Gutierrez v. Carter's, Inc.
| Docket Number | 22-CV-3234 (AMD)(LB) |
| Decision Date | 07 November 2023 |
| Parties | ROSA GUTIERREZ, Plaintiff, v. CARTER'S INC., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
The plaintiff, Rosa Gutierrez, brings this class action against Carter's Retail, Inc.[1] under New York Labor Law (“NYLL”). The plaintiff alleges that the defendant was required to pay manual workers weekly, but paid her and other manual workers every two weeks. Before the Court is the defendant's motion to dismiss for lack of jurisdiction and for failure to state a claim and, in the alternative, for an order staying this action pending a decision in a similar case before the Appellate Division Second Department. For the reasons explained below, the defendant's motion to dismiss and request for a stay are denied.
The following facts are drawn from the complaint and documents attached as exhibits. The allegations in the complaint are “accept[ed] as true” on a motion to dismiss. Dane v. United Healthcare Ins. Co., 974 F.3d 183 188 (2d Cir. 2020) (citation omitted).
From “approximately 2018 to 2020,” the defendant employed the plaintiff as a store manager. (ECF No. 8 ¶ 11.) In that position, the plaintiff spent at least a quarter of her time performing manual labor, “including tasks such as unloading and stocking inventory, handling and unpacking daily deliveries, and assembling storefront displays.” (Id.) According to the plaintiff, the defendant paid her on a “biweekly” basis; in other words, she was paid every two weeks for two weeks of work. (Id.)
The plaintiff brings a single cause of action in her amended class-action complaint, alleging the defendant failed to pay timely wages in violation of NYLL § 191(1)(a) because the defendant paid the plaintiff on a biweekly basis instead of every week. (See ECF No. 8 ¶¶ 1922.) The plaintiff seeks liquidated damages as well as reasonable attorneys' fees, costs, and prejudgment and post-judgment interest. (Id. ¶ 22.)
The defendant moves to dismiss the complaint for lack of jurisdiction and the failure to state a claim under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). According to the defendant, the Court does not have jurisdiction over the plaintiff's state law claims because the plaintiff lacks standing and because NYLL § 191 does not include a private right of action. (ECF No. 20-1 at 10-22.)[2] In the alternative, the defendant requests that the Court stay the proceedings until the Appellate Division, Second Department decides Grant v. Global Aircraft Dispatch, Inc., No. 2021-0320.
“Determining the existence of subject matter jurisdiction is a threshold inquiry,” Morrison v. Nat'l Australia Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008), aff'd, 561 U.S. 247 (2010), and dismissal is proper under Federal Rule of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction “when the district court lacks the statutory or constitutional power to adjudicate” the claim, Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). A federal court lacks subject matter jurisdiction when the plaintiff does not have standing to bring an action. Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.a.r.l, 790 F.3d 411, 416-17 (2d Cir. 2015). When a Rule 12(b)(1) motion is based on the face of the complaint, the court must determine whether the complaint “allege[s] facts that affirmatively and plausibly suggest that [the plaintiff] has standing to sue.” Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016) (citation omitted).
To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed factual allegations” are not required, “[a] pleading that offers ‘labels and conclusions' or a ‘formulaic recitation of the elements of a cause of action will not do.'” Id. (quoting Twombly, 550 U.S. at 555). Pleadings are construed in the light most favorable to the plaintiff. Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010).
“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” Pacnet Servs. Ltd. v. Off. of Foreign Assets Control of United States Dep't of the Treasury, 521 F.Supp.3d 181, 215 (E.D.N.Y. 2021) (quotation marks and citation omitted). “A court may enter a stay pending the outcome of proceedings which bear upon the case, even if such proceedings are not necessarily controlling of the action that is to be stayed.” Rankine v. Levi Strauss & Co., No. 22-CV-03362, 2023 WL 3582323, at *6-8 (internal quotation marks omitted).
The movant “bears the burden of establishing its need” for a stay. Davis v. Banana Republic, LLC, No. 21-CV-6160, 2023 WL 5979207, at *1 (E.D.N.Y. Aug. 25, 2023) (citation omitted). In determining whether to grant a stay, courts consider five factors: “(1) the private interests of the plaintiffs in proceeding expeditiously with the civil litigation as balanced against the prejudice to the plaintiffs if delayed; (2) the private interests of and burden on the defendants; (3) the interests of the courts; (4) the interests of persons not parties to the civil litigation; and (5) the public interest.” Id. (citing Kappel v. Comfort, 914 F.Supp. 1056, 1058 (S.D.N.Y. 1996)).
The defendant argues that the plaintiff does not have standing because she “has not alleged how being paid biweekly instead of weekly caused her concrete and actual harm.” (ECF No. 20-1 at 11.) According to the defendant, the plaintiff “has not alleged any facts showing she, and the class she purports to represent, forwent the opportunity to invest or otherwise use the money she alleges was due on a weekly basis,” or that she “was late on any bills and incurred a late fee, or that she intended to deposit her paycheck into an interesting-bearing account for which she would have accumulated interest in a week.” (Id. at 11-12.)
The defendant's argument “has been rejected repeatedly by courts in this Circuit in the specific context of claims arising under Section 191.” Krawitz v. Five Below, Inc., No. 22-CV-2253, 2023 WL 6385711, at *3 (E.D.N.Y. Sept. 29, 2023) (quotation marks and citation omitted). The “late payment of wages-as pleaded here-is a concrete harm sufficient to establish Article III standing.” Id.; see also Caul v. Petco Animal Supplies, Inc., No. 20-CV-3534, 2021 WL 4407856, at *4 (E.D.N.Y. Sept. 27, 2021) (same). As the court explained in Espinal v. Sephora USA, Inc., “the loss of the time value of money owed to plaintiff is not a harm that might occur, but one that has occurred; it is not a harm that might materialize, but one that has materialized,” and is thus sufficient to confer standing. No. 22-CV-03034, 2022 WL 16973328, at *3 (S.D.N.Y. Nov. 16, 2022).
The plaintiff, therefore, has pleaded sufficient facts to establish standing.
The defendant next argues that the plaintiff's claims should be dismissed because “there exists no private right of action under NYLL § 191.” (ECF No. 20-1 at 10.) The defendant is incorrect.
Section 191 of NYLL provides that “[a] manual worker shall be paid weekly and not later than seven calendar days after the end of the week in which the wages are earned” unless the Commissioner of the New York Department of Labor has “authorized” the employer to pay the worker less frequently. Section 198 of NYLL permits an “employee to recover the full amount of any underpayment” of wages. In addition, “unless the employer proves a good faith basis to believe that its underpayment of wages was in compliance with the law,” the employee may also recover “an additional amount as liquidated damages equal to one hundred percent of the total amount of the wages found to be due.” NYLL § 198.
The defendant argues that, properly interpreted, Section 191 does not provide a private right of action, and that Section 198 does not apply to the plaintiff's claims. “When deciding a question of state law,” a federal court “look[s] to the state's decisional law, as well as to its constitution and statutes.” Chufen Chen v. Dunkin' Brands, Inc., 954 F.3d 492, 497 (2d Cir. 2020) (citation omitted). Absent a clear directive from a state's highest court, a federal court must “predict how the state's highest court would resolve the uncertainty or ambiguity.” Id. at 499 (citation omitted). In doing so, the federal court “is bound to apply the law as interpreted by a state's intermediate appellate courts unless there is persuasive evidence that the state's highest court would reach a different conclusion.” V.S. v. Muhammad, 595 F.3d 426, 432 (2d Cir. 2010).
Here, a state intermediate appellate court has held that NYLL “[Section] 198(1-a) expressly provides a private right of action for a violation of [Section] 191.” Vega v. CM & Assocs. Constr. Mgmt., LLC, 175 A.D.3d 1144 1146 (1st Dep't 2019). The First Department explained that Section 198 allows an award of damages based on untimely payments even if the employer had “pa[id] the wages that [we]re due before the commencement of [the] action.” Id. at 1145. The Vega court held that “underpayment” for purposes of Section 198 occurs “[t]he moment that an employer fail[s] to pay wages in compliance with [S]e...
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