Alonso v. New Day Top Trading Inc.

Background

Jose Alonso and Marcelo Juarez Flores sued New Day Top Trading, Inc. on behalf of themselves and similarly situated workers. They alleged violations of the Fair Labor Standards Act, the federal wage-and-hour law, and the New York Labor Law. Their claims sought unpaid overtime wages, spread-of-hours wages, liquidated damages, statutory damages for missing wage statements and notices, interest, attorneys’ fees, and costs.

Five additional workers—Andres Maldonado, Jose Felix Perez, Rafael Soriano, Gustavo Martinez Tapia, and William Velos—filed notices consenting to join the federal wage claims. New Day Top did not respond to the lawsuit. The court entered a default judgment on liability, meaning the employer’s failure to respond resulted in judgment on liability without a contested defense, and referred the damages issue to Magistrate Judge Debra C. Freeman for an inquest.

Report and objections

Judge Freeman recommended damages for Alonso and Flores, but recommended vacating the default judgment as to the five opt-in plaintiffs because their consent forms had not been served on New Day Top before default was entered. She also recommended attorneys’ fees of $78,576.75 and costs of $2,227.77 based on awarding damages only to Alonso and Flores. The plaintiffs objected to the treatment of the opt-in plaintiffs, to the amount calculated for Flores, and to the reduced fee and cost award.

Court’s analysis

The court held that an opt-in plaintiff’s consent form defines the scope of that plaintiff’s claims and gives the defendant notice of those claims. New Day Top had received other materials, including default-judgment motion papers and a certificate of default, but those materials did not substitute for service of the consent forms. Because the forms were not served until after default had been entered, the court adopted the recommendation to vacate the default judgment as to Maldonado, Perez, Soriano, Tapia, and Velos.

The court stated that this problem could be corrected. The opt-in plaintiffs were permitted to serve their consent forms on New Day Top and, if the employer again failed to appear, file a new request for default judgment. The court indicated that, if a new default judgment were entered and the papers were otherwise proper, it was prepared to enter damages consistent with Judge Freeman’s recommendations for those plaintiffs.

For Flores, the complaint estimated that he worked approximately 75 to 85 hours per week. His later declaration estimated a higher range of approximately 87.75 to 96.75 hours per week. The court applied Federal Rule of Civil Procedure 54(c), which provides that a default judgment cannot differ in kind from or exceed the relief demanded in the pleadings. It therefore approved $55,912.09 in unpaid overtime wages and an equal amount in liquidated damages, rather than the higher amounts Flores requested based on his later estimate.

Disposition

Judge Paul A. Engelmayer adopted the Report and Recommendation in its entirety. The court awarded Alonso $183,026.99 plus additional interest and Flores $140,093.32 plus additional interest. It awarded $78,576.75 in attorneys’ fees and $2,227.77 in costs, directed Alonso and Flores to submit an updated interest calculation, vacated the default judgment as to the five opt-in plaintiffs, and granted those plaintiffs an opportunity to serve their consent forms and later seek a new default judgment.