Chen v. Kyoto Sushi, Inc. et al
ORDER denying 54 Motion for Attorney Fees. Based on the foregoing, Plaintiffs' motion for modification of the arbitration award to include an award of attorney's fees, costs, and expenses is denied. Ordered by Magistrate Judge Ramon E. Reyes, Jr on 4/1/2021. (Reyes, Ramon)
Case 2:15-cv-07398-DLI-RER Document 62 Filed 04/01/21 Page 1 of 7 PageID #: 476
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
No 15-CV-7398 (DLI) (RER)
SHANG ZHONG CHEN,
ON BEHALF OF HIMSELF AND OTHERS SIMILARLY SITUATED,
KYOTO SUSHI, INC. D/B/A KYOTO SUSHI, ASQUARED GROUP, INC. D/B/A KYOTO
SUSHI, AND ANDY LEE,
Memorandum & Order
April 1, 2021
RAMON E. REYES, JR., U.S.M.J.:
Before the Court is Plaintiff Shang Zhong
Chen’s (“Chen” or “Plaintiff”) motion under
Section 11 of the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 11, to modify an
arbitration award to include reasonable
attorney’s fees, costs, and expenses.1 (Dkt.
Nos. 54–56, 59). For the reasons discussed
herein, the motion is denied.
The Court assumes familiarity with the
underlying facts of this matter. A description
of the relevant procedural history follows:
On December 30, 2015, Chen filed this
suit against Kyoto Sushi, Inc., Asquared
Group, Inc. and Andy Lee (collectively,
“Defendants”) claiming multiple violations
of the Fair Labor Standards Act (“FLSA”),
29 U.S.C. § 201 et seq., the New York Labor
Law (“NYLL”) § 190 et seq; the Internal
Pursuant to 28 U.S.C. § 636, a United States District
“judge may designate a Magistrate Judge to hear and
determine any pretrial matter pending before the court,
except a motion for injunctive relief, for judgment on
the pleadings, for summary judgment, to dismiss or
quash an indictment or information made by the
defendant, to suppress evidence in a criminal case, to
dismiss or to permit maintenance of a class action, to
dismiss for failure to state a claim upon which relief
can be granted, and to involuntarily dismiss an action.”
28 U.S.C. § 636(b)(1)(A). On November 18, 2020 the
Honorable Dora L. Irizarry referred to me Chen’s
motion, which is not one of the matters excepted in
28 U.S.C. § 636(b)(1)(A). (Order dated 11/18/2020).
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(“Arbitration Award”)). Although the
Agreements required individual arbitration,
Defendants consented to consolidation of the
employees’ claims. (Arbitration Award at 1;
see also Ex. A ¶ 6). After a two-day
arbitration hearing, the parties filed posthearing briefs. (Arbitration Award at 3; Dkt.
No. 57 (“Yim Aff.”) ¶ 11). The arbitrator
subsequently issued an award in favor of
Claimants on April 23, 2020. (Arbitration
Award at 33). The arbitrator did not find any
of the Claimants credible; however,
Defendants admitted liability as to some
wage and hour violations under the FLSA
and NYLL. (Id. at 3–4).
Revenue Code, 26 U.S.C. § 7434; and the
New York General Business Law, N.Y. Gen.
Bus. Law § 349. (Dkt. No. 1 (“Compl.”) ¶¶
57–107). On April 3, 2016, Shi Hang Wu and
Shu Jun Ma (collectively, “Opt-In
Plaintiffs”) each filed consents to become
parties in a collective action ostensibly
pursuant to § 216(b) of the FLSA. (Dkt. Nos.
Prior to brining or joining suit, Chen and
“Claimants”) each had signed an arbitration
agreement with their employer (“the
Agreements”). (Dkt. No. 57-1 (“Ex. A”)).
According to the terms of the Agreements,
The arbitrator’s award provided that the
administrative fees and compensation of the
arbitrator “shall be borne as incurred” but did
not address attorney’s fees or other costs.
(Arbitration Award at 32). Chen emailed
AAA to request a briefing schedule regarding
attorney’s fees. (Dkt. No. 57-5 (“First PostAward Order”)). In response, the arbitrator
requested briefing as to her continuing
jurisdiction over the matter given that she had
already issued a final award. (Id.). After
reviewing the parties’ submissions, the
arbitrator issued an order on July 14, 2020,
finding that she did not have continuing
jurisdiction to determine a motion for
attorney’s fees and costs. (Dkt. No. 52; Dkt.
No. 57-6 (“Second Post-Award Order”)).
agree[d] that all “covered claims” that
Employee may have against
Employer (or its owners, directors,
officers, managers, employees, or
agents) or that Employer may have
against Employee shall be submitted
exclusively to and determined
exclusively by binding arbitration in
New York, New York under the
Federal Arbitration Act, 9 U.S.C. § 1
et seq., regardless the substantive law
applied in the arbitration.
(Ex. A ¶ 2). Therefore, Defendants moved to
compel arbitration. (Dkt. No. 27). On
September 22, 2017, the Court granted
Defendants’ motion to compel arbitration as
to the FLSA and NYLL claims,2 and the case
was administratively closed. (Dkt. No. 47;
Dkt. Entry dated 9/22/2017).
Chen subsequently filed the instant
motion. (Dkt. Nos. 54–56, 59).
Consistent with the Agreements,
Claimants then submitted arbitration
demands to the American Arbitration
Association (“AAA”). (Dkt. No. 57-4
Chen timely moves to modify the
arbitration award in include attorney’s fees
under § 11 of the FAA.3 (Dkt. No. 47 (“Any
party wishing to challenge the arbitration
The Court dismissed the remaining claims without
prejudice, except for Chen’s claim pursuant to 26
U.S.C. § 7434, which was dismissed with prejudice.
(Dkt. No. 47).
Chen’s motion and memorandum in support did not
provide the basis on which he sought attorney’s fees
from this Court, and hardly reference the arbitration;
he argued only that under the FLSA and NYLL,
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81 (2d Cir. 2008) (quoting Wall Street Assoc.,
L.P. v. Becker Paribas, Inc., 27 F.3d 845, 849
(2d Cir. 1994)); Companhia de Navegacao
Maritima Netumar v. Armada Parcel Serv.,
Ltd., No. 96 Civ. 6441 (PKL), 2000 WL
60200, at *5 (S.D.N.Y. Jan. 25, 2000)
(“arbitration awards are subject to very
limited review in order to avoid undermining
the twin goals of arbitration, namely, settling
disputes efficiently and avoiding long and
decision must do so within thirty (30) days
thereof.”)); see also Zambrano v. Strategic
Delivery Sols., LLC, No. 15 CIV. 8410 (ER),
2018 WL 4462360, at *4 (S.D.N.Y. Sept. 17,
2018) (“motions filed under sections 10 or 11
‘must be served upon the adverse party or his
attorney within three months after the award
is filed or delivered.’” (quoting 9 U.S.C. §
12)). Specifically, he requests that the Court
modify the arbitration award under § 11(a) on
the basis that the arbitrator made “an evident
material mistake” in failing to include
attorney’s fees and costs in the award.4 (Dkt.
No. 59 (“Reply”) at 1). As discussed herein,
however, it was not the arbitrator who made
a mistake, but Chen, who failed to submit
arguments and evidence in support of
reasonable attorney’s fees and costs prior to
or concurrently with his post-arbitration
A party seeking judicial review of an
arbitration award can request vacatur,
modification, or remand to the arbitrator.5
See 9 U.S.C. §§ 10–11; LLT Int’l, Inc. v. MCI
Telecomms. Corp., 69 F. Supp. 2d 510, 515
(S.D.N.Y. 1999) (citing Ottley, 819 F.2d at
376). “The grounds for modifying or vacating
an arbitration award are grudgingly narrow.”
Armada Parcel, 2000 WL 60200, at *5. Chen
moves only for modification of the
arbitration award to include attorney’s fees
The Federal Arbitration Act
Arbitration allows parties to avoid the
costs of litigation without abandoning
substantive rights provided in statute. Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 123
(2001). The FAA compels judicial
enforcement of arbitration agreements, id. at
111, and limits judicial review of arbitration
awards, see, e.g., Rich v. Spartis, 516 F.3d 75,
Section 11 of the FAA provides the
exclusive grounds for modification of an
arbitrator’s decision.6 T.Co Metals, LLC v.
Dempsey Pipe & Supply, Inc., 592 F.3d 329,
338 (2d Cir. 2010) (citing Hall Street Assocs.
L.L.C. v. Mattel, Inc., 522 U.S. 576, 584
prevailing employees are entitled to costs and
attorney’s fees. (See Dkt. Nos. 52, 54–56). In his reply,
however, Chen argues that the arbitrator made “an
evident material mistake” as defined by FAA § 11(a).
(Reply at 1).
(citing United Steel Workers v. Adbill Management
Corp., 754 F.2d 138, 141 (3d Cir.1985)). Chen does
not seek a remand.
In extraordinary circumstances, the Court may also
modify or vacate an arbitration award when an
arbitrator committed manifest disregard of the law.
T.Co Metals, LLC v. Dempsey Pipe & Supply, Inc.,
592 F.3d 329, 338 (2d Cir. 2010); DiRussa v. Dean
Witter Reynolds Inc., 121 F.3d 818, 821 (2d Cir. 1997)
(affirming court’s ruling that failure to award
attorney’s fees was not manifest disregard of law).
Chen does not assert manifest disregard of the law.
Chen mischaracterizes § 11(a). (See Reply at 1). In
full, the statute reads that the Court can modify or
correct an award where the arbitrator has made “an
evident material mistake in the description of any
person, thing, or property referred to in the award.” 9
U.S.C. § 11(a) (emphasis added).
“A remand for further arbitration is appropriate in
only certain limited circumstances such as when an
award is incomplete or ambiguous.” Ottley v.
Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987)
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heard in court including awards of attorney’s
fees and costs, in accordance with applicable
law.” R. 39(d). Here, the applicable laws are
the FLSA and NYLL. (Final Award at 2).
Those statutes allow prevailing employees to
collect reasonable attorney’s fees and costs.
29 U.S.C. § 216(b); N.Y. Lab. Law § 198(4).
(2008)). Under Section 11, a federal court can
modify or correct an arbitration award:
(a) Where there was an evident
material miscalculation of figures or
an evident material mistake in the
description of any person, thing, or
property referred to in the award.
(b) Where the arbitrators have
awarded upon a matter not submitted
to them, unless it is a matter not
affecting the merits of the decision
upon the matter submitted.
(c) Where the award is imperfect in
matter of form not affecting the
merits of the controversy.
The FLSA mandates that prevailing
plaintiffs be awarded reasonable attorney’s
fees and costs, see Zambrano v. Strategic
Delivery Sols., LLC, No. 15 CIV. 8410 (ER),
2016 WL 5339552, at *5 (S.D.N.Y. Sept. 22,
2016); however, it remains a plaintiff’s
burden to submit documentation that
supports the reasonableness and necessity of
the hours spent, rates charged, and costs
incurred. Fermin v. Las Delicias Peruanas
Rest., Inc., 93 F. Supp. 3d 19, 51 (E.D.N.Y.
2015); Fisher v. SD Prot. Inc., 948 F.3d 593,
600 (2d Cir. 2020) (citing N.Y. State Ass’n for
Retarded Children, Inc. v. Carey, 711 F.2d
1136, 1154 (2d Cir. 1983)). For example, for
an award of attorney’s fees, courts in this
Circuit require the submission of
contemporaneous time records for each
attorney who worked on the case. E.g.,
Fermin, 93 F. Supp. 3d at 51.
9 U.S.C. § 11.
The Parties’ Arbitration
Agreements & Applicable
Claimants each signed arbitration
agreements with their employer. (Ex. A). The
Agreements require that the parties “bring all
covered claims in one arbitration proceeding”
and that “[a]ny covered claims not brought as
one arbitration proceeding shall be waived
and precluded.” (Id. ¶ 5). They also specify
that after finding a violation of applicable
law, “the arbitrator shall have the same power
and authority as would a court” to award
attorney’s fees and costs. (Id. ¶ 14). As such,
the relief awarded must conform “with
applicable principles of common, decisional
and statutory law, in the relevant
The Arbitrator Did Not Make
an Evident Material Mistake
In reviewing arbitration awards, the
Court owes strong deference to arbitrators.
Fellus v. Sterne, Agee & Leach, Inc., 783 F.
Supp. 2d 612, 618, 622 (S.D.N.Y. 2011);
Fried, Krupp, GmbH, Krupp Reederei Und
Solidarity Carriers, Inc., 674 F. Supp. 1022,
1030 (S.D.N.Y.) (collecting cases) (“An
arbitration award having any conceivable
rational basis must be upheld even if the
arbitrator misinterpreted law or facts.”), aff’d
sub nom. Fried Krupp GmbH v. Solidarity,
838 F.2d 1202 (2d Cir. 1987). The party
challenging an arbitration award under
§ 11(a) “bears a heavy burden of proof.”
Under the Agreements, arbitration must
be administered by the AAA and governed by
the AAA Rules for Employee Dispute
Resolution (“AAA Employment Rules”).
(Id. ¶ 7). The AAA Employment Rules
reinforce that “[t]he arbitrator may grant any
remedy or relief that would have been
available to the parties had the matter been
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R. 4(b)(i)(1). The allocation of attorney’s
fees and costs was also discussed at an
arbitration management conference as
required under AAA Employment Rule 8.
(Reply at 2); see also R. 8(xii). Without
explanation, however, Claimants’ posthearing brief did not provide any arguments
or supporting documentation on which the
arbitrator could base an award of fees and
costs.7 (First Post-Award Order). Therefore,
the arbitrator, who was well-versed in the
FLSA and NYLL, (Reply at 3), could not
award attorney’s fees or costs under either
statute at the time the final award was issued.8
See Fermin, 93 F. Supp. 3d at 51.
Armada Parcel, 2000 WL 60200, at *5
(citing Folkways Music Publishers, Inc. v.
Weiss, 989 F.2d 108, 111 (2d Cir. 1993)). An
“evident material mistake” is one that
“appears on the face of the record and would
have been corrected had the arbitrator known
of it at the time.” Foster Wheeler Env’t Corp.
v. EnergX TN, LLC, No. 13 Civ. 1178 (RA),
2014 WL 982857, at *5 (S.D.N.Y. Mar. 13,
2014) (“[Section] 11(a) does not authorize a
court to modify an arbitration award simply
because it believes the arbitrator incorrectly
interpreted a contract.”).
Evident material mistakes include
clerical and typographical errors, or other
mistakes that do not implicate a substantive
dispute. Webb v. Citigroup Glob. Markets,
Inc., No. 19 Civ. 535 (PAE), 2019 WL
4081893, at *10 (S.D.N.Y. Aug. 29, 2019)
(ordering modification of an arbitration
award so that the case caption conformed to
the award). The Court may not correct a
mistake in an arbitration award if the
correction would alter the substantive
disposition. Foster, 2014 WL 982857, at *5.
Chen argues that “liability must be found
prior to the moving for attorneys’ fees under
the prevailing Plaintiffs standard.” (Reply at
2–3 (emphasis omitted)). This suggestion
runs counter to practice in this District and
the requirements of the Agreements.
Plaintiffs seeking attorney’s fees under the
FLSA and NYLL routinely include
arguments and evidence in support of
attorney’s fees along with their submissions
as to the defendants’ liability. See, e.g.,
Fermin, 93 F. Supp. 3d at 22–23 (default
judgment); Barfield v. N.Y.C. Health &
Hosps. Corp., 537 F.3d 132, 135 (2d Cir.
2008) (summary judgment); but cf. Kalloo v.
Claimants’ arbitration demands indicated
their intention to seek attorney’s fees in
accordance with AAA Employment Rule 4.
(First Post-Award Order); see also
Even with this motion, Chen failed to provide any
invoices or receipts to support his request for costs. He
submitted only an itemized list of costs related to the
litigation. (Dkt. No. 55-1 at 10).
held that such provisions excluding fees are
unenforceable and noted that under the parties’
agreements, an arbitrator must award attorney’s fees
“to the extent permitted by applicable law.” Carter,
362 F.3d at 299. As discussed supra Section II, the law
in this Circuit requires that a prevailing plaintiff
provide invoices, receipts, and other supporting
evidence to support their request for attorney’s fees
and costs under the FLSA and NYLL.
Chen emphasizes that an arbitrator is required to
award attorney’s fees and costs to prevailing plaintiffs
under the FLSA and NYLL. (Reply at 1 (citing Carter
v. Countrywide Credit Indus., 362 F.3d 294, 299 (5th
Cir. 2004); Raniere v. Citigroup Inc., 827 F. Supp. 2d
294, 316 (S.D.N.Y. 2011) (citing Carter), rev’d and
remanded on other grounds, 533 Fed. Appx. 11 (2d
Cir. 2013)); D&W Cent. Station Fire Alarm Co., Inc.
v. Ziari, 957 N.Y.S. 2d 635 (App. Div. 2010))). Carter
does not involve review of an arbitration award;
instead, the court analyzed the enforceability of
arbitration agreements that did not provide for
attorney’s fees. See Carter, 362 F.3d at 299. The court
The petitioner in D&W sought to recover attorney’s
fees incurred in post-arbitration litigation. 28 Misc. 3d
at 635. Pursuant to the parties’ contract, the court
referred the fee award to the court below. Id. Here,
Chen seeks attorney’s fees incurred during the
arbitration and the preceding litigation before this
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Unlimited Mech. Co., 977 F. Supp. 2d 209,
210–11 (E.D.N.Y. 2013) (awarding fees on a
motion submitted post-trial). Courts also
deny unsupported motions for attorney’s fees
with leave to renew. See, e.g., Restivo
Guardado v. Precision Fin., Inc., No. 04-CV3309 (JS) (AKT), 2007 WL 1041663, at *8
(E.D.N.Y. Mar. 31, 2007) (denying a
prevailing plaintiff’s motion for attorney’s
fees, because although she was entitled to
fees under the NYLL, she did not submit
information on which the Court could
determine the reasonableness of the fees).
attorney’s fees or costs. He identifies no
person, thing, or property that has been
mistakenly described or how such a mistake
would relate to his claim for attorney’s fees
and costs. See Solidarity, 674 F. Supp. at
1029 (denying petition to modify arbitration
award because the reduction of an
indemnification award including attorney’s
fees “simply cannot be characterized
as . . . an evident material mistake.”). Chen
merely argues that the arbitrator “refus[ed]”
to adjudicate a “concurrent” request for
attorney’s fees. (Reply at 3). It is unclear to
what “concurrent” request Chen refers.9
Nevertheless, the absence of an award of
attorney’s fees was not a mistake; it was a
reasoned determination that § 11 cannot
reach. See Companhia, 2000 WL 60200, at
In furtherance of “the twin goals of
efficiently and avoiding long and expensive
litigation;” however, procedural rules in the
arbitration context differ. Armada Parcel,
2000 WL 60200, at *5 (quoting Willemijn
Houdstermaatschappij, BV v. Standard
Microsys. Corp., 103 F.3d 9, 12 (2d Cir.
1997)). In that vein, the Agreements required
that Claimants “bring all covered claims in
one arbitration proceeding.” (Ex. A. ¶ 5).
Moreover, an arbitrator’s award is final and
binding. AAA Emp. R. 39(g); see also Ottley,
819 F.2d at 376 (“As a general rule, once an
arbitration panel decides the submitted
issues, it becomes functus officio and lacks
any further power to act.”) (quoting Proodos
Marine Carriers Co. v. Overseas Shipping &
Logistics, 578 F. Supp. 207, 211
(S.D.N.Y.1984)). Therefore, the arbitrator
did not have continuing jurisdiction after
issuing a final arbitration award. (Second
Chen’s counsel had the opportunity to
submit post-hearing briefing to the arbitrator.
(Arbitration Award at 3; Yim Aff. ¶ 11). That
would have been an appropriate juncture at
which to submit an explicit request for, and
to provide proof of, his fees and costs prior to
the arbitrator’s final decision. He failed to do
either. (First Post-Award Order). The FAA
limits the Court’s review of the arbitrator’s
final award, and it forecloses Chen’s post hoc
request that the Court modify the award to
include attorney’s fees and costs.
Chen has not met his burden to
demonstrate that the arbitrator made an
evident material mistake by failing to award
Chen argues that the Claimants “repeatedly notified
the Arbitrator that they were seeking attorneys’ fees
and costs before the motion itemizing the specific
attorney fee and cost amount they were seeking.”
(Reply at 2). It is unclear to what motions or other
submissions Chen refers, but the Court assumes his
reference is to the motion submitted on May 22, 2020
after the arbitrator issued her final award. Regardless,
notice alone is insufficient to meet Chen’s burden for
an award of reasonable costs and attorney’s fees under
the FLSA and NYLL.
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Based on the foregoing, Plaintiffs’
motion for modification of the arbitration
award to include an award of attorney’s fees,
costs, and expenses is denied.
/s/ Ramon E. Reyes, Jr.
RAMON E. REYES, JR.
United States Magistrate Judge
Dated: April 1, 2021
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