYLL is six years, Cohan v. Columbia Sussex
Mgmt., LLC, No. CV 12-3203, 2013 WL 8367807, at *9 (E.D.N.Y. Sept. 19, 2013),
aff'd, 2016 WL 1045532 (E.D.N.Y. Mar. 15, 2016), and the Motion to Amend was filed
on March 31, 2016, certain periods of employment for the named Plaintiffs are barred
unless such claims relate back to the filing of the original Complaint. The relation
back doctrine is governed by Rule 15(c), which, relevant here, provides:

“[a]n

amendment to a pleading relates back to the date of the original pleading when . . .
the amendment asserts a claim or defense that arose out of the conduct, transaction,

21

or occurrence set out—or attempted to be set out—in the original pleading . . . .” Fed.
R. Civ. P. 15(c)(2). The “central inquiry” under Rule 15(c)(2) “is whether adequate
notice of the matters raised in the amended pleading has been given to the opposing
party within the statute of limitations ‘by the general fact situation alleged in the
original pleading.’” Stevelman v. Alias Research Inc., 174 F.3d 79, 86–87 (2d Cir.
1999) (quoting Rosenberg v. Martin, 478 F.2d 520, 526 (2d Cir.1973)).
Applying the relation back doctrine here, the original Complaint, filed on
March 12, 2014, clearly placed Defendants on notice of the minimum wage cause of
action. For example, Plaintiffs claim that the named Plaintiffs were paid $400 bimonthly, and worked 55.5-63 hours per week. Compl. ¶¶ 7-15. The hourly wage
amounts to, at most, $3.33, below the minimum wage in 2006. See N.Y. Lab. Law §
652 (minimum wage beginning January 1, 2006 was $6.75). Further, in alleging a
class action, Plaintiffs state that “[a]ll the Class members were subject to the same
corporate Defendants, as alleged herein, of failing to pay minimum wage . . . .” Compl.
¶ 22. Accordingly, as Plaintiffs set forth facts to support a minimum wage claim and
expressly referenced such cause of action in the original Complaint, the proposed
amendment relates back to the filing of the original Complaint. Therefore, any
minimum wage claim that occurred after March 12, 2008 is viable. As each named
Plaintiff claimed to have worked for Defendants on or after that date, the minimum
wage claim is not time barred and therefore amendment is not futile on those
grounds.

22

iii. Wen Mei’s Time Records
Finally, Defendants argue that amendment is futile because Wen Mei’s payroll
records indicate that all employees were paid the minimum wage. See Motion to
Amend Opp. at 1. Even if true, this argument fails as a matter of law, as Wen Mei
may still be liable as a successor employer of Hunan Dynasty. As set forth above, a
corporate entity may be liable for the acts of its predecessor under either the
“traditional test” or “substantial continuity test.” See Chen, 2016 WL 5678543, at *4.
Here, Plaintiffs allege that Hunan Dynasty operated the Restaurant until August 15,
2012, the same year Wen Mei was incorporated, and that the two entities shared the
“same waiters, deliverymen, and kitchen staff with substantially the same work
shifts and pay conditions.” See TAC ¶¶ 5, 7, 20-21. These claims are sufficient to
allege successor liability, because, if true, they tend to establish that Wen Mei was a
continuation of Hunan Dynasty, and that it prolonged, without any substantial
change, the business operations of its predecessor. Accordingly, whether Wen Mei
paid the minimum wage does not defeat a proposed cause of action based on Hunan
Dynasty’s earlier violations of the FLSA and NYLL. In fact, Defendants offer no
evidence that Hunan Dynasty paid the minimum wage, but rather admit that they
do not have the payroll records of that entity. 5 See Motion to Amend Opp. at 1, n.1.

Rather, Defendants argue that since Hunan Dynasty ceased operation in late April 2012 and
the consents to join suit were filed March 25, 2015, “all two-year claims and most three-year claims
against that defendant are time-barred.” Motion to Amend Opp. at 1, n.1. The Court, however,
declines to deny the Motion to Amend on the grounds for leave that “most” claims may be time-barred,
particularly in light of the liberal standard applicable on a motion to amend. See Bridgeport Music,
Inc. v. Universal Music Grp., Inc., 248 F.R.D. 408, 410 (S.D.N.Y. 2008) (“Moreover, the underlying
motions are reviewed under the liberal standard applicable under Federal Rule of Procedure 15(a),
which encourages permitting amendments of pleadings . . . .”).
5

23

Accordingly, the Court finds that Plaintiffs’ proposed minimum wage claims are not
futile.
C. Prejudice
Turning to prejudice, “courts have recognized that prejudice may well be the
most important consideration when deciding a motion to amend.” See Lin v. Toyo
Food, Inc., No. 12-CV-7392, 2016 WL 4502040, at *2 (S.D.N.Y. Aug. 26, 2016). In
considering whether an amendment prejudices a non-moving party, courts analyze
“whether the assertion of the new claim or defense would (i) require the opponent to
expend significant additional resources to conduct discovery and prepare for trial; (ii)
significantly delay the resolution of the dispute; or (iii) prevent the plaintiff from
bringing a timely action in another jurisdiction.” See Portelos v. City of N.Y., No. 12CV-3141, 2015 WL 5475494, at *2 (E.D.N.Y. Sept. 15, 2015) (quoting Monahan v.
N.Y.C. Dep't of Corr., 214 F.3d 275, 284 (2d Cir.2000)).
Defendants’ main prejudice objection is that the Court certified the collective
and approved the Notice of Pendency based on overtime violations only, and therefore
Plaintiffs’ motion is an effort “to expand the conditional certification order through
amendment of their complaint without seeking any modification . . . .” Supp. Motion
to Amend Opp. at 3. Defendants’ argument misses the mark. In granting the Motion
to Certify, this Court recognized that, despite not being formally pled, “the factual
allegations in the SAC and the declarations” were sufficient to place Defendants on
notice of the minimum wage claim, and that “Plaintiffs assert FLSA claims for failure
to pay minimum wage and overtime compensation on behalf of themselves and all

24

similarly situated employees.” Am. Mem. and Order at 5. Thus, the Order granting
conditional certification was not premised solely on overtime violations. Further, for
the reasons expressed above, the Notice of Pendency encompasses the minimum wage
causes of action. See Section II.B.2. Accordingly, the Order granting the Motion to
Certify and the Notice of Pendency need not be modified, diminishing any perceived
prejudice to Defendants on that basis.
The same is true for the additional Defendants. Indeed, the Notice of Pendency
states that it applies to workers at the Restaurant located at 2993 Hempstead
Turnpike, “and/or any other entities affiliated with or controlled by any one or more
of the foregoing businesses . . . .” Notice of Pendency at 1. As Plaintiffs expressly
allege that Chen’s, and thus Andy Chen, is an entity affiliated with Fenny, Wen Mei,
and Hunan Dynasty, and controlled by the same individuals, the Notice of Pendency
sufficiently places potential Plaintiffs on notice that it applies to other related
restaurants, such as Chen’s. See TAC ¶ 24 (alleging Chen’s, Fenny, and Wen Mei are
“a single and joint employer”); ¶ 40 (stating that Kevin Chen remains in control of
the “business,” either alone or with the other individual Defendants).
Defendants further argue that amendment is prejudicial because the
minimum wage cause of action is inconsistent with Plaintiffs’ previous discovery
responses.

Specifically, they complain that Plaintiffs stated in an interrogatory

response that they are only pursuing overtime compensation and spread of hours pay.
See Second Supp. Motion to Amend at 2. Defendants’ characterization, however, is
unfounded. In response to Defendants’ interrogatory as to whether Plaintiffs claim

25

money “for any reason other than overtime hours,” Plaintiffs responded that
“[d]iscovery is ongoing, and, at this stage, it is impossible to ascertain which facts will
substantiate Plaintiff’s claims regarding federal and state laws” and that “Plaintiff
reserves the right to modify, supplement or amend this response.” See Plaintiff’s
First Response to Defendants First Set of Interrogatories, DE [150-1], ¶ 9. Moreover,
the lack of discovery on the minimum wage claim and the addition of Defendants is
not unduly prejudicial because the Court, as set forth below, grants the parties’
request for an extension of discovery deadlines.
For the foregoing reasons, the Court finds that adding the minimum wage
claim to the TAC does not prejudice Defendants sufficient to defeat the motion for
leave to amend. Accordingly, Plaintiffs’ Motion to Amend is granted and Plaintiffs
are instructed to serve and file the TAC on the docket on or before January 3, 2017.
III.

MOTION FOR LATE CONSENT TO JOIN
Plaintiffs’ second motion is for leave to file a late consent to join. In analyzing

whether “to include opt-in plaintiffs whose consent forms are filed after the courtimposed deadline has passed,” courts consider the following factors: “(1) whether
good cause exists for the late submissions; (2) prejudice to the defendant; (3) how long
after the deadline passed the consent forms were filed; (4) judicial economy; and (5)
the remedial purposes of the FLSA.” Ruggles v. Wellpoint, Inc., 687 F. Supp. 2d 30,
37 (N.D.N.Y. 2009) (internal quotation marks); see also Velasquez v. Digital Page,
Inc., No. CV 11-3892, 2014 WL 6751574, at *1 (E.D.N.Y. Dec. 1, 2014) (same four
factors).

26

Here, the Court finds that Plaintiffs have satisfied this standard regarding the
late opt-in of prospective Plaintiff Hua, who claims to have endured overtime,
minimum wage, and spread of hours violations while he worked as a busboy for
defendants. See Motion for Late Consent to Join at 1. Initially, Plaintiffs contend
that good cause exists as Hua’s name was not included on the list of all employees
provided to them by Defendants. See id. at 2; Ex. 2. Although Defendants assert that
he was never an employee of Wen Mei, and thus was not included on the list, this is
a question of fact that cannot be decided by the Court in the context of a motion for
leave to amend the pleadings. The remaining factors also weigh in favor of granting
Plaintiffs’ motion. Defendants will not be prejudiced by the late opt-in, as only one
Plaintiff is sought to be added and Defendants will be permitted to take discovery
relating to his claims. See Velasquez, 2014 WL 6751574, at *2 (“The inclusion of this
single plaintiff will not overly burden or prejudice the defendants.”).

Moreover,

although seven months have passed since the opt-in deadline of February 15, 2016,
this delay is not prejudicial as a trial date has not been set and the parties have not
moved for summary judgment. Judicial economy is also furthered, as Plaintiffs
correctly point out that, if not added to this action, Hua “would still be able to file
separate claims for relief against Defendant . . . .” See Motion for Late Consent to
Join at 2. Finally, allowing Hua’s late consent to join where he claims to have had no
notice of the suit furthers the remedial purposes of the FLSA, which is “to prevent
abuses by unscrupulous employers, and remedy the disparate bargaining power
between employers and employees.” Cheeks v. Freeport Pancake House, Inc., 796 F.3d

27

199, 207 (2d Cir. 2015), cert. denied, 136 S. Ct. 824 (2016); see also A.H. Phillips, Inc.
v. Walling, 324 U.S. 490, 493, 65 S. Ct. 807, 808 (1945) (stating the purpose of the
FLSA is to ensure “all our able-bodied working men and women a fair day's pay for a
fair day's work.”) (internal quotation marks omitted). Accordingly, Plaintiffs’ Motion
for Late Consent to Join is granted. The Consent to Join Lawsuit signed by Plaintiff
Peifeng Hua, and attached to Plaintiffs’ Motion for Late Consent to Join, DE [160-1],
is deemed filed.
IV.

MOTION TO COMPEL AND DEFENDANTS’ CROSS-MOTION FOR
SANCTIONS
Plaintiffs also seek a Court Order compelling non-party Xu to produce

documents previously subpoenaed in connection with his deposition. See Motion to
Compel. Defendants challenge the subpoena as “void and unenforceable” because
Plaintiffs failed to provide Defendants with proper notice of the subpoena in violation
of Rule 45(a)(4). See Motion to Compel Opp. at 1-2. They further seek sanctions,
claiming that they were never provided proper notice of Xu’s deposition, and therefore
“plaintiffs took the deposition of the nonparty on September 29, 2016—without the
presence of either of the defense attorneys because they had no notice of it.” Id. at 2.
Due to this purported violation, Defendants seek: (1) an order precluding Plaintiffs
and their attorneys, witnesses, agents, and experts from offering into evidence any
deposition testimony of the non-party as taken on September 29, 2016; (2) an order
requiring Plaintiffs turn over or destroy all copies of the transcript “and certify that
they have done so;” and (3) attorneys’ fees incurred by Defendants by way of their
opposition to the Motion to Compel and cross-motion for sanctions. Id.
28

An attorney “may issue a subpoena on behalf of a court in which the attorney
is authorized to practice, or for a court in a district in which a document production
is compelled by the subpoena.” Beruashvili v. Hobart Corp., No. CV 2005-1646, 2006
WL 2289199, at *1 (E.D.N.Y. Aug. 8, 2006) (citing Fed. R. Civ. P. 45(a)(3)); see also
Beare v. Millington, No. 07-CV-3391, 2010 WL 234771, at *3 (E.D.N.Y. Jan. 13, 2010)
(“Rule 45 of the Federal Rules of Civil Procedure provides that an attorney, as an
officer of the court, may issue a subpoena on behalf of a court in which the attorney
is authorized to practice, or for a court in a district in which a document production
is compelled by the subpoena.”).

“Absent an improperly issued subpoena or an

‘adequate excuse’ by the non-party, failure to comply with a subpoena made under
Rule 45 may be deemed a contempt of the court from which the subpoena issued.”
Beruashvili, 2006 WL 2289199, at *1. Further, “[i]n the absence of a claim of privilege
a party usually does not have standing to object to a subpoena directed to a non-party
witness,” Langford v. Chrysler Motors Corp., 513 F.2d 1121, 1126 (2d Cir. 1975),
unless the party challenges that it “has a sufficient privacy interest in the
confidentiality of the records sought.” Dunkin' Donuts Franchised Restaurants LLC
v. Grand Cent. Donuts, Inc., No. CV2007-4027, 2009 WL 973363, at *1 (E.D.N.Y. Apr.
9, 2009).
Rule 45(a)(4) requires that notice be served on all parties prior to service of the
subpoena on the non-party. See Fed. R. Civ. P. 45(a)(4) (“If the subpoena commands
the production of documents, electronically stored information, or tangible things or
the inspection of premises before trial, then before it is served on the person to whom

29

it is directed, a notice and a copy of the subpoena must be served on each party.”)
(emphasis added). Courts have interpreted the notice provision to require “that
notice be given prior to the issuance of the subpoena, not prior to its return date.”
Murphy v. Bd. of Educ. of Rochester City Sch. Dist., 196 F.R.D. 220, 222 (W.D.N.Y.
2000) (internal quotation marks omitted). According to some courts, the “failure to
abide by this requirement constitutes grounds to quash a subpoena.”

Mirra v.

Jordan, No. 13 CIV. 5519, 2014 WL 2511020, at *3 (S.D.N.Y. May 28, 2014); see also
Schweizer v. Mulvehill, 93 F. Supp. 2d 376, 411 (S.D.N.Y. 2000) (“A party issuing a
subpoena to a non-party for the production of documents during discovery must
provide prior notice to all parties to the litigation.”). Other courts have gone so far as
to “hold that notice provided on the same day that the subpoenas have been served
constitutes inadequate notice under Rule 45.” Usov v. Lazar, No. 13 CIV. 818, 2014
WL 4354691, at *15 (S.D.N.Y. Sept. 2, 2014). However, “[t]he majority approach . . .
requires that the aggrieved party demonstrate some form of prejudice resulting from
the failure to provide advance notice.” Kingsway Fin. Servs., Inc. v. PricewaterhouseCoopers LLP, No. 03 CIV. 5560, 2008 WL 4452134, at *3 (S.D.N.Y. Oct. 2, 2008); see
also Zinter Handling, Inc. v. Gen. Elec. Co., No. 04CV500, 2006 WL 3359317, at *2
(N.D.N.Y. Nov. 16, 2006) (“However, such untimely notice under Rule 45(b)(1) does
not automatically trigger quashing a subpoena without a consideration of prejudice
to the aggrieved party.”).
Applying the standards above, Plaintiffs’ motion to compel is granted. It is
undisputed that the subpoena is dated the same day that it was served on the other

30

parties.

When the witness appeared for his deposition without the subpoenaed

documents, he violated the subpoena’s terms. See Motion to Compel Opp. at Ex. 1
(“Email and Subpoena”), DE [165-1]. Further, Defendants do not claim that they
objected to the subpoena prior to the return date and they fail to demonstrate any
resulting prejudice based on inadequate notice. See Zinter Handling, Inc., 2006 WL
3359317, at *2 (“Among other purposes, the requirement of notice prior to service
allows opposing parties the opportunities to object before service and to move to quash
if necessary.”); Schweizer, 93 F. Supp. 2d at 411 (the purpose of the notice provision
“is to afford the other parties an opportunity to object to the production or inspection,
or to serve a demand for additional documents or things.”). Accordingly, the Court
grants Plaintiffs’ Motion. See Allison v. Clos-ette Too, L.L.C., No. 14 CIV. 1618, 2015
WL 136102, at *7 (S.D.N.Y. Jan. 9, 2015) (“Because the plaintiff has not been
prejudiced by the late notice, I decline to quash the subpoenas on Rule 45 grounds . .
. .”); Seewald v. IIS Intelligent Info. Sys., Ltd., No. 93 CV 4252, 1996 WL 612497, at
*5 (E.D.N.Y. Oct. 16, 1996) (“Defendants learned of the document request . . . prior to
the production of the documents, and thus, were not prejudiced by the lack of
notice.”). 6
Having granted the Motion to Compel, the Court turns to Defendants’ crossmotion for sanctions in connection with Plaintiffs’ purported failure to provide notice

The Court is mindful of Plaintiffs’ violation of this Court’s May 20, 2015 ruling that “[i]n the
future all subpoenas will be first served on the serving parties’ adversaries in advance of service on
the non-parties sufficient to allow for any motion practice to occur.” See DE [69]. Here, however, as
the non-party failed to comply with the subpoena, Defendants were allotted time for this motion
practice. Plaintiffs are cautioned that further violations of this Court’s orders will result in sanctions,
including the preclusion of evidence.
6

31

of Xu’s deposition to Defendants. Although a subpoena may be issued pursuant to
Rule 45 in order to compel a deponent’s attendance, Rule 30 governs the notice
requirement affiliated with the deposition.

See Fed. R. Civ. P. 30(a)(1) (“The

deponent’s attendance may be compelled by subpoena under Rule 45.”). Pursuant to
Rule 30(b)(1) “[a] party who wants to depose a person by oral questions must give
reasonable written notice to every other party.” Fed. R. Civ. P. 30(b)(1). Courts have
found that the requisite notice “is fact specific and is determined based on the
circumstances and complexities of the particular case.” Porter v. Goord, No. 04-CV485A, 2008 WL 489271, at *2 (W.D.N.Y. Feb. 20, 2008); see also Brockway v. Veterans
Admin. Healthcare Sys., No. 3:10-CV-719, 2011 WL 1459592, at *3 (D. Conn. Apr. 15,
2011) (quoting Black's Law Dictionary (9th ed.2009)) (“‘Reasonable’ in this context
may be defined as ‘[f]air, proper, or moderate under the circumstances.’”). Outlining
the specific requirements, Rule 30 mandates that the notice include “the time and
place of the deposition,” “the deponent’s name and address,” and “the method for
recording the testimony.” See Fed. R. Civ. P. 30(b)(1). Further, “[i]f a subpoena duces
tecum is to be served on the deponent, the materials designated for production, as set
out in the subpoena, must be listed in the notice or in an attachment.” Id. at 30(b)(2).
Upon review, Defendants were provided with adequate notice of the deposition
and therefore the cross-motion for sanctions is denied. On September 14, 2016,
Plaintiffs, by their attorney John Troy, emailed defense counsel William Yeung and
Carolyn Shields and attached the Subpoena.

See Email and Subpoena at 1.

Defendants’ main contention is that the “testimony” box on the subpoena was not

32

checked, and only the “production” box was selected, and therefore Ms. Shields
“believed that the subpoena sought documents only from the nonparty.” Motion to
Compel Opp. at 2. However, the subpoena is titled “Subpoena To Testify At a
Deposition in a Civil Action,” and states that the “deposition will be recorded” by a
court reporter. Email and Subpoena. Further, the subpoena complies with the
requirements of Rule 30(b), which mandates that notice of a deposition include the
time and place of the deposition, the deponent’s name and address, the method of
recording, and “the materials designated for production . . . .” Fed. R. Civ. P. 30(b)(1)(2). As such, the mere defect of failing to select the “testimony” box, where the
subpoena is titled “Subpoena to Testify at a Deposition in a Civil Action,” does not
defeat a finding that Defendants were provided with sufficient notice, and is not
sanctionable conduct by Plaintiffs’ attorneys.
Based on the foregoing reasons, the Court grants Plaintiffs’ motion to compel
the production of documents from non-party Xu, and denies Defendants’ cross-motion
for sanctions. Plaintiffs are directed to re-serve the subpoena on Xu by January 3,
2017, indicating that the documents must be produced no later than February 3,
2017.
V.

MOTION FOR EXTENSION OF TIME TO COMPLETE DISCOVERY
Finally, in light of the pending motions, both parties request an extension of

the discovery deadlines. Specifically, Plaintiffs’ ask that discovery be extended to
February 8, 2017, and Defendants seek an extension of 120 days. See Pl.’s Request
for Extension; Def.’s Request for Extension. In light of the Court granting leave to

33

amend, as well as Hua’s late consent to join, the Court grants the requests to extend
discovery deadlines. A status conference is set for January 20, 2017 in Courtroom
820 of the Central Islip courthouse, at which time new discovery deadlines will be set
and the Court will enter a Third Amended Scheduling Order.
VI.

CONCLUSION
Based on the foregoing reasons, the Court finds:
1. Plaintiffs’ Motion to Amend is GRANTED. On or before January 3, 2017,
Plaintiffs are directed to serve and file the Third Amended Complaint.
2. Plaintiffs’ Motion for Late Consent to Join is GRANTED. The Consent to
Join Lawsuit signed by Plaintiff Peifeng Hua, and attached to Plaintiffs’
Motion for Late Consent to Join, DE [160-1], is deemed filed.
3. Plaintiffs’ Motion to Compel a Non-Party to Produce Documents is
GRANTED. Plaintiffs are directed to re-serve the subpoena on Xu by
January 3, 2017, indicating that the documents must be produced no later
than February 3, 2017.
4. Defendants’ Cross-Motion for Sanctions is DENIED.
5. The parties’ respective requests for the extension of discovery is
GRANTED. A status conference is set for January 20, 2017 in
Courtroom 820 of the Central Islip courthouse, at which time the
Court will issue an Amended Scheduling Order.

Dated:

Central Islip, New York
December 21, 2016

SO ORDERED
s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge

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