Zhang v. Ichiban Group, LLC et al

Filing 18

MEMORANDUM-DECISION AND ORDER granting in part 14 Motion to Dismiss: The Court hereby ORDERS that Defendants' motion to dismiss (Dkt. No. 14) is GRANTED in part as to Plaintiff's claims under 26 U.S.C. § 7434 and New York Labor La w section 162; and Defendants' motion to dismiss is DENIED in part as to all other claims; and the Court further ORDERS that service was not proper as to Defendants David Ip, Shiow Fei Ju, Shin Shii Ju, or Chwon Tzu Ju, and Plaintiff is g ranted a thirty-day extension of time to serve those Defendants; if Plaintiff fails to properly serve Defendants David Ip, Shiow Fei Ju, Shin Shii Ju, or Chwon Tzu Ju within thirty (30) days, then any of those Defendants that is not properly serve d will be dismissed; and the Court further ORDERS that while the Court does not make a finding as to whether or not Defendants Ichiban Group, LLC, Ichiban Food Services, Inc., were properly served, Plaintiff is granted a thirty (30) day extension of time to serve those Defendants; if Plaintiff fails to serve Defendants Ichiban Group, LLC, Ichiban Food Services, Inc., within thirty (30) days, then Defendants may renew their motion to dismiss for improper service of process as to those Defen dants in a properly filed motion for summary judgment; and the Court further ORDERS that the Clerk of the Court serve a copy of this Memorandum- Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 12/1/2017. (ban, )

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
XUE HUI ZHANG,
Plaintiff,
vs.

1:17-CV-148
(MAD/TWD)

ICHIBAN GROUP, LLC, et al.,
Defendants.
____________________________________________
APPEARANCES:

OF COUNSEL:

JOHN TROY & ASSOCIATES, PLLC
41-25 Kissena Boulevard
Suite 119
Flushing, New York 11355

JOHN TROY, ESQ.

MANN LAW FIRM, PC
426 Troy-Schenectady
Latham, New York 12110

MATTHEW J. MANN, ESQ.

Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
On February 9, 2017, Plaintiff Xue Hui Zhang filed the complaint in this putative class
action against Defendants Ichiban Group, LLC, Ichiban Food Services, Inc., Chen & Ju, Inc.,
David Ip, Shiow Fei Ju, Shin Shii Ju, Chwon Tzu Ju, Liping Ju, Tyng Quh Ju, and Tommy Ju.
See Dkt. No. 1.1 Plaintiff alleges, among other claims, numerous violations of the Fair Labor
Standards Act ("FLSA") and New York Labor Law ("NYLL"). See id. at ¶¶ 70-120. Presently

According to Defendants, Tommy Ju is an Americanized name commonly used by
Defendant Shin Shii Ju. See Dkt. No. 14-2 at 6. Since Plaintiff does not deny that Tommy Ju and
Shin Shii Ju are the same person, Tommy Ju is dismissed as a Defendant in this case.
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before the Court is Defendants' motion to dismiss. See Dkt. No. 14. For the following reasons,
the motion is granted in part and denied in part.
II. BACKGROUND
Plaintiff alleges that he was employed by Defendants Ichiban Goup, LLC, Ichiban Food
Services, Inc., and Chen & Ju, Inc. See id. at ¶ 7. He further alleges that those three entities
"were, and continue to be, [a] single and joint employer and ha[ve] had a high degree of
interrelated and unified operation, and share common management, centralized control of labor
relations, common ownership, common control, common website, common business purposes and
interrelated business goals." Id. at ¶ 42. David Ip, Shiow Fei Ju, Shin Shii Ju, Chwon Tzu Ju,
Liping Ju, Tyng Quh Ju, and Tommy Ju are individuals who owned and operated the businesses
that employed Plaintiff. See id. at ¶¶ 18-32.
Plaintiff worked as a chef at a restaurant located at 1652 Western Avenue in Albany, New
York (the "Restaurant"), which was allegedly owned by Defendants. Plaintiff worked at the
Restaurant from November 20, 2008, until December 7, 2015, and he worked approximately
seventy hours per week. See Dkt. No. 1 at ¶ 45. Plaintiff alleges that he made a flat salary every
month, which ranged from $2,700 to $3,300. See id. at ¶¶ 49-53. Additionally, Plaintiff was
provided with a dormitory that he shared with approximately ten coworkers. See id. at ¶ 47.
Plaintiff alleges that he was given only fifteen minutes or less to eat meals, he was not paid
minimum wage, and he was never provided with any overtime compensation. See id. at ¶¶ 55, 58.
Plaintiff claims that the conditions of his employment violated the FLSA and the NYLL,
as well as other state and federal laws. Plaintiff brings his FLSA claims individually and pursuant
to the FLSA's collective action mechanism, and he brings his NYLL claims as part of a putative
class action pursuant to Federal Rule of Civil Procedure 23. See id. at ¶¶ 60-61. On May 11,
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2017, Defendants moved to dismiss the complaint in its entirety arguing that Plaintiff's claims
should be dismissed for insufficient service of process and for failure to state a claim. See Dkt.
No. 14.2 Plaintiff submitted an opposition, and Defendants filed a reply. See Dkt. Nos. 16, 17.
III. DISCUSSION
A.

Legal Standard
1. Insufficient Service of Process
"On a Rule 12(b)(5) motion to dismiss, the plaintiff bears the burden of establishing that

service was sufficient. " Khan v. Khan, 360 Fed. Appx. 202, 203 (2d Cir. 2010) (citing Burda
Media, Inc. v. Viertel, 417 F.3d 292, 298 (2d Cir. 2005)). Rule 4 of the Federal Rules of Civil
Procedure states that an individual may be served in a judicial district of the United States by
"following state law for serving a summons . . . in the state where the district court is located or
where service is made." Fed. R. Civ. P. 4(e). Rule 308 of the New York Civil Practice Law and
Rules ("CPLR") states that an individual may be served:
by delivering the summons within the state to a person of suitable
age and discretion at the actual place of business, dwelling place or
usual place of abode of the person to be served and by either
mailing the summons to the person to be served at his or her last
known residence or by mailing the summons by first class mail to
the person to be served at his or her actual place of business . . . .
N.Y. C.P.L.R. § 308(2). Additionally, service may be effected by "delivering a copy of the
summons and of the complaint to the individual personally; . . . leaving a copy of each at the
individual's dwelling or usual place of abode with someone of suitable age and discretion who

Defendants also request sanctions under Federal Rule of Civil Procedure 11 against
Plaintiff's counsel, as well as attorneys' fees. Those requests are not appropriate at this stage in
the litigation and are therefore denied.
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resides there; or . . . delivering a copy of each to an agent authorized by appointment or by law to
receive service of process." Fed. R. Civ. P. 4(e)(2)(A).
Under the Federal Rules of Civil Procedure, a corporation may also be served by
following applicable state law, or by "delivering a copy of the summons and of the complaint to
an officer, a managing or general agent, or any other agent authorized by appointment or by law
to receive service of process and . . . by also mailing a copy of each to the defendant." Fed. R.
Civ. P. 4(h)(1)(B). "New York law authorizes two traditional methods of serving process on a
corporation." Lopez v. Bayview Loan Servicing, No. 16-CV-1459, 2017 WL 1507452, *2
(E.D.N.Y. Apr. 27, 2017). First, personal service upon a corporation may be made by serving "an
officer, director, managing or general agent, or cashier or assistant cashier or to any other agent
authorized by appointment or by law to receive service." N.Y. C.P.L.R. § 311(a)(1). Second,
process may be served on the secretary of state "as agent of a domestic or authorized
corporation," and service is "complete when the secretary of state is so served." N.Y. Bus. Corp.
Law § 306(b)(1).
The purpose of the service requirements is "to apprise interested parties of the pendency
of the action and afford them an opportunity to present their objections." Mullane v. Cent.
Hanover Bank & Tr. Co., 339 U.S. 306, 314 (1950); see also Durant v. Traditional Invs., Ltd.,
No. 88-CV-9048, 1990 WL 33611, *3 (S.D.N.Y. Mar. 22, 1990) ("[W]hen a defendant receives
actual notice of a lawsuit brought against him, technical imperfections with service will rarely
invalidate the service"). "Before a federal court may exercise personal jurisdiction over a
defendant, the procedural requirement of service of summons must be satisfied." Omni Capital
Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987). Under Rule 12(b)(5) of the Federal
Rules of Civil Procedure, a defendant may assert insufficiency of process by motion. "The
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burden is on the plaintiff to establish that his service was not insufficient. If the court determines
that it was insufficient, the court may, but is not required to, dismiss the action. Alternatively, the
court may grant leave to allow the plaintiff to cure the insufficiency." Sajimi v. City of New York,
No. 07-CV-3252, 2011 WL 135004, *3 (E.D.N.Y. Jan. 13, 2011) (internal citations omitted).
2. Failure to State a Claim
A motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6) tests the legal sufficiency of the party's claim for relief. See Patane v. Clark,
508 F.3d 106, 111-12 (2d Cir. 2007). In considering the legal sufficiency, a court must accept as
true all well-pleaded facts in the pleading and draw all reasonable inferences in the pleader's
favor. See ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (citation
omitted). This presumption of truth, however, does not extend to legal conclusions. See Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). Although a court's review of a motion to
dismiss is generally limited to the facts presented in the pleading, the court may consider
documents that are "integral" to that pleading, even if they are neither physically attached to, nor
incorporated by reference into, the pleading. See Mangiafico v. Blumenthal, 471 F.3d 391, 398
(2d Cir. 2006) (quoting Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002));
see also Sutton ex rel. Rose v. Wachovia Secs., LLC, 208 Fed. Appx. 27, 29-30 (2d Cir. 2006)
(noting that, on a motion to dismiss, a court may take judicial notice of documents filed in another
court).
To survive a motion to dismiss, a party need only plead "a short and plain statement of the
claim," see Fed. R. Civ. P. 8(a)(2), with sufficient factual "heft to 'sho[w] that the pleader is
entitled to relief,'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007) (quotation omitted).
Under this standard, the pleading's "[f]actual allegations must be enough to raise a right of relief
5

above the speculative level," id. at 555 (citation omitted), and present claims that are "plausible
on [their] face," id. at 570. "The plausibility standard is not akin to a 'probability requirement,'
but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556
U.S. at 678 (citation omitted). "Where a complaint pleads facts that are 'merely consistent with' a
defendant's liability, it 'stops short of the line between possibility and plausibility of "entitlement
to relief."'" Id. (quoting Twombly, 550 U.S. at 557). Ultimately, "when the allegations in a
complaint, however true, could not raise a claim of entitlement to relief," Twombly, 550 U.S. at
558, or where a plaintiff has "not nudged [its] claims across the line from conceivable to
plausible, the[] complaint must be dismissed," id. at 570.
B.

Service of Process
The motion to dismiss argues that the following Defendants should be dismissed because

they were not properly served: David Ip, Shiow Fei Ju, Shin Shii Ju, Chwon Tzu Ju, Ichiban
Group, LLC, and Ichiban Food Services, Inc. See Dkt. No. 14-2 at 6. Defendants do not contest
service as to Defendants Tynh Quh Ju, Liping Ju, or Chen & Ju, Inc. See id.
1. The Individual Defendants
Plaintiff attempted to serve David Ip, Shiow Fei Ju, Shin Shii Ju, and Chwon Tzu Ju by
delivering a summons for each of those Defendants to the Restaurant and serving them on
Defendant Liping Ju, who was working as a cashier at the Restaurant. Defendants argue that
Liping Ju was not authorized to accept service on behalf of David Ip, Shiow Fei Ju, Shin Shii Ju,
or Chwon Tzu Ju, each of whom has submitted an affidavit to that effect. See Dkt. No. 14-2 at 79; Dkt. Nos. 3, 5, 6, 7. Defendants also submitted an affidavit from Liping Ju denying that she
was authorized to accept service on behalf of David Ip, Shiow Fei Ju, Shin Shii Ju, or Chwon Tzu
Ju. See Dkt. No. 14-8 at ¶ 2.
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Under CPLR 308, personal service upon a natural person may be made "by delivering the
summons within the state to a person of suitable age and discretion at the actual place of business
. . . of the person to be served and by either mailing the summons to the person to be served at his
or her last known residence or by mailing the summons by first class mail to the person to be
served at his or her actual place of business." N.Y. C.P.L.R. § 308(2). The statute goes on to
state that "'actual place of business' shall include any location that the defendant, through regular
solicitation or advertisement, has held out as its place of business." Id. § 308(6). "New York
courts have construed 'actual place of business' to include (1) a place where the defendant
regularly transacts business, or (2) an establishment that the defendant owns or operates, where
there is a 'clear identification of the work performed by her with that place of business.'" Velez v.
Vassallo, 203 F. Supp. 2d 312, 325 (S.D.N.Y. 2002) (quoting King v. Galluzzo Equip. &
Excavating, Inc., No. 00-CV-6247, 2001 WL 1402996, *4 (E.D.N.Y. Sept. 8, 2001)). "For the
purpose of service of process, a defendant can have more than one 'actual place of business.'"
Colvin v. State Univ. College at Farmingdale, No. 13-CV-3595, 2014 WL 2863224, *14
(E.D.N.Y. June 19, 2014). A plaintiff must show by a preponderance of the evidence that a
defendant was served at his or her actual place of business. See Balendran by Balendran v. N.
Shore Med. Grp., P.C., 251 A.D.2d 522, 523 (2d Dep't 1998).
In this case, Plaintiff provides two different documents in an attempt to show that the
Restaurant was the actual place of business of David Ip, Shiow Fei Ju, Shin Shii Ju, or Chwon
Tzu Ju. First, Plaintiff submits a liquor license for "Ichiban Restaurant," which is located at 1652
Western Avenue and lists David Ip, Shiow Fei Ju, Shin Shii Ju, or Chwon Tzu Ju as principals.

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See Dkt. No. 15-3 at 8.3 But the liquor license expired on April 30, 2015, nearly two years before
service was made at the Restaurant. See id. Plaintiff also provides an active registration with the
New York State Department of State for Ichiban Food Services, Inc. See id. at 3. The
registration lists 1652 Western Avenue as the address for service of process on the corporation,
and it lists David Ip and Shiow Fei Ju as the corporation's Chief Executive Officer and Principal
Executive Officer. See id. However, both David Ip and Shiow Fei Ju have separate addresses in
Schenectady, New York, listed under their names, which indicates to the Court that 1652 Western
Avenue is likely not their actual place of business. See id. The documents submitted by Plaintiff
are not sufficient evidence that the Restaurant was the actual place of business of David Ip, Shiow
Fei Ju, Shin Shii Ju, or Chwon Tzu Ju. Therefore, those Defendants have not been properly
served. See Warshun v. N.Y. Comm. Bancorp, Inc., 957 F. Supp. 2d 259, 266 (E.D.N.Y. 2013)
(finding that a service was not proper on a company's high-level employees because they were
served at a branch office where the employees did not have offices, were not regularly present,
and did not perform duties).
In Plaintiff's opposition, he asks for an extension of time to re-serve any improperly
served Defendants. See Dkt. No. 16 at 10. "Federal Rule of Civil Procedure 4(m) governs both
(1) the dismissal of actions for untimely service of process and (2) extensions of time in which
service may be effected." Zapata v. City of N.Y., 502 F.3d 192, 195 (2d Cir. 2007). Under Rule
4(m),
If a defendant is not served within 90 days after the complaint is
filed, the court—on motion or on its own after notice to the
plaintiff—must dismiss the action without prejudice against that
defendant or order that service be made within a specified period of

The page numbers for this docket entry correspond with the page number assigned by the
Court's electronic filing system ("ECF").
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time. But if the plaintiff shows good cause for the failure, the court
must extend the time for service for an appropriate period.
Fed. R. Civ. P. 4(m). Since the complaint in this action was filed on February 9, 2017, Plaintiff's
90 days have expired. Although plaintiffs bear the burden of showing good cause for an
extension, Rule 4(m) "give[s] wide latitude to courts in deciding when to grant extensions on time
to serve, including permitting courts to grant extensions even absent good cause." Gerena v.
Korb, 617 F.3d 197, 201 (2d Cir. 2010). Furthermore, "Rule 4 of the Federal Rules is to be
construed liberally 'to further the purpose of finding personal jurisdiction in cases in which the
party has received actual notice.'" Jaiyola v. Carrier Corp., 73 Fed. Appx. 492, 494 (2d Cir.
2003) (quoting Romandette v. Weetabix Co., Inc., 807 F.2d 309, 311 (2d Cir. 1986)). In the
circumstances of this case, including the fact that the all of the individual Defendants have
received actual notice, the Court finds that a thirty-day extension of time for service is
appropriate. If Plaintiff fails to properly serve Defendants David Ip, Shiow Fei Ju, Shin Shii Ju,
and Chwon Tzu Ju within thirty days of the date of this Memorandum-Decision and Order, then
those Defendants will be dismissed.
2. The Business Entity Defendants
Plaintiff attempted to effect service on the business entity Defendants in the same way that
he attempted to serve the individual Defendants—summonses were delivered to the Restaurant
and served on Liping Ju, who was working as a cashier. See Dkt. No. 7 at 4-5. As with the
several of the individual Defendants, Defendants argue that Liping Ju was not authorized to
accept service on behalf of Ichiban Group, LLC, or Ichiban Food Services, Inc. See Dkt. No. 142 at 7. However, the question whether Liping Ju was authorized to accept service on behalf of
Ichiban Group, LLC, and Ichiban Food Services, Inc., is intertwined with substantive issues at the
heart of this case: namely, who owns the various business entities and whether they function as a
9

single, joint employer. Therefore, at this time, the Court declines to address the question whether
service on Ichiban Group, LLC, and Ichiban Food Services, Inc., was proper. See First Capital
Asset Mgmt., Inc. v. Brickelbush, Inc., 150 F. Supp. 2d 624, 630-31 (S.D.N.Y. 2001) (declining to
address personal jurisdiction at the motion to dismiss stage where the issue was intertwined with
substantive claims in the case), aff'd 385 F.3d 159 (2d Cir. 2004).
Since the Court is providing Plaintiff with a thirty-day extension of time to re-serve some
of the individual Defendants, Plaintiff may also re-serve Ichiban Group, LLC, and Ichiban Food
Services, Inc., within thirty days. If Plaintiff fails to properly serve Defendants Ichiban Group,
LLC, and Ichiban Food Services, Inc., within thirty days of the date of this MemorandumDecision and Order, then Defendants may renew their motion to dismiss for improper service of
process as to those Defendants in a properly filed motion for summary judgment.
C.

Chen & Ju, Inc., Liping Ju, and Tyng Quh Ju
Defendants move to dismiss the complaint for failure to state a claim as to Chen & Ju,

Inc., Liping Ju, and Tyng Quh Ju. See Dkt. No. 14-2 at 9-10. Attached to their motion to dismiss,
Defendants provide a sales agreement in which Ichiban Group, LLC, and Ichiban Food Services,
Inc., sell the restaurant to Chen & Ju, Inc., as well a lease agreement in which Ichiban Group,
LLC, agrees to rent the premises to Chen & Ju, Inc. See Dkt. No. 14-16. The sales agreement is
dated May 1, 2016—months after Plaintiff had stopped working at the Restaurant. See id. at 15.
Defendants also provide an affidavit from Liping Ju stating the she and her husband, Tyng Quh
Ju, are the shareholders of Chen & Ju, Inc., and that Plaintiff was never employed by Chen & Ju,
Inc. See Dkt. No. 14-8 at ¶ 5. Furthermore, the affidavit states that she and her husband have
never had any interest in Ichiban Group, LLC, or Ichiban Food Services, Inc. See id. at ¶¶ 3-4.
Defendants argue that because Chen & Ju, Inc., Liping Ju, and Tyng Quh Ju were not involved
10

with the Restaurant during the time of Plaintiff's employment, the complaint should be dismissed
as to those Defendants. See id.
In reviewing a motion to dismiss, the Court may consider documents incorporated by
reference in the complaint or attached as an exhibit thereto, documents that are "integral" to the
plaintiff's claims (even if not explicitly incorporated by reference), and matters of which judicial
notice may be taken. Thomas v. Westchester Cty. Health Care Corp., 232 F. Supp. 2d 273, 275
(S.D.N.Y. 2002) (citations omitted). To incorporate a document by reference, "the Complaint
must make a clear, definite and substantial reference to the document[]." Id. at 275-76.
Moreover, "when a plaintiff chooses not to attach to the complaint or incorporate by reference a
[document] upon which it solely relies and which is integral to the complaint, the defendant may
produce the [document] when attacking the complaint for its failure to state a claim, because
plaintiff should not so easily be allowed to escape the consequences of its own failure." Cortec
Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47 (2d Cir. 1991); accord Holowecki v. Fed. Exp.
Corp., 440 F.3d 558, 565-66 (2d Cir. 2006). Notably, "a plaintiff's reliance on the terms and
effect of a document in drafting the complaint is a necessary prerequisite to the court's
consideration of the document on a dismissal motion; mere notice or possession is not enough."
Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir. 2002).
Here, Plaintiff's complaint alleges that Ichiban Group, LLC, Ichiban Food Services, Inc.,
and Chen & Ju, Inc., operate as a single, joint employer and that they share management,
ownership, labor relations, and a website. See Dkt. No. 1 at ¶ 42. In moving to dismiss the
complaint as to Chen & Ju, Inc., and its shareholders Liping Ju and Tyng Quh Ju, Defendants
provide extrinsic evidence meant to disprove Plaintiff's claims, including a sales contract and
multiple affidavits. To consider such evidence would convert Defendants' motion to dismiss into
11

a motion for summary judgment, which the Court declines to do at this stage. See Thomas, 232 F.
Supp. 2d at 275. Therefore, Defendants' motion to dismiss the complaint against Defendants
Liping Ju, Tyng Quh Ju, and Chen & Ju, Inc., for failure to state a claim is denied.
D.

Violation of 26 U.S.C. § 7434
Under 26 U.S.C. § 7434, "[i]f any person willfully files a fraudulent information return

with respect to payments purported to be made to any other person, such other person may bring a
civil action for damages against the person so filing such return." 26 U.S.C. § 7434(a). "An
'information return' is defined as 'any statement described in section 6724(d)(1)(A),' which
includes, among other things, statements related to information returns 'with respect to income tax
withheld.'" Yahui Zhang v. Akami Inc., No. 15-CV-4946, 2017 WL 4329723, *5 (S.D.N.Y. Sept.
26, 2017) (citing 26 U.S.C. § 6724(1)(A)(vii)).
Although Plaintiff alleges that Defendants violated 26 U.S.C. § 7434, the complaint does
not include any factual allegations supporting that claim. Plaintiff merely states the elements of a
claim under 26 U.S.C. § 7434 and asserts that he is entitled to relief. The pleading standard under
Federal Rule of Civil Procedure 8(a)(2) "requires more than labels and conclusions, and a
formulaic recitation of a cause of action's elements will not do." Twombly, 550 U.S. at 555.
Therefore, Plaintiff's claim under 26 U.S.C. § 7434 is dismissed. See Yahui Zhang, 2017 WL
4329723 at *5 (dismissing the plaintiff's 26 U.S.C. § 7434 claim for failure to state a claim
because it "merely parrots the statutory requirements" but does not allege that the defendant
willfully violated the statute); Jianjun Chen v. 2425 Broadway Chao Rest., LLC, No. 16-CV5735, *8 (S.D.N.Y. June 15, 2017) (dismissing the plaintiff's claims under 26 U.S.C. § 7434
because the complaint "does not specifically allege that [any defendant] filed fraudulent returns");

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Shang Zhong Chen v. Kyoto Sushi, Inc., No. 15-CV-7398, 2017 WL 4236556, *6 (E.D.N.Y. Sept.
22, 2017) (moving sua sponte to dismiss the plaintiff's claim under 26 U.S.C. § 7434 because
"[a]side from the conclusory allegation that [the defendants] violated 26 U.S.C. § 7434, there is
no mention, anywhere in the Complaint, that any documents were filed").4
E.

Failure to Provide Meal Periods
New York Labor Law section 162(2) provides that "[a]n employee who works a shift of

more than six hours which extends over the noon day meal period is entitled to at least thirty
minutes off within that period for the meal period." Plaintiff alleges that Defendants violated this
and other portions of New York Labor Law section 162. See Dkt. No. 1 at ¶¶ 109-113. Despite
Plaintiff's allegations, his claim must be dismissed because "under N.Y. Lab. Law § 162
(requiring meal periods), no private statutory right of action exists to enforce it." Awan v.
Durrani, No. 14-CV-4562, 2015 WL 4000139, *9 n.12 (E.D.N.Y. July 1, 2015). Indeed, courts
in this circuit have repeatedly held that there is no private right of action under New York Labor
Law section 162. See Hill v. City of N.Y., 136 F. Supp. 3d 304, 351 (E.D.N.Y. 2015) (collecting
cases). Therefore, Plaintiff's claim under New York Labor Law section 162 is dismissed.
F.

Preclusion
Defendants argue that the entire complaint in this action must be dismissed as barred by

res judicata. See Dkt. No. 14-2 at 2. According to Defendants, Plaintiff filed a complaint with
the New York State Department of Labor ("DOL") alleging violations of New York Labor Law
arising from the same facts as his claims in this case. See id. DOL investigated Plaintiff's
complaint and scheduled a compliance conference, but Plaintiff failed to appear. See Dkt. No.

The Court notes that the plaintiffs in each of the above-cited cases were represented by
Plaintiff's counsel in this case. Plaintiff's counsel is reminded not to include claims in a complaint
if there is no factual support for those claims.
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14-1 at ¶ 26. The DOL adjourned and rescheduled the conference, but Plaintiff once again failed
to appear. See id. at ¶ 27. In an attorney affirmation, Defendants' counsel states that the
investigation continued and that DOL ultimately determined that Defendants did not owe any
back wages to Plaintiff. See id. at ¶ 30. Therefore, Defendants argue, Plaintiff's complaint is
barred in its entirety by res judicata.
The Supreme Court's decision in University of Tennessee v. Elliott, 478 U.S. 788, 799
(1986), guides federal courts' application of preclusion doctrines, such as res judicata, to the
unreviewed findings of state administrative agencies. The Court in Elliott held that "when a state
agency 'acting in a judicial capacity resolves issues of fact properly before it which the parties
have had an adequate opportunity to litigate,' federal courts must give the agency's factfinding the
same preclusive effect to which it would be entitled in the State's courts." Elliott, 478 U.S. at 799
(1986) (quoting Utah Const. & Mining Co., 384 U.S. 394, 422 (1966)). But the Court also held
that federal courts should balance the preclusive effect of unreviewed state agency decisions with
the congressional intent behind the federal statute giving rise to a plaintiff's cause of action. See
id. at 796.5 After reviewing the language and legislative history of Title VII, the Court in
Elliott determined that Congress did not intend for unreviewed state agency determinations to
have preclusive effect on actions under Title VII. See id.
The first question, then, is whether Congress intended for unreviewed state administrative
findings to have preclusive effect on actions brought under the FLSA. Although the Second

Pursuant to 28 U.S.C. § 1738, federal courts are required 'to give the same preclusive
effect to state court judgments that those judgments would be given in the courts of the State from
which the judgments emerged.'" United States v. E. River Hous. Corp., 90 F. Supp. 3d 118, 139
(S.D.N.Y. 2015) (quoting Kremer v. Chem. Const. Corp., 456 U.S. 461, 466 (1982)). However, §
1738 applies to state court decisions; it does not apply to state agency determinations that are not
reviewed by state courts. See id. (citing Univ. of Tenn. v. Elliott, 478 U.S. 788, 794 (1986)).
5

14

Circuit has not ruled on this question, it has suggested that the answer is no. In Solomino v.
Astoria Federal Sav. & Loan Ass'n, 901 F.2d 1148, 1152 (2d Cir. 1990), aff'd 501 U.S. 104
(1991), the Second Circuit notes the absence of "any part of the FLSA or its interpretive caselaw
that indicates Congress intended in the FLSA to give preclusive effect to the judicially
unreviewed fact-finding of a state agency." Multiple district courts in this circuit have cited
Solomino for the proposition that unreviewed determinations of the DOL likely do not have
preclusive effect on claims brought under the FLSA. See Akwesi v. Uptown Lube & C/W, Inc.,
No. 07-CV-335, 2007 WL 4326732, *3 (S.D.N.Y. Dec. 3, 2007) ("While unreviewed factual
determinations of state agencies may be given preclusive effect in federal court, this is not so in
all circumstances, and appears not [to] be so in suits brought under the FLSA"); accord Metevier
v. CARR Properties, Inc., No. 15-CV-3039, 2016 WL 5793742, *4 n.2 (S.D.N.Y. Sept. 30, 2016).
However, the Court need not reach that question in this case. Even if unreviewed findings of a
state administrative agency could preclude future action under the FLSA, they would not do so in
this case.
"In New York, 'the doctrines of res judicata and collateral estoppel are applicable to give
conclusive effect to the quasi-judicial determinations of administrative agencies . . . when
rendered pursuant to the adjudicatory authority of an agency to decide cases brought before its
tribunals employing procedures substantially similar to those used in a court of law.'" United
States v. E. River Hous. Corp., 90 F. Supp. 3d 118, 140 (S.D.N.Y. 2015) (quoting Ryan v. N.Y.
Tel. Co., 62 N.Y.2d 494, 499 (1984)). However, "a state administrative decision which is
unreviewed by a state court carries no preclusive effect if it was not the subject of a 'quasijudicial' proceeding below." Linares v. City of White Plains, 773 F. Supp. 559, 564 (S.D.N.Y.
1991). In a well-reasoned decision, the court in Metevier examined the question whether a DOL
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investigation and compliance conference has preclusive effect under New York law. Metevier,
2016 WL 5793742, at *4-7. The court noted that "[a] compliance conference is merely a
precursor to an 'Order to Comply,' which the DOL may choose to issue against an employer at the
conclusion of its investigation. If the employer disputes the Order, only then does a formal
hearing take place . . . ." Id. at *6 (citations omitted). The court went on to find that "the DOL
compliance conference was not adjudicatory or quasi-judicial in nature, and therefore the
investigation of [the plaintiff's] claim . . . did not result in an adjudication on the merits.
Consequently, res judicata does not apply." Id. at *7.
In this case, there was a DOL investigation and a compliance conference that the Plaintiff
did not even attend; there was no formal hearing. See Dkt. No. 14-1 at ¶¶ 24-32. Furthermore,
Plaintiff provides just three separate documents relating to the Department of Labor investigation,
and it is not entirely clear whether these documents resolve Plaintiff's complaint. See Dkt. Nos.
9-11. Therefore, this action is not barred by res judicata.
IV. CONCLUSION
After carefully reviewing the entire record in this matter, the parties' submissions and the
applicable law, and for the above-stated reasons, the Court hereby
ORDERS that Defendants' motion to dismiss (Dkt. No. 14) is GRANTED in part as to
Plaintiff's claims under 26 U.S.C. § 7434 and New York Labor Law section 162; and Defendants'
motion to dismiss is DENIED in part as to all other claims; and the Court further
ORDERS that service was not proper as to Defendants David Ip, Shiow Fei Ju, Shin Shii
Ju, or Chwon Tzu Ju, and Plaintiff is granted a thirty-day extension of time to serve those
Defendants; if Plaintiff fails to properly serve Defendants David Ip, Shiow Fei Ju, Shin Shii Ju, or

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Chwon Tzu Ju within thirty (30) days, then any of those Defendants that is not properly served
will be dismissed; and the Court further
ORDERS that while the Court does not make a finding as to whether or not Defendants
Ichiban Group, LLC, Ichiban Food Services, Inc., were properly served, Plaintiff is granted a
thirty (30) day extension of time to serve those Defendants; if Plaintiff fails to serve Defendants
Ichiban Group, LLC, Ichiban Food Services, Inc., within thirty (30) days, then Defendants may
renew their motion to dismiss for improper service of process as to those Defendants in a properly
filed motion for summary judgment; and the Court further
ORDERS that the Clerk of the Court serve a copy of this Memorandum-Decision and
Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.

Dated: December 1, 2017
Albany, New York

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