Lopez-Martinez et al v. Gokul Inc. of N.Y. et al
MEMORANDUM-DECISION and ORDER - That defendants' 34 Motion to Dismiss is DENIED. That plaintiffs' counsel must, within thirty (30) days fo this order, inform the court whether Angelica Sanchez wishes to continue to participate in this l awsuit, or whether she requests voluntary dismissal. That the parties notify Magistrate Judge Treece in order to schedule further proceedings in accordance with this Memorandum-Decision and Order. Signed by Chief Judge Gary L. Sharpe on 11/21/2013. (jel, )
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
GOKUL INC. OF N.Y. d/b/a
QUALITY INN & SUITES et al.,
FOR THE PLAINTIFFS:
Worker Justice Center of New York,
1187 Culver Road
Rochester, NY 14609
Charny & Associates
9 West Market Street
Rhinebeck, NY 12572
FOR THE DEFENDANTS:
Greenwald Doherty LLP
30 Ramland Road
Orangeburg, NY 10962
Gary L. Sharpe
DAVID O. IRVING, ESQ.
THOMAS E. FEENEY, ESQ.
JOEL J. GREENWALD, ESQ.
KEVIN M. DOHERTY, ESQ.
MEMORANDUM-DECISION AND ORDER
Plaintiffs Leticia Lopez-Martinez, Diana Lopez-Martinez, and
Fernando Peñarrieta, individually and on behalf of others similarly situated,
assert claims under the Fair Labor Standards Act (FLSA)1 and New York
Labor Law (NYLL), against defendants Gokul Inc. of N.Y. d/b/a Quality Inn
& Suites, Kingston New York Hotel Limited Partnership d/b/a Superlodge
Motel and Superlodge Kingston New York Hotel, Bipin Patel, and Babu M.
Patel. (Compl., Dkt. No. 1.) Pending is defendants’ motion to dismiss for
lack of subject matter jurisdiction. (Dkt. No. 34.)2 For the reasons that
follow, defendants’ motion is denied.
See 29 U.S.C. §§ 201-219.
As discussed more fully below, the thrust of defendants’ argument
is that defendants’ tendered Offers of Judgment pursuant to Fed. R. Civ.
P. 68, which expired without being accepted, thus rendering plaintiffs’
claims moot and divesting the court of subject matter jurisdiction. (Dkt.
No. 34, Attach. 2 at 2-12.)
Unless otherwise noted, the facts are drawn from plaintiffs’
complaint and presented in the light most favorably to them.
Between 1998 and 2013, defendants employed plaintiffs as manual
workers, whose primary job duties included cleaning guest rooms and
doing the laundry. (Compl. ¶¶ 41-42.) Plaintiffs allege that, throughout
their employment, they, and others similarly situated, worked between
thirty and forty-five hours per week between the months of September and
April, and between thirty and fifty-five hours per week between the months
of May and August. (Id. ¶ 44.) Plaintiffs further claim that they, and others
similarly situated, were not compensated at the hourly minimum wage for
hours worked below forty hours in one workweek, paid overtime for hours
worked in excess of forty hours per week, or provided with the legally
mandated written pay notices. (Id. ¶¶ 43, 45, 48.)
Between August 13 and September 3, 2013, defendants made Offers
of Judgment pursuant to Federal Rule of Civil Procedure 68 (Offers) to
each plaintiff.4 (Dkt. No. 34, Attach. 1 at 93-94, 95-96, 97-98, 99-100, 101-
In calculating the Offers, defendants relied on time and wage
records, and reviewed the amount of hours each plaintiff worked, the
amount paid to each plaintiff, and the minimum wages required by federal
and state law. (See, e.g., Dkt. No 34, Attach. 1 at 25-35.) Defendants
also added equal amounts of liquidated damages to the calculations under
the FLSA and the NYLL. (See, e.g., id. at 26.) Additionally, to account for
02, 103-04, 105-06, 107-08, 109-10, 111-12, 116-17, 123-29.) The Offers
expired without being accepted. (Dkt. No. 34, Attach. 2 at 8; Dkt. No. 38 at
3.) Plaintiffs claim that they rejected the Offers because they were
inadequate to remedy the damages caused by defendants’ violations under
the FLSA and NYLL. (Dkt. No. 38 at 3.)
Plaintiffs filed their complaint on April 25, 2013, (see generally
Compl.); defendants subsequently filed an answer, (Dkt. No. 21). Plaintiffs’
FLSA claim was pled as an opt-in collective action pursuant to 29 U.S.C. §
216(b) and as a class action pursuant to Fed. R. Civ. P. 23. (Compl. ¶ 4.)
Since the action was commenced, eight opt-in plaintiffs signed FLSA
damages allegedly owed to plaintiffs for defendants’ notice violations,
defendants added fifty dollars per week for every week worked as of
February 1, 2012—the date by which the first yearly notice was required to
be given pursuant to the NYLL—or as of the individual’s date of hire, if
between April 9, 2011—the date that the new wage notices became
effective—and February 1, 2012, whichever was earlier. (See, e.g., id. at
4, 25-26); see also N.Y. Lab. Law § 198. To account for damages
allegedly owed to plaintiffs for defendants’ statement violations,
defendants added one hundred dollars per week for every week worked
as of April 11, 2011, the effective date of the wage statement requirement.
(See, e.g., Dkt. No. 34, Attach. 1 at 25-26); see also N.Y. Lab. Law § 198.
Finally, the Offers allowed for reasonable attorneys’ fees and costs. (See,
e.g., Dkt. No. 34, Attach. 1 at 94.)
consent forms and joined this action. (Dkt. Nos. 18, 22-27, 31.) Plaintiffs
have not filed a motion to certify the class.
III. Standard of Review
“A case is properly dismissed for lack of subject matter jurisdiction
under Rule 12(b)(1) when the district court lacks the statutory or
constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d
110, 113 (2d Cir. 2000). “In resolving a motion to dismiss for lack of
subject matter jurisdiction under Rule 12(b)(1), a district court . . . may refer
to evidence outside the pleadings.” Id. “[W]hen the question to be
considered is one involving the jurisdiction of a federal court, jurisdiction
must be shown affirmatively, and that showing is not made by drawing from
the pleadings inferences favorable to the party asserting it.” Shipping Fin.
Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998). Although the
initial burden of establishing subject matter jurisdiction rests on the plaintiff,
once the burden has been met, the court may presume that jurisdiction
exists. See Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83, 98
(1993). The defendant suggesting a controversy has become moot then
“bears the burden of coming forward with the subsequent events that have
produced that alleged result.” Id. If a defendant comes forward with
evidence of mootness, the plaintiff bears the burden of showing by a
preponderance of the evidence that the case is properly before the court.
See Makarova, 201 F.3d at 113.
Defendants contend that plaintiffs’ claims have been rendered moot,
and therefore that the court lacks subject matter jurisdiction, because
defendants tendered, and plaintiffs rejected, Rule 68 Offers of Judgment
embodying the full relief available to plaintiffs. (Dkt. No. 34, Attach. 2 at 812.)5 Plaintiffs counter that, because they dispute that the Offers represent
full relief, their claims are not moot and this court has subject matter
jurisdiction. (Dkt. No. 38 at 4-5.)6 The court finds that plaintiffs have
offered enough evidence to prove that their claims are not moot, and
Defendants also argue that plaintiffs have not plausibly alleged
wage and hour claims beyond those mooted by defendants’ Offers, and
that the court should decline to exercise subject matter jurisdiction over
plaintiffs’ state law claims. (Dkt. No. 34, Attach. 2 at 12-15.) Because the
court finds that plaintiffs’ claims are not moot, the court does not reach
defendants’ additional arguments.
Plaintiffs also contend that their claims are not moot because they
have not had a reasonable opportunity to move for class certification.
(Dkt. No. 38 at 5-7.) Although this argument is without merit, see Ward v.
Bank of N.Y., 455 F. Supp. 2d 262, 2680 (S.D.N.Y. 2006), it is of no
moment, as the court finds that plaintiffs’ claims are not moot because
plaintiffs dispute that the Offers embody full relief.
therefore their claims survive defendants’ motion to dismiss.
In order for there to be a valid exercise of subject matter jurisdiction, a
federal court must have before it an actual controversy at all times, not
simply at the time the complaint was filed. See In re Flanagan, 503 F.3d
171, 178 (2d Cir. 2007) (citing Steffel v. Thompson, 415 U.S. 452, 459 n.10
(1974)). “[A] case is moot when the issues presented are no longer ‘live’ or
the parties lack a legally cognizable interest in the outcome.” Powell v.
McCormack, 395 U.S. 486, 496 (1969). Thus, “[w]hen a case becomes
moot, the federal courts lack[ ] subject matter jurisdiction over the action.”
Fox v. Bd. of Trs. of the State Univ. of N.Y., 42 F.3d 135, 140 (2d Cir.
1994) (internal quotation marks and citation omitted).
Rule 68 of the Federal Rules of Civil Procedure provides that “a party
defending against a claim may serve on an opposing party an offer to allow
judgment on specified terms, with the costs then accrued.” Fed. R. Civ. P.
68(a). The purpose of this rule is “to encourage settlement and avoid
litigation.” Marek v. Chesny, 473 U.S. 1, 5 (1985). In the Second Circuit, a
defendant’s Rule 68 Offer of Judgment moots a case if the offer equals or
exceeds all that the plaintiff claims to be owed. See, e.g., Abrams v.
Interco Inc., 719 F.2d 23, 25, 32 (2d Cir. 1983) (holding that the district
court lacked subject matter jurisdiction where, in a private antitrust action,
the defendant’s offer to pay the plaintiffs three times the amount of their
purchases plus costs and reasonable attorneys’ fees was “much more than
plaintiffs could obtain by suit”).
Courts in this Circuit have employed this same analysis in evaluating
Rule 68 Offers of Judgment in the context of FLSA collective actions. See,
e.g., Ward, 455 F. Supp. 2d at 265-70; Briggs v. Arthur T. Mott Real
Estate LLC, No. 06-0468, 2006 WL 3314624, at *2-4 (E.D.N.Y. Nov. 14,
2006). Indeed, “an offer of judgment moots an FLSA collective action
where the offer satisfies all damages for all plaintiffs, plus all costs and
attorneys’ fees.” Ward, 455 F. Supp. 2d at 267; see Darboe v. Goodwill
Indus. Of Greater N.Y. & N. NJ, Inc., 485 F. Supp. 2d 221, 224 (E.D.N.Y.
2007) (dismissing action as moot where there was “no question that the
Rule 68 offer made to Plaintiff exceed[ed] any actual damages claimed”);
Briggs, 2006 WL 3314624, at *3 (dismissing action as moot where the
plaintiff did not object to accuracy of the defendant’s time records and
defendant’s offer of judgment exceeded amount that would be owed based
However, a Rule 68 offer does not moot an FLSA collective action
under two circumstances. First, if additional plaintiffs have opted in, but
have not been given offers of judgment, the case is not moot.7 See, e.g.,
Rubery v. Buth-Na-Bodhaige, Inc., 494 F. Supp. 2d 178, 180 (W.D.N.Y.
2007); Ward, 455 F. Supp. 2d at 268. Second, even if no other plaintiffs
have opted-in, courts have “denied a defendant’s motion to dismiss on
mootness grounds where the plaintiff potentially could recover more than
the relief offered by defendant, such as where the offer is not
comprehensive, or where the amount due to plaintiff is disputed.” Ward,
455 F. Supp. 2d at 267.8
The court notes that, here, all plaintiffs, including the opt-in
plaintiffs, were extended Offers. (Dkt. No. 34, Attach. 1 at 93-94, 95-96,
97-98, 99-100, 101-02, 103-04, 105-06, 107-08, 109-10, 111-12, 116-17,
123-29.) Accordingly, the first exception is not applicable. See Davis v.
Abercrombie & Fitch Co., No. 08 Civ. 1859, 2008 WL 4702840, at *5 n.4
(S.D.N.Y. Oct. 23, 2008).
In assessing the standard by which the party invoking the
mootness doctrine must establish that no case or controversy exists,
some courts have drawn an analogy to the standard by which a party
opposing subject matter jurisdiction must demonstrate that a diversity
plaintiff cannot recover in excess of the jurisdictional threshold. See
Davis, 2008 WL 4702840, at *6. Generally, district courts presume that
the face of the complaint is a good faith representation of the actual
amount in controversy. Id. (citing Sherer v. Equitable Life Assurance
Soc’y of U.S., 347 F.3d 394, 397 (2d Cir. 2003)). In order to overcome
this presumption, the party opposing jurisdiction must show “to a legal
certainty” that the amount recoverable does not meet the jurisdictional
threshold. Id. (internal citations omitted). Nevertheless, the court finds
Here, plaintiffs have sufficiently disputed the amount owed to them.
In calculating the Offers, defendants relied on plaintiffs’ time and pay
records. (See, e.g., Dkt. No. 34, Attach. 1 at 25-35.) Defendants claim
that, upon reviewing those records, it is clear that plaintiffs never worked
over forty hours per week, and that plaintiffs’ overtime claims are “nonexistent.” (Dkt. No. 34, Attach. 2 at 3-4.) Defendants further claim that
the time and pay records show that plaintiffs’ minimum wage claims “are
diminimus, at best.” (Id. at 4.) Defendants also argue that, after
calculating plaintiffs’ minimum wage damages, adding in liquidated
damages under the FLSA and NYLL, and accounting for notice penalties
under the NYLL, the Offers actually exceed any potential amount that
plaintiffs could recover. (Id. at 7; Dkt. No. 40 at 4 n.2.)
Plaintiffs, however, dispute that these records are a fair or accurate
representation of the actual number of hours worked. (Dkt. No. 38 at 4-5;
Dkt. No. 38, Attachs. 1-10.) In support of their opposition to defendants’
motion to dismiss, plaintiffs attached signed, sworn declarations,9 and
that, whether it applies the “to a legal certainty” standard or a lesser
standard of whether plaintiffs are unlikely to recover in excess of the
Offers, the outcome is the same.
The court notes that Angelica Sanchez, who opted into this action,
(Dkt. No. 22), is the only plaintiff who did not submit a declaration.
asserted that “[d]efendants’ representation of the hours that [each plaintiff]
worked and the back pay [each plaintiff is] owed is inaccurate,” that “[t]he
timecards [d]efendants are using to calculate the hours [that each plaintiff]
regularly worked are not a fair or accurate representation of the actual
number of hours [each plaintiff] worked,” and that each plaintiff “regularly
worked more than 40 hours a week while . . . employed by [d]efendants.”
(See, e.g., Dkt. No. 38, Attach.1 at ¶¶ 5, 6, 8.) Additionally, each
declaration stated that “[i]t is [plaintiff’s] belief that the wages [he/she is]
owed and other damages to which [he/she is] entitled by law significantly
exceed the amount that [d]efendants have offered . . . in their Rule 68
Offer[s] of Judgment.” (See, e.g., id. at ¶ 7.) Moreover, in their complaint,
plaintiffs specifically allege that during the months of May through August,
they often worked fifty five hours per week. (Compl. ¶ 44.)
Although defendants argue, without citing any authority, that Sanchez’s
claims must be dismissed because she did not submit a declaration, (Dkt.
No. 40 at 3 n.1), the court declines to take such a draconian approach at
the motion to dismiss stage. However, the court notes that defendants
attached to their reply brief a letter from Sanchez to Bipin Patel, indicating
that she did not understand the opt-in consent and does not want to
participate in this action. (Dkt. No. 40, Attach. 1 at 5, 7.) Accordingly, the
court directs that plaintiffs’ counsel must, within thirty (30) days of this
order, inform the court whether Sanchez wishes to continue to participate
in this lawsuit, or whether she requests voluntary dismissal.
Although the court acknowledges that plaintiffs provide very limited
factual context in their declarations, plaintiffs’ signed, sworn declarations
nevertheless supply the court with enough evidence to demonstrate a
factual dispute, and therefore, that there is still a live case or controversy.
Compare Davis, 2008 WL 4702840, at *6-7 (declining to dismiss action
as moot where plaintiffs submitted sworn affidavits to dispute time
records), with Pla v. Renaissance Equity Holdings LLC, No. 12 Civ. 5268,
2013 WL 3185560, at *2-4 (S.D.N.Y. June 24, 2013) (holding that motion
to dismiss was properly granted where the plaintiffs could have submitted
“sworn affidavits” to dispute adequacy of Offers of Judgment, but instead
relied only on “allegations in the Amended Complaint and arguments in
their unsworn memorandum of law”). Accordingly, because plaintiffs have
disputed that the Offers represent full relief, the court finds that plaintiffs’
claims are not moot and subject matter jurisdiction is not lacking.
WHEREFORE, for the foregoing reasons, it is hereby
ORDERED that defendants’ motion to dismiss (Dkt. No. 34) is
DENIED; and it is further
ORDERED that plaintiffs’ counsel must, within thirty (30) days of this
Memorandum-Decision and Order, inform the court whether Angelica
Sanchez wishes to continue to participate in this lawsuit, or whether she
requests voluntary dismissal; and it is further
ORDERED that the parties notify Magistrate Judge Treece in order to
schedule further proceedings in accordance with this MemorandumDecision and Order; and it is further
ORDERED that the Clerk provide a copy of this MemorandumDecision and Order to the parties.
IT IS SO ORDERED.
November 21, 2013
Albany, New York
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