Panora v. Deenora Corp

• Decision Date: 25 February 2021
• Docket Number: 19-cv-7267 (BMC)
• Court: U.S. District Court — Eastern District of New York
• Parties: Jose PANORA, on his own behalf and on behalf of others similarly situated, Plaintiff, v. DEENORA CORP d/b/a Dees et al., Defendants.

521 F.Supp.3d 177

Jose PANORA, on his own behalf and on behalf of others similarly situated, Plaintiff,

v.DEENORA CORP d/b/a Dees et al., Defendants.

19-cv-7267 (BMC)

United States District Court, E.D. New York.

Signed February 25, 2021

Aaron Schweitzer, Leanghour Lim, John Troy, Troy Law, PLLC, Flushing, NY, for Plaintiff.

Keith J. Gutstein, Kaufman, Dolowich, Voluck & Gonzo, LLP, Aaron Nathaniel Solomon, Taimur Alamgir, Taylor Michelle Ferris, Kaufman Dolowich & Voluck, LLP, Woodbury, NY, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

In this Fair Labor Standards Act ("FLSA") suit, defendants seek sanctions against plaintiff and his counsel in connection with the notice of a collective action and consent-to-join form sent to defendants’ current and former employees. After hearing oral argument on the motion, I concluded that sanctions were warranted against plaintiff's counsel but reserved decision on the sanction that would issue, noting that a written Order would follow. This is that Order.

Plaintiff worked as a chef at Dee's Brick Oven Pizza ("Dee's") and brings this proposed collective action for failure to pay overtime wages. On December 9, 2020, I granted in part plaintiff's motion for leave to send out notice of a collective action to Dee's employees. Plaintiff's motion attached a proposed notice and consent-to-join form, to which I ordered certain revisions based on defendants’ objections. That same day, plaintiff submitted his proposed revisions to the documents and, on December 23, 2020, filed a letter reporting that defendants consented to the revised forms. The notices were sent out according to schedule.

As it turns out, plaintiff did not send the Court-approved notice and consent-to-join form, but instead sent different documents. In addition, the mailings contained certain flourishes that were not previously disclosed to the Court or defendants and to which defendants object. Specifically, defendants object to five aspects of the notice and form, each of which were added by plaintiff's counsel without prior approval from the Court or defendants.

First, plaintiff's counsel used custom-designed mailing and return envelopes prominently displaying a stamp of defendant Dee's logo, which plaintiff's counsel obtained from the internet and applied digitally without even telling Dee's. Second, the mailing envelopes display a QR code (a type of bar code) that, when scanned by the recipient, connects the employee directly to plaintiff's counsel on the application WeChat. Third, the notice disseminated by plaintiff splices together the English and Spanish text onto the same page, whereas the version submitted to and authorized by the Court contemplated separate English and Spanish notices. Fourth, the consent-to-join forms were prefilled with the personal information of Dee's employees. Fifth, the consent-to-join forms accidentally name a different establishment, SungBookDong BBQ, in addition to Dee's.

As an initial matter, it was patently improper for plaintiff's counsel to send out a different notice than the one approved by the Court. The reason for the bait-and-switch is clear: counsel wanted to induce more putative plaintiffs to join the action, but he knew that defense counsel would not consent to such measures and that I might not approve them if challenged. This has been a highly contentious action; each stage of this case has been excessively litigated. Plaintiff's counsel apparently believed that it would be better to ask for forgiveness than permission, knowing that he was highly unlikely to receive the latter and that, once the notices were sent out, it would be difficult to unwind the damage.

There is often an unspoken but well understood conflict in FLSA actions: plaintiffs (or rather their counsel) want a large collective to increase potential damages and attorney's fees, and defendants want the collective and their potential liability to be as small as possible. Court-facilitated notice helps to balance these competing interests. The disputes over such notices can be quite petty, but Court approval "ensure[s] that [the] notice is timely, accurate, and informative," and "[b]oth the parties and the court benefit from settling disputes about the content of the notice before it is distributed." Hoffmann-La Roche Inc. v. Sperling, 493 U.S. 165, 172, 110 S.Ct. 482, 107 L.Ed.2d 480 (1989). Those benefits are eviscerated if plaintiff's counsel does not fully disclose its plans for the...