Qiu v. Shanghai Cuisine, Inc.

Background

The plaintiffs brought a proposed collective action alleging that the defendants failed to pay wages and overtime required by the Fair Labor Standards Act and New York Labor Law. The court had already entered default judgment against several defendants. At the time relevant to this order, John Doe Corporation, Na Sun, and Jonathan Ho, also identified as Chenwen Ho, remained in the case.

Sun and Ho had challenged service of process and personal jurisdiction. While their motion to dismiss was pending, the plaintiffs asked them to disclose their residences and domiciles under Local Civil Rule 26.1. The court initially stayed discovery, including those requests. After denying the motion to dismiss, the court directed the plaintiffs to serve Sun and Ho by June 4, 2020. The plaintiffs later requested an extension of the service deadline and an order requiring Sun and Ho to provide their residential information. Because the request was unopposed, the court granted both requests in its June 26, 2020 order.

Sun and Ho moved for reconsideration under Local Civil Rule 6.3 and Federal Rule of Civil Procedure 60(b)(1). They argued that the court had no legal basis to compel address information being sought to complete service rather than to resolve jurisdiction. They also argued that the plaintiffs lacked good cause for an extension because they had not served the defendants at the Hudson Club, which the plaintiffs said had closed during the COVID-19 shutdown.

Legal standard

Reconsideration is an extraordinary remedy. Under Local Civil Rule 6.3, it generally requires a showing that the court overlooked controlling law or facts presented on the original motion that could have changed the result. Rule 60(b)(1) permits relief for mistake, inadvertence, surprise, or excusable neglect, but it does not provide another opportunity to repeat arguments already considered. The decision whether to grant reconsideration is within the district court’s discretion.

Court’s analysis

The court first criticized Sun and Ho’s lawyer for failing to respond to the plaintiffs’ request and the court’s June 4 order. The lawyer attributed the failure to the closure of his office during the pandemic. The court noted that counsel had access to email and that the office had filed other cases during the same period. The court ordered counsel to show cause at a later hearing why he should not be sanctioned for those representations. The court did not decide in this order that a sanction would be imposed.

The court granted reconsideration of the order compelling the Local Rule 26.1 disclosures. It reasoned that Sun and Ho had consistently contested personal jurisdiction and proper service, so the court could not assume that they had waived those defenses. The court further concluded that the federal discovery rules, including Local Rule 26.1, apply when a lawsuit is pending between parties, and that the plaintiffs could not use those rules to obtain pre-service discovery in these circumstances. The court characterized its earlier contrary conclusion as clear error.

The court denied reconsideration of the extension of time to serve Sun and Ho. It explained that the defendants’ argument had effectively been rejected in the court’s May 4, 2020 order, which found good cause for an earlier extension. Sun and Ho did not challenge that order and identified no new evidence or case law showing that the later extension was improper. The court also stated that the plaintiffs might need additional extensions if the Hudson Club could not reopen soon, while encouraging them to seek other ways to obtain the information needed for service.

Disposition

The court granted in part and denied in part Sun and Ho’s motion for reconsideration. The court granted reconsideration of the requirement that they respond to the plaintiffs’ Local Rule 26.1 requests, and denied reconsideration of the extension of time to serve them. The clerk was directed to terminate the motion. A show-cause hearing was scheduled for July 31, 2020, by telephone.