Aquino v. El Gran Valle II Corp. et al

Filing 32

OPINION & ORDER: For the foregoing reasons, defendants' motion for summary judgment is GRANTED. The Clerk of Court is directed to terminate the pending motion at ECF No. 25, and to terminate this action, and as further set forth in this order. (Signed by Judge Katherine B. Forrest on 11/9/2017) (ap)

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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CARLOS AQUINO,
:
:
Plaintiff,
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-v:
:
EL GRAN VALLE II CORP.
:
and EDWIN CORONADO,
:
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Defendants.
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:
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USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
DOC #: _________________
DATE FILED: November 9, 2017

17-cv-2465 (KBF)
OPINION & ORDER

KATHERINE B. FORREST, District Judge:
On April 5, 2017, plaintiff filed this action under the Fair Labor Standards
Act (“FLSA”) and New York Labor Law for defendants’ alleged failure to pay the
state and federal minimum wages, overtime, and New York’s “spread of hours”
premium, as well as their failure to provide accurate weekly wage statements as
required by New York’s Wage Theft Prevention Act. (Compl., ECF No. 1.) Pending
before the Court is defendants’ motion for summary judgment. (ECF No. 25.) The
crux of that motion is that defendants are not covered entities under FLSA and thus
cannot be sued for violating its provisions. For the reasons stated below, that
motion is GRANTED.
I.

BACKGROUND1
Defendant El Gran Valle II Corporation is “in the food service business” and

sells Latin cuisine to “local Bronx customers.” (Pl.’s Rule 56.1 Counterstatement ¶

1

The following facts are undisputed unless otherwise noted. See Fed. R. Civ. P. 56.

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6.) Plaintiff was employed by defendants from September 24, 2013 until March 29,
2017 as a cook’s helper, maintenance person, and dishwasher. (Decl. of Pl. Carlos
Aquino Opp. Def.’s Mot. for Summ. J. (“Aquino Decl.”), ECF No. 30-1, ¶ 2; see also
Pl.’s Rule 56.1 Counterstatement ¶ 1.) He worked six days per week: eight hours
per day on Tuesdays, Wednesdays, Thursdays, and Fridays, and eleven hours per
day on Saturdays and Sundays. (Aquino Decl. ¶ 5.) This amounts to fifty-four
hours per week. (Id. ¶ 6.) Plaintiff was paid in cash, never received paystubs, and
was not provided with a “time clock, sign in sheet, or any other method for
employees to track their time.” (Id. ¶¶ 7-8, 12.)
From September 2013 until December 2014, plaintiff was paid $200 per
week; from January 2015 until the end of his employment, he was paid $250 per
week. (Id. ¶ 9.) Every second week, defendants deducted $35 from his pay, and
every fourth week, they deducted an addition $50. (Id. ¶ 9.) Plaintiff was not paid
overtime in any form. (Id. ¶¶ 10-11.)
Plaintiff and defendants disagree on the restaurant’s annual revenues.
Plaintiff “estimate[s] that sales each week totaled $15,000 to $20,000.” (Aquino
Decl. ¶ 13.) Plaintiff’s assertion is conclusory and not supported by specific facts.
Counsel asserts that it is based on plaintiff’s knowledge derived from performing his
job responsibilities. However, no facts in plaintiff’s declaration support knowledge
of amounts paid by customers. Defendant claims its gross revenues were as follows:
$53,686 in 201; $166,458 in 2014; $230,202 in 2015; and $255,684 in 2016. (Pl.’s
Rule 56.1 Counterstatement ¶ 4.) As support, defendants submitted the
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restaurant’s tax returns from 2013-2016, which confirm these amounts. (ECF Nos.
25-3 (“2013 Tax Return”), 25-4 (“2014 Tax Return”), 25-5 (“2015 Tax Return”), 25-6
(“2013 Tax Return”) (collectively, the “Tax Returns”).) Each of the tax returns was
signed by the president of the corporation and includes the information of the paid
tax preparation firm that, presumably, prepared the forms.2 (2013 Tax Return at 1;
2014 Tax Return at 1; 2015 Tax Return at 1; 2016 Tax Return at 1.)
II.

PROCEDURAL POSTURE
Defendants’ motion for dismissal of plaintiff’s claims is based on an assertion

that FLSA covers neither plaintiff nor defendant. (Mem. Supp. at 3.) From this,
defendants conclude that the court is without subject matter jurisdiction. (Id.) As
the Court noted in its order of October 17, 2017, it construes this motion as directed
to both or either of an assertion that there is no subject matter jurisdiction and/or
an assertion that plaintiff has not proven a required element for a FLSA claim.
(ECF No. 31 at 1.)3

All but the 2013 Tax Return include the preparer’s signature as well. (2013 Tax Return at 1, 2014
Tax Return at 1, 2015 Tax Return at 1, 2016 Tax Return at 1.)
3 The Supreme Court held in Arbaugh v. Y&H Corp. that the employee-numerosity requirement
under Title VII goes to the substantive adequacy of a claim rather than federal-court subject matter
jurisdiction. 546 U.S. 500, 504 (2006). Since then, courts in the Second Circuit have held that a
defendant’s claim that it is not covered by FLSA because its revenues do not exceed $500,000 goes to
the merits, not subject matter jurisdiction. See, e.g., Monterossa v. Martinez Restaurant Grp., No.
11-cv-3698, 2012 WL 3890212, at *3 (S.D.N.Y. Sept. 7, 2012) (“[T]he question of whether or not
Defendants actually are ‘an enterprise engaged in commerce’ within the meaning of 29 U.S.C. §
203(s)(1) is an issue that goes to the merits of Plaintiffs’ claims rather than [to] the Court’s subject
matter jurisdiction.” (quoting Velez v. Vassallo, 203 F. Supp. 2d 312, 332 (S.D.N.Y. 2002)); Jia Hu
Qian v. Siew Foong Hu, No. 11-cv-5584, 2012 WL 1948820, at *2 (S.D.N.Y. May 30, 2012) (noting
that whether a defendant is an “enterprise engaged in commerce” under FLSA “raises a merits—and
not a jurisdictional—issue”); Padilla v. Manlapaz, 643 F. Supp. 2d 298 (E.D.N.Y. 2009) (citing
Arbaugh and holding that “[t]he gross annual sales requirement is not jurisdictional because the
plain language of the FLSA makes no reference to that requirement in jurisdictional terms”); Velez,
203 F. Supp. 2d at 330 (“A plaintiff’s failure to make [a] showing [that a defendant is covered by
FLSA] constitutes a failure on the merits. . . . Even if it were to be found that [defendant] is not an
2

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III.

LEGAL STANDARDS
A. Pleading Standard
Summary judgment may be granted when a movant shows, based on

admissible evidence in the record, “that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). The moving party bears the burden of demonstrating “the absence of
a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
In reviewing a motion for summary judgment, the Court construes all evidence in
the light most favorable to the nonmoving party, and draws all inferences and
resolves all ambiguities in its favor. Dickerson v. Napolitano, 604 F.3d 732, 740 (2d
Cir. 2010). The Court’s role is to determine whether there are any triable issues of
material fact, not to weigh the evidence or resolve any factual disputes. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986).
A court may not grant summary judgment merely because a motion is
unopposed. See Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241,
244 (2d Cir. 2004); see also Fed. R. Civ. P. 56(e) (stating that when a non-moving
party fails to oppose a summary judgment motion, “summary judgment, if

“enterprise” within the meaning of the statute, this would not affect the Court’s subject matter
jurisdiction. Other courts have similarly recognized that whether or not a defendant is statutorily
excluded from coverage under the FLSA goes to the merits of the claims against it and not to the
jurisdiction of the Court.” (internal quotations and citations omitted)); see also Nowak v. Ironworkers
Local 6 Pension Fund, 81 F.3d 1182, 1189 (2d Cir. 1996) (“[I]n cases where the asserted basis for
subject matter jurisdiction is also an element of the plaintiff’s allegedly federal cause of action, we
ask only whether—on its face—the complaint is drawn so as to seek recovery under federal law or
the Constitution. If so, then we assume or find a sufficient basis for jurisdiction, and reserve further
scrutiny for an inquiry on the merits.”).

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appropriate, shall be entered against” it). Instead, the Court must examine record
to determine if the moving party “has met its burden of demonstrating that no
material issue of fact remains for trial.” See Vermont Teddy Bear, 373 F.3d at 244
(quoting Amaker v. Foley, 274 F.3d 677, 681 (2d Cir. 2001)). “In doing so, the court
may rely on other evidence in the record even if uncited.” Jackson v. Fed. Exp., 766
F.3d 189, 194 (2d Cir. 2014) (citing Fed. R. Civ. P. 56(c)(3)). Even an unopposed
motion for summary judgment fails “where the undisputed facts fail to ‘show that
the moving party is entitled to judgment as a matter of law.’” Id. (quoting
Champion v. Artuz, 76 F.3d 483, 486 (2d Cir. 1996)).
B. FLSA Coverage
FLSA mandates a minimum wage for employees, 29 U.S.C. § 206(a) (2012),
and requires that covered employees receive overtime pay when they work more
than forty hours per week, id. § 207. FLSA is applicable when either an employer
enterprise is covered or an individual employee is covered. To establish enterprise
coverage, the plaintiff must show that the entity has, inter alia, “annual gross
volume of sales made or business done [of] not less than $500,000.” Id. §
203(s)(1)(A).
To establish individual coverage, the plaintiff must demonstrate that the
employee “is engaged in commerce or in the production of goods for commerce, or is
employed in an enterprise engaged in commerce or in the production of goods for
commerce.” Id. §§ 206-07 (emphasis added); see also Jacobs v. New York Foundling
Hosp., 577 F.3d 93, 96 (2d Cir. 2009) (citing Tony & Susan Alamo Found. v. Sec’y of
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Labor, 471 U.S. 290, 295 n.8 (1985)). “Employees are ‘engaged in commerce’ within
the meaning of [FLSA] when they are performing work involving or related to the
movement of persons or things (whether tangibles or intangibles, and including
information and intelligence) among the several States or between any State and
any place outside thereof.” 29 C.F.R. § 779.103. Similarly, engagement in the
“production of goods for commerce” requires that those goods are “intended for
shipment out of the State, directly or indirectly.” Id. § 779.104; see also Xelo v.
Mavros, No. 03-cv-3665, 2005 WL 2385724, at *4 (E.D.N.Y. Sept. 28, 2005) (“The
dispositive test for FLSA coverage asks whether a plaintiff was an employee in the
channels of interstate commerce, as distinguished from [one] who merely affected
that commerce. So, handlers of goods for a wholesaler who moves them interstate
on order or to meet the needs of specified customers are in commerce, while those
employees who handle goods after acquisition by a merchant for general local
disposition are not.” (citing McCleod v. Threlkeld, 319 U.S. 491, 494 (1943) (internal
quotations omitted))).
IV.

DISCUSSION
A. Enterprise Coverage
Plaintiff has failed to raise a triable issue of fact, based on admissible

evidence, that defendant’s restaurant collects more than $500,000 in yearly
revenues, as required for enterprise coverage. With its motion, defendant
submitted its Tax Returns from 2013 through 2016. For each year, El Gran Valle II
Corporation’s gross receipts and sales were, in fact, less than $500,000. In the
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highest-grossing year (2016), defendant made $255,684. (2016 Tax Return at 1.)
Plaintiff’s conclusory assertion that he estimates $15,000 to $20,000 in weekly sales
is insufficient to rebut this evidence. Plaintiff has proffered no facts suggesting any
basis for this number. It appears to be entirely speculation, plucked out of the air.
The Court would not allow such speculative testimony at trial, as it would lack
adequate foundation. Plaintiff cannot manufacture a material dispute of fact by
simply declaring an estimate of the defendants’ revenues.
Plaintiff, however, contends that “tax returns alone are not sufficient to
establish an enterprise’s gross sales as an undisputed fact.” (Mem. Opp. at 10.)
Plaintiff cites a number of cases in support of this proposition, but each one is
distinguishable from the situation here. In Rocha v. Bakhter Afghan Halal Kababs,
Inc., for example, the court held that the tax returns were not reliable because three
of five were not signed, and none were accompanied by an “affidavit from the tax
preparer or from the owner of the business verifying the authenticity of the
returns.” 44 F. Supp. 3d 337, 348 (E.D.N.Y. 2014). In Monterrossa v. Martinez
Rest. Corp., the same was true and the tax returns were “inconsistent with [the]
Defendants’ own records—specifically, a handwritten log . . . .” No. 11-cv-3689,
2012 WL 3890212, at *3 (S.D.N.Y. Sept. 7, 2012). And in Chang Mei Lin v. Yeh’s
Bakery, Inc., No. 12-cv-2146, 2013 WL 867436, at *2 (E.D.N.Y. Mar. 7, 2013), and
Amaya v. Superior Tile & Granite Corp., No. 10-cv-4525, 2012 WL 130425, at *4
(S.D.N.Y. Jan. 17, 2012), the courts based their holdings on the fact that the

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defendants’ tax returns were inconsistent with the plaintiffs’ tax returns and the
number of employees the defendant allegedly maintained.
Here, the tax returns were signed and prepared by a tax preparer, and
defendants submitted an affidavit from defendant Coronado (the owner of El Gran
Valle II Corporation), which stated the restaurant’s yearly gross revenues, that they
“filed [their] tax returns in a timely fashion,” and that he had “filed taxes for the
corporation for the years at issue.” (Coronado Aff. ¶¶ 3-4; see also Tax Returns.)
Plaintiff has not provided his own tax return for comparison, nor has he alleged how
many people were employed by El Gran Valle II. He has offered no evidence, other
than plaintiff’s affidavit, to discredit the Tax Returns. As such, plaintiff has not
adequately countered defendant’s showing that it grossed less than $500,000 per
year.
B. Individual Coverage
Nor has plaintiff shown that there is a material dispute of fact as to
individual coverage. Plaintiff did not address this point in his opposition to
defendant’s motion to dismiss, and the Complaint states only that plaintiff “was an
employee engaged in commerce and/or the production of goods for commerce, as
defined in FLSA and its implementing regulations.” (Compl. ¶ 19.) Defendant
counters that plaintiff worked for a “local business selling Latin cuisine to the local
Bronx community, and not for interstate commerce.” (Mem. Opp. at 7; Aff. of Edwin
Coronado (“Coronado Aff.”), ECF No. 25-2, ¶ 4.)

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In a similar case, the court held that a local restaurant that “cooked meals for
patrons and sold take-out orders from a single location in the Bronx” was not in the
channels of interstate commerce, even though three people living outside New York
had purchased food there. Lamont v. Frank Soup Bowl, Inc., No. 99-cv-12482, 2001
WL 521815, at *2 (S.D.N.Y. May 16, 2001). As in Lamont, here, there is “no
evidence that [El Gran Valle II] received any direct shipments of supplies from
outside the State of New York. While it [may be] true that people who live outside
of New York may have eaten food prepared at [El Gran Valle II], that fact alone
cannot serve as evidence that [defendant] prepares the food for interstate
commerce. If that were true, every hot dog vendor in New York would be engaged
in producing goods for interstate commerce.” Id., 2001 WL 521815, at *2. As such,
the court concluded, the plaintiff in Lamont had not “engaged in conduct over which
Congress chose to exercise jurisdiction.” Id., 2001 WL 521815, at *3.
So too here. Plaintiff has offered no information to dispute defendant’s
assertion that his work as a cook’s helper, maintenance person, and dishwasher did
not involve interstate commerce. Notably plaintiff’s declaration makes no
statement as to any aspect of his work involving interstate commerce.4 His
Complaint states only the legal conclusion that plaintiff “was an employee engaged
in commerce and/or the production of goods for commerce, as defined in the FLSA

In Lamont, the plaintiff submitted evidence of at least three out-of-state patrons, 2001 WL 521815,
at *1, and it was still insufficient to establish coverage. Here, plaintiff has not even made this
showing.
4

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and its implementing regulations.” (Compl. ¶ 19.) As such, the Court cannot
conclude that FLSA applies to this dispute through individual coverage, either.
V.

CONCLUSION
For the foregoing reasons, defendants’ motion for summary judgment is

GRANTED.5 The Clerk of Court is directed to terminate the pending motion at
ECF No. 25, and to terminate this action.
SO ORDERED.
Dated:

New York, New York
November 9, 2017
______________________________________
KATHERINE B. FORREST
United States District Judge

5

The Court declines to exercise supplemental jurisdiction over the remaining state law claims.

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