United States v. Care Worldwide, Inc.

• Decision Date: 23 August 2022
• Docket Number: 17-CV-03294 (JS) (JMW)
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. CARE WORLDWIDE, INC. and RAINA MASSEY, Defendants.
• Court: U.S. District Court — Eastern District of New York

UNITED STATES OF AMERICA, Plaintiff, v. CARE WORLDWIDE, INC. and RAINA MASSEY, Defendants.

No. 17-CV-03294 (JS) (JMW)

United States District Court, E.D. New York

August 23, 2022

APPEARANCES:

Edward K Newman, Esq.

Jolie Apicella, Esq.

Megan Jeanette Freismuth, Esq.

United States Attorneys' Office

Eastern District Of New York

For Plaintiff United States of America

Satish K. Bhatia, Esq.

Bhatia & Associates PLLC

For Defendants Care Worldwide, Inc.

And Raina Massey

REPORT AND RECOMMENDATION

JAMES M. WICKS, United States Magistrate Judge.

Plaintiff United States of America commenced this enforcement action on June 2, 2017, against Defendants Care Worldwide, Inc. (“Care Worldwide”) and Raina Massey (“Massey”) to enforce a civil penalty and an award of back wages and costs due to the United States Department of Labor (“DOL”) Wage and Hour Division (“WHD”) on behalf of three employees formerly employed by Defendants under the H1-B visa program. Before the Court on referral from the Honorable Joanna Seybert is Plaintiff's motion for summary judgment (DE 44-45) which Defendants oppose. (DE 47.) For the reasons that follow, the undersigned respectfully recommends that the Government's motion for summary judgment be GRANTED.

I. FACTUAL BACKGROUND

The following facts are drawn from Plaintiff's Local Rule 56.1 Statement of Material Facts. Because Defendants did not submit a Rule 56.1 counter statement, those facts set out in Plaintiff's statement are now considered undisputed for purposes of this Report and Recommendation. See Giannullo v. City of New York, 322 F.3d 139, 140 (2d Cir. 2003) (“If the opposing party then fails to controvert a fact so set forth in the moving party's Rule 56.1 statement, that fact will be deemed admitted”). However, notwithstanding Defendants' failure to submit a Rule 56.1 counter statement a district court “may not rely solely on the statement of undisputed facts contained in the moving party's Rule 56.1 statement” but “must be satisfied that the citation to evidence in the record supports the assertion.” Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004). Accordingly, it is against this backdrop, that the undersigned considered the motion.

The WHD Investigation

The WHD conducted an investigation of Massey and Care Worldwide beginning in 2013 for compliance with the H-1B provisions of the Immigration and Nationality Act (“INA”). (DE 44-1 at ¶ 1.) An investigation by the WHD involves examination of records, including payroll and time records, interviews with employees, observation of working conditions at the employer's place of business, and meetings with the employer. (Id. at ¶ 2.) WHD's investigation of Defendants found that they willfully failed to pay wages to the three H-1B employees for productive work and for benching periods.^[1] (Id. at ¶ 3.) Defendants also took illegal deductions from the salary of one of those employees. (Id. at ¶ 4.) On May 7, 2014, the WHD issued a determination letter setting forth the violations and remedies imposed for each violation. (Id. at ¶ 5.) As a result of the violations, back wages in the amount of $324,178.24 were assessed for former employees bearing the initials MA, RR, and CS broken down as follows:

• Unpaid wages for MA to be $41,217.88 for 9/15/12-3/16/13 (id. at ¶ 6);

• Unpaid wages for RR to be $131,658.02 for 5/8/10-12/15/12 (id. at ¶ 7); and

• Unpaid wages for CS to be $144,309.33 for 10/03/09-09/22/12 (id. at ¶ 8).

The WHD also required Defendants to pay MA $15,000 in reimbursement for visa and training fees incurred. (Id. at ¶ 9.) A penalty of $6,750.00 was also imposed. (Id.)

Defendants Appeal the WHD Determination

On May 22, 2014, Defendants filed an appeal and request for hearing on the Administrator's determination. (Id. at ¶ 10.) On Defendants' motion, on December 7, 2014, the Administrative Law Judge assigned to the matter (the “ALJ”) deferred proceedings until May 2015. (Id. at ¶ 11.) In the December 7, 2014 order, the ALJ specifically notified Defendants and counsel that when the adjournment ended, they “will be directed to show cause why processing of this matter should not resume.” (Id. at ¶ 12.) The ALJ further noted that failure by the Defendants “to be prepared to go forward once the deferment period ends without good cause shown may be deemed a withdrawal of Respondents' objection to the Administrator's determination...” (Id. at ¶ 13.)

The December 7, 2014 order was served on Defendants by U.S. Mail, at their home and office addresses of record, as well as to their counsel at his address of record. (Id. at ¶ 14.) On May 6, 2015, the ALJ issued an order for the Defendants to provide written notice of their intention to continue to proceed with the matter by May 26, 2015. (Id. at ¶ 14.) The ALJ further warned Defendants that failure to provide such written notice could be deemed as a withdrawal of their objections to the Administrator's May 7, 2014 determination. (Id. at ¶ 16.) The May 6, 2015 order was served on Defendants and their counsel at all addresses of record. (Id. at ¶ 17.)

The ALJ Affirms the WHD Determination

The Defendants failed to file a response or appear in response to the May 6, 2015 Order. (Id. at ¶ 18.) Noting this failure, and citing to her prior notifications and warnings, on June 10, 2015, the ALJ issued a decision and order finding that Defendants' failure to respond constituted a waiver of their objections to WHD's determination and affirmed it. (Id. at ¶ 19.) This was done pursuant to 29 C.F.R. §18.39 (now found at 29 C.F.R. §18.21 (c)), which permits dismissal of a request for hearing upon its abandonment. (Id.) The June 10, 2015 decision contained a notice that advised Defendants they were able to appeal the decision through a petition for review within 30 days. (Id. at ¶ 20.) The June 10, 2015 decision was served on defense counsel. (Id. at ¶ 21.) Defendants failed to file an appeal. Accordingly, the ALJ's decision and order became final on July 10, 2015 (“Final Administrative Order”). (Id. at ¶ 22.)

On September 1, 2015, DOL sent a demand letter to Defendants (and current counsel Satish K. Bhatia via E-Mail) demanding payment of the debt, and warning that DOL would seek appropriate enforcement remedies if Defendants failed to pay by September 14, 2015. (Id. at ¶ 23.)

Defendants did not make any payments. (Id.) On November 24, 2015, the WHD issued a Certificate of Indebtedness against Defendants. (Id. at ¶ 24.) It certified that Defendants were indebted to the United States in the amount of $384,639.46 ($6,750 in civil money penalties; $324,178.24 in back wages; and prejudgment interest of $53,711.22). (Id.) To date, Defendants have made no payment on the penalties and back wages, or costs owed to the DOL. (Id. at ¶ 25.)

II. THE LEGAL STANDARD

Summary judgment under Rule 56 is appropriate only where the movant “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012) (citing Fed.R.Civ.P. 56(a)). “A fact is material if it might affect the outcome of the suit under the governing law, and a dispute is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Baldwin v. EMI Feist Catalog, Inc., 805 F.3d 18, 25 (2d Cir. 2015) (quotes omitted). “In determining whether there are genuine issues of material fact, we are required to resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought.” Johnson, 680 F.3d at 236 (quotes omitted). The movant bears the burden to initially demonstrate that there are no material facts to preclude summary judgment. Carroll v. Krumpter, 397 F.Supp.3d 234, 243 (E.D.N.Y. 2019). If the moving party meets its initial burden, the burden then shifts to the nonmoving party to show that there are specific facts that demonstrate a genuine issue of fact exists. Id. (citation omitted).

“To defeat a summary judgment motion properly supported by affidavits, depositions, or other documentation, the non-movant must offer similar materials setting forth specific facts demonstrating that there is a genuine dispute of material fact to be tried.” 7951 Albion, LLC v. Clear Blue Specialty Ins. Co., 548 F.Supp.3d 321, 324 (E.D.N.Y. 2021). The non-movant must present more than a “scintilla of evidence,” or “some metaphysical doubt as to the material facts” and “may not rely on conclusory allegations or unsubstantiated speculation.” Fabrikant v. French, 691 F.3d 193, 205 (2d Cir. 2012); Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011).

III. ANALYSIS OF THE CLAIMS

A. The United States is Entitled to Enforce the DOL Administrative Order

Plaintiff asserts that when a federal agency, such as the DOL, issues an administrative order, the DOL itself or the United States may seek a judgement from the court to enforce that order. (See DE 45 at 5-6.) In opposition, Defendants argue the United States Attorney lacks “locus standi” (standing) to bring this enforcement action under 28 U.S.C. § 516 and that this type of action can only be brought under the direction of the Attorney General. (See DE 47 at 45.)

The United States is entitled to enforce the Final Administrative Order. While case law demonstrating the United States' authority specifically under the INA's H-1B laws to enforce administrative orders is sparce, it is undeniable that the United States Department of Justice may bring suit on behalf of the United States and its agencies when the United States has a justiciable interest to protect or defend. See e.g., United States v. Occidental Chem. Corp., 200 F.3d 143, 149 n.6 (3d Cir. 1999) (“Fi...