Angel et al v. Harvest C-Food Inc. et al
Filing
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OPINION & ORDER: This Court therefore concludes that the FLSA's $500,000 gross annual sales requirement for an "[e]nterprise engaged in commerce or in the production of goods for commerce," 29 U.S.C. § 203(s)(1)(A)(ii), is not a jurisdictional requirement and that any failure to prove that Harvest earns $500,000 or more in gross annual sales would not divest the Court of subject matter jurisdiction. Instead, it would simply mean that plaintiff had failed to meet its burden of proof on its FLSA-based claims. (As further set forth in this Order.) (Signed by Judge Sidney H. Stein on 11/16/2015) (kgo)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
RAYMUNDO VASQUEZ ANGEL,
LEONEL DE LOS SANTOS, LEO
VASQUEZ, and CHRISTIAN DURAN,
Plaintiffs,
14‐Cv‐6035 (SHS)
OPINION & ORDER
‐against‐
HARVEST C‐FOOD INC. (d/b/a Harvest
Chinese & Thai Cuisine), and XIAO FENG
ZOU,
Defendants.
SIDNEY H. STEIN, U.S. District Judge.
This is a collective action brought by former delivery workers against
defendant Harvest C‐Food, Inc., an Asian restaurant operating as “Harvest
Chinese & Thai Cuisine,” and its owner, Xiao Feng Zou. Plaintiffs
Raymundo Vasquez Angel, Leonel De Los Santos, Leo Vasquez, and
Christian Duran bring minimum wage and overtime pay claims pursuant
to the Fair Labor and Standards Act, 29 U.S.C. §§ 206, 207, 216, as well as
additional claims brought pursuant to New York state labor laws and
regulations. Plaintiffs asserted federal question jurisdiction pursuant to 28
U.S.C. § 1331 as the basis for subject matter jurisdiction. This action was
tried before the Court on October 19, 2015. One issue for resolution at trial
was whether plaintiffs’ failure to prove that defendant Harvest C‐Food
made at least $500,000 in annual gross sales deprived this Court of
jurisdiction to hear the action.
I. BACKGROUND
Plaintiffs contend that the terms of the FLSA apply to them because
they are employed by an enterprise “that has employees handling, selling,
or otherwise working on goods or materials that have been moved in or
produced for [interstate] commerce by any person,” and “whose annual
gross volume of sales made or business done is not less than $500,000.”
See 29 U.S.C. §§ 203(b), 203(s)(1)(A), 206(a), 207(a)(1).
Defendants contend that this action may be heard only in New York
state court because plaintiffs have failed to prove by a preponderance of
the evidence that Harvest has met the $500,000 annual gross sales
threshold and, therefore, the Court lacks subject matter jurisdiction over
the FLSA claims and, in turn, supplemental jurisdiction over the state law
claims, 28 U.S.C. § 1367. Plaintiffs counter that the FLSA’s enterprise
coverage requirement goes to the merits of the FLSA claims, and even if
Harvest fails to satisfy the $500,000 threshold, the Court retains subject
matter jurisdiction over the remaining state law claims by way of
supplemental jurisdiction.
II. DISCUSSION
There is an apparent division among the U.S. Courts of Appeal and
among the district courts within the Second Circuit as to whether or not
the $500,000 requirement is a jurisdictional requirement. See infra pp. 3–4.
This Court concludes that the divergence of approaches is largely illusory
and that the $500,000 requirement is not jurisdictional.
Since the U.S. Supreme Court’s decision in Arbaugh v. Y & H
Corporation, 546 U.S. 500 (2006), it has become increasingly clear that the
FLSA’s enterprise coverage requirement of $500,000 in gross annual sales
is not jurisdictional for the following reasons. The question for resolution
in Arbaugh was “whether the numerical qualification contained in Title VII
[of the Civil Rights Act of 1964]’s definition of ‘employer’ affects federal‐
court subject‐matter jurisdiction or, instead, delineates a substantive
ingredient of a Title VII claim for relief.” 546 U.S. at 503. The Supreme
Court laid down a template for answering that question as follows: “If the
Legislature clearly states that a threshold limitation on a statute’s scope
shall count as jurisdictional, then courts and litigants will be duly
instructed and will not be left to wrestle with the issue. . . . But when
Congress does not rank a statutory limitation on coverage as jurisdictional,
courts should treat the restriction as nonjurisdictional in character.” Id. at
515–16 (footnote and citation omitted). Similar to the Title VII requirement
at issue in Arbaugh, the FLSA’s $500,000 requirement is not jurisdictional
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because it is in a separate provision that “does not speak in jurisdictional
terms or refer in any way to the jurisdiction of the district courts.” Id. at
515 (quoting Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 394 (1982)).
As noted above, in Arbaugh, the Supreme Court considered whether
the employee‐numerosity requirement in Title VII of the Civil Rights Act
of 1964 was an element of a claim for relief or a jurisdictional requirement.
Id. at 503. That statute made it unlawful “for an employer . . . to
discriminate” on the basis of sex. Id. (quoting 42 U.S.C. § 2000e‐2(a)(1)) . A
separate provision limited the definition of “employer” to only those
having “fifteen or more employees” and yet another provision empowered
federal courts to adjudicate civil actions “brought under” Title VII. Id
(quoting 42 U.S.C. §§ 2000e(b), 2000e‐5(f)(3)). The Supreme Court
concluded that in contrast to statutes which explicitly refer to jurisdiction
or other jurisdictional statutes,1 Title VII’s employee‐numerosity
requirement did not refer to jurisdiction in any way and was therefore not
a jurisdictional prerequisite. Id. at 515–16.
Virtually all of the circuit courts and those district courts in the Second
Circuit that have explicitly considered whether the FLSA’s $500,000
requirement is jurisdictional agree that it is a requirement that goes to the
merits of a claim and is not jurisdictional. See, e.g., Chao v. Hotel Oasis, Inc.,
493 F.3d 26, 33 (1st Cir. 2007); Chen v. New 9th Ave. Pearl on the Sushi Inc.,
No. 14‐cv‐580, 2015 WL 3947560, at *3 n.3 (S.D.N.Y. June 29, 2015); Azeez v.
Ramaiah, No. 14‐cv‐5623, 2015 WL 1637871, at *2 (S.D.N.Y. April 9, 2015);
Suggs v. Crosslands Transp., Inc., No. 13‐cv‐6731, 2015 WL 1443221, at *3 n.2
(E.D.N.Y. Mar. 27, 2015); Rocha v. Bakhter Afghan Halal Kababs, Inc., 44 F.
Supp. 3d 337, 344–45 (E.D.N.Y. 2014); Li v. Zhao, 35 F. Supp. 3d 300, 305
(E.D.N.Y. 2014); Lin v. Yeh’s Bakery, Inc., No. 12‐cv‐2146, 2013 WL 867436,
at *2 (E.D.N.Y. Mar. 7, 2013); Monterossa v. Martinez Rest. Corp., No. 11‐cv‐
See, e.g., 28 U.S.C. § 1348 (“The district courts shall have original jurisdiction of any civil
action commenced by the United States . . . against any national banking
association.”) (emphasis added); 42 U.S.C. § 405(h) (“No action against the United
States, the Commissioner of Social Security, or any officer or employee thereof shall
be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under
this subchapter) (emphasis added).
1
3
3689, 2012 WL 3890212, at *3 (S.D.N.Y. Sept. 7, 2012); Jia Hu Qian v. Siew
Foong Hui, No. 11‐cv‐5584, 2012 WL 1948820, at *2–3 (S.D.N.Y. May 30,
2012); Benitez v. F & V Car Wash, Inc., No. 11‐cv‐1857, 2012 WL 1414879, at
*1 (E.D.N.Y. April 24, 2012); Zaldivar v. Anna Bella’s Café, LLC, No. 11‐cv‐
1198, 2012 WL 642828, at *3 (E.D.N.Y. Feb. 28, 2012); Jackson v. Computer
Confidence, Inc., No. 09‐cv‐6057, 2010 WL 681228, at *1–2 (W.D.N.Y. Feb. 23,
2010); Padilla v. Manlapaz, 643 F. Supp. 2d 298, 300–02 (E.D.N.Y. 2009); Velez
v. Vassallo, 203 F. Supp. 2d 312, 330–33 (S.D.N.Y. 2002).
In addition, those circuit and district court opinions that have referred
to the FLSA’s $500,000 requirement as jurisdictional either pre‐date
Arbaugh or are perhaps best described as “drive‐by jurisdictional rulings”
that do not “explicitly consider[] whether the dismissal should be for lack
of subject matter jurisdiction or for failure to state a claim.” See Arbaugh,
546 U.S. at 511; see, e.g., Brock v. Exec. Towers, Inc., 796 F.2d 698, 701 (4th Cir.
1986) (per curiam); Dunlop v. Ashy, 555 F.2d 1228, 1230 (5th Cir. 1977);
Brennan v. Dillion, 483 F.2d 1334, 1335 (10th Cir. 1973); Zhao v. Sunny 39
Hotel Corp., No. 14‐cv‐1847, 2015 WL 5307716, at *3 (E.D.N.Y. Sept. 10,
2015); Avelar v. Ed Quiros, Inc., No. 13‐cv‐7017, 2015 WL 1247102, at *4–5
(E.D.N.Y. Mar. 18, 2015); Kasraie v. Jumeirah Hosp. & Leisure (USA), Inc., No.
12‐cv‐8829, 2013 WL 5597121, at *6 (S.D.N.Y. Oct. 10, 2013); Locke v. St.
Augustine’s Episcopal Church, 690 F. Supp. 2d 77, 84, 90 (E.D.N.Y. 2010);
Lamont v. Frank Soup Bowl, Inc., No. 99‐cv‐12482, 2001 WL 521815, at *2–3
(S.D.N.Y. May 16, 2001); Boekemeier v. Fourth Universalist Society in New
York, 86 F. Supp. 2d 280, 285 (S.D.N.Y. 2000). As Justice Ginsburg wrote in
Arbaugh, such rulings “should be accorded ‘no precedential effect’ on the
question [of] whether the federal court ha[s] authority to adjudicate the
claim in suit.” 546 U.S. at 511; see also Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 91 (1998); Lewis v. Casey, 518 U.S. 343, 352 n.2 (1996); Fed.
Election Comm’n v. NRA Political Victory Fund, 513 U.S. 88, 97 (1994); United
States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 38 (1952).
III. CONCLUSION
This Court therefore concludes that the FLSA’s $500,000 gross annual
sales requirement for an “[e]nterprise engaged in commerce or in the
production of goods for commerce,” 29 U.S.C. § 203(s)(1)(A)(ii), is not a
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jurisdictional requirement and that any failure to prove that Harvest earns
$500,000 or more in gross annual sales would not divest the Court of
subject matter jurisdiction. Instead, it would simply mean that plaintiff
had failed to meet its burden of proof on its FLSA-based claims.
Dated: New York, New York
November 16, 2015
SO ORDER
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