Janus v. Regalis Constr., Inc.

• Decision Date: 23 July 2012
• Docket Number: 11-CV-5788 (ARR) (VVP)
• Parties: ANDRZEJ JANUS, on behalf of himself and on behalf of all others similarly situated, Plaintiff, v. REGALIS CONSTRUCTION, INC., and JAN POMIANEK, Defendants.
• Court: U.S. District Court — Eastern District of New York

ANDRZEJ JANUS,on behalf of himself and on behalf of all others similarly situated, Plaintiff, v. REGALIS CONSTRUCTION, INC., and JAN POMIANEK, Defendants.

11-CV-5788 (ARR) (VVP)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

July 23, 2012

REPORT AND RECOMMENDATION

POHORELSKY, Magistrate Judge:

The plaintiff, Andrzej Janus, is a carpenter who brought this action against the defendants Regalis Construction, Inc. ("Regalis") and Jan Pomianek, for unpaid overtime wages he is owed under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., and the New York Labor Law ("NYLL").¹ The defendants have failed to appear, and the plaintiff has moved for a default judgment against both of them, submitting a memorandum of law on liability and damages, as well as affidavits and documentary evidence in support of the motion.² The Honorable Allyne R. Ross referred this matter to the undersigned to conduct a damages inquest and to issue a report and recommendation, pursuant to 28 U.S.C. § 636(b)(1)(B). On the basis of the plaintiff's submissions and the prior proceedings in this action, the court makes the following recommendations regarding liability and damages.

I. JURISDICTION

The court has subject matter jurisdiction over the plaintiff's federal claims under the FLSA. See 28 U.S.C. § 1331; 29 U.S.C. § 201, et seq. His claims arising under the NYLL are so related to his FLSA claims that they form part of the same case or controversy and are therefore within the supplemental jurisdiction of the court. See 28 U.S.C. § 1367.

II. DEFAULT

"[A] party is not entitled to a default judgment as a matter of right; rather the entry of a default judgment is entrusted to the sound judicial discretion of the court." Cablevision of S. Conn. v. Smith, 141 F. Supp. 2d 277, 281 (D. Conn. 2001) (quoting Shah v. N.Y. Dep't of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999) (internal quotations omitted)). In civil actions, when a party fails to appear after receiving notice, the court normally has justification for entering default. See Bermudez v. Reid, 733 F.2d 18, 21 (2d Cir. 1984).

The plaintiff has submitted affidavits attesting to service of process upon the defendants according to New York practice. See Wisniewski Decl. Exs. 3 & 4. Regalis was served via the New York Secretary of State, pursuant to N.Y. Bus. Corp. Law § 306. See Wisniewski Decl. ¶ 3 & Ex. 3. Pomianek was served via "nail-and-mail" service, pursuant to N.Y.C.P.L.R. 308(4). See Wisniewski Decl. ¶ 3 & Ex. 4. Such methods of service are adequate under the Federal Rules of Civil Procedure. See Fed R. Civ. P. 4(c), 4(e)(1) (allowing service of process under state methods), 4(h)(1) (same). The defendants have not responded to the complaint or the motion for default. The Clerk of Court entered separate defaults against each defendant on February 2, 2012. See Clerk's Entries of Default (Dkt. Nos. 6, 7). The grounds for default judgment are therefore established, and there is no reason to believe the default is based on a good-faith mistake or technicality. See Cablevision Sys. N.Y.C. Corp. v. Leath, No. 01 Civ.9515, 2002 WL 1751343, at *2 (S.D.N.Y. July 26, 2002) (finding default willful where defendant never responded to complaint, appeared, or explained default). The defendants' inaction makes it unlikely that the court will be compelled at some future date to enter an order vacating the default judgment. Therefore, default judgment is warranted provided liability and damages are appropriately established.

III. LIABILITY

As a consequence of the defendants' default, the well-pleaded allegations of the complaint are deemed admitted, except as to the amount of the plaintiff's damages. See, e.g., Finkel v. Romanowicz, 577 F.3d 79, 83 n.6 (2d Cir. 2009); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). Even so, "after [a] default . . . it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit conclusions of law." Leider v. Ralfe, No. 01 Civ. 3137, 2004 WL 1773330, at *7 (S.D.N.Y. July 30, 2004) (citing In re Indus. Diamonds Antitrust Litig., 119 F. Supp. 2d 418, 420 (S.D.N.Y. 2000)), report adopted as modified by 387 F. Supp. 2d 283 (S.D.N.Y. 2005). Liability thus does not automatically attach from the well-pleaded allegations of the complaint, as it remains the court's responsibility to ensure that the factual allegations, accepted as true, provide proper bases for liability and relief. See Au Bon Pain, 653 F.2d at 65.

a. Factual Background

The well-pleaded allegations in the complaint establish the following facts. Regalis is a company in the business of restoring and renovating buildings in the New York area. Compl. ¶¶ 4, 17 (Dkt. No. 1). Pomianek served as Regalis' owner, officer, president, director, manager, employee, agent and/or majority shareholder. Id. ¶¶ 8, 19, 36. The plaintiff worked for thedefendants as a carpenter from approximately August 2006 through December 2008. Id. ¶¶ 3, 21, 22. Under the plaintiff's original agreement with Regalis, his pay was $11 per hour. Id. ¶¶ 20, 21, 24. His hourly pay later rose to $12, and then to $13, where it remained for the duration of his employment. Id. ¶ 24. The plaintiff's work was satisfactory and complied with the terms of his employment agreement with the defendants. Id. ¶¶ 32, 59. Throughout his employment, the plaintiff typically worked about 50 to 60 hours per week. Id. ¶¶ 27-30. Although the plaintiff regularly worked more than 40 hours per week, the defendants did not pay him the overtime rate of 150 percent of his regular wage for the overtime hours. Id. ¶¶ 24, 31.

b. Enterprise Coverage

The plaintiff has made the requisite showing that his work for the defendants is covered by the FLSA's overtime requirements. The FLSA's overtime requirements apply to employees "engaged in commerce or in the production of goods for commerce" (individual coverage) and those "employed in an enterprise engaged in commerce or in the production of goods for commerce" (enterprise coverage). See 29 U.S.C. § 207(a)(1). The FLSA defines "commerce" as "trade, commerce, transportation, transmission, or communication among the several States or between any State and any place outside thereof." Id. § 203(b). An "enterprise engaged in commerce or in the production of goods for commerce" is one that has "employees engaged in commerce or in the production of goods for commerce, or that has employees handling, selling, or otherwise working on goods or materials that have been moved in or produced for commerce by any person," and whose annual gross volume of sales equals or exceeds $500,000. Id. §§ 203(s)(1)(A)(i)-(ii) (emphasis added).

The plaintiff is neither engaged in commerce, as that term is defined by the FLSA, nor in the production of goods for commerce. Nor is he employed by an enterprise engaged in theproduction of goods for commerce. Accordingly, the only way in which he satisfies all the elements of this cause of action is if he is employed by an enterprise engaged in commerce.³

First, the complaint ultimately establishes the commerce element by alleging that the plaintiff's duties included framing, applying sheetrock, and installing drywall. Compl. ¶ 23. It also alleges that the defendants are enterprises whose "activities affect interstate commerce in that the employees of said defendants produce, sell or otherwise work on goods that have been moved in, or produced for, interstate commerce."⁴ Compl. ¶ 13. The court finds these allegations sufficient, because, in performing his duties, the plaintiff undoubtedly handled or worked with goods moved in or produced for commerce, like building materials and tools. See, e.g., Shim v. Millennium Grp., No. 08-CV-4022, 2009 WL 211367, at *3 (E.D.N.Y. Jan. 28, 2009) ("[T]he test is met if employees . . . merely handled supplies or equipment that originated out-of-state"); Archie v. Grand Cent. P'ship, 997 F. Supp. 504, 530-31 (S.D.N.Y. 1998) (sanitation workers using "bags, brooms, shovels, pails, scrapers . . . radios, books . . . [and] flashlights" handled goods "undoubtedly moved in interstate commerce"); Marshall v. Baker, 500 F. Supp. 145, 151 (N.D.N.Y. 1980) ("[A]n apartment complex is covered [under the FLSA] because the materials used by its maintenance personnel moved in interstate commerce."); see also Radulescu v. Moldowan, 845 F. Supp. 1260, 1262-65 (N.D. Ill. 1994) (collecting cases and examining legislative history to find congressional intent to "extend coverage of the FLSA tocompanies that use products that have moved in interstate commerce"). The plaintiff's employment as a carpenter does not fall within any exemptions to the FLSA's overtime requirements. See 29 U.S.C. §§ 207, 213.

Second, the plaintiff alleges that Regalis' sales exceed $500,000. Compl. ¶ 13. Because both prongs are met, the factual assertions in the complaint establish that Regalis was an enterprise engaged in commerce for FLSA purposes. See Dunlop v. Indus. Am. Corp., 516 F.2d 498, 501-02 (5th Cir. 1975) (finding virtually every enterprise in the nation doing the requisite dollar volume of business is covered by the FLSA); Archie, 997 F. Supp. at 530; Marshall, 500 F. Supp. at 148-51. The plaintiff is thus entitled to overtime pursuant to the FLSA.

c. Joint-Employer Liability

The well-pleaded allegations of the complaint also establish that the individual defendant, Pomianek, is the plaintiff's joint-employer and can be jointly and severally liable for the plaintiff's damages. The plaintiff argues, and the court agrees, that Pomianek is liable as a joint-employer because the plaintiff has sufficiently alleged that Pomianek was an officer possessing operational control of the plaintiff's work.

The FLSA and NYLL both broadly define "employer." Compare 29 U.S.C. § 203(d) with N.Y. Lab. Law §§ 2(6), 190(3)....